For the Love of Carbon
by Paul Krugman
It should come as no surprise that the very first move of the new Republican Senate is an attempt to push President Obama into approving the Keystone XL pipeline, which would carry oil from Canadian tar sands. After all, debts must be paid, and the oil and gas industry — which gave 87 percent of its 2014 campaign contributions to the G.O.P. — expects to be rewarded for its support.
But why is this environmentally troubling project an urgent priority in a time of plunging world oil prices? Well, the party line, from people like Mitch McConnell, the new Senate majority leader, is that it’s all about jobs. And it’s true: Building Keystone XL could slightly increase U.S. employment. In fact, it might replace almost 5 percent of the jobs America has lost because of destructive cuts in federal spending, which were in turn the direct result of Republican blackmail over the debt ceiling.
Oh, and don’t tell me that the cases are completely different. You can’t consistently claim that pipeline spending creates jobs while government spending doesn’t.
Let’s back up for a minute and discuss economic principles.
For more than seven years — ever since the Bush-era housing and debt bubbles burst — the United States economy has suffered from inadequate demand. Total spending just hasn’t been enough to fully employ the nation’s resources. In such an environment, anything that increases spending creates jobs. And if private spending is depressed, a temporary rise in public spending can and should take its place. That’s why a great majority of economists believe that the Obama stimulus did, in fact, reduce the unemployment rate compared with what it would have been without that stimulus.
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http://www.nytimes.com/2015/01/12/opinion/paul-krugman-for-the-love-of-carbon.html?_r=0
