Thursday, December 2, 2010

Coal state's dark reckoning

Dec 2, 2010

Three years after the United States fell into its worst recession since World War II, many workers and families are still struggling with the fallout. In a three-part series, The Straits Times' US Bureau examines how the economic anxieties have affected ordinary Americans and the way they vote. In Part 2, we look at the perfect storm of economic challenges that is prompting a coal mining state to ask tough questions about its allegiances.

By Chua Chin Hon, US Bureau Chief in Washington

SYLVESTER (WEST VIRGINIA): When Mr Christopher Rusztowicz received his first pay cheque as a coal miner three weeks ago, he had little to celebrate.

After paying off the US$500 (S$657) he owed a supermarket and an electrical appliance store, he had US$190 left from the 45 tortuous hours he spent working each week in an underground mine here in southern West Virginia. To make ends meet, he took on a second job as a security guard that paid US$8 an hour.

Still, the 40-year-old considered his current situation an improvement over the low points in his life. For years, he was periodically homeless and lived out of a van while flitting from one temporary job to another.

At one point, he even had to sell his own blood plasma in order to pay for the medical bills of his cat - his one constant companion over the years.

When asked if he blamed anyone, Mr Rusztowicz said matter-of-factly that he felt 'sold out' by his government. If he had his way, he added, he would close the country's borders and ban foreign imports so that manufacturing jobs could thrive again in the US.

'Trade deals like Nafta (the North American Free Trade Agreement) completely changed the way I looked at the government,' he told The Straits Times over brunch at a local diner, where he owed US$300 in unpaid bills.

'The government should have found ways to keep the jobs here instead of shipping them overseas. The whole idea of 'government of the people, by the people, for the people' went right out of the window when they signed those trade deals.'

Such sentiments are not uncommon in heartland America, where workers have been squeezed not only by the recent recession but also by the decades-long decline of traditional manufacturing and industrial activity.

But in predominantly blue-collar West Virginia, struggling Americans like Mr Rusztowicz are not the only ones upset about the economy.

Well-off retirees, small business owners, conservative activists and the coal industry have found common cause in their opposition to a range of economic policies - which they believe are hurting the recovery and the country's long-term interests.

Deep differences

Comfortably retired from a long career with the government and the energy sector, Mrs Dee Armstrong could have spent the past 18 months travelling or relaxing at her two-storey log house built in the secluded woods of eastern West Virginia.

Instead, the 61-year-old threw herself into politics for the first time in her life, playing a leading role in the grassroots Tea Party movement which sprang from public anger over the economy.

Like many in the movement, she got involved not because she had lost her job or was struggling to make ends meet. Rather, she joined because she felt compelled to do something about the barrage of expensive economic policies that the Obama administration was pushing through.

By spending trillions of dollars to stimulate the economy, bail out Wall Street and rescue reckless home owners, the government was not only abandoning the free-market principles that built America, but also pushing the country towards insolvency and economic ruin, she argued.

In her view, President Barack Obama made matters worse when he signed into law earlier this year a trillion-dollar health-care overhaul that would further entrench the culture of welfarism at the heart of the economic malaise in West Virginia and the US.

'This is a free country, not a free ticket,' said an unapologetic Mrs Armstrong, who had previously worked for the Federal Bureau of Investigation and the Department of Homeland Security. 'The 'entitlement majority' wants handouts, welfare, and health benefits when they don't contribute to any health systems or insurance. And guess who the government gets the money from? Me!'

Business owners like Mrs Aimee Peters, who runs a pizza restaurant in Martinsburg, West Virginia, also expressed concerns that the health-care changes would add further uncertainty to her business in an already uncertain economic climate.

The anger among conservatives like Mrs Armstrong stems from sharp philosophical differences with Mr Obama's Democratic Party on the appropriate economic role of the government. But it is by no means the only economic debate that is shaking up politics here.

There has been much anxiety in West Virginia of late - over the Obama administration's push for climate change legislation, and tighter regulation of a destructive coal mining technique known as 'mountain top removal', where explosives are used to blast off the top of mountains so miners can get to the coal seams.

To some, these are long overdue steps towards a clean energy future. But to many West Virginians, these moves are tantamount to open warfare on their economic lifeline - waged by the party in control of the state for the last 80 years or so, no less.

'When (Mr Obama) attacked coal, he attacked West Virginia,' said Mrs Kandi Montini, 43, a database administrator.

It is no surprise then that the coal industry poured millions of dollars - much of it going to the opposition Republicans - into influencing the outcome of the recent mid-term election.

Perfect storm

To outsiders, West Virginia is something of a political puzzle. Its predominantly white working-class population is socially conservative, but has voted mostly for the left-leaning Democratic Party since the Great Depression.

Its economy is one of the worst performing in the country, yet voters keep rewarding their elected officials - most of them Democrats - with long tenures in state and national-level offices.

For decades, West Virginia's internal political logic has seemed impervious to national trends.
But some observers believe that the perfect storm of economic anxieties that has been buffeting the rich, the poor, the business community and the coal industry alike is helping to forment a major political shake-up in this traditionally Democratic state.

'This is the beginning of an ideological tsunami,' said Mr Lance Schultz, a leading Tea Party activist based in Charleston, West Virginia's capital city.

While analysts are generally sceptical of such sweeping claims, they acknowledge that the results from last month's mid-term legislative elections point to a tough political environment ahead for Mr Obama's party.

Though the Democrats retained their overall dominance in West Virginia, the party lost a seat in the US House of Representatives which it had controlled for over four decades. The Republicans also picked up six state-level legislative seats, and gave many Democratic candidates a serious run for their money.

Popular Democratic governor Joe Manchin, for instance, was forced to tack to the right of the political spectrum on a range of issues before winning a hard-fought race for the US Senate. To fight off criticisms that he would be a 'rubber stamp' for Mr Obama, the candidate went as far as to shoot a real bullet through a proposed climate change Bill - to show he was serious about protecting West Virginia's economic interests.

Mr Schultz believes that more Democratic office holders in West Virginia would have been kicked out if he and the other Tea Party activists had reached out to more voters - something he promises to fix by the next election in 2012.

That, however, would be no easy task. For one thing, many of the coal and rural communities are in remote locations which do not even have cellphone signals. Many miners are also disinterested in politics, given the long, isolating hours they work underground.

Most importantly perhaps, many families here are dependent on state-funded welfare programmes as well as government-related projects that generate jobs in their area. Both could face severe cutbacks if the Republicans seize control.

But Ms Cindy Frich, a Republican newcomer who narrowly lost her race for a state legislative seat last month, said she encountered many voters who had begun to rethink these political sacred cows.

She added: 'We've always struggled economically in West Virginia and a lot of people are on welfare and transfer payments. You would think that people like that would be more for government health care, but they weren't.

'Many of them just wanted to stop what's going on in Washington, even if it meant that their vote would cut their benefits. It's just been too overwhelming.'


Dec 2, 2010
All fired up over 'War on Coal'

Govt's green policies seen as threat to jobs

BECKLEY (WEST VIRGINIA): Historically poor, residents in this isolated but coal-rich state have long been the subject of ridicule and cruel stereotyping.

What riled many people here in the past two years, however, was not some cheeky new insult about their rural lifestyles or fondness for guns.

Instead, it was something that cut deeply in these tough economic times: a so-called 'War on Coal' allegedly waged by the Obama administration against the backbone industry of West Virginia.

For many West Virginians, that adds insult to injury and has prompted some to begin questioning their political loyalties.

A billboard on the highway leading to the city of Beckley, a major hub in the southern coal fields, summed up West Virginia's mood best: 'Don't let EPA bureaucrats take away our coal jobs.'

Since President Barack Obama took office, the EPA, or the Environmental Protection Agency, has made several regulatory decisions that raised alarm bells in the coal industry.

For one thing, it practically froze all applications for mining permits involving the controversial technique of 'mountain top removal' - using explosives to remove the tops of mountains and thus exposing coal seams.

Even permits that had been granted previously - including one given the green light in 2007 for a massive 920ha coal strip mine in southern Logan county - were sent back for additional reviews on concerns that the operations would damage the region's wildlife and water quality.

Conservative activists like Mr Lance Schultz said such decisions were tantamount to a violation of the sanctity of contracts and an unacceptable intrusion into the rights that states like West Virginia enjoyed. 'West Virginia is ground zero of the war on freedom and our right to work,' he added.

The furore over the EPA's actions even prompted then Governor Joe Manchin, a Democrat, to file a lawsuit against the Obama administration's policies on mountain-top coal mining.

Days after he filed the lawsuit in October, Mr Manchin also starred in a controversial political advertisement where he literally shot down - using a rifle fitted with a scope, no less - a proposed climate change Bill widely opposed in West Virginia. Weeks later, the governor succeeded in his campaign to become the new junior senator from West Virginia.

Theatrics aside, the importance of coal to West Virginia's economy is plain to see. According to a recent joint study by the Marshall University and West Virginia University, the coal industry generated nearly US$20 billion (S$26.4 billion) in direct and indirect economic activity in West Virginia in 2008.

That same year, the industry employed 43,800 people either directly in mining companies or indirectly via retail and transportation jobs. The coal companies also paid about US$676.25 million in state and local taxes, the report added.

It said in its conclusion: 'Probably there is not another industry more vital to West Virginia's economy than coal... the loss of coal production or even a substantial reduction in its use would worsen an already bad situation, particularly in those areas which are most in need of jobs and income.'

Mr Obama, who is already under intense pressure over the weak economy and anaemic job creation, is not unaware of the stakes involved. As he told residents in the neighbouring state of Virginia in September, his goal was not to halt the use of coal, but to push the industry towards a 'cleaner' future.

He added: 'If we have regulations that provide incentives for coal companies to burn coal cleanly and mine coal cleanly, they'll adapt and they'll start using new technologies, and that will create a more future-oriented growth industry.

'If we're not the ones who get there first... then (China and India) are the ones who are going to get the jobs of the future. I want us to have those jobs right here in the United States.'

His message, however, had been largely lost on unconvinced West Virginians. Asked for her views on the Obama administration's plans to create green jobs, Ms Kandi Montini, a database administrator, said dismissively: 'I think that's just a lot of bunk.'

CHUA CHIN HON


Weak economy despite wealth of resources

ECONOMY

  • West Virginia's economy is among the weakest in the United States, ranking 40th in a list of 50 states despite its wealth of natural resources like coal and timber. It is the second-largest coal producer in the US, behind the state of Wyoming.
  • Its unemployment rate in October was 9.3 per cent, slightly lower than the national average of 9.6 per cent. But job figures do not tell the full story about West Virginia's economy, which suffers mainly from a lack of diversity and entrepreneurship.
  • Many families live from pay cheque to pay cheque and rely heavily on government welfare programmes. This is borne out by statistics showing West Virginia's median household income to be the lowest in the country.

POLITICS

  • The Democratic Party has largely dominated politics in West Virginia since the Great Depression, thanks to the powerful influence of the coal mining unions. Democrats currently control most of the state-level offices, and a majority of the national-level legislative seats in the House of Representatives and Senate.
  • Republicans, however, have become much more competitive in last month's election, aided by the rise of the Tea Party, a grassroots conservative movement. West Virginian voters have also sided with Republican presidential candidates since 2000, a trend that is likely to continue in 2012.
  • While registered Democrats here outnumber their Republican counterparts by nearly two to one, most Democrats in West Virginia are much more conservative than their counterparts in the coastal areas. This factor, combined with the state's dependence on coal, explains why climate change legislation and the government's recent economic policies have been unpopular.

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