January 25, 2017

Two Steps Forward, One Back

Bully for the President! Approving Keystone XL and Dakota Pipelines. Way to go.

The WSJ Ed Page -- like me -- is quite enthusiastic. The rule of law was truly subverted on both of these to appease the environmentalist left.

Such carve outs for progressive constituencies are one reason voters rejected Democrats in November, and the pipelines promise broader prosperity. Keystone is predicted to spin off 20,000 construction and manufacturing jobs, many of them to be filled by union workers, and add $3 billion to GDP. The pipeline could move 830,000 barrels a day along the route from Alberta to Nebraska; up to 100,000 would come from North Dakota, where a glut of crude has to travel by rail to reach refineries built to process it. The efficiencies will ripple across the oil and gas industry.

Pretty awesome huh? Boy, we sure like the cut of that Trump fellow's jib. Oh. Wait...
One danger here is President Trump's campaign promise to "renegotiate some of the terms" that included bromides about how "we'll build our own pipes, like we used to in the old days." He floated royalty payments during the campaign, and a separate order on Tuesday directed the Commerce Department to develop a plan to use U.S. steel and iron in all new pipelines. TransCanada has said in past months that it's "fully committed" to Keystone XL, but the company may not be eager for another politician to direct its investment decisions.

Ah yes, the good old days when we built our own pipes. Wow -- America was really great back then. I'm going back to bed -- call me on my mobile if you need anything...

Oil and Energy Trump Agonistes Trump Revolution Posted by John Kranz at January 25, 2017 10:15 AM

You are right to object. Personally, I think it's a negotiating tactic. Like "uuge tariffs" on companies that move jobs out and try to sell goods back in. Have any such tariffs been established? Not that I'm aware of, but I'm aware of scores of factory closings that were reversed, and offshoring that was canceled.

Posted by: johngalt at January 25, 2017 2:58 PM

Perhaps. The WSJ Editorial Board has suggested that President Trump offers business a bargain: I'm going to lower your taxes and keep government regulators off your back; you're going to let me browbeat you and bias your investments toward domestic production.

As a great blue-eyed economist once said "That ain't love. But it will have to do until the real thing comes along." Much as I love trade, that's likely a better bargain than they saw over the previous eight years,

Posted by: jk at January 25, 2017 4:49 PM

I'm actually hopeful that Trump is more saavy than all of the principled free-market advocates realize. Yes, he is distorting markets with his browbeating. But perhaps he is doing it as a countermeasure against foreign currency manipulation. There is a direct way to counter such manipulation, which is "by far, the world’s most protectionist international economic policy in the 21st century" and there are indirect ways. Perhaps President Trump is engaging in one of these. Among other things, the browbeating has the advantages that it can be done quickly, by executive action, and it is not an obvious countermeasure to something else. It just looks like unbridled populism. It is that, of course, but a principled executive knows how far to take it before backing off.

We have admitted that Trump is smarter than most critics assume, haven't we?

Posted by: johngalt at January 25, 2017 7:13 PM

Dagny told me I'm a hopeless, rationalizing, optimist.

Guilty!

Posted by: johngalt at January 26, 2017 1:40 PM

And he thinks the Rockies are going to be good this year.

Posted by: dagny at January 26, 2017 1:57 PM

I was going to comment on your optimism, but I would never have gone so far as Sister Dagny (though the brave black and purple are not without talent...)

On a serious note, optimism is good and I must admit that -- so far -- more of your rosy scenarios have materialized than my dark dystopian visions. But it is Day Four; I hope you'll be willing to hold him accountable.

And yes, he is well served by the compete insanity of his critics. Holy Cow, those people have left the rational plane. But they can be bonkers and he can still be wrong.

And the bullpen. Some steps up, but enough?

Posted by: jk at January 26, 2017 3:28 PM

Yes, I'll hold him accountable. I probably won't march on the capitol or cut off any parts of my anatomy, but I'll always be willing to condemn bad acts.

I haven't been following the Rox off-season moves but I did hear about the once great Royals reliever who's coming off some surgery or another. But a sports radio jock I know is predicting Rocktober already!

Hope springs eternal - if not this year, then next. Or the year after that. ;)

Posted by: johngalt at January 26, 2017 4:17 PM | What do you think? [7]