Welcome to the July Agribusiness issue of NorthBay biz. As observed and reported over the past 37 years the magazine has been published in the North Bay, California has long-suffered the excesses of its “boom or bust” business cycles. These swings define the state’s bipolar nature. The state’s overall economic health would be much better served if its other business sectors were able to duplicate the steady growth and stability exhibited by the $50 billion-plus agriculture industry’s performance.
In the North Bay, the ag community not only sets the tone of the economy, but also the rhythm of local life. So enjoy the stories and features in this special ag issue as we attempt to capture the spirit of what makes life here in the North Bay so special.
Is it November yet? The latest 8.2 percent unemployment rate masks the fact that an additional 4.6 millions Americans, on a net basis, have left the workforce since January 2009. When that number is included (and it should be, since they’re still unemployed), the unemployment rate rises to 10.8 percent and reflects 17.3 million people out of work. As unbelievable as that number might seem, it gets worse. When you go all in and include the underemployed, the rate grows to 17.2 percent, or 27.5 million people who are out of work or can’t find full-time employment—40 consecutive months, and counting, of greater than 8 percent unemployment.
Is it November yet? Home values still hover around their lowest point since the housing bubble popped six years ago and more than 10 million people are still underwater on their home loans.
Is it November yet? Federal tax revenues of $2.3 trillion in 2011 are down approximately $250 billion from 2008 levels. Another sign that the stimulus money was well-spent. So much for revenues, let’s talk expenses. Annual spending is up by almost $900 billion. Voila—maybe, just maybe, that’s why the yearly deficit in 2007 went from $160 billion to $1.3 trillion in 2011. The real crime is, as Americans (both in and out of work) struggle to pay their bills, the federal government is now paying out $454 billion annually just to service the debt of the enormous $15.7 trillion deficit it’s run up. Imagine what that amount of money could do to create jobs and stimulate the private business economy if it wasn’t being squandered in payouts to national and international banking concerns that have underwritten that debt?
Is it November yet? I’m convinced that politicians, as an entire class, are the best con men in the world. P.T. Barnum would be green with envy were he alive today. They spew exaggerations, half-truths and outright lies and, in an instant, it’s an accepted truth. For example, President Obama states unequivocally that the United States consumes “25 percent of the world’s oil,” but only has “2 percent of the reserves.” This is a stat that’s repeated in the media to justify refusing to increase our oil production by saying even if we “drilled every drop of oil, it wouldn’t be enough to meet our long-term needs.” So, instead, we’re to accept, as inevitable, rising energy costs that are, in reality, only truly serving a “go green” agenda. Let’s check the reality of these numbers: According to the International Energy Agency, the global oil demand stood at 89.1 million barrels per day last year. The U.S. Energy Information Administration calculated that we used 18.8 million barrels of oil per day last year. So that means our consumption was 21 percent of the total.
But the story goes much further. The World Bank reports the global GDP last year was $63.3 trillion. A U.S. GDP of $15.3 trillion last year means that our country contributed more than 24 percent of total worldwide GDP. It seems reasonable, then, that using 21 percent of the world’s energy to produce 24 percent of its goods is more than reasonable. I suggest comparing ratios of energy consumption to production of some of the other countries around the world if you disagree.
What really should resonate is the understatement of American oil reserves. When the President states we only have 2 percent of the world’s oil reserves, he’s evidently only referring to the “proved” (but ever-increasing) reserves. According to U.S. Energy Information Administration estimates, global reserves of oil and natural gas total 2.4 trillion barrels. Of that total, 185 billion barrels are in the U.S. However—and this is a really big however—there are another 2 trillion barrels of oil shale that could be counted in our reserves, according to the U.S. Geological Survey estimates. These numbers are game changers. They mean that the United States has double the potential reserves of all the OPEC countries combined. And even more important, the United States total of global oil reserves is not 2 percent, but rather approaching 65 percent.
Energy is crucial to our economy. It’s the building block for job creation, rising standards of living and wealth creation. When over-regulation, artificial restraints and ideology trump what’s in the best interests of the American people, something is seriously wrong. The Gulf Coast debacle, Alaska, the Keystone pipeline denial and 95 percent of government-controlled lands off limits for leasing, exploration and drilling, it seems a deliberate strategy to repress any chance for energy independence, job creation and wealth creation.
Instead, we get fantasies about creating millions of green jobs by subsidizing failing industries with more taxpayer dollars chasing unproven and failed ideas. If these green energy companies were viable and could compete, private capital would be leading the charge to invest in them. Instead, the only way they get off the ground is through government investment. These green schemes have only succeeded in making energy cost more.
If the goal is to have everyone live in smaller homes and drive less in tiny electric cars and live on the dole, then this administration’s policies make sense. For me, I still have one question: Is it November yet?
That’s it for now. Enjoy this month’s magazine.
