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What Happens When Humans Get in the Way of Politicians?

John Powers 28 August 2012 No Comment

CNN has a surprisingly balanced story about the problems an Indiana based manufacturer is having with manufacturing an attic ventilation system. The solar-powered system relies on a panel which is made in China to power his device. The Obama administration, which had touted this manufacturer as a Green Energy company, now is slapping a 250% tariff/fine on his imported panels, to encourage US Made panels to be used.

 

Troubling news is that there are no available US panels, so the manufacturer is pulling his hair out on how to make a profit and satisfy customer demand for his ventilator.

It’s a small scale story illustrating a large scale problem. Politicians are deciding what customers want, rather than customers deciding what they want themselves. Care for a Wal-Mart on the West Side? Good luck getting that through the City Council. Want a Ford car made in Korea? Doesn’t count for Ford’s US fuel mileage requirements, so you can’t have it. How about a small business loan from your neighborhood bank? Doesn’t fit with underwriting regulations, so the answer is NO.

We get into trouble when politicians have more influence that consumers and manufacturers over economic policy.

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But what about the opposite? Say there was a US made product that our trading partners were demanding. Wouldn’t that be something that would help reduce the trade deficit, bring money into the USA, and create jobs here? Natural Gas and it’s liquefied form LNG may be just the thing, if politicians got out of the way and let US Business sell US products to overseas clients.

From the Washington Post

US Production of United States has passed Russia as the world’s largest gas producer, with an output of more than 23 trillion cubic feet in 2011. As recently as 2005, many experts thought that the United States would need more liquefied natural gas (LNG) imports.

I had lunch last week with a high school classmate who is now a commodities trader in Tokyo, who brought up the point that Natural Gas in Japan costs about 300% of what it does in the USA.  I asked him how this could happen: “Simple, it is pretty much illegal to export natural gas from the USA.  In the meantime Japanese nuclear power is shut down, and we are using natural gas for electricity all over the country”.

So we have a pretty clean fuel, a world market starving for fuel, more gas than we know what to do with in the United States, and the worst unemployment crisis since the Great Depression.

On the other hand (along with the usual environmental quacks), we have some US industries who would like to take all the cheap gas they can get and save on their own gas bills.  Of course with that kind of logic, a farmer should grow all the corn he can sell to himself very cheaply, rather than selling anything to paying customers.

Clean burning fuel should be a goal for not only the United States, but the rest of the world.  And when clean burning fuel is also the cheapest fuel, which could provide thousands of jobs and profits to US Companies, mine-owners, pipelines and investors.  If only the politicians would get out of the way.

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John Powers is the President of the Chicago Daily Observer.  He has worked in import and export businesses for the last 25 years.

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