Grassroots Commentary

Here Comes the Boom

George Rogers Clark · Nov. 15, 2012

This is not about the new Kevin James movie by the same title. Somebody just said, “Shucks!” I understand, because I hear it is a really entertaining, “feel good” movie.

The subject is the coming economic boom precipitated by the coming energy industry boom that is bearing down on us like a fast moving freight train. It is not “Unstoppable,” but it is probably going to happen. An economic boom changes everything and it changes nothing.

There it goes again; I just heard voices. They are asking, “What energy industry boom?” By the time some finish reading this they will be convinced that I really am hearing voices and have surely gone off the deep end. But, I am not the only one who can see the probability of an energy boom.

Even a casual observer has heard about the new technologies making our vast reserves of shale oil and natural gas a marketable commodity. Soon, we will be able to export more energy products than we import. The projected profit margins are quite attractive. When the infrastructure is built to facilitate handling and transporting natural gas to markets in Europe and Asia the positive affects on many fundamentals of our economy could be dramatic, to say the least.

Let us review the history: Those of a certain age will remember the oil shortages, gas prices and associated loss of productivity of the 70’s. It was perhaps the first time we became conscious that the Mideast oil cartel had us in a headlock. It seemed likely that in time our growing dependence and their headlock would make things even worse. Indeed, things got worse.

By the 90’s and beyond, many Americans seemed to concede that the Mideast oil cartel held all the cards and we were forced to ante up upon their demand. Aided and abetted by the environmental lobby and profiteers pushing the environmentalists out front as cannon fodder, the foreign oil cartel continued to rape and pillage and supply terrorist groups with the funding they needed to do their dirty deeds.

Being further assaulted by the recent reelection of Barack Obama, some Americans can no longer see the light. One commentator wrote that it was the “end of civilization.” Certainly, in my view these reactions are extreme. Moreover, no battle is lost until everyone is dead or you give up. Conservatives are not all dead and we should never give up.

A new picture emerges: The technology to extract natural gas and oil from shale is not on the drawing board, it is in the field. It is real. It is now. It makes investors drool and opportunistic politicians feel a career power surge.

Our exports of oil are already increasing. Also, gas prices will soon be making stutter steps downward, followed by a more precipitous drop. Natural gas prices will surely fall domestically, that is good for our own manufacturing and transportation sectors. But the biggest plum may be natural gas exports. Building the infrastructure and exporting natural gas will likely be the mother of the energy boom.

From energy boom to economic boom: There will be investment wealth created by the energy boom. There will be energy industry jobs created. An increase in consumer spending will result from those jobs. Taken together, these factors will be more than enough to energize a general economic upturn. Turning a trade deficit into a trade advantage will help the financial condition and debt reduction of the nation. As the economy turns, investors will have other opportunities to reinvest their gains in energy into other markets and companies, speeding the creation of even more jobs. From there the momentum begins to build on itself and soon we could see an exponential curve on the economic chart. There you have it: a boom is a boom by any other name. Some people will think utopia has arrived.

One argument is this: Some have already started penning rebuttals saying Barack Obama will never allow an energy boom and does not really want an economic boom. I disagree. I think Obama wants to accomplish his agenda and if an economic boom would provide more tax revenue to the federal government to spend on that agenda, I think he would be just fine with that. I have not said everyone will agree with how he spends it. I just said he would use it to his advantage. Besides, it is hard to foresee how much of the boom will occur while he is in office.

Extending the perspective: Over the past several years I have often said that to solve our nation’s larger problems of debt, financial crises, wasteful and excessive spending, etc that we would have to have a near boom in the economy and at the same time reduce federal spending, starting with reducing the excessive size of the federal bureaucracy itself. Additionally, for the long-term I have said we needed a spiritual revival and the blessings of God.

However, let us now picture a real boom, a big boom, and consider the outcome. If we are rolling on the revenue side of the budget, do you believe Barack Obama, or any other administration will substantially reduce spending? I do not think so. Ronald Reagan was elected by landslides; twice. He addressed the nation’s people frequently. He convinced us to write letters to congressmen, etc. But, not even Ronald Reagan with all that support managed to get congress to reduce spending.

Clearly, in some ways a boom will change everything, and change nothing. I certainly hope we get that boom, because we surely need a break. I hope we become so successful that everyone with a charitable heart will be able to do more to help those who cannot directly benefit by the boom.

Now let us consider the flip-side: If you send a sailor to shore that is hell-bent on immorality and heavy drinking with $200 in his pocket, he might not survive the night. If you send him to shore with $50 in his pocket, he still might not survive, but at least you will have that other $150 in the bank. Perhaps it will do someone else some good.

And so it is with the public servants in Washington. Boom or no boom, we must prove to the political class that we will not tolerate waste and corruption as reasons to spend our money. Boom or no boom, we want statesmen working for the good of the people. We do not want wheeler-dealers working for the good of their own excessive lifestyle.

Unfortunately, some of what I observe today tells me that some of us, the people, are much like that drunken sailor. If we end up with more income, more this and more that, will we still allow government to rule us, or will we remember that we are the sovereign of this great nation? When we are rolling in cash and spending it fast, will we remember that neither booms, nor politics nor politicians will last forever? Will we work and prosper that we might be generous? Will we remember that our faith and trust belong first to the Lord? I hope so.

George Rogers Clark blogs at: Please visit.

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