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The panel discussion below recently took place at David Horowitz’s Restoration Weekend in West Palm Beach, Florida (Nov. 17-20, 2011).
Craig Snider: First, I want to thank — my name’s Craig Snider, I’m a member of the Board of the David Horowitz Freedom Center, recently appointed. But also, I am the director of the Philadelphia Freedom Center, which is David Horowitz’s East Coast operation. And I am delighted to be here today. And I appreciate all of the long hours and focus that everybody has put in. I think everybody will be glad that this is the last panel, despite the fact that it’s been a most interesting and illuminating weekend.Today, for our last panel, we’re going to talk about economics. And I will tell you that it is a fascinating group of people that we have here today, each of whom brings an interesting insight into an aspect of the economy that I think you’ll feel grateful to have heard.On the panel with me today, beginning on my right, is Steve Moore. I will introduce each person before they speak rather than do it all now. To his right is James Delingpole, an author from Britain. To his right is Congressman Ed Royce of California. And to his right is John Fund, journalist, author and analyst of all things political.We will be talking about a number of different things. First, I’d like to introduce our first speaker, James Delingpole. James had a book for sale here, called “Watermelon.” And it describes the adverse effect that the green movement has had on jobs and the economy, in contrast to the idea that green jobs is somehow helping the economy.
James is a journalist, a broadcaster, and an author of six books, including “How to Be Right,” “Thinly Disguised Autobiographies.” And he writes for the Daily and Sunday Telegraph, the Daily Mail, the Mail on Sunday, The Sunday Times, the Times, the Independent on Sunday, and everything from rock culture to politics and gardening.
With pleasure, I introduce James Delingpole.
James Delingpole: Thank you. Thank you very much.
Can I just first say how wonderful it is to be here on my first ever Restoration Weekend, and secondly how fantastic it is to be in America. I love you people.
And there are three reasons why I love you people — number one, your generosity; number two, your tolerance. But above all, what I love about you is –
So let’s just deal with the first two. Your generosity — there was a small, struggling solar panel company you may have heard of. I think we all know here that solar panel — the solar industry is an [indrawn] industry. It doesn’t work on any economic level. The only reason solar panel industries can survive is through massive taxpayer subsidy. But nevertheless, despite knowing this fact, you, you generous American people, donated $527 million to this company called Solyndra.
But that wasn’t enough. Oh, no. You gave even more to a company owned by this poor kid called JFK Jr., a company called BrightSource Energy. You funded this ailing solar industry to the tune of $1.4 billion. How proud you must be.
Let’s move on to the tolerance — your tolerance. When these industries started to fail, you did not do what you could’ve done, which is march on the White House, march on the Environmental Protection Agency, and come back with Steven Chu’s, John Holdren’s, Lisa Jackson’s, and President Obama’s heads on spikes. You didn’t do that at all. You were perfectly happy to let this happen in your name.
Now, I tease you, America, about what’s been happening in the name of green jobs, that great myth. But I’m afraid to say, it is not a problem which exists only in America. In Britain, where I come from, we have a government which is committed by something called the Carbon Act. It is committed to spending 18.3 billion pounds every year de-carbonizing our economy. Now, I know 18.3 billion pounds may not seem too much to you guys. But 18.3 billion here, 18.3 billion there, and soon you’re talking pretty serious money.
The green movement is the enemy of capitalism. I’ll give you another example of what is being done at the moment by environmentalists to destroy your economy. Consider the example of the Keystone XL pipeline. That is going to cost your economy 20,000 jobs you could’ve had. By rejecting that pipeline — or postponing it, as he puts it — President Obama has denied 20,000, at least, jobs they could’ve had.
Now compare and contrast the green jobs industry. When Obama came to power, he promised that he was going to create — I believe, rather optimistically — he claimed he was going to create five million green jobs. He then amended this to a more modest 65,000. And he was going to achieve this by spending $38.6 billion of your generosity, giving loan guarantees to clean tech industries. Well, I can tell you now that green jobs are a myth.
A blogger rightly described green jobs as the equivalent of feeding the poor on unicorn ribs. It is a fantasy. Of that 38.6 billion, so far, the administration has disbursed about half of it. As of September this year, that massive taxpayer splurge resulted in the creation of — get this — 3,545 green jobs. At a cost to the taxpayer, per job — you are so generous, you Americans — of $5.4 million. Per job. You are such nice people.
Unidentified Participant: USA, USA.
James Delingpole: USA, USA, all the way.
I was particularly interested to read the excuse that President Obama gave for canceling or postponing the Keystone XL pipeline. He said — I quote — folks in Nebraska, like folks all across the country, aren’t going to say to themselves — we’re going to take a few thousand jobs if it means our kids are potentially drinking water that would damage their health.
I love that use of the word “potentially.” I don’t know how many of you have heard of something called the precautionary principle. The precautionary principle is an excuse often advanced by the eco-Nazi movement to justify why we cannot, say, drill in the Gulf; why we cannot build oil pipelines, why we cannot frack for shale gas and shale oil.
By that token, you could say that on the precautionary principle, what we should be doing right now is building in every state a gigantic death laser pointed towards space, just on the precautionary principle that all the alien species out there are waiting to invade us. We need a deterrent, do we not? We need to spend this money, on the precautionary principle. Because it could happen, in the same way that building a pipeline could somehow jeopardize water supplies?
What planet is your President living on? What planet is the Environmental Protection Agency living on?
I can tell you now, America, that environmentalism isn’t the only thing that is destroying your economy and destroying the global economy. But it is doing a very important part of this, this war on economics. It is — there are many things we’re going to have to do to bring about an economic recovery in America. But one of them definitely is to disband the Environmental Protection Agency.
I don’t think it’s an exaggeration to say that the EPA is run by Marxists, who justify their rape of the American economy using the flimsiest of junk science.
The fashionable thing for the last 20 years has been this thing they call manmade global warming, or anthropogenic global warming, or climate change, or global climate disruption. It keeps changing. It has to keep changing. Because now the warming has stopped, they’ve got to think of a new name to make it all make sense. So now it seems — since global warming stopped in 1998, it seems that global cooling is a sign that global warming is happening. Go figure.
I must say I’m slightly concerned about Newt Gingrich’s candidacy, given that only a few years ago he was sitting on a loveseat with Nancy Pelosi, singing the praises of Cap and Trade. I hope he gets over that. I do think that you should come down very hard on any Republican candidate who even flirts with the idea that manmade global warming is a problem. Because it ain’t.
Perhaps you’ll have some questions to ask me later. I always think it’s nice to keep it short. Thank you very much.
Craig Snider: Those Brits are so polite. We didn’t even have to get out the hook.
You know, it’s funny — I don’t know if this is true, but I heard somewhere that the temperature of Venus is actually rising a little bit, too. So how is it that man could’ve made that happen? Is that — have you heard about that?
James Delingpole: It’s one of their favorite things, you know — Venus, the greenhouse effect. Yeah, we’d all be like Venus, we’re all going to fry. I don’t believe it; it’s all junk science.
Craig Snider: Yeah. And somehow we’ll be blamed for that, too.
John Fund is our next speaker. I think you all know who John is. He was a columnist at The Wall Street Journal. I’m sure he’ll be making many contributions there over the years to come. And he’s currently the Senior Editor at The American Spectator. He’s also the author of “Stealing Elections: How Voter Fraud Threatens Our Democracy.”
John, is that actually on sale now, or is that coming out?
John Fund: Well, that’s a completely revised and updated account based on everything the Obama Justice Department has been doing to try to steal our elections. But I do have — people have been asking since my introduction of Catherine Engelbrecht last Thursday what can they do to stop the stealing of the elections? And I do have a new update to my book, which is brand new, which I’ll be happy to sign just outside after the panel. This is everything the Obama Justice Department under Eric Holder and his mismanagement agency are doing. And I’d be happy to do that.
Craig Snider: You know, by the way — and I’d like to let you get started — but I will say that that introduction to Catherine — and I thought Catherine Engelbrecht’s presentation last night was terrific — I think she’s left already, she had to leave last night or early this morning. But for the person that asked — what can I do in my community, I’ll tell you — if voter fraud is the problem that she thinks it is — and I think John will be able to explain more in his book — that’s something you can do right away, right in your own neighborhood. And I would urge all of you to look into TrueTheVote.com.
Okay, John, you’ve got 10 minutes, starting right now.
John Fund: James asked what planet President Obama is from. He’s from the planet Union. Because the only group in America that’s gotten everything it wanted out of the Obama Administration are the unions, especially the public sector unions.
This actually has a connection to some of the interests of people in this room in foreign policy. Because in the next few years, we are going to see the great budget crunch. There is not going to be any money for anything near the obligations that we have, domestic and foreign. And if you don’t think that our military budget and our foreign aid budget and our international relations budgets aren’t going to be strained because of all of the obligations and promises, many of them to unions, you have to wake up.
How serious is the budget crunch? Well, first of all, my friend Steve Moore has a very good definition of what a trillion dollars is. Who’s the biggest sports player in the country? LeBron James. What is his contract worth? $40 million a year. How many seasons would LeBron James have to play to [reach] a trillion dollars? The answer — as Steve has calculated, and I trust his math — 25,000 seasons. That’s how big a trillion dollars is.
Well, how much do the 20 million people who work for federal, state and local government — one out of seven workers in America — how much of their salaries and benefits a year? They’re $1.5 trillion, 10 percent of our gross domestic product. Ten percent. They spend an additional $2 trillion. If government could be run more efficiently by just 30 percent, we would save a trillion a year. And there wouldn’t be any discussion about cutting the military budget and cutting the foreign aid budget.
How bad is the waste and the abuse and the fraud with the public sector unions? Well, in New York, when new equipment is installed, the city must reopen collective bargaining in the union contract for the sole purpose of “negotiating on the practical impact that any such equipment has on the affected employees.” When the Deputy Mayor of New York tried to get ideas for budget savings from public employees, he was told it would be illegal by the union leader. He was told, “You’re warned not to talk with employees in order to get suggestions because it might violate the union contract.”
Well, what do these union contracts include? Well, in Long Island, New York, it means that 90 percent of Long Island railroad workers retire with a disability. That is not a verbal typo — 90 percent. In my home state of California, 82 percent of senior California state troopers manage to get disabled in the last year before their retirement, boosting their pensions by over 30 percent by that one action.
It also means featherbedding and protecting incompetent employees. The city of Los Angeles, the largest school district in America, succeeded in firing five teachers out of 33,000 in the last 10 years. Five teachers out of 33,000. The costs of litigating all of the appeals processes of those teachers added up to $3.5 million. In other words, to fire one teacher, it cost Los Angeles $700,000. Why would you fire anyone? It’s too expensive.
The unions used to be at least valuable in foreign policy. Because under Lane Kirkland and George Meany and some of those other great labor union leaders, they were anti-communist, and they stood up for American values abroad. Today, they are part of the blob, the Find The Networks website that David Horowitz has set up. They are part of the international leftwing movement.
ACORN — ACORN was not really ACORN. ACORN was the bullyboy section of the Service Employees International Union. They were the people that the Service Employees International Union hired to do all the stuff they didn’t want to do openly. ACORN has, of course, fallen on hard times. But it has reassembled. Because ultimately, it was a network of 196 front groups, back groups, side groups; [functioning] under one umbrella. They are re-coalescing for this next election under new mismanagement.
And now, admittedly they’re a little disorganized. As you can see, they were behind the Occupy Wall Street movement. The Internal joke inside ACORN is that — we are so confused sometimes that our left wing doesn’t know what our extreme left wing is doing.
So, as chaotic as they are, though, they have enormous resources for one reason. And this is my point. The single most important public policy issue in this country right now regarding political power is follow the money. We have seen this fought out in two states in the last year — Wisconsin and Ohio. It’s the issue of public sector unions and their political power, and the money, and how they derive it. We won in Wisconsin, we lost in Ohio. There’s some lessons which we can bring out in the questions and answers.
But here’s what it’s important. I interviewed Governor Scott Walker in Wisconsin. The day after he announced his union reforms — because he had to close a $5 billion state budget deficit over the next few years — the day after he announced his reforms, the union leaders came into his office and said — look, we don’t like these health and pension changes you’re trying to make, but we can live with them. We will fight you, but not to the death, if you just remove two things in your package — one, get rid of this end to the mandatory collection of union dues that we’ve enjoyed for lo these many decades. Don’t make it voluntary. And two, don’t force the union leadership of all the public sector unions to be certified and reelected every year by a vote of the membership. This democracy thing is very messy.
And Governor Walker told me he was astonished at the extent to which the union leaders were willing to throw their own members under the bus in terms of health and pension benefits, if they could just keep their money and their posts.
So all of those demonstrators that you saw in Wisconsin, in Madison, were there not over the health and pension benefits; they were there about the mandatory union dues. And they came from all over the country to try to defend that privilege.
Why is it important to have this mandatory collection of union dues? Well, first of all, it is a privilege that almost no one else has. There is not a single private entity in this country that has the power to extract money from your wallet without your permission. The American Association of Retired Persons can’t do it, no charity can do it, no church can do it; but unions can do it.
And this is even unprecedented in the world. In Germany, which is one of the leading lights of the labor union movement of the industrialized West — did you know that labor union dues are voluntary in Germany? You don’t have to pay them. If you don’t want to pay them, you don’t have to. But in the United States, you do have to pay them. And here’s why.
Mitch Daniels was able to end the mandatory collection of union dues in Indiana by executive order. Because it’d been imposed by a previous governor’s executive order. He ended it in January 2005, the second day he took office. He got a lot of heat. But he held firm, and he won.
Today, what percentage of Indiana state employees do you think belong to the public sector unions? Five percent. Five percent. And he was able to reorganize, reenergize and re-imagine state government, because he didn’t have to go through negotiating 37,000 separate paragraphs of the union contract.
This has happened elsewhere. In Utah, they ended the mandatory collection of union dues in 2001. Ninety-five percent of public schoolteachers opted not to pay. In Washington State, the same story. In Colorado, basically, the same story.
The unions recognize this. Robert Chanin was the General Counsel of the National Education Association for 40 years — from 1968 to 2009. This is what he said in a US District Court testimony a few years ago. This is the General Counsel of the National Education Association — It is well recognized that if you take away the mechanism of payroll deduction — other words, the mandatory collection of union dues — you will not collect a penny from these people. It has nothing to do with voluntary or involuntary. I think it has to do with the nature of the beasts who are our members, the beasts who are our teachers. They simply will not come up with the money, regardless of the purpose. You can’t trust them — unquote. They have contempt for their own members.
So when Governor Walker was able to win in Wisconsin, on July 1st, the mandatory collection of union dues ended. And immediately thereafter, the unions sent out a swarm of people. You know, you’ve heard of going door to door? They went desk to desk. They went desk to desk with nice little forms called direct deposit slips, to every state employee, and said — would you please fill this out? It’ll just mean your union dues keep coming to the union coffers. Everything will be the same, don’t worry about it.
And the union members looked at this. And they said — you know, my union dues are between $800 and $1,000 a year. I don’t think I’m getting much from my union dues, because most of it is going to politics. And some union members disagree with the politics that it’s going towards. The best anecdotal evidence is that between 15 and 20 percent of employees are filling out those direct deposit slips. This is having a devastating effect on the political clout of the unions.
Finishing up — all right, I get the message.
The Wisconsin Education Association just laid off 40 percent of its headquarters staff. Forty percent.
They’ve taken a second mortgage on their headquarters building. They ended their statewide convention for the first time ever. They didn’t hold it.
And lastly — this is the most important — the largest AFSCME local in the country — because AFSCME, the Association of State and Municipal Workers, was founded in Madison, Wisconsin in 1936 — the largest chapter in the country is Local 23 — it has 29,000 members. Last month, they announced — very quietly, I can assure you — they’re no longer a union. They’ve become an association. The reason? The leaders of that union local, 29,000 strong, did not want to go through the certification election, which would’ve meant their jobs if they’d lost it.
We have discovered the soft underbelly of the Left in this country. It is mandatory payment of union dues to unions to pay for politics, to elect politicians, to make government grow bigger, so the unions can grow bigger. It’s a vicious circle. If we stop this, if we learn from our defeat in Ohio, and we learn from our victory in Wisconsin, we have discovered the secret to disassembling their political power base and finally saving the money which can make all taxpayers once again the recipient of efficient, honest government services, without the 30 to 40 percent overhead the unions represent.
Craig Snider: John, I want to thank you for another great contribution to the insights this weekend. That coupled with voter fraud, I think, is something we can all follow.
I’d like to add that if follow-the-money is the single most important issue, you know, two things — one is, when you see things happening in places like Wisconsin and Ohio, and there are organizations out there raising money to see if you can help — you can help, even though it’s not your own back yard. Because these statewide referendums have really become national referendums to the issues we care about. So as you hear about these things happening in other states, pay attention. And please be open-minded to support those efforts with your pocketbook.
The other thing I would say is, also, school choice is very much related to this issue. The teachers unions in this country — I don’t know the statistics, but I know they’re among the strongest of the unions in terms of financial capability and wherewithal.
And in Pennsylvania, where I come from, they have just recently passed a school voucher program for school choice. If it’s not an issue that you’re actually aware of, please find out more about school choice. Because in Pennsylvania, if it passes through the House of Representatives, it means that every inner-city student is going to be able to take that tax money and take it where they want to go to school. And this will break the teachers unions in the United States. And it’ll help the kids, and it’ll help our country. So big, big issue.
Craig Snider: Thank you. Our next speaker is Ed Royce. He’s a congressman from California in his eighth term, serving Southern California’s 40th District. He serves as a senior member of the two important committees, in the House Foreign Affairs and Financial Services. Congressman Royce is a ranking member of the Subcommittee on Terrorism, Nonproliferation and Trade.
Ed Royce: Thank you. I thought I would just talk to you about a couple of issues here that concern me in terms of our strategic position in the world, vis-à-vis energy.
And one of the realities on the Foreign Affairs Committee is we see China locking up their energy needs long term. We see them all over Africa, developing — putting in place what they’re going to need to access for the future. We certainly see them in Latin America, locking down sources of energy. And now you see them in Western Canada doing the same thing.
I want to contrast what China is doing right now, in preparing in this direction, with what the United States is doing. Because we had an opportunity last week with the Keystone project. The third-largest, the third-largest, oil deposits are in Canada, are in Alberta. And up until last week, the expectation was that we were going to let gravity feed a pipeline project which brought that oil to our refineries in the United States, and along the way would not only provide a great number of jobs — I think James mentioned 20,000 jobs — that’s just on the pipeline itself — if you consider the heavy equipment, and all the ancillary jobs that are connected to that, the Chamber of Commerce here anticipated 250,000 jobs.
We also had a situation where we anticipated that we were going to drive down the price of energy in the United States because of the proximity. We also had the situation where, economists tell us, when you spend money in Canada, it comes back to the United States.
Now, if you think about why we were a little concerned about diversifying our source of energy, it was because so much of our petrodollars go to the Middle East. And basically, because OPEC has the ability to sort of enact monopoly pricing on this, we are building up — we’re having a huge wealth transfer out of the United States into the coffers of these regimes in the Middle East.
So until last week, we had before us a long-term solution to this problem, to which, after going through all of the environmental reviews, and the government determining it was safe; after going through three years of a drawn-out process, taking much longer than usual in order to get all the approvals; we now have the President of the United States saying that we’ve got to put this off until after the next election, to which, to which Prime Minister Stephen Harper had a response. And he met with the Chinese Premier, Hu Jintao. And Hu Jintao told him that China had a different vision.
Now, the Prime Minister has talked about Canada having to depend upon, you know, sort of a source for this market. Dependability was important. China was offering dependability. China would like, out of Vancouver, to ship this oil into the refineries on the Eastern Coast of China, rather than to have this oil access our market here.
And before our very eyes, we’re watching a situation where what would’ve been 250,000 American jobs — a project supported by the building trades, as well as industry across the United States — is being substituted for an alternative, which will now give China not only access long term to what they’ve already nailed down — in Africa, in Latin America — but now Canada.
And you have to ask yourself, from a strategic standpoint, what is the President thinking, when he boxes the US in terms of our long-term — Canada is not going to wait. They’re not going to wait until after the next election, not with China laying out a scheme to get the pipeline to Vancouver.
And by the way, they can now buy the pipe, which has already been made in anticipation of this deal, for pennies on the dollar. Because the pipe is now out there. And I can tell you, from listening to those who were involved in this project — now left holding the bag, having produced a lot of the material that was going to go into this project — this is a real opportunity for China long term.
Now in the meantime, in the United States, I watched as this initiative to put $1 trillion into a stimulus program produce nothing, other than an expansion of every government agency and department in the United States. I remember, after the passage of that legislation, going to a reception being hosted by the US Department of Agriculture. They were giddy with excitement over all the new slots, all the new positions, they were getting. This is when I began to really look at how this money was being used to ramp up, in double digits, the growth of every agency and every department.
You would think, right about now, we would be thinking — you know, with commodity prices as high as they are, and the necessity to cut government spending, shouldn’t we be ramping down the subsidies to agriculture; and with it, since we’ve got so many employees over there in the US Department of Agriculture — I mean, when I looked at the budget, it was about the number — little less than the number in the Air Force — isn’t it about the time we sent people into productive labor at these government agencies, rather than always ramping up?
And yet, here we stand, on the verge of another downgrade of our Treasury — of our status in the world market, which is going to hit every municipality and is going to hit the cost of capital of large firms afterwards. Here we sit in this situation, with this economic opportunity before us, turning our back on this. Here we sit with a super-committee trying to come up with a strategy originally designed by Dick Armey.
I don’t know how many of you remember the BRAC process, the BRAC Commission, but his concept was this — you’re never going to get a member of Congress to vote to kill something in his district. And since there’s a base in every district, and since the Pentagon says we’ve got to close 30 percent of them, the way to do it is one up or down vote that can’t be filibustered in the Senate and can’t go in committee in the House. Well, this is this process that we’ve now designed in order to try to get an additional 1.2 trillion in reductions here.
If we look at some of the opportunities before us in order to reach this goal on the governmental side, think for a minute about where we are with our corporate tax rate, and contrast that to the average corporate tax rate, marginal rate in Europe. We have — we’ve got an eight percentage higher rate here in the United States.
If we were able to close off some of the corporate welfare, you know, shut down some of the loopholes and trade it off — we’re getting that corporate rate down to the average European rate — you know, 28 percent — the consequence of that would be, economists tell us, three quarters of a trillion in new revenue, because of economic growth, into the coffers — that would come back from the companies that hold those earnings overseas, into our economy here. Investment would go to highest and best use, we’d get economic growth — this is agreed to by everybody. We’d be able to better compete, it would put us in a better position for the next 10 years. And here we sit — for those of you who’ve watched this Occupy Wall Street movement — with a demand that rather than reduce those marginal rates on corporate tax, that we increase them.
Ladies and gentlemen, we’re moving in exactly the wrong direction. But you’re here today in order to try to get the intellectual ammunition to advance this argument down the field in our direction. Let’s hope that, by the time the debate is over in this select committee of 12 members, that at least one of those six Democrats sees reason and will vote with the six Republicans to pass out something that will actually generate economic growth and opportunity and jobs for this nation, and not continue down the road we’re on, which is one that is totally unsustainable.
Thank you all very much.
Craig Snider: Congressman Royce, thank you very much. You have a unique insight into the workings of government. The fact that our stimulus money went to increase programs that will never necessarily be reversed — or, if so, it’ll be hard to do — is really disturbing. And it’s a story that should be told.
I’d also add that in thinking of your comments here about the Keystone project — and something, of course, I wasn’t even really aware of — just one of the many things that we can pay attention to and lobby our congressmen and our senators about. Also along the lines of what can we do — I think that one thing that we all know, and we can share with our children and our neighbors, is that our country has been traditionally a wealth creator.
We create wealth. This country created more wealth in a short period of time than has ever been seen in the history of the earth. And it elevated the standard of living for most people around the planet. We should be talking about creation of wealth, not redistribution of wealth. And I know you all know that. But perhaps it’s an idea we can carry with us. Creation of wealth is really what we’re about. And we cannot do it with massive regulation and overprotection of the environment to the extent that the green movement tries to do.
Finally, I appreciate all of your patience. Obviously, you’re here because we’ve got great speakers. Steve Moore is a perennial favorite here at this Weekend. And you all know him, undoubtedly, from Greta.
Actually, that’s how I first encountered Steve Moore. But as you know, he is the founder of the Club for Growth and the former — its first president. He is a Fox News contributor and author of “Return to Prosperity.” He worked as a senior economist of the US Congressional Joint Economic Committee in the ’90s, and he is currently a member of The Wall Street Journal’s Editorial Board.
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