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A First Step to Restoring our Economy: Drill Baby, Drill!

Written on:August 19, 2011
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It’s a sad fact: For each dime the price of fuels rises above $2, more jobs are lost. There’s no way to escape reality. Our economy depends upon growth – all life does, and growth requires energy, but as energy becomes more costly, the less growth you will necessarily see. We have other issues too, but with each day that Obama sits at the helm, our ship of state wanders farther off course. We need a steady hand at the wheel, one who knows about energy production, and how to create the conditions in which energy production is boosted, and not hampered by regulations. That leader also needs to hold energy giants’ feet to the fire, preventing them from squatting endlessly on resources the market demands. There is only one potential candidate in the country who has done this.

Don’t let the propagandists lead you astray: What’s doing more to keep our economy in decline and hamper growth or recovery is the big government regulations and myriad obstacles Obama has placed in its way. If you want to make a substantial change, you’re going to need to strip from him the power to obstruct you, and put in his place a president who understands the critical importance of energy to our economy. We need an “Energy President”, and that can only be Sarah Palin.

It’s really very simple. Every dollar diverted to the cost of energy is a dollar that cannot go for other things. You cannot upgrade your machines, hire more employees, or buy as many raw materials if a larger proportion of your expenses is taken up by energy costs. Any sensible examination of the economy of the United States immediately demonstrates the foolhardy nature of an economic policy and a regulatory regime that promises to drive the prices of energy up, while simultaneously driving down the value of our currency. Either one would be be a disaster on its own, but the two in combination sends devastating effects through the entire economy to create a spiral of cannibalistic decline which is nearly impossible to arrest. This is the simple fact.

Like most instances of cause and effect in macroeconomics, there is always a lag between the two. Fuel prices sky-rocketing today will depress economic growth in the statistics that will be tabulated in three to six months. When fuel prices decline, the lag of the effect in response to this cause means economic growth will be well behind, but it will respond favorably to energy prices. So you want proof? I’ve gone out and found the first graph for each measure I could find to cover the period of the last 6 years. They come from different sources, different sites, but I’d like you to look closely. First, let’s look at the prices of gasoline:

Fuel Prices

(H/T Gasbuddy.com for the graph)

Next, let’s take a look at the US Gross Domestic Product’s growth(or decline) in the same period:

United States GDP

(H/T TradingEconomic.com for the chart)

As you can clearly observe, there’s a clear lag, but the tepid growth we began to experience beginning in second half of 2009 tracks well with the lower fuel prices under which the economy had been operating for roughly six to eight months. At the same time, the bottom of the GDP numbers in Janurary 2009 tracks well with the peak in fuel prices in the summer of 2008. If for some reason, you view these graphs and remain unconvinced, notice later in the same charts that while the trend is a little less clear, the results are the same. Fuel prices began a steep climb in February of 2011, and now, six months later, look what has happened to GDP growth. (Note, the 2nd quarter numbers represented in this GDP chart do no show the revised GDP numbers, as that last bar should be half as high above the line as this chart reflects.)

So what can you make of all of this? Simply put, there is no escaping the fact that the rational among us have always known: Our economic future is directly tied to the relative cost of energy. None of this should surprise anybody reading this site, but the colossal ignorance among those on the other side of the argument is shocking. We cannot resume economic growth until we have a president who is not a servant to leftist causes, particularly environmental radicals, who wish to constrain economic growth by making it too expensive to operate.

This is the meaning of Obama’s campaign promise:

“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

In other words, he knew this would be the effect, but he damned-well did it anyway. People wonder why Rush Limbaugh wanted Obama to fail? Ladies and gentlemen, we should have been so fortunate, but sadly, we’ve not been lucky and Obama’s plan has succeeded, and it’s reflected in the anemic growth we’ve experienced since his policies to constrain energy production have begun to press down on the economy.

(As I prepared to post this, this headline appears as the Dow drops 400 points: US Jobless Claims Up, Gasoline Lifts Consumer Prices)

Case Closed!

If you ever need evidence that we need a president who understands the importance of energy to our economic growth, you now have it, and if you need further evidence that Sarah Palin is best suited to be that President, I suggest you read up on her own many energy proposals, as outlined here at Organize4Palin, and look at her record on energy as the Governor of Alaska. Nobody has done it better. It’s time to choose, and if you want a future not stifled by policies that are becoming more entrenched daily, and ever more difficult to reverse, it’s time to give serious thought to 2012 and what you’re going to do. I’m going to support a candidate who knows the way to repair this. I support Sarah Palin, and I say:

“Drill Baby, Drill!”

Article source: http://conservatives4palin.com/2011/08/a-first-step-to-restoring-our-economy-drill-baby-drill.html

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