With unemployment still hovering around 10 percent and the 111th Congress in the books, it is worth taking a moment to reflect on the past two years and examine what policies and programs abetted or stymied a rising unemployment rate. Unfortunately, much of the legislation that came out of the 111th Congress had a marginal effect on the unemployment rate. Conversely, America’s energy producers managed to create tens of thousands of jobs in the midst of the worst economic downturn since the Great Depression. While White House economists were busy calculating stimulative multipliers, America’s oil and natural gas companies were investing billions in towns and communities across the country.
Upon grabbing the reins of government, Democrats’ first major move was to pass the massive $800 billion stimulus bill. Democrats argued that the economic downturn necessitated government intervention; that the stimulus would create 4 million jobs keeping the unemployment rate below 8 percent.
Failing to meet their own benchmarks, the national unemployment rate quickly rose to double digits and news stories about waste, fraud, and abuse turned the American public against the stimulus (68% of Americans think the stimulus package was a “waste,” according to an October 2010 ABC/Washington Post poll).
After passing the unprecedented $800 billion spending package, Democrats set their sights on an old legislative priority: health care “reform.” Looking to whip up support for the divisive health care bill, then Speaker Pelosi, once again, played the jobs card. She argued that passage of the Democrats’ health care bill would “create almost 400,000 jobs immediately.” Much like the White House’s promised stimulus jobs, the health care jobs never materialized, leaving Americans with higher taxes and historic levels of government spending.
While both Democratic bills were couched in the Trojan Horse of job creation, their real goal was a desire to increase the size and scope of government.
In the midst of a fledging federal government’s attempts to stimulate the economy, the oil and natural gas industry transformed sleepy North Dakota and Pennsylvania communities into bustling commercial regions. Almost entirely due to oil and natural gas companies’ investment in the state, North Dakota has the lowest employment rate in the country at 3.8 percent.
In western North Dakota, there are currently 19,000 workers directly employed by oil producers. This number is expected to rise 8 percent in 2011 as companies look to extract the 3.0-4.3 billion barrels of oil in the Bakken Formation.
Similarly, the discovery of the Marcellus Shale natural gas reserve has proved to be a boon for Pennsylvania and parts of West Virginia. Natural Gas producers have already invested $4 billion in Pennsylvania creating 44,000 thousands jobs in 2009 and an estimated 89,000 jobs in 2010.
Extrapolating the North Dakota and Pennsylvania case studies, a Wood Mackenzie study found that full development of America’s oil and natural gas reserves would likely create 460,000 jobs by 2020 and 530,000 jobs by 2025. Further sweetening the deal for lawmakers, total development of America’s resources would net the government an additional $150 billion in taxes, royalties and other revenue by 2025.
The past two years codified what most Americans have known all along: our government cannot create jobs or wealth, only the private sector can. Representatives looking to drag down the unemployment rate should remove the handcuffs from our job creators, America’s oil and natural gas producers.