Industry, Energy, and the Moral High Ground

Originally published in Flourishing Mar Apr 2013

I was watching television last night (March 26), when I was disturbed by a news item scrolling across the bottom of the screen.  Paraphrasing, the message was that the U.S. State Department will open new hearings on the Keystone XL pipeline project on April 18.  Huh?  I thought Hilary’s State Department had given President Obama clear passage to a decision on Keystone XL way back in 2012, long before the election.   And, I thought I’d read not long ago that the EPA Administrator was planning to resign, because she thought the President was going to approve the Keystone XL project.  So I checked, and my memory was correct.

This is why central planning and heavy-handed regulation don’t work; or perhaps I should say they don’t work for the American people or for economic progress.  We all know intuitively, I think, that political calculations in Washington more or less continuously trump reason and reality.  So, I’ve never understood how we get suckered into the belief that patently demagogic politicians and their swarm of camp followers can make better economic, environmental, and public safety decisions than the often brilliant and generally hard-working people who strive every day to offer life-enhancing products to increasingly discerning customers for a profit.  The historical evidence and our own life experience is virtually all to the contrary.  

We in the western world are the beneficiaries of the greatest development in human history—the Industrial Revolution—which enabled higher human productivity, more leisure time, faster and safer transportation, more complex scientific discoveries, safer and more comfortable places to live, and longer lives, to name just a few of its benefits; and left in its wake the Information Revolution and the emerging Biological Revolution. 

So, instead of trusting everything to the posers in Washington, I think we might want to once again embrace the free market principles that gave us that Industrial Revolution.  We could start, for example, by stopping the endlessly redundant nit-picking of every industrial project for the remote, one-in-a billion chance that somewhere, sometime, somehow, a pipeline will rupture and leave a temporary stain the size of a football field in some farmer’s patch of corn.  I mean no offense to the farmers, but do we think that the aggrieved farmer—who does retain his property rights—will not be recompensed, contractually or through the courts?

But wait, didn’t I also hear on the news yesterday that a Canadian freight train had derailed in Minnesota, spilling oil in a farm field?  Maybe we should weigh that all but trivial event—which I’m sure captured the President’s attention—against the incalculable human benefits of petroleum-based energy.  And, if you please, I’ll include nuclear and coal-based energy in my argument, too.

Really, it should be a moral embarrassment to us that in today’s world, millions of people die every year due to a lack of dependable energy supplies.  Isn’t it amazing that we environmentally aware, creature-sensitive Americans have cordoned off centuries worth of potential energy supplies in the form of natural gas, nuclear power, oil, and coal in the name of  “saving the planet”.  Rather than promote a better quality of life for desperate human beings throughout the rest of the world—which we could readily do at great economic, cultural, and moral benefit to ourselves—we instead celebrate, as  moral idealism, battery-powered cars with a driving range rivaling the distance of Tiger Woods’ 6 iron; and sorting through trash to put everything in its proper bin.  That’s a pitifully vapid—not to say inverted—path to moral self-esteem, don’t you think?

I’ve been watching this nonsense and remaining mostly silent for upwards of forty years.  But, yesterday I read something that was said by the greatest cultural icon of the 20th century in America:  Our lives begin to end the day we remain silent about the things that matter.   So—not to offend or debate, but to educate—my self-imposed muzzle has been removed.  (I know that you know that I write to you out of love; and if you’re not convinced by my argument, that’s ok.  I won’t hold it against you, and I’d appreciate the same consideration.)

We Americans have taken industrial and material progress for granted, and we’ve carelessly embraced “going green” as a moral ideal–expecting that the unprecedented standard of living we’ve enjoyed would continue.  For forty years, we’ve permitted relatively small, but politically connected and well-funded, groups of anti-industrial environmentalists to roadblock new energy production and industrial development at nearly every turn.  Some call them “tree-huggers”; but since I love trees—just as I value the clean air and clean water,  which are available only in the most energy–intense industrial economies—I just say they’re wrong.   Since policies have consequences, we’re paying the price for the government’s stifling of innovation, productivity, and growth in the energy industry with nearly nationwide economic stagnation and fruitless “green energy” cronyism.   “Going green” is doing more damage to our moral and economic future with every day that passes. 

If we freedom-loving, prosperity-seeking people continue to grant the anti-industrialists the moral high ground they claim to represent with their “green energy” agenda, they may continue to inspire support for their “green economy” suicide pact.  But, don’t miss my main point:  To sacrifice the modern human environment we enjoy here in America—fueled by petroleum, nuclear, and coal-based energy—to the non-human environment, as the anti-industrialists insist we do, is not just bad economic policy, it is immoral.  A mere moment’s reflection on the living conditions that exist in the non-industrialized world is evidence enough of that fact.  So, do we want to live like they do?  Or do we want to help them live like us?  Because those are our choices. 

The anti-industrialists like to talk about “industrial policy” by which they mean the obstruction of private industry initiatives and the demise of the large-scale energy production our modern economy requires.  The only industrial policy we really need to assure ourselves of a healthy environment, and to restore prosperity and abundance, is one which respects private property rights and individual self-determination.  As the history of western civilization since the beginning of the Industrial Revolution has demonstrated, human ingenuity and the natural human desire to create better lives for ourselves and our families will take care of the rest. mh

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In Support of Tea Parties

Originally Published in Flourishing May/June 2010

Some of you will disagree with what I say in this article, including some members of my own family.  (But, Superman agrees with me.)  I tell you that to remind you of two things:  First, I have no partisan ax to grind.  My political hero is George Washington, and, unfortunately, he’s dead.  I’m interested in political philosophy, history, and economic science—not partisan politics.  Second, this newsletter is a labor of love, written with nothing but my clients’ interests in mind, and I think you deserve my honest opinion on issues that affect all of us.  Happily, the feedback I’ve received from clients over the years has been decidedly positive.  As always, agree or not, I thank you for your business.

Do you remember how people were outraged by the Bush/Paulson $700 billion bank bailout?  Or the $180 billion for AIG?  Or President Obama’s dismissive treatment of Chrysler bondholders and the auto industry takeovers?  Then, we saw the passage of an $800 billion stimulus package, with its litany of mostly irrational, hastily conceived supposedly shovel-ready projects.  In my opinion, this was all unnecessary and mainly helped a few politicians and their business associates, some influential labor unions, and state and local governments. 

Then there was the 2010 federal budget deficit of $1.4 trillion.  The national debt, which was 50% of the Gross Domestic Product (GDP) in 2008, will approach 80% of the GDP by 2012.  This program was sold primarily as a “jobs creation package”; yet, unemployment remains at nearly 10% of the American workforce.  (http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf)

Now we have Obamacare, with concern from some of the American people, using tactics that politicians used to their advantage.  It was uncomfortable for me to watch, as one legislator after another voted for this legislature.  It now seems likely that those 2700 pages will add at least $1 trillion, possibly $2 trillion, (who can really know?) to our nation’s debt.

Spending of this magnitude is unlike anything Americans have ever seen—allowing for the wartime spike of 1942 to 1945.  What scares people, I think, is that today’s spending doesn’t look like a spike; its shape is an asymptote to indigence.  In my opinion, this fiscal irresponsibility will diminish their freedom, their quality of life, and their children’s futures.  On the other hand . . .

The entrepreneurial spirit that defines America is too powerful to be swept away.  Many Americans take their responsibility for their won lives quite seriously.  They value their independence and the freedom to structure their lives as they see fit.  They resent being subject to policies created by opposing politicians and bureaucrats, and, if you please, to policies supported by people who expect to be taken care of by politicians and bureaucrats.  Some Americans are of an ambitious breed, not keen to trade self-determination and affluence for extended unemployment benefits and a healthcare queue. They do not want the government to run care companies, banks, or clinics.

Besides, the disparity between President Obama’s campaign promises and his governing style are now too apparent.  People expected transparency and tolerance, not duplicity and disdain.  The President and Robert Gibbs can slander the tea party movement, if they like, and at the risk of their own credibility; but I believe most tea-partiers are neither bullies nor bozos.  In fact, some surveys have shown that a majority—particularly the organizers—are well-educated women.  (http://volokh.com/2010/04/15/national-survey-of-tea-party-supporters–done-by-the-new-york-times-and-cbs-news/)  Nor are they Tim McVeigh types, as some have suggested; I see them as Patrick Henry types.  They’re our neighbors, driven by their dedication to freedom.  They know American history, and they respect our founders’ Constitution.  They are, for the most part, members of America’s honest, intelligent, and productive middle class.  As the Wall Street Journal has noted, when President Obama vilifies and denigrates those he’s elected to serve, he dishonor’s himself, not the targets of his invective. 

I’m confident that most Americans still have an inbred love for liberty.  Most take appropriate pride in their personal achievements.  Just look around, or better yet, in the mirror.  Then look at Greece, a European country where those who live on the dole outnumber productive citizens.  That country is quite literally bankrupt and it appears to me as if it’s the freeloaders who are taking to the streets to defend their nanny-state entitlements in violent demonstrations.  Some people worry that America is heading down that same path.  Maybe we are; but I don’t think so. 

Just consider this difference.  In America, it’s the producers who are taking to the streets, and peacefully so.  The tea party movement is a non-violent, grass-roots campaign for fiscal responsibility and a more limited government.  I think the tea parties foretell a dramatic and overdue return to America’s founding principles, and more prudent economic and fiscal policies from government at every level.  Mh

The above material reflects the opinions of Michael Harvey and not those of LPL Financial.