Say what you want about Donald Trump, but he has said two things recently that more profoundly diagnose America’s true problems than anything Hillary Clinton has even come close to thinking about in her entire lifetime.
The first thing he said — that political correctness “cripples our ability to talk and think and act clearly” — is not the subject of this column. The second — that “It is time to remove the anchor that is dragging us down” — is.
The “anchor” he was talking about is the government and, especially the Obama administration and any extension thereof through Hillary Clinton.
We have a government that is choking us to death with regulations and economy killing policies. As Trump pointed out:
The Federal Register is now over 80,000 pages long. As the Wall Street Journal noted, President Obama has issued close to four hundred new major regulations since taking office, each with a cost to the American economy of $100 million or more.
In 2015 alone, the Obama Administration unilaterally issued more than 2,000 new regulations – each a hidden tax on American consumers, and a massive lead weight on the American economy.
Nowhere is this truer than in the energy sector Trump spotlighted in his speech in Detroit. But to appreciate Trump’s prescription for the energy sector and the rest of the economy, it’s first necessary to understand how the Obama administration has sabotaged both.
Probably the least talked about effect of Obama’s anti-economic policies has been the destruction of the economic model for the electric power industry. Electric utilities used to make money the old fashioned way — by selling more electricity. For a variety of reasons, that has not been possible in the moribund Obama economy.
Instead utilities have been forced to engage in various government-mandated energy efficiency and green power schemes where utilities can only make more money by selling less electricity at higher prices. Flattened electricity production by utilities has then had downstream effects on fuel production industries.
Lower fuel needs has forced down coal prices and caused overproduction in a coal industry that has become increasingly efficient over the years at producing coal.
The Obama administration then compounded this problem for the coal industry by commencing its infamous war on coal. This has had the effect of forcing utilities to choose either to endure high regulatory compliance costs and political disfavor by sticking with coal or to switch to alternatives like natural gas, wind and solar. While the Obama administration favored the later two energy sources, the markets tossed a monkey wrench in these plans.
A glut of cheap natural gas produced by hydrofracturing technology (fracking) eased the coal-switching problem for utilities. Making progressive lemonade out of lemons, at this point the Obama administration then decided to finish off the coal industry by making the permanent the glut of cheap natural gas. It did this by slow-walking if not just simply preventing natural gas from being exported to a global market hungry for it.
The effect was two-fold. First, it forced most of the coal industry into bankruptcy. Second, it kept gas prices depressed. If an oil and gas firm is not struggling today, it’s probably only because it has gone into bankruptcy, too. And it you’re thinking that cheap fuel prices must have been good for electric utilities, think again. Midwestern utilities were hoping that the cheap fuel glut would lead to a renaissance of manufacturing in the Rust Belt, facilities to which they could sell more electricity. But regulatory uncertainty brought about overzealous and arbitrary Obama administration agencies and actions has prevented any such renaissance.
A President Trump would remove the government boot from the energy industry. Natural gas could be exported to a gas-hungry world. This would relieve pressure on what’s left of the coal industry. Then, unburdening utilities of regulatory and political pressure to use politically correct fuels and allowing utilities to sell more electricity to a growing economy would restore health to the ailing energy sector and help create millions of good-paying, wealth producing jobs.
All this is complex and difficult to explain in a brief column, let alone a policy speech by a candidate who is more of a business-doer than a political-talker. But Trump gets the big picture. Overregulation is killing our economy. The energy sector is living (on life support) proof.
Steve Milloy publishes JunkScience.com and is a former coal executive.
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