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The Plan We've All Been Waiting For

Well, the wait is over. After explaining at this week's debate that he needed more time to produce an economic proposal because he, unlike Mitt Romney, hadn't been running for six years (a fair point, if you ask me), Rick Perry today revealed the grand plan. As he hinted at the debate, it is all about energy. Casting off limits on domestic energy production, oil drilling in particular, will create 1.2 million new jobs, Perry said:

With a renewed commitment to developing American energy resources and technology, we will create American jobs – 1.2 million based on various studies. The stark difference between the Perry vision and the Obama vision amounts to 3.6 million jobs in just one sector of our economy. But the ripple effect will impact all sectors of our economy. Manufacturers will benefit from more affordable electricity, in addition to new opportunities to provide goods to energy producers. All sectors of the economy will reap the benefits of a more stable and affordable supply of electricity.

There's just one problem. That estimate comes from congressional testimony in April by LSU professor Joseph Mason, who was testifying in favor of greater domestic production but who made clear that his 1.2 million jobs estimate was for the long-term -- seven years, to be exact.

I will thus assume an average initial investment period of seven years followed by an average production period of 30 years. The total increase in U.S. employment from the investment phase is approximately 271,570 full-time jobs per year.  Applying the BEA multipliers to the estimated production value results in approximately 870,000 coastal state jobs in addition to the jobs created during the initial investment phase. Again, the total increase in U.S. employment in all states (including those in the interior) resulting from increased OCS production is 340,000 greater, for a total of approximately 1,190,000 jobs be sustained for the entire OCS production period.

So, perhaps not a solution for the millions out of work today. And one other observation about Perry's speech. He declared that "as part of a broader tax reform strategy, I will also ask Congress to eliminate direct subsidies and tax credits that distort the energy marketplace." That is interesting, because, as I reported at some length in my cover story on Perry, his job-creation account, the Enterprise Fund, spent quite heavily on direct subsidies for the energy marketplace -- $5 million for Citgo to move some operations from Tulsa (which Citgo later said it would have done even without the cash reward) and $3.6 million to create a "Texas Energy Center" in Sugar Land whose entire purpose was to become a receptacle for direct federal subsidies for energy exploration that, the thinking went, would be procured by Sugar Land's then-congressman, Tom DeLay. Today, as I report in the piece, the center exists only on paper, though its official minder still claims that it has created 1,500 jobs; the vacant office in Sugar Land that briefly housed it before it went defunct is pictured above, with its sign barely visible through the smudged glass.

But then, maybe direct subsidies that distort the energy marketplace are another one of those things that the feds shouldn't do, but states can.