Hillary's Big Tell

Hillary’s Big Tell

The View from the Middle

Just out of curiosity, I looked up the definition of a “Freudian Slip” the other day, and here’s what I found.  It is “An unintended error in speech or writing that reveals a person’s real intentions - OR – When a politician accidently tells the truth and reveals his or her true motives.”  OK, I added the “politician” part, but it really makes sense doesn’t it.  And my timing was impeccable, because Hillary had a whopper of a slip earlier this year. 

Here’s what Hillary said, “We’re going to put a lot of coal miners and coal companies out of business.”  She didn’t say that the coal business was dying of natural causes.  She said that, “We are going to put coal companies out of business.”  Oops, the truth slipped out.  And I know it's the truth because that statement is very consistent with what Barack Obama has been saying for years.

Mr. Obama said, “If someone wants to build a coal powered plant, they can.  It’s just that it will bankrupt them because they are going to be charged a huge sum for all of the greenhouse gas that’s being emitted.”  He has also said, “Under my cap and trade system, electricity rates would necessarily skyrocket.” 

Notice that neither Hillary nor the President said that coal companies would go out of business because it is getting too expensive to get coal out of the ground.  They implied that they would destroy them through governmental regulations, fines and taxes.  The good news is that at least the truth is out, and now we can deal with it.  Hillary Clinton will try to destroy the coal business, and eventually the oil business if she gets the opportunity.  Should we be doing that?  The short answer is “No”!

First, we should be thanking God that he has blessed the United States with the bountiful recourses we have.  We have more coal than Saudi Arabia has oil.  We have more oil than all of the Middle East countries combined and natural gas may be our most abundant resource.  Thank you, God, and these are the resources that have fueled our industrial growth for at least the last 200 years. 

I’m also a big fan of renewable energy, especially the sun.  Did you know that the sun puts down more energy in an hour than the world consumes in a year?  But unfortunately, we haven’t figured out how to effectively and efficiently convert that power to a usable form.  Today, solar power only accounts for about 1% of the US electrical power.  I’m confident that we’ll figure it out, but it’s not ready to shoulder the power needs of our country today.  So how should we proceed?

There is a natural process called “creative destruction” that has fueled capitalism from the beginning.  Creative destruction is the ceaseless churning of the free market as old businesses and industries are replaced with new more productive and efficient ones.  The really good news is that our total society benefits through better products, shorter workweeks, better jobs and higher standards of living.  The fundamental role of government in this natural process is to stay out of the way. 

But that’s not what Hillary and Barack Obama want to do.  They want the government to step in and destroy entire industries with no realistic plan on how to replace them.  Let me give you an example of how creative destruction should work.  Back in 1768 Nicolas-Joseph Cugnot built the first car.  It was powered by steam, and at that time, virtually everyone in America got around by horse and buggy.  Over a hundred years later in 1886, Karl Benz made the first gas powered car and the horse and buggy were still king.  In 1908 there were only 8,000 cars in the US and there was only about 144 miles of paved roads, and the horse and buggy was still dominant.

Today, there are almost as many passenger vehicles as people in America (256 million in 2013) and we have over 2.5 million miles of paved roads, and the horse and buggy have been relegated to hobby status.  Slowly, over those 248 years, people who make cars slowly replaced the people who made buggies.  Today there are many more people employed by the auto industry, at relatively higher wages, and society has benefited tremendously from this transition.

What if our government had decided to place its heavy hands on the horse and buggy industry back in 1768 by over taxing it, over regulating it and applying punitive fines to it with the intent of destroying it?  Even if their intent were to accelerate the development of the automobile, it would have had the opposite effect, because that industry was not ready to satisfy the transportation needs of our country.  What if they had done it in 1886?  Same affect.  What about 1908?  Same.  We would have only retarded the development of the auto industry here and thus around the world.

With a wisdom that ran from Washington to Lincoln to Wilson to FDR, our government allowed the auto industry to develop at its own pace.  That is what we should be doing with the energy industry. 

We will eventually figure out how to convert solar and wind energy effectively and efficiently, but we can’t do that today to satisfy our energy needs, even with massive subsidies.  Punishing or destroying fossil fuel industries will not get us there faster.  In fact, it will probably retard the progress and punish the average American through job losses and higher energy costs. 

As usual, my recommendation is for the government to get out of the way and let the natural creative destruction process do its job.  Put money into research (NASA, MIT) instead of subsidies (Solyndra), which we can do at a fraction of the cost to encourage the process, but most importantly, GET OUT OF THE WAY!!