The Stains of Social Justice

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The United Nations defines social justice as "the fair and compassionate distribution of the fruits of economic growth." Furthermore, social justice is impossible "without strong and coherent redistributive policies conceived and implemented by public agencies." Social justice is an axiom held dearly by socialists — apparently reconciled by the belief that great wealth and prosperity would have been created in places such as North Korea, East Germany, Cuba, and Venezuela, if only the "strong and coherent redistributive policies" had been, well, stronger and more coherent. In reality, social justice brings stagnation and decline, which, to socialists, look like fruit ever ripening into new and increasingly meddlesome forms of social justice. To socialists, distributing poverty and despair (even abysmal poverty and despair) is acceptable, as long as they are handling the distribution.

The socialists (more precisely, eco-socialists) in charge of US redistribution have managed to create a new American phenomenon: permanent economic stagnation. While speaking at the November 2013 IMF Economic Forum, Harvard University economist Larry Summers, was puzzled as to why, after four years, the US economy had not yet recovered. Noting that efforts to prevent a future crisis might be counterproductive, he concluded his speech by saying, "We may well need, in the years ahead, to think about how we manage an economy in which the zero nominal interest rate is a chronic and systemic inhibitor of economic activity, holding our economies back, below their potential."

Translation: even at extremely low interest rates, bank lending has been flat since 2009 because businesses are afraid to invest in an economy tainted by socialist mischief. Since social justice (delivered through the redistributive policies of Climate Change, the Stimulus, Obamacare, Dodd-Frank, etc.) is "a chronic and systemic inhibitor of economic activity;" we need to think about how to manage future stagnation, after some unspecified number of "years ahead" in continuation of the present stagnation.

The socialists in charge of US redistribution have managed to create a new American phenomenon: permanent economic stagnation.

Think about that. In the election year of 2008, we had a do-something-about-it-now problem. Today, in 2014, as the stagnation persists, is Washington ready to do something about it? No. Will Washington be ready to do something in the years ahead? No. But by then it will be ready to think about it. Maybe. The 2008 promises of jobs and economic growth were replaced by the vast, warm fuzziness of social justice vagaries such as equality, diversity, fairness, dignity, renewability, and sustainability. What happened to the grandiose 2008 plan for economic revitalization? In 2009, eco-socialist lawyers and academics reached into their magic hat of "strong and coherent redistributive policies" and pulled out a plan to build a new economy. Why fix an outdated economy that was driven by greed, racism, overconsumption, and planet-heating "fuels of yesterday"? Today, more than five years into the new economy of stultifying compassionate distribution, they reached back in and pulled out a Plan B: inurement.

But as this elite cabal was settling into a genial Washington DC, their big heads bubbling with theories (touted by bigger-headed sociologists and environmentalists) on how to build a shiny new economy, a handful of crass entrepreneurs was settling into the rude world of fracking, creating an oil and gas revolution that would blight the dreamscape of the social justice crowd. The New York Times article "North Dakota Went Boom" eloquently describes the discovery and development of the Bakken Shale Formation in western North Dakota, a rugged, empty area blemished by "roaring fires and messy drill pads." But the blemishes are producing a flood of jobs, prosperity, and cheap energy, infuriating eco-socialists, who have produced but a trickle of anything with their centrally planned economy of government-approved renewable energy. Then there is the horror that the great wealth befalling North Dakota is the result of "an economic imperative that dates back to the triumph of the treaty breakers who usurped the Native Americans and commodified the land, and to the waves that came in their wake, the great white hunters who cleaned out the buffalo." God have mercy. Has there ever been social justice in North Dakota?

Eco-socialists are unwanted in North Dakota, where household income is $2,214 higher than the national average, unemployment is the nation's lowest, and budget surpluses accrue even after major income tax cuts (more than 50% since 2009). But many of them can be found at the North Dakota border, weeping over economic fruits they are helpless to distribute. Tears blind them to "the allure of a derrick dressed up in lights and looming 10 stories over a desolate landscape where the leading academic solution to social and economic stagnation had been to surrender and let the land lapse into buffalo commons." Alas, the North Dakota buffalo commons strains the vision of prying eco-socialists peering into the state. It is a pathetically small plot (only 4% of North Dakota is federal land), barely large enough to hold a respectable climate change sit-in without its whimpers being heard in at least a few of the more than 6,000 wealth-producing drilling sites on private land, where 90% of the wells reside. Other eco-socialists are faced with the task of hawking income inequality or green jobs (such as solar panel installation at $38,000 per year) to the sullied hordes of climate deniers rushing into the state, on their way to oil and gas fields where the average annual wage is $90,225.

It has been said that veterans of the oil patch can estimate the productive capacity of an oil well from the size of its flare gas flame (which burns off the natural gas contained in the well). A seasoned eco-socialist can no doubt make a similar estimate based on the size of the yellow puddle at his stomping feet, as he rages against the carbon emissions that flaring spews into the atmosphere. Out of self-interest, oil companies eventually build gas-gathering pipelines that channel the gas to a processing plant, where they make even more money –while saving the gas. But for wells on federal land, these pipelines require the bureaucratic approval of the National Environmental Policy Act (NEPA) — the same law that has delayed the Keystone XL Pipeline for more than five years. Oil companies, therefore, are forced to flare off gas while they wait for their permits. In Wyoming, for example, the average wait time is seven years. According to Forbes Magazine, the state's "lost opportunity cost associated with the delay of oil and natural gas development is $22 billion in labor income and $90 billion in economic output over a ten-year period." Not a problem, when social justice is at stake.

Eco-socialists are unwanted in North Dakota, where household income is $2,214 higher than the national average, unemployment is the nation's lowest.

Under social justice policies, GDP growth during the "recovery" has averaged 2% annually, dropping to an alarming -2.9% in the most recent quarter. This is stagnation. But to eco-socialists, it is not failure. It is merely an economic aberration that their intellectuals will have to think about managing in the years ahead. In the world of social justice, success is not measured by wealth, growth, jobs, or income; the expansion of "strong and coherent redistributive policies" is the only yardstick. Accordingly, with $17 trillion of debt, medium household income down 8.3%, labor participation down to 62.8% (the lowest since 1978), and 46.5 million Americans living in poverty, eco-socialists shamelessly exclaim that we are "heading in the right direction."

And that they have "more work to do." That work largely involves stifling the US oil and gas industry — the only bright spot in an otherwise moribund economy. While forging the new green economy, eco-socialists have suppressed oil (down 6%) and gas (down 28%) production on federal land. Fortunately for our stagnating economy, oil and gas production has increased dramatically (61% and 33%, respectively) on non-federal land. Thanks to entrepreneurs such as Harold Hamm (who discovered the prolific Bakken shale "play") and innovators who developed fracking and horizontal drilling, the US oil and gas revolution has created well over one million jobs, reduced annual oil imports by 800 million barrels, slashed our annual energy bill by $100 billion, and cut carbon emissions by 300 million tons. It has also increased GDP by more than 1.7% — a contribution without which eco-socialists could not claim (at least not shamelessly) that we are "heading in the right direction."

While most of us celebrate these achievements, eco-socialists fear them. Their vision of social justice calls for our vast oil and gas resources to "lapse into buffalo commons." Otherwise, the income inequality gap might widen or the earth's temperature might rise (by the end of the century) or a flame might shoot out of someone's faucet, etc. Besides, the economic contributions from the oil and gas revolution amplify the failure of their immense, whimsical green energy investments, and expose the disingenuous tenets of their overreaching scheme to rebuild the US economy. According to the insightful Hamm, “That’s why these guys are raising so much hell, because suddenly they realize that everything they’ve invested in isn’t going to work . . . They know they’re misleading the public.”

Nevertheless, the social justice parade marches forward. Armed with NEPA, the Clean Air Act, the Clean Water Act, the Endangered Species Act, and other social justice regulations, eco-socialists won't be happy until our utility bills "necessarily skyrocket" and the price of US gasoline matches the price in Europe — thereby paving the way for government-approved solar panels, windmills, and electric cars. Forget about oil and gas. They are yesterday's fuels, dirty and finite. We will have renewable energy in a sustainable economy, even if it takes permanent stagnation to get there.

Social justice leads to stagnation, which leads to scarcity, which leads to rationing, which is what eco-socialists do best.

The good news is that America's oil and gas boom is winning. Eco-socialists, in denial of its benefits, are resigned to the desperate hope that it will be like other booms — short-lived. But estimates of its increasing longevity have revealed a brown stain on the seat of the pants of eco-socialism. There is no stagnation in North Dakota, where energy experts expect the Bakken play to last for 100 years or more. There, the odor of flare gas is preferable to the stench of socialism and, with an annual salary of $90,000, oil field workers can buy all the social justice they need.

This sentiment, of course, is shared by Texas, home to the Eagle Ford and the Permian Basin, and the leading oil and natural gas producing state in the nation. And recent breakthroughs in drilling technologies have the boom spreading to Oklahoma, Utah, Colorado, Wyoming, and New Mexico, where the combined shale oil production has increased 57% in the last three years — causing, no doubt, a proportionate enlargement of that nasty brown stain. Mr. Hamm — whose oil company is developing a drill pad packing technique that could put more than 100,000 wells into North Dakota — would probably estimate a much larger and darker stain.

Social justice leads to stagnation, which leads to scarcity, which leads to rationing, which is what eco-socialists do best — with their "strong and coherent redistributive policies." They believe that through such policies we now have affordable healthcare, a kinder Wall Street, a cutting-edge renewable energy industry, and a world-class education system. Soon, electric vehicles will pour out of a rejuvenated Detroit, millions of Americans will work at high-paying green jobs, and solar panels and windmills will bring us energy independence. By then, their economists may have begun thinking about how to manage the permanent stagnation. That is their story, and they are sticking to it, even if it means squandering the world's most prolific source of fossil fuel energy, a resource that, if properly exploited, could revitalize the economy overnight, increase the wealth of every one of us, and finance self-help programs for anyone still afflicted by social injustice.

Nothing will change the minds of eco-socialists. But America's enormous, expanding oil and gas revolution may eventually make them change their pants.

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