One full year after getting elected, there is no denying that Trump is doing important things to support West Virginia’s long-standing regime of fossil fuel feudalism — by any economic manipulation necessary.
But even as Trump’s administration scraps Obama-era regulations and shoves the costs of business onto West Virginia’s families, coal and nuclear are still struggling to stay competitive with other sources of energy (such as unsubsidized renewables).
The administration’s solution to that reality reeks of big government cronyism: Make the federal government pay higher rates to those sources so that those sources can continue to operate, even though they’re uncompetitive.
But the big news recently is the administration’s plan to bolster the natural gas industry through a deal with China. Instead of tough trade talks with China involving new hefty tariffs or value-added taxes, the Trump administration, with Gov. Jim Justice, Sen. Shelley Moore Capito and Sen. Joe Manchin’s cheerleading, wants to allow China to invest more than $80 billion in West Virginia’s gas fields.
It’s a huge number for a state with an annual GDP closer to $75 billion — but it’s important to remember that this is an investment, not a grant.
Yes, that’s money coming into our economy. And that money may cause the economy to swell — but there’s little chance it will cause the economy to grow.
The fundamental issue here is that investors, foreign or domestic, expect returns. And they expect those returns whether West Virginia’s economy grows or not.
It’s all but guaranteed that more money will leave the state than will come in over the next 20 years. The question is, will we tax that wealth before it leaves the state? Will we tax it enough to pay for the clean up, when we reach the 21st year? Will we tax this investment enough to rebuild our roads and bridges? To bolster our public education? To rebuild when the next floods happen?
Is there any stipulation on this proposed deal that would require China Energy to hire locally? Is there any stipulation that they’ll build their machinery locally? That they’ll use local vendors?
Or will they do like they’ve done in regions of Africa and other resource-rich regions around the world, and bring in their own workers to work their equipment — while dictating the terms of agreements to any local vendors they do business with?
Is there any stipulation that these firms keep our waterways clean, our roads safe and that they act as good members of the community?
Seems unlikely, since those stipulations don’t seem to apply even to the fossil fuel firms that currently operate in West Virginia — the ones based out of Oklahoma or North Dakota, or anywhere but West Virginia.
But it’s tough to know. As far as I’ve been able to find, the text of this deal has not been made public.
Foreign investments have always been part of a “race to the bottom” strategy — whether it’s the US investing in South Asia and Mexico, Germany investing in South America, or China investing in Africa and West Virginia.
Like Lucy holding the football for Charlie Brown, the financial elites who have benefited from the last 40 years of international trade (including the current president) want us to believe without question that this agreement will ultimately be different for West Virginia’s working families.
But this agreement seems to follow a very basic economic model, one older than the United States itself.
1.) We’ll produce the natural gas for Chinese firms.
2.) The Chinese firms will produce the valuable finished goods (probably plastics).
3.) They’ll sell those goods back to us at a massive mark-up.
And based on history, what will West Virginia have to show once the gas is harvested and the profits funneled out?
Toxic groundwater, more abandoned factories and a new generation of citizens to foot the bill for this deal’s true costs to West Virginia’s communities and to the environment.