Texas Grows On Pennsylvania’s Woes

In what amounted to a complete non-surprise, Pennsylvania was just ranked near the economic bottom of the nation. Forty-third, to be exact.

Why the dismal showing for what was once the major industrial powerhouse, not just of the country, but the world?

More than anything else, crushing taxes and a hostile business climate.

Shackled with the nation’s second-highest corporate income tax, it is also 15^th in personal income tax, 30^th in property tax burden, and number one in estate and inheritance tax.  Those figures are bleak enough in their own right, but because Pennsylvania rolls over to organized labor and trial lawyers, it comes in dead-last last in labor competitiveness.

The result?  A mass exodus.  Businesses, and the Pennsylvanians who work for them, flee the state for the greener pastures of employer-friendly states.

And as our children and grandchildren --- indeed our future --- leave, so too does our political clout.

In the latest census, Pennsylvania has lost yet another electoral vote, giving it just 20. But again, this is nothing new, as the state has seen at least two electoral votes disappear in every census since 1960.

Pennsylvania is not alone in its demise.  Neighboring states such as Ohio, Michigan, New Jersey and Illinois are in the same boat, with millions voting with their feet to escape ever-escalating taxes and an overbearing government.

While some businesses are outsourced overseas, many relocate to states that believe in welcoming rather than hindering. It is no coincidence that the recipients of Pennsylvania’s brain drain are primarily located in the south and west, states that are free of entrenched, business-as-usual politicians who would rather fall on the sword than make the effort to change the system.

And no state more so than Texas exemplifies the fruits of the strategy to attract the best and brightest. 

Despite America experiencing one of the worst recessions in its history, the Lone Star state is booming. Huge numbers of people seeking opportunity are migrating to Texas, so much so that it just gained a whopping four seats in the Electoral College, bringing its total to 38 --- second only to California’s 55.  In stark comparison to its rust belt competitors, Texas has experienced a period of nonstop growth, gaining at least one electoral vote in every census since 1930. (It is interesting to note that California’s economy shrank faster than all but three states over the last ten years; for the first time since 1920, it failed to pick up an electoral vote).

A look at the numbers tells the story:

-         The Texas economy, nearly $1.3 trillion in output, ranks 13^th --- in the world. Some analysts see it eventually eclipsing California in that category.

-         Texas leads the nation in overseas exports, its railroads are ranked at the top, it has more miles of highway than any other state, and has state-of-the-art shipping ports and cargo airports.

-         In Forbes Magazine’s “Best Cities for Jobs” list, Texas cities topped the lists for best big, mid-size and small cities.

-         Nearly 40 percent of all jobs created in the current “recovery” are in Texas, and it is one of only three states have more jobs now than when the recession began in December 2007. The others are North Dakota, Alaska --- all, not coincidentally, big energy states.

-         Texas leads the nation with six cities on the top 20 Overall Strongest-Performing Metro Areas, according to the Brookings Institute’s "MetroMonitor" quarterly report.

Texas innately understands that fostering a business-friendly atmosphere pays big dividends.  So it has paved the way for achieving that goal: it is a Right To Work state (where it is not compulsory to join a union as a condition of employment), has no state income tax, and ranks 8^th best for business tax climate. And its regulatory environment is not nearly as onerous to business as in many other states.

It has also aggressively passed legal reform measures (reducing litigation costs to historic lows), which is credited as a major factor in the unparalleled job growth Texas is experiencing.

Industries in Texas are quite diversified, from energy and mining, to timber, health care, bio-medical and tourism --- industries that parallel those in Pennsylvania.

So why then does the Keystone State, despite its many similarities to Texas, continue to stagnate, seemingly content to limp along while its competitors are thriving?

Because the people, through the politicians they keep electing, are satisfied with mediocrity. Rhetoric aside about wanting to make the state great again, nothing of significance changes in Pennsylvania, no matter what Party controls the Governorship and Legislature.

Tax rates? Among the highest in the nation, especially for businesses, with reductions almost nonexistent. Legal reforms? Few and far between, with no attempt made to pass what is desperately needed: caps on runaway jury awards.  (While the Fair Share Act was just signed into law, limiting liability to one’s responsible share in a lawsuit, it took nine years just to revisit the issue after it passed in 2002 but was thrown out on a technicality).

Regulations? More burdensome than ever.  Educational achievement for the future workforce?  Nearly half of all public school 11^th graders cannot pass basic proficiency tests in reading and math.

And of course, Pennsylvania has made absolutely no attempt to rein in the out-of-control public sector unions.

Year after year, teachers’ unions strike more than in all other states combined, with children becoming the victims in the unions’ never-satiated appetite for more taxpayer largesse.  The mere discussion of eliminating collective bargaining was taken off the table by Gov. Corbett prior to entering into negotiations with the state workers’ unions --- while getting nothing in return.  And in an era where private sector employees are lucky to keep their jobs, with raises out of the question for most, Corbett just gave the public sector workers an 11 percent raise over four years with lavish benefits and no furloughs.

As far as becoming a Right To Work state, that possibility ended with the Corbett Administration stated it could never pass in Pennsylvania.  Which was true --- with Ed Rendell as Governor and a Democratic House.  But with Corbett as leader and major GOP majorities in both chambers, a strong push could well have made that economic godsend a reality.  But it died before it even began.  (And for the naysayers who say it couldn’t pass, just look to Wisconsin for what can be achieved with real leadership.  In arguably one of the most liberal state in the country, collective bargaining was recently eliminated).

The saving grace for Pennsylvania is that it’s sitting atop the second largest natural gas deposit in the world.  Just as energy leads the way it Texas, it could also do so in the Keystone State, as responsible drilling of the Marcellus Shale could pave the way for an unprecedented economic boom.

But given Pennsylvania’s history of chasing away business, the natural gas industry is still (wisely) hedging, waiting to see what the ground rules (no pun intended) will be.  Corbett is right not to impose an extraction tax, as that only would serve to drive a nail into the coffin, but there are many other issues that need to be addressed.  And if the highly-mobile industry does decide to pack it up either because of a hostile business climate or low demand, Pennsylvania, unlike Texas, has no fallback position, pushing it that much closer to the abyss.

Perhaps the most telling difference between the states is not a statistical one, but an intangible.  When in Texas, there is an unbridled sense of pride, a feeling that the American pioneering spirit is thriving, and that nothing is unattainable.

And you see the symbol of that pride everywhere: the Lone Star is embedded in concrete pillars of the modern infrastructure, in buildings, on car bumpers, and even in airport restaurants.  That vibrancy, which is downright palpable, is not just because of Texas’ rich history, but comes from the security that only a booming economy can generate.

Sadly, that feeling has been nonexistent to most Pennsylvanians for decades. Whether we ever regain it will be decided over the next four years.

*****

To Texans, everything they do is not just bigger, but better.  That may seem arrogant to folks in the other 49 states, but as the old adage says, “arrogance ain’t arrogance if you can back it up.”

And looking at the Lone Star State’s success story, it most certainly backs it up.

Chris Friend is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com

Readers of his column, “Freindly Fire,” hail from six continents, thirty countries

and all fifty states. His work has been referenced in numerous publications including

The Wall Street Journal, National Review Online, foreign newspapers, and in Dick

Morris' recent bestseller "Catastrophe."

Freind, whose column appears regularly in Philadelphia Magazine and nationally in

Newsmax, also serves as a frequent guest commentator on talk radio and state/national

television, most notably on FOX Philadelphia.  He can be reached at CF@FreindlyFireZone.com

Gov. Onorato --- Err…Corbett --- Gives Unions A Sweetheart Deal

How this affects you: the new contracts for unionized state employees will cost $164 million as workers get an 11 percent raise, with no pension reform, while the private sector continues to get rocked.

In case you have been living under a rock, here’s a newsflash: we are experiencing one of the most severe recessions in our history, and there are no greener pastures in the immediate future.

So common sense dictates that with high unemployment, decreased tax revenues, large deficits, and, most significantly, massive pension obligations, governors would take whatever steps were necessary to ensure that their states, and its citizens, remain solvent, especially when it comes to negotiating public-sector union contracts.

That happened in places like Wisconsin, Indiana and Ohio, where true Republicans are in charge. Governors Scott Walker, Mitch Daniels and John Kasich took the heat and did what they had to do, reeling in the out-of-control taxpayer largess afforded to these unions.

But most amazing of all is New Jersey Governor Chris Christie’s remarkable success. Just last week, he pushed through a monumental union pension and benefit reform package that will save taxpayers over $120 billion --- and did so with heavily Democratic, pro-union legislative majorities.  So effective was Christie that alongside him at the bill-signing was the Senate President --- a longtime union member.

Contrast that to the deal just reached by Pennsylvania Governor Tom Corbett with the largest state unions. Instead of acting in the best interests of the taxpayers footing the bill, he simply continued the Rendell legacy of keeping the cash register door wide open.

It’s bad enough the Governor rolled over on all the sweeping concessions he was seeking, but he ended up giving the unions a sweetheart deal.

Over the next four years, unionized state employees will receive an almost 11 percent raise and a guarantee of no furloughs.  And remember, this significant bump is in addition to their three percent raise two years ago, four percent raise last year --- and three annual step increases which averaged 2.25 percent during that time. Cha-ching!

Must be nice to have such staunch advocates like Governors Rendell and Onorato --- sorry, I meant Corbett --- fighting for you.

And how do these pay raises compare to those in the private sector?  With such high unemployment and underemployment rates, do you really have to ask?  Most are receiving no raises at all, not even cost of living adjustments.  And those fortunate enough to still have a job have no choice but to hang on for dear life, praying they survive the next round of layoffs.  Making matters worse, many have to also shoulder ever increasing healthcare costs, if they have coverage at all.

In addition to substantial retirement benefits, state workers have guaranteed healthcare, too.  And while they will pay a bit more with this new contract, it’s still at a level way below many in the private sector.

It used to be that working in the public sector was a trade-off.  You wouldn’t make as much money as in the business world, but the benefits were good and contracts were guaranteed.  But all that changed as union contracts exploded upward --- at the expense of taxpayers.

Now, in many cases, unionized public employees make more than their peers in the private sector, and retire on pensions and benefit packages that would make Wall Street financiers blush with envy.  Of course, that has come with a price, especially in Pennsylvania, and now it’s time to pay the piper.  State pension obligations go through the roof over the next several years, as annual taxpayer-funded contributions to the two state pension funds increase exponentially, ballooning from $800 million now --- to billions per year.

The last Governor and legislature kicked the can down the road last year, but that only gets you so far, and, in the process, devastates the future of our children and grandchildren.

By caving in to the unions, giving them a contact that would be way too generous even in a strong economy, this Governor has chosen not to address the reforms necessary to keep Pennsylvania on solid ground, which will eventually lead to higher state borrowing costs and push the state closer to the abyss.

And while we’re on the subject of the state’s finances, let’s set the facts straight about the current budget. Reducing the budget by four percent is a good thing, but was inevitable after the loss of federal stimulus dollars.  Had he won the governorship, Dan Onorato would have signed a budget almost exactly the same as the one Corbett did.  For that matter, even Governor Spendell, who never saw a spending increase he didn’t like, would have been forced to reduce the budget to close the $4.2 billion budget deficit.

Which, in reality, is closer to $7 billion because no one in Harrisburg wants to address the real fiscal situation.  The budget, which is constitutionally required to be balanced, was passed last year on ghost revenue: $400 million from the tolling of Interstate 80 (which never got tolled);  $800 million raided from the MCARE fund (used to offset high medical malpractice rates) which, in all likelihood, will be ordered repaid by the state Supreme Court; federal Medicaid dollars that were budgeted to be $800 million but in actuality amounted to $595 million; and a $1.1 billion revenue shortfall after ten months of last year’s fiscal year. 

This shortfall seems to have simply vanished off the books.  Of course, do that with your own business --- and you go to jail.  So with the looming pension bomb and the real state deficit, it’s not a pretty picture for Pennsylvania’s future.

There was a way to address these issues and begin to reverse the state’s decline.  Governor Corbett could have mandated a situation whereby union members would negotiate with their prospective employer individually, and free market-type incentives would allow for a fair offer --- fair for the employee, and fair for the “employer” (the taxpayer).

So an offer would be made --- salary, healthcare, benefits --- and the individual could choose to accept or decline it.  Which is exactly how it’s done in the free market.  And for those who would claim it wouldn’t be “fair” to the state worker, you know what?  There would be a line a mile long of qualified individuals ready and willing to accept such an offer. Accountability and efficiencies would increase, and unmotivated, bureaucratic sloths would be eliminated in favor of those willing to be good stewards of taxpayer money.

Sound simple and fair enough?  It is, and it’s called the elimination of collective bargaining.  It’s something successfully implemented in other states, but was incomprehensibly taken off the table by Corbett three months ago --- while getting absolutely nothing in return. 

The result?  No pension reform, and a lucrative union contract that the Governor says will be a net cost to the taxpayers of $164 million (which means that figure can be safely doubled).

The Wall Street Journal just labeled Corbett as leader of Keystone Cops.  After this latest debacle, it’s hard to disagree.

Chris Friend is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com

Readers of his column, “Freindly Fire,” hail from six continents, thirty countries

and all fifty states. His work has been referenced in numerous publications including

The Wall Street Journal, National Review Online, foreign newspapers, and in Dick

Morris' recent bestseller "Catastrophe."

Freind, whose column appears regularly in Philadelphia Magazine and nationally in

Newsmax, also serves as a frequent guest commentator on talk radio and state/national

television, most notably on FOX Philadelphia.  He can be reached at CF@FreindlyFireZone.com

Another Rendell Bailout: Build Ships With No Buyers

Corbett Can Drop Anchor On Governor’s Taxpayer Boondoggle

In the movie Dave, Kevin Kline plays a presidential lookalike who finds himself running the country after the real President falls into a coma.  Convening a Cabinet meeting, this political novice uses common sense to expose the ludicrous mentality of the entrenched Business As Usual crowd.

Kline asks the Commerce Secretary about an ad campaign his Department has implemented to boost consumer confidence in the American auto industry.  “It’s designed to bolster individual confidence in a previous domestic automotive purchase,” the Secretary proudly explained.

Speechless at first, Kline fires back, “We're spending millions for somebody to feel good about a car they already bought? I don't want to tell an eight-year-old kid he's gotta sleep in the street because we want people to feel better about their car. Do you want to tell him that?”  The shocked Secretary (finally) sees the light, and the program is eliminated.

Incredibly, that mentality isn’t limited to fictional Hollywood scripts, but is a large part of the way our governmental leaders operate. Look at what Pennsylvania’s Ed Rendell is trying to pull off before he walks out of the Governor’s Mansion a few weeks from now.

Shortly before leaving office, Rendell authorized $42 million in taxpayer money to be sent to the Philadelphia Regional Port Authority (PRPA) to help bail out the sinking Aker Shipyard in Philadelphia.

The funding, we are told, would prevent Aker from going under, since it would be building two new tanker ships.  

Of course, there’s one small problem.

There are no buyers for the ships.  And the prospect of that changing course anytime soon is virtually nonexistent.

Thousands of ships worldwide are lying at anchor because of the global recession, idled indefinitely because the demand for shipping is dismally low.  It’s gotten so bad that some ship owners are even scrapping their vessels to eliminate harbor costs, receiving pennies on the dollar. But the remaining glut of vessels is still huge, depressing prices for the foreseeable future.

So, let’s be “Dave” for a second and get this straight.

Rendell wants to spend money --- our money, since there’s no such thing as “state” money --- to build ships…that no one is going to buy, ostensibly so some 1,000 workers can keep receiving a subsidized paycheck. And since there aren’t any buyers, the ships obviously wouldn’t be built-to-order, further devaluing them and making their eventual purchase all the more difficult.

Rendell may not care, but I certainly wouldn’t want to tell a mother that her child died in a bridge collapse that resulted from a lack of maintenance --- because $42 million was spent on ghost ships instead of bridge repairs.

But what type of Rendell move would it be if he didn’t take care of his political pals and big-time fundraisers?

The Chairman of the PRPA is none other than John Estey, former Rendell Chief of Staff and a longtime partner at Ballard Spahr, the Guv’s old firm which has received the lion’s share of millions in no-bid legal contracts from the state.  And guess who the outside counsel of PRPA was?  Ballard Spahr.

This is the same John Estey who is also Chairman of the Delaware River Port Authority (DRPA), which is intricately linked to the PRPA, sending millions their way over the years.

The DRPA couldn’t dole out legal contracts fast enough to Ballard when it served as its outside counsel --- over $3.2 million since Rendell was elected in 2002, up from $480 the year prior. And when Chairman Estey voted to approve those legal bills, he was, in fact, approving funds that went directly to Ballard --- his own firm. 

Ballard and its associated entities, by the way, have contributed $1.5 million to Rendell.

The Philadelphia Port Authority is nothing if not politically-connected, too: two Board members alone have donated over $350,000 to the Governor’s campaigns.

It must be nice (and lucrative) to represent both Authorities when all that “Other People’s Money,” to quote the legendary Vince Fumo, is flying around, but that’s another story.

But to make the story even more interesting, enter Manny Stamatakis, Chairman of the nonprofit Philadelphia Shipyard Development Corporation.  That is the entity which will receive the $42 million so it can buy Aker assets and lease them back to the company as part of the bailout.  Some might call that a shell game.

“If they don't build these next two ships, this yard is shutting down," Stamatakis was reported as saying.  Well then, let’s not mess around, Manny.  Let’s make it $420 million and employ 10,000 workers.  Or even $4.2 billion so that Aker can build 200 ships.  No one will buy them, either, but so what?  We’re keeping people employed and the political-elite will be happy.

Ironically, the entity that should be in the best position to throw money Aker’s way would be the DRPA with all the economic development money it controlled.  But it was under Manny’s watch as DRPA Chairman that much of the $500 million in such funds were blown --- pretty much on everything not related to bridges or ports.

And now Stamatakis is Chairman of the Shipyard Development Corporation.  Go figure.

Hope is not lost though.  Attorney General Tom Corbett must still approve the contract.

Sources have told Freindly Fire that the lobbying on Corbett to let this contract sail through before his January 18 gubernatorial inauguration by has been extremely intense.  Given the Rendell Administration’s track record with these types of contracts, that should be red flag enough to put the brakes on this deal until all questions are thoroughly answered.  And clearly, questions abound.

The Rendell legacy has been one of abject failure for all Pennsylvanians not linked at the hip to the Governor, and the attempted Aker bailout is a perfect illustration of how he achieved that dubious status.

Like two ships passing in the night, Corbett and Rendell could not be any more different in their direction. Here’s hoping Corbett drops anchor on Rendell’s last hurrah and charts a course for safer harbors.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com

Freindly Fire’s Biggest Winners Of 2010

It's that time of year again when Freindly Fire heaps praise upon those most deserving. You probably aren't going to find these winners on the lists of typical media outlets, most of which bow at the altar of political correctness.

The Biggest Winner of 2010, as is the case every year, goes to none other than illegal invaders, all 20 million of them. Year after year, they continue to win everything. They are handed driver's licenses, free education - in some cases all the way to college - and free first-rate health care. Most appallingly, their freedom exists because of our government's non-existent efforts to deport them. Their presence has forced the closure of hospitals, taken jobs from American workers, depressed wages and caused taxes to sharply increase. And let's not forget that many illegals are voting in our elections. How's that for irony: foreigners deciding American elections. And every time the illegals win, there is an even bigger loser. Us.

Michael Vick and the Canine Community

As quarterback for the Philadelphia Eagles, Vick has played spectacularly well, good enough to hide the team’s considerable shortcomings and earn the Birds the Division crown.  He is often mentioned as a leading MVP candidate, and many experts predict he will lead his team to the Super Bowl.

Which is all an unexpected pleasure, given that Vick was in jail not that long ago for executing losing canines in his dog-fighting operation. Given a reprieve by the League, he was the Eagle’s third-string QB last season, and he started this one as the backup.  He got his shot though, and, made the most of it.  Perhaps most noteworthy, he never used his numerous injuries as a crutch when the team lost, and has demonstrated more leadership in one season than former-quarterback Donovan McNabb showed in his entire, lackluster career.

Is Vick truly remorseful about the dog killing, or sorry only that he got caught? Tough to say, but second chances are what America is all about, and, for the most part, he has kept himself out of trouble.  With dogs everywhere breathing easier (actually, breathing at all), and Vick on the right track, he is definitely the most unexpected winner this year.

Governor Ed Rendell

Ok, not really.  Rendell’s eight-year tax-and-spend agenda, combined with widespread conflicts of interest throughout his Administration (some say pay-to-play) has driven Pennsylvania off the financial cliff, leaving a $5 billion deficit debacle for incoming Governor Tom Corbett to fix. And it’s been three years and counting since his promised interview with “Freindly Fire” --- making that the only media entity with which he refuses to speak.  I wonder why.

But fair is fair, and Rendell could not have been more correct when he hammered the NFL for canceling the Sunday night football game in Philadelphia because of a snowstorm.  Not a two-foot storm of the century, mind you, but an 8 inch “weather event” that would have made an outdoor football game one to remember. The roads were drivable, subway trains were operational, and the fans would have shown up in force --- loving every minute of it.  They do it in other places just fine --- Green Bay, Chicago and New England, to name a few.  But now, Philadelphians are officially considered pansies.

The reality is that the League saw an opportunity to test market Tuesday Night Football.  As with most things, the decision was rooted in money.  But it was done so at the expense of the last real sport in America, where players gut it out with broken bones instead of running to the disabled list because of a hangnail.  In many ways, the game’s cancellation reflects what America has become: soft and wimpy, offended by everything and decisive in nothing. It’s how we run business, operate government, wage war, and yes, play football. The pioneering, tough-as-nails spirit that made us unique is all but gone.

Rendell labeled the NFL’s action the “wussification” of America.  Wrong first letter, Guv.

Congressman Joe Sestak

True, Sestak lost his bid for United States Senate, but he was unique among politicians. Here’s a guy who gave up the job security of a 100 per cent safe congressional seat to take on 30-year incumbent and Goliath of the Senate, Arlen Specter, in a long-shot bid. The entire Democratic Party power structure was against him, from Rendell to President Obama, thus ensuring very limited campaign money.  Yet he persisted in his mission, even turning down a reported job offer from the White House. And a funny thing happened along the way: he won the primary election.

But the more admirable trait of Sestak was that he never backed down from his core convictions.  Whether or not one agreed with him, he should be respected for standing his ground and not playing both sides or “moving to the middle” to appease the pundits. 

For any pol to do that is unusual, but it’s even more amazing in a year that saw a political wave running in the polar opposite direction of his beliefs.  To Sestak’s credit, in the best Republican year since 1946, he ran to the left of Barack Obama, favoring bigger government, higher taxes, more stimulus and expanded national healthcare.  And with the courage of his convictions, he ran towards those ideas, not away, as the vast majority of Democrats did.

Voters are craving more leaders committed to their ideals, whether Right or Left.  They may not always agree with those people, but they respect knowing where such leaders stand.  Unfortunately, such courage is in short supply.

China

The global recession is wreaking havoc on America, but China continues to grow at an unprecedented rate.  Why?  Because they put themselves in a position to win no matter what transpires, assuming that political will in America doesn’t raise its head.  And since there’s a fat chance of that happening, China’s push toward domination continues.

 Taking advantage of its favorable trade deals with the U.S. (READ: bad for us), and benefitting from America’s business-killing tax rates (highest in the world), China is advancing itself with state of the art infrastructure --- such as the world’s fastest train, biggest hydro-electric dam, and 25 nuclear power plants under construction ---, and a first-rate military that not only boasts quantity but quality.

 If the dollar stays (relatively) strong, China’s boom will continue as its manufacturing expands.  And if the dollar plummets, China, while taking a slight hit in the value of the considerable U.S. debt it holds, could well find itself a kingmaker by controlling the world’s reserve currency.

Blaming China for our woes makes for effective campaign commercials, but unless we start taking a hard look in the mirror very, very soon, we might as well invest in Rosetta Stone for one last financial hurrah, as its “How To Speak Chinese” will be the hottest seller in the USA since Rubik’s Cube.

Chris Christie and the Republican Party --- Sort Of

New Jersey’s Christie has accomplished more in one year than damn near all the other 49 governors combined.  And all it took was that elusive trait called “political will.” The Republican Chief Executive has successfully taken on all sacred cows, from public education to unions, bureaucrats to the entrenched political culture. 

So effective has his brand of in-your-face reform been --- achieved with both legislative chambers being solidly Democratic ---, Christie’s star power is so bright that he is routinely mentioned as a presidential contender, and serves as a model for politicians nationwide, including Pennsylvania’s Governor-elect Tom Corbett. With Corbett and Christie as bookends in two powerhouse states, these law-and-order leaders may yet pave the way for how America gets itself back on track.

The Republican Party as a whole is a different story. 

The GOP would be wise to understand that the election was NOT a mandate for Republicans, as much as it was a protest…a shot across the bow of both Parties. Voters have grown increasingly irritated with the Business As Usual approach in Washington, Harrisburg and Trenton, and are demanding their elected officials focus on what the people want, not what some leaders think they need.

If they become the Party of No, expect the pendulum to swing back yet again.  People don’t want more of the status quo.

And with America more vulnerable than ever before, from its reliance on foreign oil to its economy --- with the dollar based on absolutely nothing of value --- the stakes have never been higher.  Will the GOP work with the President on his promises to expand nuclear energy and offshore drilling, enact further tax cuts and demand more teacher accountability?

The next year will tell, and if the Republicans --- and the President --- don’t play their cards right, they will end up on the nations’s Biggest Losers list.  And most definitely, neither can afford to be on such a list. 

Look for Freindly Fire’s Biggest Losers of 2010 column next week

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com

Marcellus Shale: Not An NBA Player, But Key To PA’s Future

First in an ongoing series examining all aspects of developing the Marcellus Shale.

Stories keep rolling in about the booming economy in a faraway land.  Tales of jobs, new construction on every corner, more jobs, hotels booked for a year, office space --- long vacant --- now renting for the highest prices ever fetched, and even more jobs.  Yet despite years of growth, the influx of foreign capital hasn’t subsided, but in fact, continues to exponentially increase. Combined, all these things have created a climate so healthy that taxes haven’t risen in eight years.

As with Doubting Thomas, something this good must be seen to be believed.

So as my trip was being arranged, I was asked the duration of my flight to China, and how long I’d be away.  As to the second question, the same day.  I can’t answer the first, because it’s based on a false assumption.  I was, most definitely, not going to China.

Although solid growth and low taxes are now virtually nonexistent in this country, I had a mere three hour drive to behold the only thing that can bring Pennsylvania --- and maybe the nation --- back from the edge of the abyss.

Time to get up front and personal.  Time to meet Marcellus Shale.

*****

Pop quiz.

Which of the following is true:

A)    Bon jour, monsieur. I present to you Marcellus Shale, ze best French wine this side of ze Seine River;

B)    Meet Marcellus Shale, the new Philadelphia 76er who might help the NBA team win more than 10 games;

C)    Welcome to the Marcellus Shale, one of the largest natural gas fields in the world, and centered in Pennsylvania, where 60 percent of the state sits atop the reserves, whose liquid gold is conservatively valued in the hundreds of billions.

Unfortunately for vinophiles and the impotent Sixers, the answer is C. 

But unbelievably, there was almost an asterisk.  If lame duck Pennsylvania Governor Ed Rendell and his protégé, failed gubernatorial candidate Dan Onorato, had their way, the Marcellus Shale industry would have died before ever getting off the ground.  Those politicians wanted to impose a severance (extraction) tax on natural gas, as high as ten percent.  Rendell’s rationale?

Oil companies needed to pay their fair share.

Thankfully, Governor-elect Tom Corbett, with a No-New-Tax promise being the cornerstone of his campaign, trounced Onorato. In doing so, he slammed the door shut on the catastrophic failure that will forever be known as the Rendell Legacy, and opened a portal to opportunity not seen in Pennsylvania for generations.

*****

Corbett and Onorato were like night and day on a number of issues, but none more important than how to proceed with the Marcellus Shale. A severance tax, especially the one proposed by Rendell/Onorato, would have undeniably been the death knell of what is a mobile industry.

While Pennsylvania is blessed with a sizable portion of the highly-profitable Shale, our competitors are not far behind: West Virginia, Maryland, Ohio, New York and up into Maine and Canada.  And Michigan, with the second highest unemployment rate in the nation, is making lucrative offers to the industry to extract Shale gas from beneath the Great Lakes.

In his attempt to make Pennsylvania competitive again --- dare we say viable ---, Corbett innately understood two things that were lost on Rendell.  First, if you want less of something, tax it.  Second, you can’t tax your way out of a recession and into prosperity.

But what about the “fair share” that the industry allegedly doesn’t pay?  Pure election year theatre, orchestrated in a shameless attempt to close the $5 billion budget deficit created by the reckless former Governor.

The real story?

The natural gas companies in Pennsylvania, just like all other corporations, are saddled with the second highest corporate net income tax (CNI) in the nation (10 percent), along with an onerous capital stock and franchise tax and the country’s most hostile legal system.  And this horrid picture doesn’t even include the world’s second-highest national corporate income tax rate (40 percent).

Put another way, the proposed severance tax and the CNI alone would have handicapped the industry from the get-go, imposing on them a massive 20 percent tax deficit out of the gate.   And the result if the tax had passed?  The industry would have simply rolled away from unprofitable pastures in Pennsylvania.

So much for fair share.

But now that it’s here, what is the industry giving back to the Keystone State?

Hope, optimism and a really big torch --- one bright enough to rekindle the flame that lights the way to a better tomorrow.  In doing so, our citizens may yet revive the once-undying faith that each successive generation will fare better than the one before it.

How? Simple.  In addition to bolstering national security (by decreasing reliance on foreign oil and diminishing the threat of terrorist attack), energy independence is the first step to bringing back our manufacturing base. And with upwards of 500 trillion (that’s with a “t”) cubic feet of natural gas in the Marcellus Shale --- enough to power the gas needs of our entire nation for decades --- there are several hundred thousand jobs that will directly result from Shale operations in Pennsylvania alone.

I saw that first-hand on a sunny day in late November.

Not far from Williamsport (of Little League World Series fame) in Lycoming County stands Montgomery, a once proud manufacturing town where jobs were guaranteed, but which has since fallen on hard times.  Shells of long abandoned factories, mills and drug-infested subsidized housing became the bleak landscape at every turn, with zero job prospects and no future.

That was, until the secret of the Shale surfaced.  Literally.

Now, Montgomery is full of smiling faces once again, as it has become a living, breathing symbol for the prosperity ahead --- so long as politicians and bureaucrats don’t muck a good thing.

On this day, ground was broken on a Shale-related building at the site of an old mill.  The new occupants, PEAK Energy and Newalta, made a commitment for the long haul.  And with them will come more and more drilling infrastructure, logistics, personnel --- and tax revenue.  Revenue that will fill the coffers of Montgomery, Lycoming County and the state, as workers are employed, houses are bought (rather than foreclosed upon), hotel rooms are booked, restaurants spring up, and an entire support industry grows around Shale businesses. (Which is why, because of the Shale, Lycoming County hasn’t raised taxes in eight years).

And the workers?  Primarily Pennsylvanians.

As I witnessed the job-creating event --- not exactly a common sight in this country --- I had the chance to speak with the project’s developer, John Moran, President of Moran Industries and one of the leading businessmen advocating safe, environmentally-sound gas extraction in Pennsylvania.

He said that the only way to be competitive again is to wean the nation off foreign oil, with its volatile price fluctuations, and instead develop the vast natural energy resources available domestically, starting with the Marcellus Shale.

Spoken from a man of experience, given that each truck in his logistics fleet was drinking $1,000 of diesel fuel every 36 hours during the 2008 oil spike crisis.

“I have lived and worked in Pennsylvania all my life, and never have I seen such an awesome opportunity. Responsibly harnessing the Marcellus Shale is the only thing capable of resurrecting our shattered manufacturing base and making us competitive again,” Moran told me.

A stodgy, aloof businessman John Moran is not.  He gets down and dirty in his business, and his passion for the Shale allows him to explain its real value in a refreshingly simple and clear way. Politicians should take a lesson.

 “Domestic gas production helps free us from our enemies while allowing us to compete with cheap labor overseas...it lowers the cost of business because of cheap energy.  Pennsylvania is a snapshot of what America can be if it ever decides to truly pursue energy independence,” he added.

As we were parting ways, he summed it up this way: “Unimaginable amounts of gas under our feet, low cost energy, our manufacturing grows and jobs stay here, and the country is safer.  Where’s the downside?”

The good news for John Moran is that if he ever decides to look for a new career, he would make a great columnist, as no one could have stated the importance of the Marcellus Shale any better.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com
Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris' recent bestseller "Catastrophe."
Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX.  He can be reached at CF@FreindlyFireZone.com