Obama vs. Keystone.....again.

U.S. Senate Republican Leader Mitch McConnell made the following statement on the Senate floor Thursday regarding efforts by the President to lobby Democrat Senators against Senator Hoeven's amendment on the Keystone XL Pipeline:

“Last night the two parties reached agreement on amendments to the Highway Bill. I’m happy to report that there are a number of strong job creating measures in the mix. One that stands out is Senator Hoeven’s amendment on the Keystone XL Pipeline.

“Most Americans strongly support building this pipeline and the jobs that would come with it. And it’s incomprehensible to me that the President of the United States is lobbying against it.

“There’s a report this morning that President Obama is personally making phone calls to Democrat Senators he thinks might vote for this amendment. He’s asking them not to. And, frankly, it’s hard to even comprehend how out of touch he is on this issue.

“I mean, think about it: at a moment when millions are out of work, gas prices are skyrocketing and the Middle East is in turmoil, we’ve got a president who’s up making phone calls trying to block a pipeline here at home. It’s unbelievable.

“What we’re seeing in Congress this week is a study in contrasts.

“On the one hand you’ve got a Republican-controlled House that’s about to pass a bipartisan jobs bill that would help entrepreneurs and innovators by getting Washington out of the way. And today we’ve got a Democratic-controlled Senate trying to line up votes against amendments that would create jobs—and a President lobbying against the biggest one.

“We’ve got an opportunity to work together to create jobs. We can do that with these amendments. And we can do that by taking up the bipartisan jobs bill the House will pass later today.

“Let me just say a word about that. The bipartisan jobs bill the House will pass later today is supported by the President. It is ready to go, and I hope that once it gets over to the Senate we'll simply take it up and pass it.

“It's an example of a measure that is supported by Republicans and Democrats and the President that we believe will clear the House with a very large majority. I think the sooner we pass that here in the Senate and send it down to the President for signature, the better.

“With that, Mr. President, I yield the floor.”(1)

Upon Further Review

Many talking heads, pundits and media-types put forth the proposition that Obama is preventing oil independence, etc., and/or he is siding with environmentalists by opposing Keystone. Fair enough arguments.

What one doesn't seem to experience with the media is this public choice theory proposition: since Obama and his ilk built a massive network of crony capitalist green energy, a massive political constituency building exercise through use of taxpayer dollars, does not Obama have a vested interest to protect [reduce/eliminate competition] regarding such a purposely built massive network of crony capitalist green energy concerns? That is, given the network of constituency building exercises, Obama is merely acting rational to protect the purposely built network of crony capitalists.

Now consider this political economy proposition:

Many politicos with a vested interest in the crony capitalism regarding alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Notes:

(1) McConnell: President Lobbying Against Keystone XL Pipeline Jobs, Real Clear Politics, 03/08/2012

Environmentalism as an exclusionary, barrier to entry, denial scheme?

“In turning down Keystone, however, the President has uncovered an ugly little secret that has always lurked beneath the surface of environmentalism. Its basic appeal is to the affluent. Despite all the professions of being "liberal" and "against big business," environmentalism's main appeal is that it promises to slow the progress of industrial progress. People who are already comfortable with the present state of affairs -- who are established in the environment, so to speak -- are happy to go along with this. It is not that they have any greater insight into the mysteries and workings of nature. They are happier with the way things are. In fact, environmentalism works to their advantage. The main danger to the affluent is not that they will be denied from improving their estate but that too many other people will achieve what they already have. As the Forest Service used to say, the person who built his mountain cabin last year is an environmentalist. The person who wants to build one this year is a developer."
- William Tucker, Environmentalism and the Leisure Class, American Spectator, 01/20/2012

Link to the entire article appears below:

http://spectator.org/archives/2012/01/20/environmentalism-and-the-leisu

More on the Keystone XL pipeline

The Keystone XL Pipeline Meets Public Choice Theory

If one considers alternative energy schemes as crony capitalist ventures, with taxpayer dollars being profit to the rent seeking special interests, then is the postponement of the XL pipeline  merely an exercise in the best interest of the special interest?

A special interest, in this case alternative energy, can only rent seek (acquire taxpayer dollars) if the special interest has a politico or collection of politico enablers. Governments do not think, act nor react. Only politicos think, act and react. Hence politicos through the mechanism of government allocate taxpayer dollars to special interests. Therefore, politicos associated with alternative energy have a vested interest in the political constituency exercise that taxpayer dollars generate.

Many of the politicos with a vested interest in the crony capitalism of alternative energy also have a vested interest in environmentalists. As the formula goes, the politico through the mechanism of government uses taxpayer dollars to build a political constituency. In this particular case the constituencies are associated in that the crony capitalist of alternative energy “appear” to also be the champion of the environmentalist. Therefore the politico enabler receives a double constituency building outcome through the awarding of taxpayer dollars.

Digressing for a moment, consider the concept of big oil windfall profit tax. Is crony capitalism, in the area of alternative energies, a substitute as it were for a big oil windfall profit tax, which creates the same "effect" for a particular political constituency? Stated alternatively, if one champions a big oil windfall profit tax and wants to capture the political constituency such a proposed tax caters to, then if one can not achieve the windfall profit tax does one use crony capitalism in the area of alternative energy to achieve the same political constituency building effect?

Now consider a fully engaged crony capitalist exercise in the area of alternative energy with hundreds of billions of taxpayers money allocated. Also consider that these alternative energies are not price competitive. Further consider that the same associated politicos have not only subsidized alternative energy but have mandated its usage. Therefore, a fully engaged crony capitalist system generating a non-competitive above market price has been guaranteed to perpetuate as the same politicos have added mandated usage. Political dupery at its zenith!

　
Enter the XL pipeline, a facilitator of lower priced, much less subsidized, and price competitive energy source. The fully engaged crony capitalist exercise, the political dupery as it were, views competition as a threat. Competition from the private sector no less. Hence simply eliminate competition and preserve the fully engaged crony capitalist exercise.

You see, its not that certain politicos are against monopoly, they are just against “private monopoly”.

　

　

　

　

　

Keystone Pipeline Decision: Environmentalism or Crony Capitalism?

This week Mr. Obama put off a decision on the Keystone pipeline until after the 11/2012 presidential election. That somehow, some way unresolved environmental items existed.

‘Obama said in a statement that he supports delaying a decision.

“Because this permit decision could affect the health and safety of the American people as well as the environment, and because a number of concerns have been raised through a public process, we should take the time to ensure that all questions are properly addressed and all the potential impacts are properly understood,” Obama said.

“The final decision should be guided by an open, transparent process that is informed by the best available science and the voices of the American people. At the same time, my administration will build on the unprecedented progress we’ve made towards strengthening our nation’s energy security, from responsibly expanding domestic oil and gas production to nearly doubling the fuel efficiency of our cars and trucks, to continued progress in the development of a clean energy economy."‘ (1)



Put aside for a moment the politics of environmentalism. Also put aside drill, drill, drill politics for a moment. View the Keystone decision in crony capitalism terms. More specifically think in “crony capitalism market terms“:


(1) crony capitalism, in and of itself , is affected by market forces,


(1a) one market force is: although economic rent seekers want to insulate themselves from markets, competition, and actual profitable productive endeavors, that in fact crony capitalist compete among themselves for taxpayer dollars e.g. wind vs. solar, solar vs. bio-fuels, wind vs. ethanol, and so on.


(1b) a second market force phenomena is the unsubsidized entities or minor subsidized entities [in this particular case coal, natural gas, and oil] are constantly butting up against the wall of insulation crony capitalists crave/enjoy. (2) (3)


Was/is the Keystone decision merely Obama and his ilk’s purposefully protecting their purposely created subsidized crony capitalist market of wind, solar, bio-fuels, and ethanol against the much less subsidized and more free market oriented energy producing items?


Did the crony capitalist competitors of wind, solar, ethanol and bio-fuels come together to oppose Keystone to protect their greater crony market (regardless of internal crony competition for tax dollars)?


Now put this proposition into action. If Keystone was approved you have twenty-some thousand well paying jobs immediately created with say one hundred thousand spin off jobs created in increments over time [some estimates of job creation are higher]. The energy market becomes more competitive as less costly oil can be delivered to refineries. Hence we have a no or low subsidy item creating actual profitable production and intensifying competition. The entire phenomena of Keystone puts pressure on the highly subsidized, non-productive endeavors of wind, solar, bio-fuels, and ethanol. In the main, Keystone is about competition.


The other item is the actual long term private sector jobs created by Keystone for all to see vs. the declining employment, bankruptcies, etc. of the subsidized wind, solar, bio-fuel, and ethanol propositions.


Therefore Keystone’s delay may not be about environmentalism,  it may be about crony capitalism. By politicos through the mechanism of government distorting markets, benefits accrue to the crony capitalist. Stated alternatively , limiting competition rewards the purposely built crony capitalism constituency base of the politico.

Note: its long been lamented that the Department of Energy (DOE) in conjunction with the Environmental Protection Agency (EPA) have never come up with a low cost energy plan. That is, after decades and decades where is the “energy plan”? One might ponder that the lack of an energy plan may if fact be purposeful. That no plan exists as the DOE and EPA are merely conduits, pipelines if you will, for crony capitalism within the energy sector.

Notes:

(1) Obama punts Keystone XL pipeline, Politico, 11/10/2100 http://www.politico.com/news/stories/1111/68089.html

(2) Crony Capitalism
http://dangerousintersection.org/2011/10/16/crony-capitalism-defined-by-a-libertarian/

http://www.answers.com/topic/crony-capitalism

(3) Economic Rent Seekers

http://www.econlib.org/library/Enc/RentSeeking.html