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West Virginia Is Bleeding Out But Lawmakers Won't Debate Its Economic Survival

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When Alexis de Tocqueville started traveling across the United States in 1831, he was taken aback by the powers granted to the people. But he quickly concluded that such freedoms are fragile — that they are put at risk by the powerful who are positioned to manipulate the economically feeble.

de Tocqueville’s insights are more relevant today than ever, especially in West Virginia where debate at the congressional level has literally been shut down: two Republican incumbents are refusing to debate their Democratic challengers while the Republican vying for an open seat in the state’s poorest district is also avoiding her Democratic opponent.

For all of its potential, the state could bleed out — making it crucial that a battle take place over competing ideas. Shunning a debate, conversely, is tantamount to the railroading of policies that may run contrary to the people’s interest. Indeed, it is nothing less than the indirect killing of a state — and potentially the unravelling of democracy in America.

"The people reign over the American political world as God rules over the universe," wrote de Tocqueville in Democracy in America in 1835. "I know no country in which, generally speaking, there is less independence of mind and true freedom of discussion than in America …  If ever freedom is lost in America that will be due to the ... majority driving minorities to desperation ….”

West Virginia can be credited for helping to industrialize the United States through the development of its coal industry — a fuel that helped power most of the electric utility sector through 2007 while also serving the country’s steel industry. But times have changed. Today, of course, the flood of cheap shale gas in combination with the emphasis on reducing CO2 emissions has displaced coal-fired electricity. And so has wind and solar energy.

Consequently, between the Great Recession that started in December 2007 and June 2018, the state has 9,000 fewer jobs, says Ted Boettner, executive director of the West Virginia Center on Budget and Policy and Dean Baker, a senior economist at the Center for Economic and Policy Research in Washington. Its labor force, meanwhile, has shrunk by 34,000 positions during that time. And today, the state has the third highest unemployment in the nation at 5.3%. 

West Virginia’s gross domestic product grew by $1.8 billion last year. But $1.4 billion of that was created by coal mining and natural gas production. The good news for the state is natural gas prices are rising and adding to the coffers. The bad news is that its coal is going overseas and it is servicing a dying industry at home. At the same time, the economic fruits of both coal and natural gas are transferred out-of-state while the jobs are unstable.

“This means that West Virginia’s politicians can’t really take credit for the growth of the last two years, unless they want to claim responsibility for the jump in world energy prices that gave us $3.00 a gallon gas,” write Boettner and Baker. “The loss of oil exports from Venezuela and Iran has far more to do with recent growth than the end of ‘Obama’s war on coal.’”

Logical Pathway

In fact, West Virginia’s poverty rate increased last year — one of only two states to have such a distinction, according to the U.S. Census. That figure is about 18% and is largely a function of a decline in coal development and it is focused mostly in the southern parts where that industry had once thrived. The state is also home to an aging and sicker population that has fewer available workers. 

To succeed going forward, the state must diversify and expand its manufacturing base, says Rebecca McPhail, president of the West Virginia Manufacturers Association. Current plants could expand and attract suppliers and distributors to co-locate on or near plant sites — just as Toyota is doing. Ditto for new companies like Proctor & Gamble that has already attracted additional related manufacturing. Chemical-makers, like DowDupont, are also primed for investment, all made possible by the wealth of natural gas located in the state.

“It is the most logical pathway,” says McPhail. To get there, “we encourage downstream shale development and a healthy energy portfolio that includes natural gas-fired power and renewables.”  

Will President Trump’s 2017 tax package help accelerate economic growth? It reduced taxes by $1 billion in the state, according to the economists Boettner and Baker, but most of the benefits went to the wealthy. Conversely, expansion of the Medicaid program to working adults has increased federal spending in West Virginia by $900 million a year.

Certainly, there’s a legitimate debate to be had over public policy and the merits, generally, between Keynesian economics and those espoused by free-marketers like Adam Smith. The former says that government must exercise its spending power to help ailing communities or sick economies while the latter takes a hands-off approach. 

Bureau of Labor Statistics

In point of fact, President Obama’s $1 trillion stimulus is the catalyst that helped the country rebound from the Great Recession while President Trump’s $1 trillion tax cut added more fuel to what has already been a powerful expansion. But it has also added more debt, which must be repaid by the selling of government instruments that compete with corporate bonds for investors. That forces up interest rates, which can slow economic growth.

More Questions

Why then are elected members of Congress hiding behind a president who is ensnared in a criminal investigation and who is literally the laughing stock of the world? Why are they timid about defending their ideas? When asked about their positions, they fall back on simple platitudes: “Hillary and Obama bad, Trump good.”

“Honestly, when you look at every issue … she kinda takes the liberal Democrat position, I’m a conservative Republican,” Rep. Alex Mooney, R-WV told the Charleston Gazette-Mail, referring to his opponent, Talley Sergent. “It’s like Hillary Clinton’s views versus Donald Trump’s. I think that voters are pretty clear on the differences between us ... I don’t really think it’s needed to be honest.”

Mooney, who has run office from New Hampshire and Maryland, also campaigned in West Virginia’s open congressional seat in 2014. He had never lived there or voted there before the election. He has been able to raise a ton of cash from outside conservative interests and he uses it to buy television ads that bash his opponents. Mooney has infected the state’s politics like no other politician, sucking the lifeblood out of it for his own purposes.

Similarly, Republican Carol Miller refuses to debate her Democratic opponent Richard Ojeda in the coal producing counties. Absent an economic rebirth in that area, it will be death by attrition, all compounded by an opioid crisis. What are their ideas for economic expansion?

Meanwhile, Republican David McKinley won’t discuss the issues with his Democratic foe Kendra Fershee, in what has been one of the state’s growth engines and home to much of the natural gas production. How will they address environmental concerns? No one knows, which is the formula for keeping the powerful entrenched and their ideas in force.

“The best way to promote … patriotism is to make people take a personal interest in their country's fate by giving them a share in government," de Tocqueville wrote. 

The candidates for U.S. Senate, Democrat Joe Manchin and Republican Patrick Morrisey are scheduled to have one debate. Morrisey has run for political office in New Jersey, for Congress. After moving to West Virginia around 2010, he ran for attorney general there in 2012 and again in 2016, winning both times. Manchin is reportedly ahead by several points.

If incumbent politicians feed the public with “alternative facts” and think that the people will just fall in line, then democracy is at risk. Any disagreement with the prevailing thought is rejected and the “refuseniks” are imprisoned. A fierce debate and a free press are therefore essential. If they are squelched or minimized, it will lead to the suffocation of West Virginia and the American ideal  — the open society that de Tocqueville had come to admire.