September ends in Washington with a government shutdown looming and a debt crisis pending -- a political rerun when the American public expects new shows and a new season to begin. But it's prime time for pundits, hyperventilating in front of their cable channel doom-clocks, declaring that our situation can't get any worse.
They're wrong. It can.
Here's the case for even deeper gloom, in three snapshots of recent government dysfunction:
First, a politically-inflected economic development: UK-based mining company Anglo American's pullout from Alaska's proposed Pebble copper mine. The exit comes as the U.S., currently dependent on foreign sources of copper for 35 percent of its annual needs -- up from 7 percent 20 years ago -- has a copper shortfall of 600,000 metric tons a year, roughly what Pebble would produce. While the company claims the exit is merely a business decision, anti-mine opponents are celebrating a victory driven by the threat that the Environmental Protection Agency may veto the copper project before it even enters the official permitting phase -- a dramatic and unilateral expansion of the agency's regulatory power, with a chilling effect on metal miners of all kinds.
That's good news for non-U.S. copper producers from Angola and Russia to DRC Congo and Pakistan -- and even Iran, on a crash-course to double copper production by 2015. Every pound of American copper that stays in the ground acts as a "price support" for non-U.S. copper producers, and feeds the net outflow of dollars as we continue to source key metals from abroad.
Snapshot #2: The Keystone XL Pipeline that, on the same day as Senator Ted Cruz's 21 hour non-filibuster, celebrated its fifth year waiting for federal approval. This anti-anniversary passed with speculation that Keystone will remain in limbo, with its start date -- once set to be 2013 -- slipping to 2015 or later. Our loss? Sang Kim at the American Action Forum puts it at more than 40,000 U.S. jobs, more than $2 billion in revenue -- and the ability to reduce our Middle East oil dependency nearly overnight by one-third.
Our inaction is good news for oil-rich Middle East despots, Russian oligarchs and Iranian clerics, as the U.S. continues to spend more than $7 billion on Middle East oil that Keystone would have supplied from Canada. And don't forget China, who will be more than happy to see a pipeline to the Pacific delivering Canadian oil the U.S. refuses to grant an entry visa.
Third is an issue where both mining and energy come together: an arcane House battle over a bill that would allow Arizona's Resolution Copper mine to be developed. In the way: a skirmish over whether the proposed mine would destroy what a local Indian tribe claims is a "sacred site" that others see as a simple acorn grove. Up comes an amendment to surrender Congress' right to weigh such issues in the course of legislating, and hand it to the Secretary of the Interior -- an unelected official, subject to whatever lobbying pressure interest groups can apply via that official's president and party.
And here's the catch: this new federal "sacred site" czar could use the power not only to stop an Arizona copper mine, but any project where a sacred site might be "discovered." Keystone opponents will already be on a "sacred site" scavenger hunt -- surely there must be at least one sacred site somewhere along Keystone's 1,179 miles.
That's good news for oil-rich despots and metal-producing autocrats alike -- a win-win for America's adversaries.
Everyone knows the old adage, added to our political vocabulary by Senator Vandenberg, that "politics stops at the water's edge" -- an admonition, increasingly quaint, that warring American political parties should observe a rhetorical ceasefire when it comes to the rest of the world. Today, it seems as if there's an assumption that "economics ends at the water's edge" -- that the policies Washington pursues, by omission as much as commission, will somehow suspend the laws of supply and demand that function in the global economy.
Washington can do many things, but the Laws of Economics are one set of statutes that the U.S. Congress and President can't evade, ignore or repeal. Our myopia here at home only strengthens our adversaries abroad.
The government shutdown and the debt crisis are only the beginning. This is an ugly period for Washington politics, with a world made uglier by adversaries emboldened by our own failure to think globally before we act parochially.
