Welcome to Blue Monday, True Believers.
This morning the always-worth-reading, long-term California resident Victor Davis Hanson gives us another commentary on the Golden State’s continuing slouch into the Pacific. Mr. Hanson writes on this theme quite a bit; it’s kind of sad to read what is essentially a dirge by a Californian who, despite everything, loves his home state. Excerpt:
California in the Balance.
We calibrate California’s decline by its myriad of paradoxes. The nation’s highest bundle of gas, sales, and income taxes cannot close the nation’s largest annual deficit at $25 billion. Test scores are at the country’s near bottom; teachers’ salaries at the very top. Scores of the affluent are leaving each week; scores of the indigent are arriving. The nation’s most richly endowed state is also the most regulated; the most liberal of our residents are also the most ready to practice apartheid in their Bel Air or Palo Alto enclaves.
We now see highway patrolmen and city police, in the manner of South American law enforcement, out in force. Everywhere they are monitoring, watching, ticketing — no warnings, no margins of error — desperate to earn traffic fines that might feed the state that feeds them. I could go on. But you get the picture that we are living on the fumes of a rich state that our forefathers brilliantly exploited, and now there is not much energy left in the fading exhaust to keep us going.
Next, a spot of potential good news from the Weekly Standard: The Gas Revolution. No, I’m not talking about the kind that follows a big dinner of beer and burritos. Excerpt:
When Andrew Liveris took over as CEO of Dow Chemical at the end of 2004, the company was in the midst of a wrenching reorganization that saw it shed 7,000 jobs—14 percent of its workforce—and close 23 older chemical plants in this country. Looking ahead to a new product cycle in a fast-growing global marketplace, Liveris faced a stark choice: Should Dow invest in new capacity in the United States, or should he locate more facilities in emerging markets? One factor made expanding overseas much more attractive—not labor costs but the price of natural gas.
Dow and several other industrial manufacturing sectors use natural gas as a basic feedstock for much of their product line, not primarily as an energy source. As such there are few substitutes or efficiency strategies the company could use. As Liveris told the Senate Energy and Natural Resources Committee in the fall of 2005, “This [natural gas] price of $14, simply put, renders the entire U.S. chemical industry uncompetitive. . . . We simply cannot compete with the rest of the world at these prices. . . . When faced with a choice of investing in the United States at $14 gas versus $2 to $3 elsewhere, how can I recommend investing here?” Not long after, Dow Chemical announced plans for a major expansion in Kuwait and Oman, both of which were able to guarantee long-term rock-bottom natural gas prices. Other chemical companies followed suit, and a sector that was once among the nation’s strongest export industries became a net importer. Between 1997 and 2005, overall industrial consumption of natural gas in the United States fell 22.4 percent.
We need energy. The United States is sitting on vast amounts of energy. Coal, oil, and gas. We need that energy. Our economy depends on it. It’s baffling how hostile the current administration in Washington has been to energy development, even though they cheerfully encourage other nations to do what they won’t allow here. That may well be one of the reasons behind President Obama’s continuing slide in the polls.