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The National Paycheck


The Dow noticed it.  It wasn’t just the fact that Obama stated that we were going to crack down on those corporate CEO’s, in effect stipulate more than stimulate the large Wall Street Concerns.  It wasn’t simply that the government was going to begin to closely monitor the behavior of those corporations that made the Dow start diving as he spoke.  It wasn’t even the fact that the President’s power grab and effort to consolidate some activities formerly supervised by the Congress was even objected to by a prominent member of his own party, Senator Byrd.  It was also the fact that any thought of offshore drilling, or any oil drilling for that matter was never mentioned.  He spoke of clean energy and energy renewal.  He spoke in general platitudes guaranteed to please the average listener about how we would pioneer renewable energy efforts,  but in reality his energy decisions amount to this:  he has reversed the Bush decision to drill in Utah, and catered to the left by staying far away from any notions of new offshore drilling.  Wind and solar energy are a very distant hope for a real yield, and building electric cars that can take advantage of this New Clean Hope would be a 20 year conversion that wouldn’t even begin for 5 to 10 years.  Natural gas is a logical choice for future energy, but you have to drill for that in about the same places you have to drill for oil.


It’s not just the paychecks of individual Americans that are at risk.  It’s the national paycheck.  We all know that you can go around your house, swapping out light bulbs, tightening leaky faucets, and putting insulation strips in the door jambs, but unless you can bring home a paycheck, none of that matters.  You can only live on borrowed money so long.


We’ve been borrowing our fossil fuel energy from foreign countries to the tune of 750 billion dollars a year.  That’s not earning a paycheck.  That transfer of wealth ends up resulting in the transfer of shares in America: mineral deposits, beef, lumber rights, stock in corporations.  When dollars change hands,  power changes hands.  So what’s the paycheck?  Our energy resources are the paycheck – natural gas, coal, crude, wheat, corn barley… 


But never fear!  We’re going to grow our own clean energy!  We’re going to put up windmills, and make ethanol from corn.  Hmmm.  ….. but that will be cutting down the paycheck, because we sell our corn.  Also, ethanol is highly subsidize by tax dollars, so it doesn’t really represent a gain at this point.  (It will if we can get environmentalists to let us harvest switch grass.)  Also, we traditionally have used our excess grains in exerting global influence.  It’s part of our diplomacy.  That’s the carrot.  The fact that Egypt and Israel are both recipients of our excess wheat and corn has helped maintain a useful relationship in both cases with great payoffs in helping to maintain Mideastern stability.


Renewable clean energy is on the horizon, and it will become more and more necessary, but what I saw is the same thing other investors saw.   There isn’t a viable bridge to get there.  The concept of finally tapping into our great fossil fuel reserves before they are siphoned off by China drilling 50 miles outside of our waters, and using them to stem the tide as we are debugging this new program of fuel cells and solar cells, wasn’t even presented.  What the president doesn’t say is as carefully listened to as what he does say.


Maybe the average person can be fooled, and I say maybe.  Maybe zombies who will follow a political leader into purgatory will be fooled.   Maybe Congress with its big credit card and papers already in order to apply for a second mortgage on the country was fooled, or didn’t care….  but tick by tick, word by word, the Market wasn’t fooled.


-John P. Schumake





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