01/23/2012 08:53 am ET Updated Mar 24, 2012

Symbolic Politics and the Keystone Pipeline

The effort by Republican Presidential candidates to paint President Obama as some kind of job-killing socialist marches on. Romney, Santorum and Gingrich are not as anti-government as they'd like you to think, and the President is not about to Occupy Wall Street. The proposed Keystone oil pipeline is not a symbolic issue, but it has gotten wrapped up in an amazing ideological song and dance.

The issue of allowing this pipeline to be built raises three key questions: 1. How long will it take to complete the transition to a fossil fuel free economy? 2. What are the environmental impacts of the proposed pipeline route? 3. What are the costs and benefits to the American economy? Instead of focusing on these central questions, we are treated to a ridiculous rhetorical onslaught about the anti-business President. I've said this on numerous occasions but I'll say it again: The war between the communists and the capitalists has ended and... both sides have won. There is a broad consensus on the need for a mixed economy.

Successful capitalist states like the U.S. require a large, consumer-oriented middle class, and until recently our middle class was growing. Enlightened capitalists see the danger of poverty in the midst of great wealth. That is why extreme poverty is minimized by a social safety net that has been built to assure political stability. Capitalists need consumers and poor people can't buy things. Socialists, like those in "Red" China have learned the importance of private property and individual reward. Today, the commies have stock options and the capitalists have come to terms with the need for a safety net.

Someone tell the guys left running in the Republican Presidential race that it's time to stop fighting the last war. The idea that government has no positive role to play in the national economy has always been a fantasy. Even this Keystone Pipeline is not an example of pure free market economics. After all, a pipeline of this size cannot be built without use of government's power of eminent domain.

The real issue that we need to engage in is a debate about the extent and strategic direction of government involvement in the economy, not the necessity of that involvement. The profit motive is a key driver in the creation of economic wealth. So too is the work ethic. A political system that overtaxes income and profits can discourage risk-taking and entrepreneurship. A system that discourages work by providing too many entitlements can destroy the work ethic. These are not trivial concerns, but there is another side to the story: First, a society that impoverishes workers and does not allow wage earners to join the middle class will find that too few people can buy the goods and services produced by that society. Second, a society that under-taxes itself will be unable to generate the resources to make long-term investments in infrastructure and basic knowledge. Finally, a society that provides no help or economic mobility to its poor while allowing its wealthy to avoid taxation loses the moral standing needed to encourage public service and sacrifice in the public interest.

This debate does not lend itself to sound bites, but that is all we seem to get. How much investment is enough? What type of tax policy can maintain private incentives while providing resources for investments and social welfare? How do we encourage the social and economic mobility so central to what we once called the American Dream?

We are in a global economy that has rapidly changed the rules of the game. We read about Chinese factory workers willing to work for as little as seventeen dollars a day while living in dormitories. These are conditions that American workers would never tolerate. One wonders how long Chinese families can survive an assault so profound. Moreover, the rapid development of high-tech production machines like China's Foxconn City only came about because of massive intervention and investment by China's government.

The sound bites and baloney we get from both the left and right wings of American politics only distracts us from the real issues of the day. It is amazing to me that we are still re-fighting the long settled politics of the New Deal even though we now live on a planet with over seven billion people and an economy so globally interconnected that it is getting more and more difficult to identify corporations with their country of origin.

Which brings me back to this pipeline and the nature of the debate we are now enduring: The debate is not about jobs, and the ecological impact of the pipeline itself is not the heart of the issue. The central issue posed by the Keystone Pipeline project is the wisdom of our ceaseless quest to quickly burn every form of hydrocarbon we can lay our hands on. It is clear that the current world economy needs more and more energy from anywhere we can get it. It is also clear that this is not sustainable. The fuel is getting more and more difficult to get out of the ground, and will only get scarcer since it is finite. Over time, it will not get cheaper, but more expensive.

The construction of the pipeline will increase our use of fossil fuels at a time when we should be encouraging investment in alternatives. Of course, it doesn't require public money, so the issue can be seen as regulatory rather than an issue of investment. While I think it is a step in the wrong direction, I also would like to see a more mature discussion of the real issues at stake, instead of another misguided dialogue about the so-called tradeoff between jobs and the environment. The issue we need to address is America's role in a sustainable global economy. How do we compete and protect the planet that sustains us? How do we ensure that other nations join us in an effort to achieve global sustainability? Now that would be an interesting TV Presidential debate...