 We're back to energy in America. Very important to talk about all the confluence of factors that are now working on the economy and thus on energy and gee whiz. We have so many things going on as a three-ring model these days that we need to talk about all three rings if we're going to really appreciate what's going on in energy in America. So we have Lou Plurici. He's the CEO of E-Princk, an energy research think tank in Washington, D.C. And he joins us from his attic in Washington. Yes, I've been on the road quite a bit so it's very quiet up here. So Lou, you know- My boat hole. It's my boat hole. This is where you can think, you know? Yeah. So you've said a bunch of slides, you've done a lot of thinking about this and it's really well worth the effort to try to examine all the factors that are in play that affect the economy and thus energy, you know, in Congress and government in general. And this is the right time to do it as we head down the trail to the 2020 elections. So tell us your thinking about all that. You've done a lot of research, you've looked at a lot of data, I am so interested, I've looked at your slides and I can't wait for you to roll them out. Right. So I thought- The reason is, you know, we usually talk about a lot of technocratic issues which are probably not as interesting as some of the political developments. And since we live in Washington and really we don't really think about a lot of substantive issues, it's all about power and who's in charge. I thought it might be interesting to connect what's happening in the kind of energy divide and then look at some of the forces that play outside energy. As I said yesterday, President Trump made a major address in Louisiana, I think it was Haxton, Louisiana, and at the initiation of a major LNG facility owned by the Semper Company and he touted America's dominance, the employment growth in the energy sector in the United States. And this is a court of contrast. Today I spent a day at Johns Hopkins on an energy dialogue with a lot of people concerned about the environment. And I thought the divide, I couldn't think the divide could have gotten any greater, but it is. It's a group of people who think the world is coming to an end and then there's a group of people who I guess think these people who think the world's coming to an end are crazy. So I thought I would sort of dig behind this a little bit and actually a lot of this data comes from a group of sort of political gurus from the Melman Company, but so I think let's just why don't we just get into it right away and see if we can sort of peel back some of the forces. We talked about this before, so this is kind of an update and it's never too early to think about the 2020 election if you live in Washington. So let's go to the, so we'll skip this introduction slide and go to the first slide now. So we've talked about this before. In the Gilded Age, what you could argue was sort of the late 1800s. Here it's called the area of agrarian mercantilism, right? In the Gilded Age, we have these forces that were quite common when we were busting the trusts and all these things that happened in the late 1800s. And I think if you look at that period, we sort of are entering another period where there's a lot of social concerns over rising income inequality, insufficient consumer protection, growing market concentration, all the discussion we have about breaking up the Facebook and Microsoft even, or Bezos. I mean, Bezos gets divorced and his wife, when she gets happy, she's the fifth richest woman in the world. The fact that politics are so hyper-partisan, we can't seem to come across the aisle. There's growing calls for systemic reform. I think we need to know that these forces are underway now. They're going to shape how the electorate goes to the polls and what they think about, how they think about the future. So let's go to the next slide. And you should stop me if you have any questions as we go along. So let me, I do have a question. In the previous slide, you talked about the industrial age, which essentially ended with the early part of the 20th century. And with the suggestion that we are in the same kind of model right now. But wouldn't you distinguish our life under Trump for the last couple of years with our life busting trusts and the like in the early 19th century or the 19th century? Oh, right. So if you go back to the Gilded Age, which is, say, 1878 and 1920, you have this big transformation in American society. You have the introduction of industrial technology, mass production. You have all kinds of new technologies start to emerge in the telephone, radio, cars, particularly as you get to the 1910, 1920. And it's such a massive shift in society. I mean, people forget. I mean, in the United States, we were a negrarian society until 1870, 1870, 1880, large. Most American families just lived on a few dollars a day. So you have this huge social change that takes place. You have rising incomes, but you have massive income inequality. You have concerns about, you know, people's lives are being disrupted. And that's what I think that that's the parallel I think we want to draw here. So if you go, and part of the problem is, is I think in the 1870s, 1880s, I think you're right. We did have, you know, Teddy Roosevelt was a very populist president. And you could argue we're in an era of populism now, but I do think that if you look, go to the next slide, one of the problems we're having is that nobody's really in a mood to compromise, right? So if you look at this, this is a really interesting set of data, right? We think our side is losing. So if you poll the Democrats or the Republicans, you ask them on issues that matter to you today as your side been winning or losing, right? And both sides say the same thing, oh no, we're losing, you know. And then the other thing is that we have a lot of people who see the other side as a threat. I mean, I, when I started in Washington, even though I was working for a Republican administration, I think the relationships with the other side of the aisle, you know, as I saw, I mean, I wasn't that political, but I was in a Republican administration. They were pretty cordial. These guys played cards together. They, you know, they did a lot of stuff together. They sort of knew the difference between politics and sort of personal related. It wasn't personal, you know, they, they knew it was important to try to work things out. That's gone. Right? We have this hyper partisanship and they prefer politicians who stick to positions not compromise, right? If you compromise, you know, going back, and I don't care whether you're talking about the new Green Deal. I mean, look at Biden, Biden is saying, you know, we talked about this. The North American petroleum renaissance is worth a trillion dollars. That's it's worth a trillion dollars. Two weeks ago, the state of Mexico got a check from the federal government for $450 million. They're cut, they're cut of the public land lease sale in New Mexico last year, right? Well, it's pretty hard to go around saying, gee, we should give that money back. You know, now you can build a lot of schools and roads, health clinics. So, you know, this is, this is kind of the problem, you know, the other side on both sides see the other side as, you know, completely out of touch with the, with what we need to do. I'm just curious to punctuate on that. I'm just, what, that's a lot of public lands for, you know, a lot of public lands to be sold in one state. Was that a sale that was popular? I mean, what, what are the forces in play with the Sierra? It wasn't, it wasn't popular with the Sierra Club or the National Resources Defense Council. It was Bureau of Land Management land, and the land wasn't sold. It was the rights to develop the oil and gas on the land that was sold. It's an extension of the vast and productive, I mean, I mean, they held another lease sale a few months later, got almost nothing, but obviously there were a lot of oil resources. But one of the things I point out to people is, okay, you don't want that to happen. You have to say, oh, I also don't want all that money that flowed to the government. It's fine to say you don't want that to happen, but then you have to say, okay, I'm willing to give up all the things I can do with new schools and roads and clinics, welfare, whatever it is that New Mexico wants to do, right? And I can tell you, I'll send you a picture of this, of this guy receiving the check, you know, they had, they made a big check. He was not unhappy to get the money, and New Mexico is a very environmentally friendly state. You know, and to make that distinction also, that at the end of the whatever industrial revolution period of time, in the early part of the 20th century, you know, I don't think we had this problem with infrastructure. We hadn't really started building big infrastructure yet anyway, but now we have a problem with big infrastructure that is failing, and we have fiscal problems that are major fiscal problems, where it's not clear what the positions are of the Democrats or the Republicans on spending and on taxing and raising money for infrastructure. Bottom line is the government doesn't seem to be able to address infrastructure at all. So I think it's different now in terms of that element. It is different. It is different. There are different set of problems, I agree. So if you take a look at the next slide, I think this kind of is an interesting, high tech is really a neighboring greater wealth, right? But it is capital intensive, much more than you would think. So these are employees on companies per billion dollars of market cap, right? The 20 most valuable global companies. And you can see here, if you go back to 2009 to 2019, the number of employees per billion dollars of market cap has declined dramatically. Facebook has a huge amount of wealth, has a huge amount of revenue, but it doesn't have that many employees. It doesn't have massive assembly lines of people twisting bolts and nuts and producing automobiles, right? It's very, very capital intensive. It does not need a lot of employees to do its job. Well, you know, one comes out of that with a couple of thoughts. Number one is, gee, is a consolidation. This capital is in the hands of a relatively small number of companies with huge capital concentration, huge. And the second is that, is there anybody regulating that? Because if, you know, all be known, maybe they wouldn't be, if they were regulated maybe in a different way, such as people are now suggesting with Facebook, they wouldn't be making so much money and then you wouldn't have this kind of huge return and a dwindling number of employees. It sounds out of joint, you know, it sounds unsynchronized somehow. It does. Yeah. And I'm not suggesting there's an answer for this. I'm just pointing out what the trends are, you know. I'm like your dentist. I'm just telling you what's wrong with your teeth. I'm not telling you what you should do. And I'm here to tell you what else is wrong with your teeth. So let's go to the next slide here. Let's go to the next one on the right. The tide is rising. Okay. I think this is very interesting. Okay. You can see here that real US gross domestic product, right, is rising very rapidly. I mean, we've done really well. Real family, real median family income is up 18.5%, right? But the real, you know, and real US GDP is way up. But if you look from 1987 to, you don't see, you know, the median family income, that's the family in between in the middle, right? You know, the half or above and half or below, they're not rising as fast as the GMP. So they're not sort of being pushed along this wave. They're kind of drowning, right? So this is a big problem. If you think about the US, total wealth of the US is probably $100 trillion, right? And three families, I think it's maybe Bezos, Zuckerberg and Walmart or something. They have as much wealth as the bottom 50% in America. Three families. Oh, boy. This is something that Bernie talks about. He's right about that. It's a kind of huge. Even though we probably have the best fed, clothed, and housed poor people in the history of the world, right? There is this huge income inequality that has been growing. And it has to do with the kind of winner-take-all mentality that is prevalent in the high-tech business. There's nothing to do about it. I don't think so. That's not unlike what was happening in the... You can take the money and get it for people, right? Not unlike what was happening in the robber baron era. Let me ask you one question. That chart you just showed had this large slice of green above the real median family income line. Right. Right. So where is it going? Where is the excess going? I was just asked to look at Zuckerberg's bank account. I think that's where you'll find a lot of it, okay? Or Bezos' bank account. We have a society. We do have... I mean, that's a little glib. We do have a society now in which the return to highly skilled, more skilled workers is very high compared to workers with low or very semi-skills, right? So I think that's part of the problem and that not enough people have those skills. So you can take a look at why do some lawyers, doctors, high-tech software engineers go... Why are they getting so much? And other people are getting... They're not getting really as much as they used to. And the ratio in one of these... Part of it is... Ratio in one of these companies, the CEO might make thousands of times what an ordinary working staff makes. But can we take a short break, Lou? Take a very short break. We'll come back. And then we can talk about the rest of this and how it plays into the future. We'll be right back. Absolutely. Okay. Hi, I'm Rusty Komori, host of Beyond the Lines on Think Tech Hawaii. My show is based on my book, also titled Beyond the Lines, and it's about creating a superior culture of excellence, leadership, and finding greatness. I interview guests who are successful in business, sports, and life, which is sure to inspire you in finding your greatness. Join me every Monday as we go Beyond the Lines at 11 a.m. Aloha. Hi, I'm Mabuhay. My name is Amy Ortega Anderson, inviting you to join us every Tuesday here on Pinoy Power Hawaii with Think Tech Hawaii. We come to your home at 12 noon every Tuesday. We invite you to listen, watch for our mission of empowerment. We aim to enrich, enlighten, educate, entertain, and we hope to empower. Again, maraming, salamat po, Mabuhay, and aloha. Okay, we're back with Lou Plurici, Energy in America here on The Given Wednesday. And we're talking about the trends, major political and economic forces underway as we go toward the 2020 election. Very interesting charts and graphs. Lou, please continue. So let's go to the next one. I don't think we have a bit of data to get through here, so we'll try to speed it up a bit. So here on this chart here, which shows the tax burden is more, you know, it's more progressive. And I think people don't, I think, well, with the rich, we just pay more, we would be better off. But actually, if you look here, let's just spend a second on this. The tax burden has become more progressive, even though the deficits are rising. And you can see here, in 1986, the bottom 90% of income earners in the U.S. paid about 40% of the total tax paid into the Treasury, right? Now the bottom 90% pay only about 25%, right? So it's not true that the rich aren't paying. They are paying plenty. Maybe not enough, but they are paying plenty. Okay, so let's go to the next picture. And also, I think, you know, one thing about globalization, and we forget about this, it's very good for actually the poorest people, the number of people moving out of poverty in the world, it's just amazing. If you go back, once again, 1987, 1998, we had 35% of the world living in poverty. And this is like, I forget, $1.50, $2 a day. And now that number is down to 10%. I mean, it's not much more prosperous. It's also been very good for billionaires. So the number of billionaires has risen dramatically, right? You can see they took a little bump here in the financial crisis. So the next, let's go take a look at the next slide, I think, is another issue. And you can see this in a lot of the discussion, so are now surging, right? But most people are missing out. So the S&P, if you go from 1989 to today, to 2016, S&P was up about 590%. But the family net worth of the bottom 80% by income is only up 29%, right? So the net worth of most of the American population has not improved that much, even though the market, the value of these assets traded in the US worldwide have risen dramatically. So this is all part of this thing. So let's see if we can go to see where the politics is taking us. Let's go to the next slide. So I think one of the things which I guess I should reveal, I think the fact that there's two things happening with the Democratic Party, which I'm not sure they're good, right? One is that they're moving much more to the left. And the other thing is we have all these politically correct or getting, I didn't even know we're getting woke met, but I guess that means you should be, you should not be so immune or not aware of all the different kinds of insults people feel in society, the incidents of discrimination, the misogynist period of men and all these things. So this is a kind of big, a big problem, right? So if you look through what's going on, we have people talking about reparations, the percent of Democrats who now call themselves liberal, right? Because a lot of Democrats were conservative when I was much younger. That's risen from 25 to 51 percent where people said we should get rid of ICE. We have the Green New Deal, which doesn't make any sense to me. I mean, it's not really. We have Bernie saying we should have public colleges and universities tuition free. And I've got people, let's get rid of the reparations from Kamala Harris and get rid of the electoral car. So these are things that are very divisive in American society. Some of them may make sense. But they're extremely divisive because the broader base of the electorate has not been brought along. I don't think yet. Well, I don't think there's a certain amount of fragmentation within the people in the Democratic Party. They don't agree on so many things. All right. And then, so let's go to one one in the next slide. So I think, you know, people talk about, and you know, it's easy. I always say about Trump, you know, he's people just think, well, he's just a horrible character, you know, a horrible person. And people are upset about him. But part of the problem I really believe is that we've had past presidents who were pretty horrible in their characters. They just hit it much better than Trump. So and but I think that one of the things which I would advise my Democratic colleagues to think about, and I think Biden is trying to do this. He's trying to move to the center, although he's getting just beat up. By his own party over this, that if there's no recession, we know going back to 1916, if we have no recession in two years before the election. So that two years is relatively calm. The incumbent wins. So that's I think people should wake up and think about that. Okay. And in a case where we had a recession two years before the election, incumbent always lost except once for Calvin Coolidge. And if you see what Trump is doing now, I think he is. I mean, I think Nancy Pelosi is trying her best to kind of, you know, herd the cats into a kind of circle, it'd be less destructive. But I don't think it's working. So he wants to capitalize on the fact that the economy is is still good. And he's going to go to Louisiana and everywhere else and tell everyone that. Yeah, yeah. Actually, if Trump would just quit tweeting, he'd probably walk into the election. Trump is the only person who could probably do himself in on this election. And he'll try to do that. Okay. So I think, but I still don't think it's a done deal. So let's go to the last slide. You can talk about this. So if you think about this, there are tailwinds and headwinds, right? So his job approval is, you know, it's about greater than Reagan. It's about where sort of Clinton and I mean, where Clinton was about the same time his base. His base actually has historic approval. Like he has very high approval rate among his base. And people forget that elections aren't a referendum. They're a choice. People are going to have to pick between Trump and whoever. Whoever the Democrats put up, we still have an electoral college. There are founders had good reasons for having that. And it's not going away. He's going to bet. You know, the bet he's making is on the anti-establishment initiatives are popular. And he's got plenty of help from the other side. He's got all these foils, all these crazy things a lot of the Democrats are doing, right? And the economy is very, very hot. 3.8% unemployment, historic lows in Hispanic and African American job rates. Historic lows, I mean, in unemployment rates, right? But he does have headwinds, right? There's a lot of resistance. The President of the United States has never been about 50% approval. His 53% of the voters say they will definitely not vote for Trump. And he's underwater in some key states, Minnesota, Wisconsin. So once again, the bet's going to be unchanged, right? The Democrats say, look, you need change. He's going through, he's taking some hits with the media scrutiny and the oversight from the Congress. And there are some growing risks of recession, but particularly globally, but I think this is kind of preceding the bit right now. And I will see, we'll see the trade, the trade issue is a big risk for Trump, in my view, particularly the farm states. So that's, I would add to that, that we're in a dynamic here, which, which, which reveals itself almost every day and forget about all the criticism and forget about all the, you know, disputes of the investigations and Mueller and Mueller report and all that. Fact is, this is an inexperienced president who doesn't surround himself with experienced, you know, qualified, moderate people. And he's, he's taking huge risk geopolitically, including in around oil around the world. And we're getting into, we're getting into more warlike, contentious, adversarial situations now that I can remember in a long time. And we're, we're about to, we're about to get into a war. And then maybe you can say that wars help the economy. And so that would stave off a recession. But if, if not, if we do get into a war, you're going to lose popularity, I think. If we don't actually, it affects it, then we have a recession with a lack of a war, just, you know, the normal sine curve of economic, economic change, that's going to hurt him. So he, I think he's very exposed one way or the other because of where we sit right now. He is, but my guess is Trump's instinct is, I mean, he might do something like he did in Syria, sort of established deterrence. My guess is he is very, very critical of historic wars of choice. And I think this is something like I completely disagree with the way Trump is dealing with the trade with the Chinese. On the other hand, it may turn out fine. I don't know. It depends what he plans to do with these tariffs or whether they're leverage or not. But I think his instincts are, if you look at his behavior, is not to go to war. I think he's not, he's not going to do the things Bush did or even Clinton. I think he's going to be very cautious in that respect. That is a big theme for Trump. So I'm not, I personally don't think that's a big issue yet. I think Iran is a potential area in which there could be some conflict, but I don't think we're going to go to war. Well, so last question, we're almost out of time. I want to ask you the last question. So all these factors, economic factors and forces are underway. It's clear. It's very complex right now. All these things are feeding into, you know, where we go. The future is unsure. And of course, you're a think tank. You're supposed to be thinking about this, right, Lou? So here we are heading into the 2020 election and energy and environment, you know, and global energy trade, if you will, LNG to Asia and Europe all play into this. So where are these factors taking us in terms of energy in America? I know that's not a short question or answer, but maybe you have a thought on it. No, I think U.S. will be first in the conventional fuels area, figure which is the dominant fuel, even it's going to be the dominant fuel. I mean, we may adjust our consumption over time. I don't believe we're going to see a massive penetration of renewables above 10%. The U.S. will be a major, if not a dominant force in the world. It'll be a force of stability, actually, because the reliance upon the Middle East is declining and its importance is declining. And the U.S. is that for all the crazy politics, we are a force of stability in the gas market. Our energy security has been enormously enhanced by what's happened here. And so the real question is, and I think this is a question American people are going to have to decide, which is, what does the choice look like? Trump is delivering, like him or not, he's delivering a high degree of prosperity to the country, economic growth, people's 401Ks are rising. We still have terrible problems with income inequality. And so I don't see yet on the Democratic side, somebody emerging who can say, look, I believe in all these central values, but with me, I'm not crazy like the other guy. Well, I think that is really important question. The Green New Deal, we were going to try to touch on that. We didn't really touch on it much. And we should touch on it going forward. And then the Green New Deal and energy, as you have described the current situation and prospect of energy, query whether the Green New Deal and energy all rolled up, how important is, and the environment, I suppose, how important is that in the campaigns? We're going to have time for it now, but next time, oh, we should cover it. We can talk about that. Yeah. Thanks. Absolutely. Lou Pulirisi, joining us from his attic in Washington. We so appreciate talking to him. Thank you so much. All right, great day. Take care. Bye, bye, loha.