Herman Cain - The Right Problems: What the President, Congress, and Every Candidate Should Be Working On

CHAPTER 4

THEN AGAIN, SOME THINGS JUST REQUIRE WILL AND WISDOM

Four Problems We Can Solve Quickly Just By Embracing Better Public Policy

The four problems in this chapter are actually easier to solve, because they dont require the government to do anything other than make some different decisions. I would contrast that with, say, balancing the budgetwhich is one of the problems discussed in the previous chapter. It has to be done, but its very difficult to achieve success. That s no excuse for failure; its just recognition of the nature of the problem. I think we could balance the budget faster than the political class thinks we could do it, but I know we couldnt do it overnight.

The items in this chapter, though, can be accomplished just by someone deciding to do them. In that respect, the reality of these problems is both hopeful and infuriating. Its hopeful because it demonstrates that so much of whats required to put the country back on the right track is truly within our power to do. Its infuriating because it demonstrates the degree to which the political class has put us in this hole simply by refusing to do the right things.

But we can be infuriated all day long if we want. This book is all about solving problems and stewing over inaction is not going to solve the problem. So lets choose to be hopeful and recognize that we have the power to achieve these solutions if we will just embrace the wisdom and the will to do it.

The next four problems are just begging for the right leadership to address them:

Achieving True Energy Independence and Security

You want to talk about a problem thats entirely of the federal governments making? This is it. The is absolutely no reason we should be dependent on foreign nationsespecially those not particularly friendly to usto supply us with the energy sources we need. America is rich with oil reserves, coal and natural gas. We are also more than capable of safely generating nuclear power.

We have the capacity to extract these resources, to refine them where necessary, and to distribute them throughout the country. We even have the capacity to make the whole enterprise highly profitable by exporting some of our resources across the globesuch that other nations are dependent on us for energy sources.

And all the federal government needs to do to make these things happen is change its policies. The market will take it from there and do the rest. The policies differ in that some are purely operating policies while others would require legislation to affect any change.

This is one of the right problems to solve for three crucially important reasons.

First, unleashing the full power of the energy reserves America has at the ready would dramatically and permanently reduce energy costs simply by virtue of its impact on supply. I realize that would also present a challenge for American producers in making a profit because they would have to sell at lower prices. But thats the nature of competition. Its how markets are shaped. The producers who can operate efficiently enough, and can provide the type of service consumers want, will be successful at the price range set by the market. Those who cant, will not. If you think about what you spend every month filling your gas tank, heating your home, powering your electrical appliances and devices then think about the impact of a major reduction in those costs. It would be like you got a raise or a tax cut. Now imagine the impact if everyone in America got that raise or tax cut, not to mention the fact that more of the money they do spend on energy would be going to American companies rather than overseas.

Second, a real American commitment to energy production on a massive scale completely changes the dynamic that has long existed between the U.S. and other oil-producing countries. And thats a good thing. It puts us in a stronger position in those relationships. It means we need them less and were in a stronger position to stand up for our interests. As it stands now, its difficult for us to stand up against some of the emirs and potentates in the Middle East when they support terrorism and abuse human rights, because we need their oil. The same is true of Venezuela, which is limping along with a socialist economy and jailing political prisoners. Its oil revenue is the only thing keeping that regime afloat and a lot of that money is coming from us because we have no choice but to buy what theyre selling. Thats insane. And keep in mind, bringing down global energy costs is also good for America because it weakens OPEC and other hostile nations who use jacked up oil prices to fund all kinds of thingsincluding terrorism, in many casesthat are counter to our interests. The only reason OPEC is able to set the market at willdeciding when to pull back on production and when to boost itis that we refuse to really get in the game to the extent we could.

Third, the potential for job creation in a truly unleashed American energy sector is enormous. And these wouldnt be make-work jobs like the ones politicians presume to create with shovel-ready projects and all that sort of nonsense. These would be permanent jobs that would give people the opportunity to do highly productive and very necessary work that creates value and wealth for the nation.

These are huge benefits and the potential to realize them is greater than everespecially now with the ascent of fracking. The technology to truly exploit our energy resources has advanced to the point where there is no longer even a plausible excuse (not that there ever really was) to resist the full-on pursuit of energy development in the United States.

Here are the policy changes the federal government needs to make in order to solve this problem and realize this vision:

First,cease and desist in the war on coal. Coal is the source of 40 percent of electricity in the United States, and weve got 500 years worth of it. Yet the Obama administration is trying to kill the industry in a foolhardy attempt to force us into using green energywhich currently only provides about 7 percent of our electricity needs.

Second, put the EPA on a leash, especially as it pertains to fracking. The administration has tried to scare people by implying that fracking is a threat to the environmenteven trying to blame it for earthquakesbut the truth is they have no data to back up their claims that fracking is a threat of any kind. And they know it.

Third, end the ban on oil exports. This was imposed in the 1970s during the darkest days of the oil embargowhen the government thought it would create an existential crisis if we let U.S.-produced oil out of the country. Like so many laws Congress passes, this stands today as a relic of a bygone era with no relevance to modern times. Let U.S. producers decide what to distribute domestically and what to export. That maximizes their economic power and maximizes the economic value of Americas natural resources.

Fourth, relax the restrictions on new refineries and distribution of oil and gas throughout the U.S. This aspect of the business is much more expensive than it needs to be because politicians put up every barrier they can think of to it.

Fifth, stop using unfortunate but very rare oil spills as an excuse to stop off-shore drilling.

Sixth, sell the federal land on which there are major oil reserves just waiting to be extractedbut for the inability of producers to get leases from the federal government. There is no reason the federal government needs to own these lands. Sell them to energy developers and put the money toward principal on the national debt. Or do something else useful with it. But dont keep the land sitting there vacant and unproductive when the private sector can be turning it into energy resources and wealth.