Editor’s note: Thomas G. Del Beccaro is the chair of the California Republican Party. Del Beccaro is also an attorney, publisher of PoliticalVanguard.com, a Forbes columnist, author of “The New Conservative Paradigm” and frequent radio talk show guest.
Energy. It is the lifeblood of economics and in this age of international trade and connectivity, the energy policy of the United States has ever-larger implications. Our decades-old policies: drive up the costs of energy, slow the economy, grow unemployment, include business and consumer subsidies and increase our deficits. They also drive up our defense costs and are leading to more world pollution. There likely is no worse set of long-term policies than our energy policies and we must change them.
There is no example in history of a super power that systematically denied itself of its natural resources. Nor has history been a witness to a super power that allowed itself to be so dependent, for a critical commodity or product, on those that mean to do it harm. Today, the United States does both.
Our state and federal policies actively and significantly restrict our ability to access our own energy supplies even as we subsidize countries like Brazil to access theirs.
In denying ourselves such access, our policies:
1) force Americans to pay artificially higher energy prices while we reduce our own supply of energy, and the refineries needed to process it,
2) reduce the size of our economy because higher energy costs reduce purchasing power and business investment, and
3) reduce the number of Americans working because, as North Dakota has proven, there could be an abundance of high paying jobs in energy if only we accessed it.
Those drags on the economy mean:
4) that more people are unemployed and receiving unemployment checks which drives up the cost of government,
5) that we have reduced employment and the reduced size of the economy ??? both of which means less government revenues, and
6) those higher energy costs result in higher government subsidies, such as home fuel subsidies, which drive up government spending, all of which
7) drives up deficits and government borrowing from places like China.
If we sensibly changed our energy policies, we could unravel all of those bad economic effects and, instead, catapult our economy forward with more jobs throughout our country in hard-hit places like California, Colorado and more.
As bad as those policies are, however, we need to focus on how dangerous they are — both from a matter of national defense and from an environmental perspective.
In no uncertain terms, our flawed energy policies make the world a far more dangerous place. By artificially increasing the price of all types of energy, the United States has dramatically increased the amount of money that Iran and Saudi Arabia make off of oil production. Both subsidize enemies of world peace including Hamas, Hezbollah, Syria, Iraq before the Gulf Wars, al Qaeda and others — not to mention the threats posed to Israel. The high price of energy has inflated the Middle East???s strategic importance and no one can seriously argue against the fact that, all combined, higher Middle East strategic importance has led to dramatically higher U.S. defense costs.
If we changed our policies sensibly, we could lower the strategic importance of the Middle East, defund those that would do us harm and therefore lower our defense costs over time.
That is not all — our energy policies are also environmentally endangering the world. The policies of the EPA and states like California greatly reduce domestic energy production, as well as manufacturing, and drive it off-shore all in the name of a cleaner environment. The result, however, is quickly becoming the opposite. For instance, California???s Global Warming law, AB32, is driving manufacturing jobs to places like China. Obviously, China has far less regard for clean air than either California or the Unites States as a whole.
As a result, China is polluting the world in amounts that turn our so-called green efforts upside down. That pollution doesn???t just hover over China. Scientists have shown that it is making its way to the United States. California and the World would be far better off with a sensible regulatory process that preserved jobs at home and prevented pollution aboard.
Finally, it is worth mention that our own Federal Reserve is only making matters worse. By devaluing our dollar through quantitative easing, i.e. printing money, the Fed is driving up the price Americans are paying for all goods including foreign energy.
All in all, our energy policies, now decades old, are perhaps our worst policies. If we don???t change them now, not only will our standard of living continue to fall, the world will be a far more dangerous place.