Belmont Club

Squaring the Circle

Unless Canada, that most pacific of North American nations, is restrained, then life on earth as we know it may be finished.  The Washington Post reports that “in May, environmental writer and activist Bill McKibben — pondering a simmering energy issue — asked a NASA scientist to calculate what it would mean for the Earth’s climate if Canada extracted all of the petroleum in its rich Alberta oil sands region.” The answer was blunt. “It is essentially game over,” wrote James E. Hansen, who heads NASA’s Goddard Institute for Space Studies: “It would push atmospheric carbon concentrations so high that humans would be unable to avert a climate disaster.”

That great danger according to environmentalists, makes it essential to prevent a pipeline from being built from Alberta to the Gulf Coast. But the arrest of environmental protesters at the White House has raised the question among Democrats: how could they be arrested? On whose side is Obama on?

Charles K. Ebinger, a senior fellow for energy at the Brookings Institution, said the issue has “become a test case for the Democrats,” with two factions within the Obama camp asking the same question: “Is he with us or against us?” …

Lawmakers on both sides wrote to the administration. While dozens sent letters supporting the project, 50 Democrats wrote to Secretary of State Hillary Rodham Clinton on June 23, 2010, to complain that the department’s draft environmental impact statement failed to take into account the full climate impact of shipping crude from the oil sands.

Why is the President, who famously promised the oceans would fall, even thinking about approving the pipeline? The answers is politics and money.  When the unions heard about the project, they saw nothing  but the prospect of jobs for their members, and weighed in FOR the pipline. And sure they’re all for snail darters and little boidies and such, but when it comes to jobs they are dead against the environmentalist opponents of “dirty oil from Canada”.

In September 2010, four unions — the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada; the Laborers International Union of North America; the Teamsters; and the International Union of Operating Engineers — reached a tentative project labor agreement with Trans­Canada to build the pipeline, which is now finalized. They say the project will directly generate as many as 20,000 high-wage jobs for their members.

“It doesn’t cost the government two cents,” said United Association General President William P. Hite, whose union represents plumbers and pipefitters in the United States and Canada. “We promote it every chance we get.”

Money has a way of setting members of the Big Tent at sixes and sevens with each other.

The President has similar problems with Wall Street. He was for Wall Street before he was against it.  Ann Lowrey at Slate catalogs the former amicable relationship between the President and the Masters of the Universe. “Just three years ago, he was Wall Street’s favored candidate. After being elected, he helped bail them out. He stopped Congress from going after their pay. He rejected proposals for radical reforms like breaking up the biggest banks. You would think Wall Street would give Obama a big Christmas bonus this year.”  But now they’ve turned against him because his administration turned out to be bad for business — including their business.

Perhaps Wall Street hates Obama because Wall Street is doing terribly—and everybody blames the incumbent when the economy turns sour. The big investment banks are hardly broke—they remain, for the most part, profitable enterprises. But they are not thriving in the way they were a year or even six months ago, and they are dropping employees and slashing bonuses as profits tumble.

Wall Street is turning out to be a political liability for the President too. They are widely seen as having received a bailout from government, evading pay cuts and successfully resisting radical reforms. In a word they are hated for all the things Obama has given them. And since the President needs someone to blame for the things Wall Street is blaming him for, who better than “Occupy Wall Street”, whose lack of hygiene is matched only by their lack of wits, to send against them?

These nasty preliminaries and public skirmishings may only be a prelude to an amicable settlement.  For if money is the source of discord in the Big Tent it is also the engine of reconciliation.  Activists are in their own way like cats: “one never knows when listening to them whether they are fighting or making love.”  The reason they are fighting is probably to set up the reconciliation. The vast sums of money that “dirty Canadian oil” will generate may eventually convince the environmental lobby to relent — the right combination of payoffs and tacked-on regulations will ensure that. And by Spring 2012, when elections are in the air and campaign money is short, perhaps even President Obama will have rediscovered his fondness for his old donors.

The people on earth today are blessed to be living in a global but Mixed economy. For eons men have faced the problem of how to provide a free lunch. In Socialism everything is free but there is no lunch. In Capitalism there is lots of lunch but none of it is free. The solution is to mix the two.  In that way part of society can make lunch while the other part can give it away for free. And there we have it: the free lunch. “No drilling! Where’s my free schooling! No power plants! No blackouts!”  That is certainly better than the old Soviet system where the socialist economy manufactured nothing and the socialist state distributed it for free.

Loretta Napoleoni of Cambridge University’s Judge School of Business believes that Communism saved itself when it discovered how to levy taxes on profits.  “Retrospectively, she says, Marx won, Mao won and Deng won, too. The West lost. The world now awaits the imminent collapse of capitalism and the triumph of communism. What happened? The profit motive, she says, saved communism. Had the Soviet Union embraced profits, Lenin and Stalin could have gone down in history as winners, too.”

The problem with the old style of Communism is nobody made anything and there was nothing for the Party to tax.  Today the Caring Ones have a much more nuanced relationship with capitalists.  They can keep breathing so long as they know how to keep coughing it up, and when they start to forget — well there are the “Occupy” chumps to remind them.

One difficulty with Napoleoni’s theory is that the Caring Ones may not know when to stop. They may want to spend more than the capitalist economy can sustainably produce.  That would manifest itself in ever-increasing levels of debt based on struggling system that can only be kept alive by stimulants. If that sounds surprisingly like today’s welfare state then all resemblance to persons living or dead are purely coincidental.

Did Communism win? Well, it’s clear who lost. Under the new mixed system the only persons guaranteed to lose in any case are the taxpayers — of whom Ronald Reagan once said, “that’s someone who works for the federal government but doesn’t have to take the civil service examination.” Unlike the unions and boidies and the Masters of the Universe, they have not yet found an effective way to fight so that someone — anyone — respects them.


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