Is there any economic issue that Jim Cramer actually understands well?

Clearly, his stock tips prove that his understanding of investments leaves a lot to be desired. Jon Stewart simply eviscerated him on The Daily Show, leaving him a quivering mess. Now one would think that would cause Cramer to look much more seriously at his body of work, to show that he actually merits having his own financial show on a financial channel.

But that presumes far too much when it comes to Jim Cramer. Jim Cramer's idea for President Obama to 'fix' the economy? The Keystone XL Pipeline!

You want to put 60 thousand people to work in this country in four weeks because these jobs are there? Keystone Pipeline. But this is a fossil fuel vs greens debate. Why do I say the pipeline does work? Because these pipelines have been the creators, the largest creators of jobs in the last four years. You may hate fossil fuel. You may think it’s ridiculous to be able to have it so that oil and gas are in charge of hiring in this country. But we’ve got tons of oil and gas in the wrong places. You put people to work on pipelines, $60,000 is the minimum that you pay a pipeline worker. You put people to work all over this country. That’s what needs to happen.

Is anyone surprised to hear that just like his stock predictions, Cramer's assessment of the KXL pipeline is similarly pulled from his posterior?

First, TransCanada, the Canadian company seeking permission to build the KXL, estimates only 15,000 temporary jobs, which is only a statistical drop in the bucket when looking at the unemployment rolls, according to a Cornell University study on the impact. Moreover, the same Cornell study claims that long-term, the pipeline could prove to be a job-killer through higher fuel costs (remember, this pipeline is intended for Canadian tar sands oil to get to the Gulf of Mexico to sell to the highest bidder on the WORLD MARKET--none of this benefits directly US oil costs) and potential environmental disasters. One only needs to look at Arkansas to see how no matter how much Washington DC and TransCanada pooh-poohs the risk, the potential is devastating.

And guess what, Cramer? Top job creators in this country? Not oil companies.

But seriously, does anyone expect him to understand anything well any more?

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This is not a post about rising gas prices, despite the title of the video. No, this post is about something else entirely. Rising gas prices just happens to be the convenient topic.

I've just finished reading "The Fox Effect" by David Brock and Ari Rabin-Havt. For those of us who have lived every painful minute of the past three years, reading this book is no less painful, nor will it offer many revelations. What it does offer, however, is a strong, well-argued case for the anti-American techniques they use to indoctrinate and hypnotize their audience into believing the lies they spew. Beginning with the history of Fox News and Roger Ailes' vision for "conservative television," the book takes the reader through how Fox News is structured, what their goals are, and how they've changed since Barack Obama was elected President.

For those people smart enough to keep Fox News out of their living room, it is an instructive and safe walk through their process. For those of us who have actually watched it over the past three years, it feels like having a root canal six times over.

Still, the book really should be shared with as many people as possible, if for no other reason than to save them from the consequence of too much Fox viewing; namely, being a misinformed citizen, which harms our democracy. On page 168, the authors describe "The Fox Effect," as it relates to fake controversies like Shirley Sherrod and ACORN. But it's far more than that. They also use the same techniques and distorted facts to create fear and discontent for fun and profit. The gas price rise is a shining example.

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In all of the smoke and mirrors and true protests and political posturing over the Keystone XL Pipeline, one of the least-reported issues has been the conflict between the state of Nebraska and the United States government.

That debate has not yet been settled, as Montana Governor Brian Schweitzer patiently explains to an incredulous, disbelieving Neil Cavuto.

Back in October, Nebraska Governor Dave Heineman called a special session of the state legislature. The purpose of the session was to discuss the Keystone XL Pipeline route through the state and whether the state should exercise its right to withhold approval of the route through Nebraska, since it seemed apparent at that time that the State Department was moving toward approval before the end of 2011. Since Heineman couldn't be certain that the Obama Adminstration would delay their decision, Nebraska chose to exercise their rights to block, or at the very least, delay, approval of the pipeline.

Two bills were passed as a result of that special session. The first is the Major Pipeline Siting Act, which requires pipeline owners to submit their plan to the state for approval. From the Nebraska legislature, this explanation:

LB 1 adopts the Major Oil Pipeline Siting Act, which sets out a procedure for pipeline carriers to follow. An application must be approved by the Public Service Commission prior to beginning construction of a major oil pipeline in Nebraska. One or more public hearings would be held. In making the decision as to whether the pipeline is in the public interest, the Commission can evaluate evidence of the impact due to intrusion upon natural resources, including evidence regarding the irreversible and irretrievable commitments of land areas and connected natural resources and the depletion of beneficial uses of the natural resources. The Commission can also evaluate the reports submitted by related agencies, as well as the views of the governing bodies of the counties and cities in the area of the proposed route. The Commission is preempted by federal law from looking at safety issues when making their decision. Furthermore, LB 1 requires the approval of an application prior to the use of eminent domain.

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These drill-loving, lobbyist-friendly politicians love to promise jobs when they're pushing projects like the Keystone XL pipeline, but it never quite turns out like that. From Think Progress:

However, studies conducted independently of TransCanada find much smaller jobs numbers, far from “tens of thousands.” An oil contractor hired by the State Department reported it would create between 5,000 and 6,000 temporary jobs, while an independent study by Cornell University found it would create only 500 to 1,400 temporary jobs. Once the costs of the increased pollution and risk of oil spills is factored in, Cornell found, the jobs impact is likely to be negative.

The “118,000 spin-off jobs” number used by TransCanada received two Pinocchios from the Washington Post Fact Checker:

As opponents have documented, if the capital costs are lower than predicted, and if the multiplier is smaller, then the number of “spin-off jobs” can shrink dramatically. The same goes for the estimates of “permanent jobs,” which depend also on the price of oil.
….
Among the list of jobs that would be created: 51 dancers and choreographers, 138 dentists, 176 dental hygienists, 100 librarians, 510 bread bakers, 448 clergy, 154 stenographers, 865 hairdressers, 136 manicurists, 110 shampooers, 65 farmers, and (our favorite) 1,714 bartenders.

I have a friend who lives upstate where they're drilling into the Marcellus Shale, and she said the same thing - no local jobs, all the drillers are from out of state. The only local people making money, she said, are the bars, restaurants and hotels.

It's almost unthinkable that something with such a huge environmental impact will be approved, but the tars sands pipeline certainly looks likely to get the go-ahead from President Obama [via McClatchy]:

WASHINGTON — Thousands of people are expected to mass at the White House on Sunday to send an environmental message to President Barack Obama: Say no to a proposed pipeline that would import highly polluting oil from Canada.

It's likely to be the biggest environmental protest in Washington in a long time. Protests organizers, speaking at a press conference Friday, said the event is meant to show the president that they're passionate about cleaner energy and want Obama to take their side in the controversy over the pipeline and the source of the heavy crude oil, the tar sands of Alberta, Canada.

"We really, really believe in him," Maura Cowley, a leader of the Energy Action Coalition, a youth environmental movement, said of Obama. "But we're watching this very carefully because it's a symbol of President Obama's commitment to clean energy."

[...] Opponents want the president to stop the pipeline because of the risks of spills and of impact on global warming from tapping Canada's vast oil sands. The thick crude from the oil sands produces more heat-trapping carbon-dioxide emissions than regular oil because of the extra energy required in extracting and processing it.

The extra emissions from burning the oil would be the equivalent of the pollutants from 5 million cars or seven coal-fired power plants, according to the Sierra Club.

In addition, the pipeline would cross many rivers, including the Yellowstone in Montana, and the Ogallala aquifer and the environmentally sensitive Sand Hills in Nebraska. The Nebraska legislature is in a special session focused on concerns about the pipeline's route through that state.

The United Association of Plumbers, Fitters, Welders and HVAC Service Techs released the above video earlier this week, expressing support for the proposed Keystone XL pipeline that would transport dirty tar sands oil from Canada to the Gulf of Mexico across American soil. Their argument for the pipeline in the video, which is:

Focused partially on refuting claims of environmental danger beneath American soil, partially on the need to grow the union workforce through the pipeline’s construction, and partially on the ability to free the nation from international oil dependence, the UA supplies three sides of the argument not frequently articulated in media coverage of the project.

This stands in stark contrast to the strong opposition to the pipeline expressed by a host of progressive groups, including unions such as the Amalgamated Transit Union (ATU) and the Transport Workers Union (TWU). The presidents of those two unions issued a joint statement on the pipeline:

“We share the Environmental Protection Agency’s concerns conveyed to the State Department on two occasions (most recently on June 11, 2011). These concerns cover the potential impacts to groundwater resources from pipeline spills, the high levels of GHG emissions associated with the proposed project, and the inevitable damage to the health of communities affected by the increase in refinery emissions.

Approval of this project at this time would therefore be reckless given the EPA’s own assessment of the environmental risks.

“We are also concerned that Keystone XL could double the amount of highly toxic Tar Sands oil being imported into the United States. The Tar Sands has destroyed vast areas of boreal forest and inflicted havoc on local communities. The expansion of the Tar Sands will inflict immeasurable harm on both people and the environment and impede our country’s and the world’s efforts to transition to a green and more sustainable economy.

“We need jobs, but not ones based on increasing our reliance on Tar Sands oil. There is no shortage of water and sewage pipelines that need to be fixed or replaced, bridges and tunnels that are in need of emergency repair, transportation infrastructure that needs to be renewed and developed. Many jobs could also be created in energy conservation, upgrading the grid, maintaining and expanding public transportation—jobs that can help us reduce air pollution, greenhouse gas emissions, and improve energy efficiency.

I'm very proud of the 1000 people so far who put themselves on the line to save our world -- and ashamed that I'm not there with them. I'm so impressed by their commitment to protecting our environment from this insane climate hazard:

More than 200 people were arrested outside the White House Saturday following two weeks of protests directed at President Obama in an effort to persuade him to deny final permitting of a controversial 1,661-mile pipeline that would carry oil from Alberta, Canada, to Port Arthur, Tex.

The arrests follow more than 1,000 arrests made since protesters arrived in late August to conduct sit-ins along Pennsylvania Avenue.

While a White House decision is not expected until December, the protests centered on an environmental impact statement released Aug. 26 by the US State Department that concluded there will be “no significant impact” on natural resources affected by the pipeline route.

If Obama approves the pipeline, it will begin a series of additional permits, approvals and authorizations, with operation set to launch in 2013. The $7 billion, 36-inch pipeline, called the Keystone XL, is expected to deliver 830,000 barrels, or 34.9 million gallons, per day across Montana, South Dakota, Nebraska, Kansas, and Oklahoma into Texas.

TransCanada, a leading North American pipeline operator, started operation of Keystone I, a 36-inch pipeline system, in June 2010, making it possible to deliver Canadian oil to markets across Midwest farmland in several states, from the Dakotas through Illinois. Keystone XL will incorporate a section of that existing pipeline in its delivery through the bottom half of the US.

Environmentalists say TransCanada has a failed safety record regarding its pipeline operations.

Federal regulators shut down Keystone I following two leaks, on May 7 and May 29. The first released 400 barrels, or 16,800 gallons, of crude oil in Sargent County, North Dakota. The second involved a leak at a pump station in Doniphan County, Kan., which released 10 barrels, or 420 gallons, of crude oil into the environment. The pipeline was restarted days later.

In a statement, Russ Girling, TransCanada's president and chief executive officer said “TransCanada takes all incidents very seriously … none of the incidents involved the pipe in the ground. The integrity of Keystone is sound.”

As always when it comes down to environmental roulette, their response is, "Trust us." Why should we? The stakes are too high.

Despite denials, it sure looks like they produced the report they were told to produce in order to justify rubberstamping this project:

The State Department released its final environmental impact assessment of the Keystone XL pipeline Friday, and it’s just as bad as some feared—perhaps worse. The report concludes, as did two prior versions, that there would be “no significant impact“ on natural resources near the pipeline route, while also downplaying the potential for increased greenhouse gas emissions.

In a conference call with reporters, Assistant Secretary in the Bureau of Oceans and International Environmental and Scientific Affairs Dr. Kerri-Ann Jones stressed that “this is not the rubberstamp for this project. The permit that is required for this process has not been approved or rejected at all.”

But the environmental concerns are clearly the main objection to Keystone XL, and the report is widely seen as removing one of the final roadblocks to the project. Environmental groups were quick to blast the results. “The U.S. State Department’s final report on the Keystone XL today is an insult to anyone who expects government to work for the interests of the American people,” the Sierra Club said in a statement.

On the issue of pipeline spills, the State Department report assesses that “there could be from 1.18 to 1.83 spills greater than 2,100 gallons per year” for the entire project. It helpfully adds that “crude oil spills are not likely to have toxic effects on the general public.”

While that many spills might already sound risky, the real number is likely much higher than what the State Department calculated. First, as the report itself notes, there have already been fourteen spills along the existing Keystone pipeline since it began operating in June 2010.

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After Republicans in Congress put a deadline on the President's decision to defer a decision on the Keystone XL pipeline, the Obama Administration responded:

Earlier today, I received the Secretary of State’s recommendation on the pending application for the construction of the Keystone XL Pipeline. As the State Department made clear last month, the rushed and arbitrary deadline insisted on by Congressional Republicans prevented a full assessment of the pipeline’s impact, especially the health and safety of the American people, as well as our environment. As a result, the Secretary of State has recommended that the application be denied. And after reviewing the State Department’s report, I agree.

This announcement is not a judgment on the merits of the pipeline, but the arbitrary nature of a deadline that prevented the State Department from gathering the information necessary to approve the project and protect the American people. I’m disappointed that Republicans in Congress forced this decision, but it does not change my Administration’s commitment to American-made energy that creates jobs and reduces our dependence on oil. Under my Administration, domestic oil and natural gas production is up, while imports of foreign oil are down. In the months ahead, we will continue to look for new ways to partner with the oil and gas industry to increase our energy security –including the potential development of an oil pipeline from Cushing, Oklahoma to the Gulf of Mexico – even as we set higher efficiency standards for cars and trucks and invest in alternatives like biofuels and natural gas. And we will do so in a way that benefits American workers and businesses without risking the health and safety of the American people and the environment.

Republicans, as you'll see from the clip above, are predictably anxious to make this decision about jobs, because suddenly they're very interested in job creation after spending their first year of the 112th Congress waging war on women, the social safety net, and the poor. Mitt Romney stepped right up with a predictable condemnation.

Via Talking Points Memo:

President Obama’s decision to reject the Keystone XL crude oil pipeline is as shocking as it is revealing. It shows a President who once again has put politics ahead of sound policy. If Americans want to understand why unemployment in the United States has been stuck above 8 percent for the longest stretch since the Great Depression, decisions like this one are the place to begin. By declaring that the Keystone pipeline is not in the ‘national interest,’ the President demonstrates a lack of seriousness about bringing down unemployment, restoring economic growth, and achieving energy independence. He seems to have confused the national interest with his own interest in pleasing the environmentalists in his political base.

Of course, it should be noted that Speaker Boehner has some key investments in the Keystone XL pipeline, and the talking points used by Republicans around it are largely lies, especially when it comes to oil prices and jobs.

Ezra Klein reminds that the battle is far from over:

Now, this doesn’t mean the pipeline is dead and buried. TransCanada will reportedly be allowed to reapply for permits once it comes up with an alternative pipeline route that doesn’t run through Nebraska’s Sandhills. This will delay the project further, because the company probably will have to grind through the permitting process all over again, but it’s possible that the company could eventually win approval. (TransCanada’s share price plunged when rumors of the rejection first emerged, but the stock now seems to be slowly recovering.)