Job Creation and Natural Resources

Job Creation and Natural Resources
by Paul H. Betancourt
copyright February, 2010

The President is running around telling people that job creation is important. Excellent. He has highlighted the importance of small businesses in creating new jobs. Again, excellent. An unspoken root of the issue of job creation is the question, How do we use our natural resources? Here the natural resource in question is water. In the Pacific Northwest it used to be timber. In other places across the country there are other resources in question.

The Creation of Wealth and the Creation of Jobs
We don’t create wealth as individuals or as a nation by trading paper like Wall Street bankers. We create wealth by producing things or providing services. Some of that ‘producing things’ comes from utilizing natural resources. That very idea of utilizing natural resources has come under suspicion and criticism for a generation now in our country.
It is ironic that the same people who say led the destruction of the timber industry in the Pacific Northwest a decade ago are the same people who say we ought to learn from the Europeans. OK, here’s a lesson from the Europeans. On our first visit to Sweden I noticed beautiful forests full of trees. After a while I noticed that the trees in each area were all the same size. Then I came across some areas that were clear cut. You guessed it- they plant and harvest trees. Yes, they are very careful about how they do it and it is the work of generations. But, they get it done. Timber is one of the major exports from Southern Sweden.
The Swedes is that they have figured out something we have not. They have figured out how to balance utilization of natural resources and job creation. Our current crop in the environmental community do not offer solutions. Just look at the timber industry in the Pacific Northwest. It was gutted ten years ago in the name of the Spotted Owl. A few years ago NPR reported that Spotted Owl populations were collapsing the Olympia National Park where logging was not an issue.

So When Can We Use Natural Resources?
When I asked one of my professors at Fresno State what is the appropriate use of natural resources? He responded, “No one has the answer to this question. Pricing environmental damage into production and consumption would help.” What he is talking about is the economic concept of externalities. That is the idea behind a carbon tax. The tax would cover the environmental damage caused by using carbon products like fossil fuels. I bought a train ticket recently and they asked if I wanted to buy a carbon offset. That is an attempt to pay for the externality of using the train. The problem with calculating externalities is that it is difficult. Indeed, environmental writer Andrew Kimbell says it is ‘incalcuable’ (Kimbell 15).
From the environmentalists the answer to the question, ‘When can we use natural resources? becomes, ‘Never”. They want to count the ‘externalities’ and by their own admission the externalities are ‘incalculable’. We are going to have to develop a working answer without their help.

I appreciate the President focusing on job creation. Part of job creation is addressing the issue of using natural resources. If we do not find a safe and sane balance for the use of our natural resources then our economy will spiral down to where we are flipping each others burgers or washing each others cars.