Two Sides to Every Dispute

Here’s is an interesting article which points out reasons why the Keystone pipeline was a bad deal all along. Of course this is contrary to Bob’s article and point of view expressed in his blog earlier today, but in an effort to be fair and balanced I thought it was worth posting. This decision was clearly not an easy one for the president.

If you don’t have time to read the article here is a brief recap.

TransCanada made it known that most if not all of the extracted and refined oil from the pipeline would be exported and sold over seas not kept in the United States.

Currently their are Canadian oil reserves stored in the midwest and part of the pipeline deal was that TransCanada could drain these reserves and export them which would raise gas prices in the United States especially in the Midwest.

The original TransCanada permit application stated there would be a peak workforce of 3,500 temporary jobs.

The current Keystone pipeline in Canada leaked twelve times last year.

Nebraska Republican Governor Heineman opposed the pipeline because the proposed route of the pipeline was to run through an aquifer in the state that supplies clean drinking water to 2 million Americans plus water for the agriculture industry. His reasoning was does it make since to create 3,500 temporary jobs when even a minor spill near the aquifer would jeopardize more jobs not to mention the health of the citizens of his state.

I’m not saying the pipeline is a bad idea, but I have no problem with the Obama administration taking their time to consider this project carefully. Have we already forgotten our frustrations watching video day after day of the Gulf Oil spill releasing oil into the ocean ?

The Keystone Pipeline And Lilliput

Today President Obama rejected a proposal to build the Keystone Pipeline. It is one of those decisions, I think, that carries a deeper message about our country, its leaders, and where we are headed.

The proposed pipeline would run 1,700 miles, carrying oil from Canada to the Gulf of Mexico.  It was opposed by environmentalists, who hate the idea of a pipeline crossing the heartland and argue that it would invade sensitive environmental areas in Nebraska.  It was supported by business and labor unions, who say it would be like a colossal public works project — except the $7 billion cost wouldn’t be paid by the government, but by the company that wants to build the pipeline.

The pipeline issue posed a difficult political choice — so the Obama Administration punted and blamed Congress.  The State Department said that the denial was due to Congress imposing an unreasonable 60-day deadline on the Administration’s decision on the project.  Congress, of course, says the 60-day deadline was necessary because the Administration was dithering and proposed to delay any decision until after the 2012 election.  The story linked suggests that the Administration’s decision today was motivated by various carefully weighed political considerations.

The deeper message, I think, is that we increasingly seem to be a country that can’t get things done.  In my view, approving the pipeline makes sense.  It would create lots of jobs during these tough times.  It would inject huge sums into our economy.  It would allow us to get more oil from a safe source, rather than relying on oil from more volatile areas of the world.  Given Iran’s latest saber-rattling talk about closing the Straits of Hormuz, the latter point may be the most important point of all.  (And don’t talk to me about focusing on alternative renewable sources of energy — the reality is that we need oil now and will need it for the foreseeable future.  Our energy needs aren’t going to be met by the magical ministrations of Tankerbelle, the petroleum fairy.)

Obviously, environmental issues must be considered in deciding where the pipeline should go — but why should they quash it altogether?  It already is designed to run through the sparsely populated  central region of the United States.  We need to remember that we live in a country that is criss-crossed and tunneled through with pipelines, power lines, generators, underground storage tanks, highways, railroad, and other delivery systems.  I’m confident that the experts can find an appropriate location for this pipeline and install the protections needed to make it as safe as is reasonably practicable in an uncertain world.

America used to be fabulous at this type of massive project, like the transcontinental railroad, the Hoover Dam, the Panama Canal, or many others.  Those projects had broad political support because they promoted development and commerce.  Does anyone doubt that Democratic Party icons like Franklin Roosevelt, Harry Truman, and Lyndon Johnson would approve this pipeline?  Conversely, does anyone think the interstate highway system could have been built so speedily if the current regulatory morass that has grown up around consideration of environmental issues existed in the ’50s and ’60s?  Consider that, the next time you drive on our interstates and see the hills that have been sheared off or tunneled through so that you can get from point A to point B at 65 mph.

So now we’ll wring our hands, and hire consultants, and do impact studies for months and years more — all the while leaving people without a job unemployed when they could be working, leaving our economy moribund when it could be helped, and leaving our reliance on energy from volatile regions unchecked when it could be reduced.  Does any of that really make any sense for our country?

America has become like Gulliver, the slumbering giant tied down by thousands of Lilliputian restraints and political considerations and regulations and standards and policies and statutory notice and comment requirements, to the point where it is unable to move.  We need to break those ties and start moving again.

Capitalism 301 (And The Food Network)

If, like Kish and me, you like to watch The Food Network from time to time, you’ve been exposed to capitalism at its very essence.  Whether it is Diners, Drive-Ins and Dives, where great food made from scratch earns raves and steadfast loyalty from customers, or the latest competitive cooking or baking show, or Restaurant Impossible, where the host tries to rescue a failing business every show, viewers of The Food Network regularly see how capitalism works.

Restaurant Impossible is a good example.  Each episode, chef Robert Irvine takes his bulging biceps to a new restaurant that’s on the skids.  In short order, he finds out why the place has one foot on the banana peel.  The food is slop.  The service stinks.  The decor is dreadful.  The owner doesn’t know how to keep the books or otherwise run a successful business.  The kitchen is a grease-laden horror story.  The cooking staff doesn’t even know how to properly chop vegetables.

The viewer quickly understands why the marketplace has spoken and the business is doomed.  Irvine, however, injects $10,000 and effort into the venture and tries to turn it around in two days.  The place gets redecorated.  The menu gets changed.  The staff gets trained and a kick in the butt, besides.  The owner gets schooled on basic business and finance principles.  And, quality and the importance of serving hot, tasty, attractively presented food in a pleasant setting are emphasized and re-emphasized.  After two days the place reopens to rave reviews and we learn how the business fares over the next few months.

In short, Irvine and his team are like the Bain Capital of the restaurant sector of our economy.  They don’t get an equity interest in exchange for their investment of time and money, but the principles of what they are doing is the same:  figure out why a business is failing, decide how to fix the problems, and then spend the money and time necessary to try to turn the business around.  In the real world, unlike on Restaurant Impossible, sometimes the turnaround can’t be achieved.

Restaurant Impossible is a weekly, one-hour lesson in business basics and the “invisible hand” at work.  Adam Smith — and probably Mitt Romney, too — would be proud.

Capitalism 101

Capitalism 201

Hunger Games – May the Odds be Ever in Your Favor

Last Friday night a friend from work (thanks Ashley) let me borrow her copy of The Hunger Games, the first book in the Susan Collins trilogy and I had finished it by Sunday night. I literally could not put the book down it was that good.

The story takes place in a post apocalyptic world where North America is no longer the United States of America, but a place called Panem. Panem is made up of the Capitol which houses an oppressive government and a ruling caste who live in luxury, while the rest of the country is broken down into twelve districts where the people live as peasants doing mostly hard labor jobs barely making enough money to live on much less eat.

Annually as punishment for a previous rebellion by the districts against the Capitol a lottery or draft is held in each district. All children’s names between the ages of twelve and eighteen are included in the draft sometimes more that once and two – one boy and one girl are chosen from each district to participate in a fight to the death in a Capitol controlled setting.

The story revolves around a girl Katniss Evergreen a sixteen year old who is from District 12 – currently Appalachia and she volunteers to take the place of her younger sister Primrose who is only twelve and whose name was drawn in the lottery. Katniss is forced to find a way to survive not only the other participants, but thirst, hunger, fire and wild animals.

I’m not sure if it was the author’s intention, but while reading the book I couldn’t help but think about the current class warfare debate that is going on in the country and how this book points to some of the issues of what it’s like to be poor and disadvantaged.

I would definitely recommend the first book and I think my niece Amy would too !