Blog Posts > The Chamber is Frustrated by Coal’s Impact on the State Budget
July 13, 2010

The Chamber is Frustrated by Coal’s Impact on the State Budget

This is the only conclusion I can reach after reading Steve Roberts’ op-ed in the State Journal attacking our report on coal’s fiscal impact on the state’s budget. It’s obvious that Mr. Roberts didn’t read the entire report. In the op-ed, he responds to the report’s findings by calling us “anti” everything and he dismisses us as “activists” and a “so-called policy and research organization.” As most people know, this response is a classical logical fallacy or a serious error of reasoning. In other words, because he can’t argue the facts he shifts the discussion by making ad hominem attacks.

As an exercise, let me break down in bold each paragraph of Mr. Robert’s complaints and identify where his logic has gone awry. Before I do so, let me make it crystal clear that we are very open to constructive criticism of our report, and there are some debatable points in the paper, but Mr. Robert’s offers no real criticisms – just rhetorical polarization.

1. Activists at the West Virginia Center on Budget and Policy recently publicized an anti-coal report, paid for in part by the Sierra Club and Natural Resource Defense Council . These environmental groups advocate for policies that would end or seriously curtail coal production in West Virginia, causing tens of thousands of miners to be out of work and .”

Are me,  Paul, Linda, Renate and our summer associates “activists”? I can’t speak for everyone, but I would say maybe depending on your definition of “activist.” While we use intellectual reasoning and empirical evidence to find solutions to improve the lives of low and moderate income residents ( aka the “common good’),  the Chamber is a membership based group serving a narrow special interest that doesn’t rely heavily on scientific reasoning. If you wanna call this “activism” than that would be the pot calling the kettle black since pushing policy is the Chamber’s raison d’etre. Moreover, casting the word “activist” as pejorative reminds me a lot of this.

Is our report “anti-coal”? Taken literally, being pro-coal would mean that you would leave coal in the ground and not disintegrate it into the atmosphere. You would want to protect it. However, I don’t think that’s what Mr. Roberts had in mind. He’s employing binary or circular logic, meaning you are either for coal or against coal – no middle ground. Similar to the “support the troops” tropes of the Bush years, this is a crass appeal to emotionalism, a bullying of dissent with the goal of suppressing debate. It would not be deployed if not for the hopeless logical and factual position that Mr. Roberts finds himself in. The primary purpose of our report was to have an honest discussion about not just the benefits (revenue) of the coal industry, but also it’s costs (expenditures).

Our report revealed that state taxpayers heavily support the coal industry,  like most industries. This should not have come as a surprise to Mr. Roberts or the Chamber of Commerce.So the real question is: Are we allowed to have a honest discussion about the costs of coal in West Virginia? Apparently the Chamber thinks this issue isn’t a public concern.

While I can’t speak for the Sierra Club and NRDC, I do agree that they want to dramatically reduce coal production in the U.S. and West Virginia. So i think it is “fairer” to call these groups “anti-coal” because they would like to reduce employment in the WV coal industry. It’s equally important to note that these groups have been leading voices in the fight for “green jobs.”  (not mention that NRDC is a member of USCAP , which is comprised of such left-wing groups as DuPont, Duke Energy, and GE) However, this discussion has very little do with the contents and facts included in the report. This is just another fallacious argument and it doesn’t point to any substantiated criticisms in the report. On another note, as I showed earlier there are not “tens of thousands of miners” in West Virginia. However, there are about 20,00 workers in the coal mining “industry.”

2. “This report was written by people who are staunchly against the energy production industry. Additionally, they oppose job growth in West Virginia by seeking to drive away coal and manufacturing industries. However, through these industries, West Virginia’s economy flourishes and provides workers with competitive wages and benefits.”

We are obviously very supportive of energy production.  And we know Downstream Strategies is very supportive of wind power energy. Unless Mr. Roberts means “coal” energy production. While we have not formed a definitive opinion about coal production in West Virginia, it makes sense to transition away from coal toward a more renewable energy sources.  Especially since it might be a declining industry over the next couple of decades. Bottom line, we think it’s high time to invest our money in sustainable jobs and work towrd economic diversification. Regarding manufacturing jobs, I take it Mr. Roberts never saw this piece Paul and I had in the State Journal or he wouldn’t make such outlandish claims. As we’ve pointed out, jobs in mining and manufacturing do pay well in comparison to most jobs in West Virginia. That said, I don’t know anyone who opposes job growth. This is just ridiculous.

3. “For West Virginia to see progress, and an improved and competitive global economy, we must begin listening to the people who have an ownership stake in West Virginia. Those who have created jobs, invested in a business or are not dependent on government or the philanthropy of others for their survival deserve our focus.

Bummer. I guess we can dismiss all think-tanks and get rid of Visions Shared, Create WV, Imagine WV, Policy Foundation of WV, WVU BBER, and MU CBER. And not to mention all charities and non-profits in West Virginia. Their opinions on West Virginia’s economic future are not wanted; they have no ownership. According to Roberts, we should also dismiss those pesky foundations that have fund economic development projects.

Creating jobs? Technically, since the WVCBP became an organization we have created five FTE jobs and each of us invests a lot of overtime in our business. We also are member of the Charleston Area Alliance. We have a large stake in the future of West Virginia.

Regarding government dependence, every business relies on government for its survival. Without a well-educated workforce, a court system, police and fire departments, a military, laws, no business would survive.

4. “The West Virginia Center on Budget and Policy has a history of supporting policies that would greatly hinder job creators in our state. They support additional government involvement in health care, anti-jobs and anti-economic growth policies and higher taxes for those who create jobs. These policies result in the increase of our national debt.”

Wow. Where to start? Well, similar to his previous criticisms Mr. Roberts doesn’t provide any evidence to the contrary. Do we support additional government in health care? Yes, we do, and so does the AMA and AARP. Government is already responsible for over 50% of health care spending in the US. Does health reform hurt job creation? No, it doesn’t.  If we had the health-case cost of Canada, there would be no long-term budget deficit.

Do we support higher taxes on those who create jobs? Yes and No. It’s important to note that government creates more jobs than any other employment sector. So do I want to tax the government? No.  it seems Mr. Roberts believes jobs are only created by the private sector. While WVCBP supports strong public structures that require a sound and equitable tax system to support job creation, I’m not sure what policy positions we’ve taken that would increase the national debt over the long-term. The central reason for our current national debt is the 2001 and 2003 Bush Tax cuts and the Chamber of Commerce was very supportive of this policy decision and wants to make the cuts permanent. And don’t forget their support for this major unfunded initiative.  According to the non-partisan CBO, the health care reform bill will lower our long-term budget deficit. In fact, the health care reform bill might be the single biggest act in fiscal conservatism in our history. But don’t let facts get in the way. That said, I do think we need to increase the debt temporarily to boost employment.

5. “The West Virginia employees and the state’s budget will be severely hurt by adopting and promoting ludicrous attacks. For instance, the report from the West Virginia Center on Budget and Policy ignores our nation’s most affordable and most abundant energy supply.

I think if Mr. Roberts read our conclusions calling for increases in the coal severance tax and for the creation of an economic diversification fund trust fund  he might have come to a difference conclusion. Each of the policies would put more money into the state’s budget and would create more jobs i.e. more revenue. We export about two-thirds of all coal produced in West Virginia, therefore it’s an exportable tax not borne primary by West Virginians. Moreover, when the state enacted additional severance taxes on coal in 2005 it didn’t appear to curtail production or employment. Put more simple, we advocated for tax increases that would help, not hurt, the state’s budget.

Did we ignore coal? Our report was 83 pages about coal. I don’t think we ignored it. In fact, we talked about our nations dependency on coal and why we need energy diversification. Do we understand that about 50% of our country relies on coal? Yes. Did we recommend to stop coal production tomorrow? No. Did we say that this is an unsustainable path for WV? Yes. Does that mean “stop all coal production” and let’s lay off everyone in the mining industry. No. I don’t know anyone who wants to do this.

6. “Worse, if we continue to restrict domestic energy production and impose new costs and hardships on industries and business, America, from a national standpoint, will be less competitive. Simultaneously, investment will continue to locate overseas, therefore we will be more dependent on foreign supply of energy.

I totally agree if we restrict energy production that it will make the U.S. less competitive. But why not look to the future?

Is this coming from the same Chamber of Commerce that supported NAFTA? As many know, NAFTA, whether you like the deal or not, exacerbated the U.S. trade imbalance and moved investment from the U.S. to Mexico (and not always producing good results). Energy Independence? I seriously doubt the Chamber is worried about this.

7. “Nearly 75,000 West Virginians currently are seeking work. Now is the time to understand the need for energy production, the importance of manufacturing and the urgency of repairing our economy so our families have an opportunity for wage earners to succeed. False claims form a so-called “policy and research organization” will not create jobs or help our West Virginia families.

Nothing to disagree in the first two sentences. I couldn’t have said it better myself. However, it’s too bad the Chamber of Commerce is standing in the way of more federal stimulus and the “tax extenders” bill  that would create or save tens of thousands of jobs. When did the Chamber start caring about the unemployed?

As I said before, Mr. Roberts never showed one flaw in the report – so I don’t know what “false claims” he’s referring to. As for the “so-called policy and research organization,” this is nonsense and he knows it. As much as a I abhor the policies from these guys, I do think they are a policy and research organization.

8. “Wet Virginia employers have strong ideas for creating jobs while encouraging investment in our state. Let’s encourage our state leaders to continue to stand up for our energy driven industry and strive to keep workers and their families from ending up in the unemployment lines.”

I don’t disagree with much here, but I’m not sure what a “energy driven industry” is? Manufacturing? While our state leaders should (and they do) address the concerns of the “energy driven industry” they also need to be thinking about our future. This means economic diversification. And the Chamber needs to quite viewing this as a threat to coal. The economy is changing and we need to catch up.

On a side note,  If we want to increase employment Sean has a good idea here.

That’s it for now. Let’s hope the anti-intellectual currents subside and that we can have an open and honest discussion about West Virginia’s future.

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