The Way to Compete With China

Like two heavyweight boxers ready to do battle, the US economy appears pitted against the Chinese.  And, increasingly America's intellectual elite's have their money on the Chinese.  Americans are bombarded by the "new normal" orthodoxy that ours is a nation in decline.

But, if we had the political will to do so, we could throw the knock-out punch.  America's key to winning is cheap energy.  The Congressional Research Service reported that the United State is tops in energy resources.









And here's why that's so important.  China's advantage is cheap labor.  America's is abundant energy.  We can out-produce them.  Energy accounts for much more of the cost of manufactured goods than labor does.  And we have more energy than any other country.  Would that a GOP presidential candidate put those facts together.  America can have its cake and eat it too: high wage job and economic growth.  The United States is doomed to President Obama's "race to the bottom" only if we continue to embrace his energy policies.

If the United States maximizes its energy resources we can have cheap gas, high paying jobs and manufacturing supremacy.  Oil, specifically, is that important.  It far exceeds the cost of labor.  Take, for instance, a water bottle.  Researchers Peter Gleick and Heather Cooley from the Pacific Institute argue against bottled water because it's oil intensive.

In 2007, US consumers purchased more than 33 billion liters of bottled water, or 110 liters (30 gallons) per person. The total energy required to produce 33 billion liters is equivalent to 32-54 million barrels of oil (although not all the energy used comes from oil). Energy to produce bottled water accounts for about one-third of one percent of total US energy consumption.

And bottled water is just one example of oil dependence.  It's a well known fact that higher gasoline prices almost always foreshadow a recession.  Why?  Gasoline prices have a disproportionately powerful affect on consumer behavior.  On Wall Street and in Washington we'll be told not to worry, since the proportion of a consumer's income spent on energy has be declining in the past decade.  But, leave New York and Washington -- and their higher than average incomes -- and see what's happening in fly-over country.  Consumers are cutting back, sentiment is declining.  Americans are increasingly fearful -- they can't live without gasoline, nor it seems can they afford to live with it.  Their helplessness breeds fear.  An aggressive energy policy that allowed America to use its resources would reverse these trends.  It is intuitively obvious that cheap energy leads to prosperity.  Lower pump prices encourage Americans to buy larger, more profitable vehicles.  This leads to expanded production, more jobs, and high wages.  These workers may also go out and buy a boat.  And now, more than ever, political constituencies can be combined to fight the elites and the environmental extremists.  Global climate change is a science in disrepute.  On cheap energy many union and Tea Party members could find common ground.  And even in some liberal corners the current budget cutting can be used to argue against the policies of energy high jacking.

A cheap gas focus would also improve our nation's foreign policy.  How many Americans would lament buying less oil from the Saudi's and thus help defund Islamic terrorism?  Millions of us would welcome a "hands-off" approach to the Middle East.  The Chinese however, don't have that luxury.  Let them buy from and be beholden to the Saudis.  America need not have these problems.

It's hard to conceive of a more important issue than cheap energy.  Conservatives need to make the argument that it is our moral duty to the world to use our energy resources.  It is just and right that Americans bring prosperity and innovation to mankind.  How else can we ever hope to improve education and raise health standards, absent a growing economy?

America is truly a blessed nation.  Those who first settled this land were awed by the beauty and resources.  But, America's elites have kidnapped our resources.  They are holding the nation hostage.  And a few such Al Gores have become billionaires in the process.  Now is the time to shake off a decade of government induced economic decline and put our resources to use.  We can lower US energy costs, and thus out manufacture and out produce all comers. 

America has the energy resources to fund a new American Century.

But do we have the political will to build the coalitions -- conservatives and labor -- necessary to win the day?
Like two heavyweight boxers ready to do battle, the US economy appears pitted against the Chinese.  And, increasingly America's intellectual elite's have their money on the Chinese.  Americans are bombarded by the "new normal" orthodoxy that ours is a nation in decline.

But, if we had the political will to do so, we could throw the knock-out punch.  America's key to winning is cheap energy.  The Congressional Research Service reported that the United State is tops in energy resources.









And here's why that's so important.  China's advantage is cheap labor.  America's is abundant energy.  We can out-produce them.  Energy accounts for much more of the cost of manufactured goods than labor does.  And we have more energy than any other country.  Would that a GOP presidential candidate put those facts together.  America can have its cake and eat it too: high wage job and economic growth.  The United States is doomed to President Obama's "race to the bottom" only if we continue to embrace his energy policies.

If the United States maximizes its energy resources we can have cheap gas, high paying jobs and manufacturing supremacy.  Oil, specifically, is that important.  It far exceeds the cost of labor.  Take, for instance, a water bottle.  Researchers Peter Gleick and Heather Cooley from the Pacific Institute argue against bottled water because it's oil intensive.

In 2007, US consumers purchased more than 33 billion liters of bottled water, or 110 liters (30 gallons) per person. The total energy required to produce 33 billion liters is equivalent to 32-54 million barrels of oil (although not all the energy used comes from oil). Energy to produce bottled water accounts for about one-third of one percent of total US energy consumption.

And bottled water is just one example of oil dependence.  It's a well known fact that higher gasoline prices almost always foreshadow a recession.  Why?  Gasoline prices have a disproportionately powerful affect on consumer behavior.  On Wall Street and in Washington we'll be told not to worry, since the proportion of a consumer's income spent on energy has be declining in the past decade.  But, leave New York and Washington -- and their higher than average incomes -- and see what's happening in fly-over country.  Consumers are cutting back, sentiment is declining.  Americans are increasingly fearful -- they can't live without gasoline, nor it seems can they afford to live with it.  Their helplessness breeds fear.  An aggressive energy policy that allowed America to use its resources would reverse these trends.  It is intuitively obvious that cheap energy leads to prosperity.  Lower pump prices encourage Americans to buy larger, more profitable vehicles.  This leads to expanded production, more jobs, and high wages.  These workers may also go out and buy a boat.  And now, more than ever, political constituencies can be combined to fight the elites and the environmental extremists.  Global climate change is a science in disrepute.  On cheap energy many union and Tea Party members could find common ground.  And even in some liberal corners the current budget cutting can be used to argue against the policies of energy high jacking.

A cheap gas focus would also improve our nation's foreign policy.  How many Americans would lament buying less oil from the Saudi's and thus help defund Islamic terrorism?  Millions of us would welcome a "hands-off" approach to the Middle East.  The Chinese however, don't have that luxury.  Let them buy from and be beholden to the Saudis.  America need not have these problems.

It's hard to conceive of a more important issue than cheap energy.  Conservatives need to make the argument that it is our moral duty to the world to use our energy resources.  It is just and right that Americans bring prosperity and innovation to mankind.  How else can we ever hope to improve education and raise health standards, absent a growing economy?

America is truly a blessed nation.  Those who first settled this land were awed by the beauty and resources.  But, America's elites have kidnapped our resources.  They are holding the nation hostage.  And a few such Al Gores have become billionaires in the process.  Now is the time to shake off a decade of government induced economic decline and put our resources to use.  We can lower US energy costs, and thus out manufacture and out produce all comers. 

America has the energy resources to fund a new American Century.

But do we have the political will to build the coalitions -- conservatives and labor -- necessary to win the day?