Ailing US Investment gets boost from energy

This might be a tough article without the nice graphs and using a progressive report for this. But hold on to your oysters because I think no matter the source, the message is pretty clear. If not, there are plenty of other sources, even better ones.

In a report from Progressive Policy Institute titled “US investment heroes of 2013: the companies betting on America’s future”, the underlying point though is:

“total domestic investment fell drastically during
the recession and has yet to fully recover.”

But its billed as the heroes investing in America, based largely on 2012. There are 25 in all. Interesting though that the top 8 are energy(oil & gas) companies. Weeding through the progressive agenda, after the above quote, it complains:

With gridlock in Washington and financial troubles at the state and local level, government real spending on productive assets from highways and bridges to computer equipment, net of depreciation, is down by half compared to the average level of the 2000s.

So we are comparing investments and purchases under a good economy to a stunted one. In progressives’ eyes, the problem is usually that government spending is not up to par. Putting that aside, they point out the raw total investment in US is down, and not what it should be.(chart shows a slide) There we can have a real point.

As shown in Figure 1, business investment, outside of housing, is still 20 percent below its long-term trend. There are several reasons why private business investment is failing to reach its potential. Globalization, weak demand, deleveraging and a shortage of workers with technical skills all contributed to the investment fall-out and subsequent investment gap. And as PPI has documented elsewhere, the sheer accumulation of regulations over time can discourage capital investment and innovation.

The top five U.S. investment heroes of 2013 are At&t, Verizon, Exxon-Mobil, Chevron, and Intel.

“PPI’s ranking of U.S. Investment Heroes for 2013 is once again led by AT&T, which invested almost $20 billion in the U.S. in 2012. The list then follows with Verizon, Exxon, Chevron, Intel and Walmart. Together, we estimate these companies invested almost $75 billion in the U.S. in 2012, an astonishing total almost twice the GDP of Wyoming. Over the last year, these companies have poured capital investment into the deployment of high-speed broadband, oil and natural gas production, and new corporate and retail facilities. The eight energy companies on this year’s list invested a combined $56 billion in 2012.

There are 25 top-rankers investing in the US. Of those, there are 8 formidable energy companies on the list. While At&t and Verizon take top billing – you can surmise why – individual energy sector companies are not far behind. And that is without the much ballyhooed XL Pipeline.”

Of a grand total of (blns)149,817 investment in 2012, the largest portion of 56 billion comes from the energy sector. Telecom and cable was 50.5 billion. Technology was 14.4 billion. Retail was 13.5 billion. Other category is 9.0 billion. The auto sector invested 6.3 billion.

It is essential our economic policies make domestic business investment a priority.

“In energy, the debate over natural gas fracking, along with territorial disputes over interstate and oil and natural gas pipelines, could eventually hinder investment if issues remain unresolved. It is important that U.S. energy policy embrace the potential of low cost natural gas, while encouraging producers to adopt “best practice” drilling and production techniques that minimize health risks and environmental damage. Our research has shown both U.S. and non-U.S. energy companies are among the largest investors in America’s plants, properties, and equipment.

Policy makers also can encourage more companies across all sectors to invest domestically. Through responsible regulatory reform, we can clear bureaucratic red tape by removing or improving the many outdated and duplicative regulations imposed on U.S. businesses at the federal, state, and local levels.”

So while they want energy investment in America — and it is a big portion — they admit the regulations constrain overall US investment. Of course, their solutions are not the central point. They are more progressive based. I doubt they take into account what all the impacts or consequences of their policies would be . However, there is a message in the results.

While they admit the bureaucratic red tape and regulations constrain investment and, I argue, real economic growth, they still plead for a progressive approach.

The very industry the progressive left is beating up on and demonizing most of the time are the ones who are investing in US, despite the economic conditions which have most major players hamstrung. At the same time, Obama’s administration continues its war on the coal industry.

Of course, some of the top-name companies are gloating about being on “the list” of top investors in America, even as investment is down. When you look at the list, the amounts of many individual companies seem small by comparison to the large investors. To some, like At&t and Verizon, that investing is the nature of their business. Still some boast.

But the energy sector is a significant piece to our economic survival. Imagine if they were out there demonizing the other sectors the same way.

Source: PPI Pdf report


Tagged , , , , , , , , . Bookmark the permalink.

8 Responses to Ailing US Investment gets boost from energy

  1. Ayn Rand’s “Equalization of Opportunity” bill,,, yeah, right~!

  2. Clyde says:

    These clowns understand “investment” like monks understand fornication.

  3. Hardnox says:

    Good post. No wonder the Left is hammering the Oil & Gas industry.

    The asshats won’t be happy until we’re back on horseback. Then they’ll bitch that we’re cruel to animals.

  4. Kathy says:

    Great post, Bull, evidence in front of them and they still refuse to admit it.

    Here’s a statement that caught my eye – “..a shortage of workers with technical skills all contributed to the investment fall-out..”

    With a gozillion people on unemployment, how can there be a shortage of workers…of ANY kind?