Senator John Thune thinks that 65% of Americans want the Keystone XL pipeline. Maybe 65% of Americans say that, but that "support" may signal that they don't understand the real effects the pipeline would have.

Consider this subsequent poll that finds that 77% of Americans support restrictions on oil exports if those restrictions help keep domestic gasoline prices down. The absence of Keystone XL is a significant practical export restriction. As we've discussed here numerous times, TransCanada's business case for Keystone XL is to make more money by clearing the North American glut, pushing its oil out to China and other global bidders, and raising our gasoline prices here in America.

People who support Keystone XL may operating, like Rep. Kristi Noem, under the hopeful assumption that a new pipeline means new oil for us and cheaper prices at the pump. But TransCanada's last big pipeline project produced no such result.

You and I don't stand to benefit from the Keystone XL pipeline. But the Koch Brothers do:

The biggest lease owner in Canada's oil sands isn't one of the well-known international oil giants. It's a subsidiary of Koch Industries, the privately owned cornerstone of the fortune of conservative Koch brothers Charles and David.

The Koch Industries subsidiary holds leases on 1.1 million acres — an area nearly the size of Delaware — in the oil sands region of Alberta, Canada, according to an activist group that studied Alberta provincial records.

...[T]he International Forum on Globalization... is arguing that Koch will benefit indirectly. The IFG contends that the Keystone XL pipeline will create competition among rail and other pipelines and lower transportation costs for all oil sands producers, bolstering profit margins and making additional reserves economically viable [Steven Mufson and Juliet Elperin, "Koch Brothers' Quiet Play: Oil Sands," Lincoln Journal-Star, 2014.03.22].

Once again, Senator John Thune and the Republican Party put the interests of Big Oil over the economic and environmental interests of South Dakotans. Thanks, John!

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Rick Weiland makes clear he's my kind of Democrat. In a March 10 interview with Tasiyagnunpa Livermont on the Cheyenne River Sioux Reservation, Weiland says that, polls be darned, he opposes the Keystone XL pipeline:

Weiland says proponents are exaggerating the domestic energy and jobs benefits:

The problem I've got with the Keystone piepline as its been proposed is that it's an export pipeline. Very little if any of the oil, tar sand oil, that's going to be coming through South Dakota is going to stay in the United States. Most of it's going overseas.

The other thing you hear about too is that it's supposed to create all these jobs, and... the last report I read, which was put out by the Government Accounting Office... basically says we're talking about 35 full-time jobs, permanent jobs, and we don't even know how many of those are going to be in South Dakota, and the 2,000 that its going to take to build the pipeline, those are temporary jobs.

The oil that's going to be shipped is really not going to contribute to our energy independence. And the jobs? It's not a jobs bill. Those are the two things that the proponents, the people that want to build Keystone are focused on, and... from the research I've done, that's just not the case.

So what you end up having... is an awful lot of risk associated with the construction of this and the potential for impacts on the environment and very little reward, and that's why I'm opposed to it [Rick Weiland, interview with Tasiyagnunpa Livermont, Cheyenne River Sioux Reservation, 2014.03.10].

With such illusory benefits, South Dakota and the United States wouldn't really receive compensation for the significant risks Keystone XL would bring to, for example, the Ogallala aquifer:

...You look at what it takes in terms of the extraction of the oil and the energy that is consumed to do that, the transportation... they have to heat the tar sand up so it becomes almost liquefied, through a pipeline that crosses over precious water resources like the Ogallala and the potential for the damage that could occur, and the fact that we're not really getting anything for taking on that risk. I think that in and of itself is reason not to build it [Weiland, 2014.03.10].

Only demerits here: Weiland skips the part of Livermont's question about Keystone XL's crossing of Indian treaty land. Our Lakota neighbors are ready to wage war on the pipeline, in part because they contend TransCanada and the federal government have not sufficiently consulted with them in the permitting process. The bogus claims of jobs and energy independence are headline issues, but Keystone XL opponents should never miss the chance to build allies on the reservation and to remind all of us that TransCanada is pushing Keystone XL in ways that perpetuate centuries of abuse and neglect of Native interests.

But Weiland's explicit opposition to Keystone XL at least makes clear the door is open to the conversation about treaty rights, not to mention the property rights that South Dakota courts have surrendered to the foreign pipeline profiteers at TransCanada. This opposition is also one more sign that Weiland is willing to challenge big money when it acts against the best interests of South Dakota.

71 comments

Lynne Hix DiSanto and other red-meat Republican candidates call for "no deficit spending." Rep. Kristi Noem makes the deficit the centerpiece of her public slideshows. Yet that budget absolutism hamstrings Republicans' ability to focus on solving more urgent problems, like unemployment.

Texas economics professor John T. Harvey points out the irrefutable accounting fact that a public sector deficit is a private sector surplus:

...when the public sector spends in deficit, it is by definition a surplus for the private sector. If the government spends $500 more than it taxes, then it must be true that the private sector earned $500 more than it was taxed. Period. This is an inescapable accounting identity [John T. Harvey, "Four Reason's You Should Consider Washington's Deficit as Your Surplus," Forbes.com, 2014.02.24].

I know, it sounds like magic money, but as we've discussed before, macroeconomics doesn't follow the rules of kitchen-table bookkeeping.

Harvey refutes deficit-hawk inflation fears by pointing out that the two biggest post-World War II deficit binges, under Reagan and Obama, were accompanied by low to mild inflation, not wild price explosions. He says that deficit reduction should be a much lower priority than job creation:

...there is absolutely no reason to be discussing deficit/private sector income reduction with unemployment at 6.6%. We are a long way from full employment and firms and consumers remain rightly hesitant to increase their spending sufficiently to address this problem. Yet, while the government is in a perfect position to do so, both parties’ ignorance of economics and accounting has served as a major roadblock in generating jobs and income in the private sector. This is not to say that all deficits are created equal. There are most certainly good and bad ways to spend, just as there are good and bad ways to administer first aid to an accident victim. But, that the victim needs first aid is not an open question [Harvey, 2014.02.24].

Lynne Hix DiSanto hasn't floated a jobs plan yet. Rep. Kristi Noem has yet to pass a jobs bill in Congress. They should read Harvey and realign their priorities.

7 comments

The good news: Only 4.7% of South Dakota's hourly workers are making minimum wage or less. That percentage is higher  in Wyoming, Nebraska, and Iowa. Passing the initiated measure to raise the South Dakota minimum wage should thus not hurt too many employers.

The kinda bad news: That percentage is lower in Minnesota, North Dakota, and Montana.

The kinda worse news: The median wage in South Dakota, $12.78, is lower than the median wage in 31 states. Every state on our borders has a higher median wage.

The worst news: according to the ACCRA Cost of Living Index averages for 2013, South Dakota's cost of living isn't much different from North Dakota's or Minnesota's, and it's notably higher than Iowa's and Nebraska's. Factor in cost of living, and half of the hourly in each of our neighboring states have significantly more purchasing power than half of the hourly workers in South Dakota.

cost of living 2013 median wage MW/COLI
IA 92.1  $    13.10  $    14.22
MN 101.9  $    14.31  $    14.04
MT 98.4  $    12.96  $    13.17
ND 99.9  $    14.59  $    14.60
NE 89.5  $    13.02  $    14.55
SD 99.6  $    12.78  $    12.83
WY 96.7  $    14.24  $    14.73

What's that again, Bruce Yakley, about why you're having such a hard time hiring workers in Mitchell?

14 comments

Following the reëlection of President Barack Hussein Obama, various captains of industry vented their grief by asserting that they would not be able to do as much business as they would have if that man of their own stripe, Mitt Romney, had won 334,000 more votes. For instance, Bruce King, CEO of Trail King in Mitchell sour-grapesily moaned that he would have hired 150 more people if Romney had won.

More than two years later, Yakley finally throws out his sour grapes and admits that he's hiring every good worker he can find. The problem is that that darned Obama economy is expanding faster than he can recruit:

Trail King President Bruce Yakley has seen his company consistently struggle to fill skilled positions, such as welders, needed to keep up with demand for its products. Yakley, who started at Trail King in March 2011, said he knew within two months that workforce was going to be an issue.

"The experience has been frustrating, to say the least," Yakley said in an interview this week with The Daily Republic.

The trailer manufacturer, with locations in Mitchell and West Fargo, N.D., cut nearly two-thirds of its workforce during the recession. When the company looked to expand in a burgeoning economy in 2012, the workers weren't available.

"We lost a lot of business because we couldn't ramp up fast enough," Yakley said.

The company's Mitchell plant currently employs approximately 550 people, up at least 30 employees from last year, according to Yakley.

Trail King is still looking to expand, but to meet its goals the company will have to hire as many as 200 skilled laborers in the next five years, Yakley said.

"We are definitely still in need of workers" [Chris Mueller, "Help Wanted in Mitchell," Mitchell Daily Republic, 2014.02.21].

The relative dearth of young workers compared to baby-boomer retirements and the challenge of convincing people to move to Mitchell are putting Trail King in a hiring bind, not the victory of President Obama. Contrary to the theme of Romney's Republican-capitalist campaign, Yakley continues to call for more government help for his fortunes:

A long-term solution to the state's workforce shortage won't come from just one source -- it will require cooperation from local communities and state government, Yakley said.

"We need to work as a region on this problem," he said [Mueller, 2014.02.21].

Yes, Yakley and the rest of us all hate government until we want something from it.

By the way, Obamanomics have unemployment declining, the stock market surging, growth projections rising, and things look a lot better for Yakley and friends now than they did at the end of the Bush Administration:

Obama Economy 2014

Pesky facts, indeed.

22 comments

Hard-core conservatives call Speaker Boehner's cooperation with Democrats in passing a no-drama, no-strings increase of the debt ceiling "complete capitulation." Rapid City blogger John Tsitrian calls it a pragmatic recognition of the best way to cut deficits:

...increase revenues, people. In this case that translates into keeping an economy thriving and growing so that businesses and individuals have continually growing incomes from which continually growing taxes can be received. How on earth is the business sector of our economy supposed to thrive when it constantly fears talks of budget stalemates, government shutdowns, and U.S. Treasury defaults as a backdrop for their day-to-day spending and investment decisions? These showdowns cost money, and money is just what the federal government needs in order whack away at its deficits [John Tsitrian, "Sez Reality: 'I Bite!' Sez Kristi Noem: 'Ouch!'" The Constant Commoner, 2014.02.15].

Tsitrian offers biting words for Rep. Kristi Noem, who once again voted for economic chaos over fiscal responsibility. Tsitrian's descriptors of Rep. Noem include...

  • cognitively disconnected
  • ridiculous
  • right-wing anarchist
  • stupid
  • immature
  • selling us out
  • failure

...and that's in just one blog post.

The Powers commentariat would label such language Noem Derangement Syndrome. I'd label it an honest assessment of Noem's job performance from a disappointed Republican businessman.

6 comments

The Mitchell Daily Republic almost gets the Keystone XL pipeline. In this morning's editorial, the paper acknowledges that burning Canadian tar sands oil makes a messier planet. They admit the jobs created by the pipeline number only 2,000 and will last only a couple of years. (Remember: investing in water and gas infrastructure would create more jobs and do more good.) They acknowledge that China and India are driving demand and that Alberta's oil will be distributed around the world.

But the Mitchell paper still tangles itself in imperfection and says it's time to build the pipeline:

A recent report by the U.S. State Department highlights the jobs the pipeline would produce and characterizes its environmental risks as effectively neutral. Republicans and Democrats are joining across the aisle in support of the project.

It's time to stop haggling and let it happen [editorial, Mitchell Daily Republic, 2014.02.12].

Never mind that the State Department got its Keystone XL report from folks who've worked for pipeline builder TransCanada. Never mind that we are not obliged to give in to other countries' energy demands at the expense of our environmental security. Never mind that the southern leg of Keystone XL is already raising oil prices and that the pipeline through West River will raise them more. We just shrug our Midwestern shoulders and give in to a bad idea, hoping someday, somewhere, someone will invent something better and clean up the mess we chose to make.

We can do better, MDR editors. We don't need Keystone XL.

51 comments

Jana and I are quite happy to see the Affordable Care Act working just the way we expected to end job lock. We are dismayed to see the media working as we have come to expect, getting the story wrong in the urge to spin the ACA as killing jobs.

The Congressional Budget Office released its 2014–2024 Budget and Economic Outlook Tuesday. The CBO's analysis includes an estimate that the Affordable Care Act will reduce the number of hours people work by 2.0 million full-time equivalent positions by 2017 and 2.5 million FTE by 2024.

My conservative friends are quick to conclude that Obamacare is putting people out of work. My conservative friends are wrong. The Affordable Care Act is making possible what almost every one of you working stiffs will be wishing today around 3:30 p.m. (or tomorrow when you get up for the early shift at 3:30 a.m.): that you didn't have to spend so much time working.

The Affordable Care Act is not taking jobs away from people. It is reducing Americans' need to do crappy jobs:

CBO estimates that the ACA will reduce the total number of hours worked, on net, by about 1.5 percent to 2.0 percent during the period from 2017 to 2024, almost entirely because workers will choose to supply less labor—given the new taxes and other incentives they will face and the financial benefits some will receive. Because the largest declines in labor supply will probably occur among lower-wage workers, the reduction in aggregate compensation (wages, salaries, and fringe benefits) and the impact on the overall economy will be proportionally smaller than the reduction in hours worked [Congressional Budget Office, "The Budget and Economic Outlook: 2014 to 2024," February 2014, p. 117].

Thanks to the Affordable Care Act, millions of Americans won't have to take that second part-time job to cover their health insurance premiums. Americans hoping to start their own businesses will feel a little freer to let go of a job they do for someone else just to hang onto a health insurance policy. Folks approaching retirement won't be quite as stuck doing unsatisfying jobs just for the sake of keeping health coverage until they qualify for Medicare.

Yes, yes, work is noble. Work builds character. Work gives us purpose. But work also wears us down. Work makes us miss our kids' dance recitals and track meets. Work subjects us to the will of other people and corporate policy manuals. Work makes us say and do things that we would not do if we did have to take orders from the boss.

By allowing millions of people to choose to work less without risking their families' physical and fiscal health, the Affordable Care Act expands liberty. By reducing the labor supply without equal reductions in labor demand, the Affordable Care Act creates more opportunities for folks who do want to work extra hours.

Think about when you feel the greatest liberty. It's probably not when you're in the office, hurrying to finish the report the boss wants by the end of the day. It's probably Friday night when you don't have to set the alarm, or maybe Saturday when you wake up to enjoy a leisurely breakfast with your kids, or that one day a week when neither job calls you in and you can walk around town in your jeans, knowing you've paid your bills for the month and can afford to buy a book or a new toolbox. Or maybe it's that one blessed day when you can finally show your pain-in-the-neck boss your backside and leave for a job you really want.

The Affordable Care Act makes more days like that possible. The ACA doesn't kill jobs. It doesn't promote laziness. It promotes liberty—daily, practical liberty.

78 comments

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