Time To Get Tough Part 1

Time to Get Tough.

Donald Trump.

As always, I dedicate this book to my parents.

Mary and Fred Trump.

ONE.

GET TOUGH.

Next Tuesday all of you will go to the polls, will stand there in the polling place and make a decision. I think when you make that decision, it might be well if you would ask yourself, are you better off than you were four years ago?

-Ronald Reagan.

I've written this book because the country I love is a total economic disaster right now.

For starters, we are in debt $15 trillion and soaring. Let me help you wrap your mind around that number. If by some miracle the so-called leaders in Was.h.i.+ngton could find a way to save one billion dollars of your tax dollars every single day, it would still take thirty-eight years to pay off the debt. And that's not even taking into account the interest.

We don't have thirty-eight years to turn this thing around. The way I see it, we have four, maybe eight years tops.

Every day in business I see America getting ripped off and abused. We have become a laughingstock, the world's whipping boy, blamed for everything, credited for nothing, given no respect. You see and feel it all around you, and so do I.

To take one example, China is bilking us for hundreds of billions of dollars by manipulating and devaluing its currency. Despite all the happy talk in Was.h.i.+ngton, the Chinese leaders are not our friends. I've been criticized for calling them our enemy. But what else do you call the people who are destroying your children's and grandchildren's future? What name would you prefer me to use for the people who are h.e.l.l bent on bankrupting our nation, stealing our jobs, who spy on us to steal our technology, who are undermining our currency, and who are ruining our way of life? To my mind, that's an enemy. If we're going to make America number one again, we've got to have a president who knows how to get tough with China, how to out-negotiate the Chinese, and how to keep them from s.c.r.e.w.i.n.g us at every turn.

Then there's the oil crisis. The idea of $85 a barrel for oil used to be unthinkable. Now OPEC yawns at that figure and jacks the price higher, laughing all the way to the bank. The result: you and your family are paying $3 a gallon, $4 a gallon, $5 a gallon, and soaring. Excuse me, but OPEC-these twelve guys sitting around a table-wouldn't even be in existence if it weren't for the United States saving and protecting those Middle Eastern countries! Where is our president in all this? Where's the accountability? What is the point of executive leaders.h.i.+p if our executive is weak and doesn't lead? What excuse is there for a president whose answer to the oil crisis is not to get tough with OPEC, not to free our own domestic oil companies to do their job and drill, but to release our strategic reserve? That's not leaders.h.i.+p, that's an abdication of leaders.h.i.+p.

Whether we like it or not, oil is the axis on which the world's economies spin. It just is. When the price of oil goes up, so does the price of just about everything else. Think about it. You buy a loaf of bread. How did it get to the store? What powered the bread truck? What equipment did the farmer use to harvest the grain? Equipment and vehicles don't fuel themselves. They need oil. And when a producer's prices go up, they pa.s.s the cost along to you in the form of higher prices. I was privileged to be educated at the finest business school in the world, the Wharton School of Business. But it doesn't take some prestigious business diploma to realize what's going on here. It's basic math.

And yet, with China beating us like a punching bag daily, OPEC vacuuming our wallets clean, and jobs nowhere in sight, what does President Obama do? He makes his NCAA basketball picks. He hosts lavish parties at the White House. Now look, I like basketball and lavish parties like the next person. But when you're the president of the United States and your country is burning to the ground right before your eyes, your first instinct should not be to party. It's no wonder America is flat broke.

Did you know that one in seven Americans is now on food stamps?1 Think of it. In the United States, the most prosperous nation in the history of human civilization, our people are going hungry. In March 2011, we saw the steepest spike in food prices in almost four decades.2 Combine that with skyrocketing energy costs, double-digit unemployment, Obama's ma.s.sively wasteful spending spree, the federal government's annexation of the health-care system, and the outcome is painfully clear-we're headed for economic disaster. If we keep on this path, if we reelect Barack Obama, the America we leave our kids and grandkids won't look like the America we were blessed to grow up in. The American Dream will be in hock. The s.h.i.+ning city on the hill will start to look like an inner-city wreck. It won't be morning in America, as President Reagan put it. We'll be mourning for America, an America that was lost on Obama's watch. The dollar will fall as the world's international currency. Our economy will collapse again (something I believe is a very real danger and risk: a double dip recession that could turn into a depression). And China will replace America as the world's number one economic power.

But it doesn't have to be this way. If we get tough and make the hard choices, we can make America a rich nation-and respected-once again. The right president can actually make America money by brokering big deals. We don't always think of our presidents as jobs and business negotiators, but they are. Presidents are our dealmakers in chief. But the outcome of a deal is only as effective as the person brokering it. Const.i.tutionally, a president is the commander in chief, appoints judges, and can veto or sign bills. What's his job the rest of the time? Well, I can tell you one important job: he serves as America's chief negotiator and dealmaker. He is supposed to broker deals that protect and benefit us with other nations. The president's duty is to create an environment where free and fair markets can flourish, private sector jobs can be created, and our economy can boom. If they are strong negotiators and make the right deals, America wins. If they wimp out and make the wrong deals, you and your children pay the price.

Now consider the embarra.s.sing and anemic deals Obama has pulled off. I'm for free and fair trade. After all, I do business all over the world. But look at the deal Obama cut with South Korea. It was so bad, so embarra.s.sing, that you can hardly believe anyone would sign such a thing. In theory, the agreement was supposed to boost American exports to South Korea. In reality, the agreement Obama signed will do next to nothing to even out the trade imbalance, will further erode American manufacturing and kill more American jobs, and will wipe away the tariffs South Korea presently pays us to sell their stuff in our country. Why would Obama agree to these terms, especially when we hold all the cards? The South Koreans like our military defending them against North Korea. But they don't need us to do their dirty work-South Korea's armed forces number between 600,000 and 700,000. And yet we still have 28,500 American troops in South Korea.3 Why?

Even if you think it's a good idea for us to keep troops in South Korea, why isn't South Korea footing the whole bill for our defending them? (Currently they only cover a portion of the costs.) Better still, why is our president signing the trade bill that the South Koreans want him to sign instead of the one that gives us maximum advantage? He may have been a good "community organizer," but the man is a lousy international dealmaker. This is hardly a surprise-he's never built or run a business in his life. His entire career of dealmaking, such as it is, has been finding ways for government to shakedown taxpayers to reward his special interest groups. That's not the kind of dealmaker we need.

Then look at China. There are four Chinese people for every American. China's population is ma.s.sive, and its economic power is huge and growing. China is now the second-largest economy in the world. We are building China's wealth by buying all their products, even though we make better products in America. I know. I buy a lot of products. Windows, sheet rock, you name it, I buy it by the truckload. I buy American whenever I can. Unfortunately, a lot of times American businesses can't buy American products because, with the Chinese s.c.r.e.w.i.n.g around with their currency rates, American manufacturers can't be compet.i.tive on price. If China didn't play games with its currency and we played on a level economic playing field, we could easily out-compete China. But the Chinese cheat with currency manipulation and with industrial espionage-and our alleged commander in chief lets them cheat. The whole thing is a scandal and unfair to our workers and businesses. There's no way America can become rich again if we continue down the path we're on.

Yet with all this, in January 2011, Barack Obama kowtowed to China's president Hu Jintao and welcomed him to the White House. He even gave the Communist leader the high honor of an official State Dinner. China's economy enjoys double-digit growth at our expense, while China screws us with every turn of its currency, is the biggest commercial espionage threat we face, continues its deplorable human rights abuses, and Obama's response is to roll out the red carpet? It's incompetence that borders on betrayal.

Obama legitimized China on the world stage. So what did he get in return? Export deals amounting to a measly $45 billion. Obama's team immediately declared him a master negotiator. In 2009, our trade deficit with China was nearly $230 billion. A pathetic $45 billion in trade contracts is an insulting joke. But when Hu Jintao looks across the negotiating table, he sees the kind of spinelessness and amateurism that lets him know he can buy us off by whisking a few crumbs our way. I believe America's honor shouldn't be for sale. We shouldn't entertain Communists and beg for a few tiny contracts. Instead, a true commander in chief would sit down with the Chinese and demand a real deal, a far better deal. Either China plays by the rules or we slap tariffs on Chinese goods. End of story. This year, by the way, our deficit with China will be more that $350 billion-they are laughing at us.

I love America. And when you love something, you protect it pa.s.sionately-fiercely, even. We are the greatest country the world has ever known. I make no apologies for this country, my pride in it, or my desire to see us become strong and rich again. After all, wealth funds our freedom. But for too long we've been pushed around, used by other countries, and ill-served by politicians in Was.h.i.+ngton who measure their success by how rapidly they can expand the federal debt, and your tax burden, with their favorite government programs.

America can do better. I think we deserve the best. That's why I decided to write this book. The decisions we face are too monumental, too consequential, to just let slide. I have answers for the problems that confront us. I know how to make America rich again. I've built businesses across the globe. I've dealt with foreign leaders. I've created tens of thousands of American jobs. My whole life has been about executing deals and making real money-ma.s.sive money. That's what I do for a living: make big things happen, and now I am worth more than $7 billion.

Restoring American wealth will require that we get tough. The next president must understand that America's business is business. We need a president who knows how to get things done, who can keep America strong, safe, and free, and who can negotiate deals that benefit America, not the countries on the other side of the table. A president doesn't "create" jobs, only businesses can do that. But he can help create an environment that allows the rest of us-entrepreneurs, small businessmen, big businessmen-to make America rich.

The damage that Democrats, weak Republicans, and this disaster of a president have inflicted on America has put us in a mess like we've never seen before in our lifetimes. To fix the problem we've got to be smart and get tough. There's no time to waste.

TWO.

TAKE THE OIL.

If you put the federal government in charge of the Sahara Desert, in five years there'd be a shortage of sand.

-Milton Friedman.

When you do someone a favor, they say thank you. When you give someone a loan, they pay you back. And when a nation like the United States sacrifices thousands of lives of its own young servicemen and women and more than a trillion dollars to bring freedom to the people of Iraq, the least-the absolute least-the Iraqis should do is pick up the tab for their own liberation.

How much is it worth to them to be rid of the bloodthirsty dictators.h.i.+p of Saddam Hussein and to have gained a democracy in which they can vote and have a freely elected parliament? In reality, that's a priceless gift, although after being blown to pieces, many people think that they were better offbefore. When I say they should pay us back, I'm not even talking about cash out of their pockets. All I'm asking is that they give us, temporarily, a few flows of oil-enough to help pay us back and help take care of the tens of thousands of families and children whose brave loved ones died or were injured while securing Iraqi freedom.

But does Iraq do that? No. In fact, they've made it clear they have no intention of doing so. Ever.

To the Victor Go the Spoils.

In June 2011, Republican Congressman Dana Rohrabacher of California visited Iraq and told Iraqi Prime Minister Nouri al-Maliki that he hoped Iraq would someday consider repaying America for all our sacrifices on Iraq's behalf. The Prime Minister's response was to have his press spokesman, Ali al-Dabbagh, call up the U.S. emba.s.sy and say that they wanted the congressman to get out of their country and that his remarks were "inappropriate."

Excuse me? Inappropriate? What's "inappropriate" is the fact that America puts up with this garbage. We've spent blood and treasure defending the people of the Middle East, from Iraq to Kuwait to Saudi Arabia and the small Gulf states. And if any country in the Middle East won't sell us their oil at a fair market price-oil that we discovered, we pumped, and we made profitable for the countries of the Middle East in the first place-we have every right to take it.

The ingrat.i.tude of Iraq's leaders.h.i.+p is breathtaking. This year, the Baghdad city government even had the audacity to demand that America pay $1 billion for the aesthetic damage caused by blast walls we erected to protect the people of Baghdad from bombs. That's like a drowning man charging a lifeguard for having torn his swimsuit in the process of saving his life.

Granted, eight years ago when we were told that we would be greeted in the streets by the Iraqi people with flowers and welcomed as liberators, I didn't buy it. But as far as I'm concerned, Iraq can keep its flowers-the oil is a different matter. We should take the oil. And here's why: because the Iraqis won't be able to keep it themselves. Their military, even as we try to rebuild it, is incompetent, and the minute we leave, Iran will take over Iraq and its great oil reserves, the second largest after Saudi Arabia. If that happens, all of our brave men and women will have died in vain and $1.5 trillion will have been squandered.

So, if Iran is going to take over the oil, I say we take over the oil first by hammering out a cost-sharing plan with Iraq. If we protect and control the oil fields, Iraq will get to keep a good percentage of its oil-not to mention its independence from Iran-and we will recoup some of the cost of liberating the Iraqis and also pay back the nations that fought with us in the war. And I want to repay the families of the soldiers who died or were terribly wounded. Of course, nothing can ever replace a lost life or a lost limb, but we can send the children of dead or badly wounded veterans to college, provide compensation to the spouses of our service members killed in Iraq, and make sure that wounded veterans are properly looked after. It's common sense, and peanuts compared to what is lying under Iraq's land. Each American family who lost a loved one in Iraq should be given $5 million, and our wounded veterans should be given money, perhaps $2 million each plus medical costs.

Call me old school, but I believe in the old warrior's credo that "to the victor go the spoils." In other words, we don't fight a war, hand over the keys to people who hate us, and leave. We win a war, take the oil to repay the financial costs we've incurred, and in so doing, treat Iraq and everybody else fairly. As General Douglas MacArthur said, "There is no subst.i.tute for victory." From the very beginning of Operation Iraqi Freedom, I believed we should have hammered out the repayment plan with the Iraqis-through exiled Iraqi dissidents-before we launched the war and rid the people of Iraq of their murderous dictator, Saddam Hussein. And back then, there were a few smart people who agreed with me and said the same thing. One of them was the director of the Defense Department's Office of Net a.s.sessment, Andrew Marshall. He recommended that oil revenues should be used to reduce the sticker price for occupation.1 Of course, that hasn't happened. Still, there's no reason we can't or shouldn't implement a cost-sharing arrangement with Iraq. Do not take no for an answer.

It's hardly a radical idea. In September 2010, our own Government Accountability Office (GAO) and others studied the issue in depth and concluded that a cost-sharing plan is feasible and wise. All the know-nothings in the White House need to do is read the cover of the report: "Iraqi-U.S. Cost-Sharing: Iraq Has a c.u.mulative Budget Surplus, Offering the Potential for Further Cost-Sharing." That's literally the t.i.tle. And if they actually read the first line of the report, they would know the GAO found that the Iraqi government is running a budget surplus of $52.1 billion. 2 Iraq just came through a lengthy war and they're already back in business and flush with cash. Why are we footing the bill and getting nothing in return?

I'll give you the answer. It's because our so-called "leaders" in Was.h.i.+ngton know absolutely nothing about negotiation and dealmaking. Look, I do deals-big deals-all the time. I know and work with all the toughest operators in the world of high-stakes global finance. These are hard-driving, vicious, cutthroat financial killers, the kind of people who leave blood all over the boardroom table and fight to the bitter end to gain maximum advantage. And guess what? Those are exactly the kind of negotiators the United States needs, not these cream puff "diplomats" Obama sends around the globe to play patty cake with foreign governments. No, we need smart people with t.i.tanium spines and big brains who love America enough to fight fiercely for our interests. Ronald Reagan's Secretary of State George Shultz used to ask diplomats into his office and, standing before a map, ask them what country they represented. When they pointed to their a.s.signed country, he'd correct them and say, "No, that's not your country, you represent the United States." Leaders.h.i.+p starts with the person at the top. The president sets the tone. Ronald Reagan put America first, and he knew how to negotiate. Barack Obama is no Ronald Reagan-not even close. And that's why we're in the mess we're in and why our nation is on the wrong track and doing so badly.

Until we get a new president, our congressmen will continue to be treated with contempt by the Iraqi government, that government will continue to run a surplus at our expense, and we will continue to suffer economically because the Iraqi government, and everyone else, knows Obama is weak and won't stand up for America's interests. The man's natural instinct is to bow before every foreign leader he can find.

We don't owe the Middle East any apologies. America is not what's wrong with the world. We're an example of freedom to the world. No one can match America. We have big hearts-and the courage to do what's right. But we're not the world's policemen. And if we have to take on that role, we need to send a clear message that protection comes at a price. If other countries benefit from our armed forces protecting them, those countries should cover the costs. Period.

Leaders.h.i.+p Is Down, Gas Prices Are Up.

Beyond simple justice, and beyond reducing our national debt, another advantage of taking the oil is that it will significantly bring down the price of gas. Gas prices are crippling our economy. In the first two years of the Obama administration, gas prices leapt a shocking 104 percent. That's hardly the "hope and change" Americans voted for. That said, there are many environmentalists who are cheering and applauding higher prices. Their logic, if you can call it that, is that if we drive less we will emit less carbon, which will allegedly help alleviate the make-believe problem of global warming. Don't forget, when he was a United States senator, Obama himself suggested that higher gas prices would be a good thing, but that he would prefer a "gradual adjustment."3 Then look at the person Obama appoints as his Energy Secretary-Steven Chu, a guy who actually told the Wall Street Journal, "Somehow we have to figure out how to boost the price of gasoline to the levels in Europe."4 So the fact that we've seen a 104 percent jump in the price of a gallon of gas since Obama was elected president should hardly come as a surprise to anyone who was paying attention. He and his supporters telegraphed as much all along. As crazy as it sounds, these folks want higher energy prices because they believe that will force Americans to drive less and businesses to slow down on production and transportation, which they think is a good thing, but which in fact will only cost us more jobs and put us at a greater economic disadvantage against China. Whose side are they on, anyway?

Here's another one: Cap and Tax (or as they called it, Cap and Trade). Remember that? When he was campaigning to become president, Obama outright admitted that his plan to tax businesses on carbon emissions that exceeded his arbitrary cap would drive energy prices sky high. Here's exactly what he said: Under my plan of a cap and trade system, electricity rates would necessarily skyrocket, even regardless of what I say about whether coal is good or bad, because I'm capping greenhouse gases, coal-powered plants, you know, natural gas, you name it. Whatever the plants were, whatever the industry was, they would have to, uh, retrofit their operations. That will cost money. They will pa.s.s that money on to consumers.5 Most of us shake our heads in disbelief at this stuff. But you really have to understand the fringe Left's radical mindset and just how extreme and out of touch with reality this president and his dwindling group of supporters are with the rest of the country. They want us to have higher energy prices, they want to deprive our economy of the fuel it needs to grow, they intentionally put the pseudo-science of global warming and socialist management of our economy-the two go together-ahead of making our economy compet.i.tive and creating real private sector jobs for the American people.

The fact is, you're not going to see real growth or create real jobs until we get these exorbitant energy costs under control. Someone needs to tell this president that business owners are not the enemy; they're the people who create jobs. Government can't create jobs. All it can do is put more people on the taxpayer's dime. All it can do is sap our nation's wealth.

The real way to help the 14.4 million unemployed Americans get their jobs back is not through "stimulus spending" that only has you, the taxpayer, cutting the check for yet more government employees. The real way is limiting taxes, slas.h.i.+ng crippling and unnecessary regulations, and keeping commodity and fuel costs low.

If our "community organizer in chief" would take the time to study the marketplace, he would know that over the past year, things like fruit, pasta, coffee, bacon, and lots of other foods have registered price spikes as high as 40 percent, and there's no end in sight-in large part because of the price of oil, which has spiked transportation and fertilizer costs.6 Until we get this country's lifeblood-oil-back down to reasonable rates, America's economy will continue to slump, jobs won't get created, and American consumers will face ever-rising prices.

We can talk all day about windmills, nuclear power, and solar, geothermal, and other alternative fuels. I'm all for developing alternatives to oil, but that's for the long term. The fact is, right now and for the foreseeable future, the planet runs on oil-and that means we need to get the price of a barrel of oil down-way down, maybe even to $20 a barrel-and boy would our economy rock.

Does Obama do that? No. He goes around the country lecturing everyone that they need to buy hybrid vehicles, before hopping in his carbon-spewing presidential limousine and Air Force One. If he's really concerned about carbon emissions and air pollution, then maybe he should have grounded his wife before she jetted off with forty of her "closest friends" on a lavish vacation to Spain on the taxpayers' dime. I've got a private jet and love taking my wife and kids on expensive trips too, but there are two differences: I pay for it myself, and I don't go around waving my finger in people's faces lecturing them on the evils of travel and restricting their economic freedoms.

Obama promised he was going to create millions of so-called "green collar" jobs. He used that promise to justify his ma.s.sive government giveaway of billions and billions of taxpayers' dollars to green energy companies. We're now seeing the results of Obama's promise and big government scheme. Solyndra, a U.S. solar panel company, turned out to be a total bust. They were selling $6 solar panels for $3. It doesn't take a genius to realize that's a loser of a business model. But Solyndra's owner, billionaire George Kaiser, had an inside connection with Obama: Kaiser was a big Obama donor and one of the president's campaign fundraiser "bundlers." So the Obama administration fast-tracked a $535 million federally guaranteed loan. Obama believed so much in Kaiser and Solyndra that he made a big public relations event at Solyndra to deliver a speech singing the praises of Solyndra, green jobs, and justifying why taxpayers should foot the bill to stimulate green companies. Predictably, the company went bankrupt, its 1,100 workers lost their jobs, and the American taxpayer got the shaft, to the tune of over half a billion dollars.

Obama has played off the Solyndra scandal, saying he has no regrets and that the company "went through the regular review process."7 However, in the wake of FBI investigations, the truth is now leaking out. According to the Was.h.i.+ngton Post, emails have now been released revealing that "evidence is mounting that there was something irregular about the way the Solyndra deal got greenlighted."8 I predict that there will be many more "Solyndra-style" revelations in the months to come. But Solyndra just shows you that this bunch is engaged in the very crony capitalism and insider deal-cutting that they are always accusing others of. Worse, it shows that the millions of green jobs Obama promised were completely bogus.

But even more shocking than the hypocrisy of it all is the total cluelessness it reveals. At one of the president's speaking events, a man told Obama that he and his wife need a bigger vehicle because they have eight kids. So what did Obama do? He told the guy, "Buy a hybrid van." Just one problem: they don't exist in America. This president cannot even speak intelligently without a teleprompter. It's embarra.s.sing and sad!

When he's not hectoring people about hybrids, he's appointing his Attorney General Eric Holder to conduct criminal investigations of gas stations engaging in "price gouging." This is a silly attempt to scapegoat and deflect attention away from how ineffective and weak he is on energy policy. As anyone with a brain knows, the reason gas prices are through the roof is because OPEC controls supply and therefore ma.s.sively inflates crude oil prices.9 America doesn't have time for games. This country is in huge trouble. It's time to get serious and look at the facts. Currently, we're paying over $85 a barrel for oil. The United States uses about 7 billion barrels of oil a year. Do the math. We're singlehandedly transferring hundreds of billions of dollars a year to OPEC countries that hate our guts. And again, we're giving all this money to governments who seethe with anti-American hatred. It's stupid policy.

Take On the Oil Thugs.

With proper leaders.h.i.+p, we can get that price down to $40$50 a barrel, if not the $20 that I have previously suggested. But to get there we need a president who will get tough with the real price gougers-not your local gas station, but the illegal cartel that's holding American wealth hostage, OPEC. OPEC stands for the Organization of the Petroleum Exporting Countries. It was created at the Baghdad Conference in September 1960 by our good buddies Iran, Venezuela, Saudi Arabia, Iraq, and Kuwait. Since then OPEC has added as members Angola, Ecuador, Qatar, Algeria, the United Arab Emirates, Nigeria, and our dear friend Libya. So here you have twelve men (in this case they're all men) sitting around a table determining and fixing the price of oil. Now, if you have a store and I have a store and we collude to set prices, we go to jail. But that's what these guys do, and no one lifts a finger. And the worst part of it is that these twelve OPEC countries control 80 percent of the world's accessible oil.10 Let your eyes dart back up to that list of OPEC's founding members. First up, Iran. Iranian President Mahmoud Ahmadinejad has called for wiping our close ally Israel off the map. He said that the September 11 terrorist attacks on New York were a plot by the United States government. He believes the Holocaust is a "myth." His regime is developing nuclear weapons in violation of the Nuclear Non-Proliferation Treaty. Next, Hugo Chavez's Venezuela. During one of his rambling United Nations speeches, Chavez called President George W. Bush "the devil." His mouthpiece in Venezuela, ViVe TV, issued a press release in January 2010, saying the 200,000 innocent victims of the awful Haiti earthquake were really killed by an American "earthquake weapon."11 Then look at Saudi Arabia. It is the world's biggest funder of terrorism.12 Saudi Arabia funnels our petro dollars-our very own money-to fund the terrorists that seek to destroy our people, while the Saudis rely on us to protect them! Then there is Kuwait, which would not even exist had we and our allies not fought the First Gulf War against Saddam's aggression. And of course we have Iraq, whose freedom we've paid for to the tune of more than a trillion dollars and more than 4,000 dead servicemen and women. These countries do us no favors. Through OPEC they squeeze us for every penny they can get out of us.

Two years ago, Amy Myers Jaffe, an energy expert from the James A. Baker III Inst.i.tute for Public Policy at Rice University, did a study to determine the real product cost of a barrel of oil. The price of a barrel of oil back then was $ 60. Jaffe found that the actual cost to produce a barrel of oil then was $15, exactly a quarter of the actual market price.13 That means you're looking at a 400 percent markup on pricing before the oil even gets to the refinery to be turned into gas. Again, if you or I did this, we would be thrown in jail, because it's illegal to collude and fix prices. But these petro thugs do this year in and year out and laugh all the way to the bank. They claim they're not restricting oil production to jack up the prices, but that's a lie. In 1973, OPEC produced 30 million barrels a day. Guess how much they produced in 2011? That's right, the same amount. Production hasn't moved an inch. The reason for this is not because OPEC countries have reached peak oil output. After all, as Robert Zubin points out, as recently as April 2011, the Saudis announced they were going to cut production by 800,000 barrels a day, so they're nowhere near running at full capacity.14 Instead, OPEC is squeezing production so oil prices skyrocket and America pays.

The OPEC countries wouldn't even exist if it weren't for us-it's our money that makes them rich and our troops that have made Iraq free and kept Kuwait, Qatar, and Saudi Arabia from being gobbled up by Saddam Hussein (or now, potentially, by Iran). A smart negotiator would use the leverage of our dollars, our laws, and our armed forces to get a better deal from OPEC. It's time to get tough. And smart!

Sue OPEC.

We can start by suing OPEC for violating ant.i.trust laws.

Currently, bringing a lawsuit against OPEC is difficult. It's been made even more complicated by a 2002 federal court, and subsequent appeals courts, ruling that "under the current state of our federal laws the individual member states of OPEC are afforded immunity from suit brought for damage caused by their commercial activities when they act through OPEC."15 The way to fix this is to make sure that Congress pa.s.ses and the president signs the "No Oil Producing and Exporting Cartels Act" (NOPEC) (S.394), which will amend the Sherman Ant.i.trust Act and make it illegal for any foreign governments to act collectively to limit production or set prices. If we get it pa.s.sed, the bill would clear the way for the United States to sue member nations of OPEC for price-fixing and anti-compet.i.tive behavior.

One of the smart people in this debate is Iowa Republican Senator Chuck Gra.s.sley, a co-sponsor of the bill. "It's time to get it pa.s.sed," says Gra.s.sley. "OPEC needs to know we are committed to stopping anti-compet.i.tive behavior."

Here's the good news: since 2000, this bill has pa.s.sed the Senate Judiciary Committee four times with bipartisan support, and in May 2008, the NOPEC bill pa.s.sed in the House when Democrats were in control. Now the bad news: President George W. Bush got spooked and threatened to veto the bill because he was afraid that, with the wars in Iraq and Afghanistan raging, NOPEC might spark "retaliatory action." Bush's fear was misguided. First of all, these oil shakedown artists need and want our money. What are they going to do? Fold their arms, throw a temper tantrum, and refuse to sell us their oil and be out billions and billions of dollars? Give me a break. And two, they already engage in "retaliatory action": it's called a 104 percent spike in the price of gas since Obama took office, and that's with him going around practically kissing their feet.

Thomas W. Evans was an adviser to Presidents George H. W. Bush and Ronald Reagan. Evans says that when OPEC or its member nations realize the likelihood of the huge damages they would face and how their illegal actions would be curtailed, they would be forced to seek a settlement on production goals that would put prices in much closer alignment with actual costs. The net effect, says Evans, would be price reductions for heating fuel and gas at the pump that would be so large they might exceed the $168 billion the government spent on the 2008 federal stimulus package. As for concern over any potential fallout, he says what I say: getting tough is getting smart. Suing OPEC "would undoubtedly anger political leaders in the Middle East," writes Evans. "But how stable is the Middle East right now? And isn't starting a lawsuit better than starting a war?"16 Imagine how much money the average American would save if we busted the OPEC cartel. Imagine how much stronger economic shape we would be in if we made the Iraqi government agree to a cost-sharing plan that paid us back the $1.5 trillion we've dropped on liberating Iraq so it could have a democratic government. Just those two acts of leaders.h.i.+p alone would represent a huge leap forward for our country. And by the way, it would also make us respected again in the world. It's sad-truly sad and disgraceful-the way Obama has allowed America to be abused and kicked around. All we have to do is be smart and show some backbone to begin setting things right.

Use America's Resources and Create Jobs.

So number one, we take the oil through the cost-sharing plans that even the GAO says are smart and feasible. Two, we hit OPEC in the wallet and rein them in by signing into law the bipartisan NOPEC law. And the third thing we need to do is to take advantage of one of our country's chief a.s.sets-natural gas. We are the "Saudi Arabia" of natural gas, but we don't use it. Abu Dhabi recently had all of their transportation converted to natural gas so they can sell their expensive oil to us.17 Even they recognize how efficient natural gas is. It's cleaner, cheaper, and better. So why aren't we using it to our advantage?

Did you know that with the natural gas reserves we have in the United States we could power America's energy needs for the next 110 years? Those aren't my estimations, that's what the United States Energy Department's Energy Information Administration says. In fact, one of the larger mother lodes of natural gas, the Marcellus Shale, could produce the energy equivalent of 87 billion barrels of oil.18 Some critics believe those numbers might be inflated. Fine. Let's say the real number is fifty-five years of energy, or that we only get 43 billion barrels' worth of energy. So what? That buys us more time to innovate and develop newer, more efficient, cleaner, and cheaper forms of energy.

The point is that sitting around handwringing all day accomplishes nothing. Yes, I want us to extract the shale gas safely and responsibly. Who doesn't? But too often, environmental extremists take things so far that they will never be pleased. They're for nuclear energy, then they're against it. They like natural gas, then they don't like it because of new drilling techniques. They want windmills everywhere, then they oppose them because they hack birds to pieces and create "visual pollution" (about this, I agree!). They love ethanol, then they don't anymore because it eats up vast amounts of farm land and sparks food riots in Africa when the price of corn goes up. They like electric cars, then they don't because they realize that half of electricity comes from coal, and they hate coal. On and on, back and forth it goes. Meanwhile, our country's economy is sinking like a stone.

What people need to know is what the great conservative economist and writer Thomas Sowell taught us: in the world of economics, there are no such things as "solutions," only tradeoffs. Every action has a consequence. Every decision has an upside and a downside. So you make smart decisions that minimize harm and maximize freedom. One of the many reasons why I'm a conservative is because I believe in the so-called Law of Unintended Consequences-the idea that, no matter how good government's intentions, when you start social engineering or messing around with the free market, more often than not you open a Pandora's box of negatives you didn't see coming.

So, in terms of energy, we need to be exploring and developing numerous approaches ... and I also include in that drilling for oil right here at home. We have oil all over the place in America. It's incredible how much oil is right under our own land and water. But the Obama administration refuses to get tough with the environmental lobby and liberate our oil companies to drill for domestic oil.

Yes, the BP oil spill was bad, but it was no reason to put tighter clamps on domestic drilling. That showed no leaders.h.i.+p at all. What it showed was that the Obama administration is driven more by hysteria than facts.

You want some facts? Here's one that anyone who has ever studied oceanic oil supplies already knows: "Tens of millions of gallons of crude oil leak into the ocean every day. Naturally, from the sea floor," as David Ropeik from Harvard University, hardly a rightwing inst.i.tution, has written. 19 I also read from the U.S. National Academy of Sciences that the ocean itself is to blame for contributing "the highest amount of oil to the marine environment."20 So if the extreme environmental crazies have a beef to pick with anyone, perhaps it should be with Mother Earth herself.

The real issue, of course, is that those who oppose drilling in the United States simply don't want the drilling to occur in their own backyard. What they ignore is the fact that the holes are going to get drilled into the planet anyway. We should drill them on our soil and create our own jobs and keep the revenue here instead of exporting it to the Middle East. Remember when Obama gave his 2008 speech at the Democratic National Convention and said that he would "invest" $150 billion in renewable energy over the next ten years and create "five million new jobs?" How did that turn out? He spent $80 billion of your and my money and, by his own Council of Economic Advisors' admission, "created or saved" just 225,000 jobs. Now run those numbers: that's $335,000 for each so-called "green collar" job we created or "saved," whatever that means.21 Sadly, when it comes to using the energy industry to create American jobs, Obama has been a total disaster. And that's a shame, because he's missing a huge opportunity that could give a lot of people good quality jobs while helping get our country back on solid economic footing. Just look at how he's mismanaged offsh.o.r.e oil drilling. Here at home, he's kept in place the bans on drilling off our coasts. But he goes to Brazil, gives them $2 billion through the U.S. Export-Import Bank, and brags that he's proud and excited to make America one of Brazil's "best customers." Pull it up on YouTube and watch it for yourself, if you can stomach it. It's the most ludicrous, anemic leaders.h.i.+p anyone could imagine. Think about it. If Obama supports offsh.o.r.e drilling in Brazil, and puts billions of our dollars in their hands to do it, why can't we drill in America and create more jobs and less dependence on foreign sources of oil?

The fact that Obama decided to tap into our nation's Strategic Petroleum Reserve-a stockpile of 727 million barrels of emergency oil, or thirty-four days' worth of America's annual usage-and used up 30 million barrels to lower summertime gas prices so he could goose his sinking approval ratings is a national disgrace. But ironically, his decision only proves what everyone knows: more domestically produced oil on the market will drive down gas prices. Period.

So let's drill already. And let's do it in America. It's not only economically smart, it's strategic-the Middle East needs to get the message loud and clear that we're done coming to them on bended knee. We're waking up, getting up, and making America the powerhouse we once were.

Take the oil, sue OPEC, and drill domestically-if we do these three big things, we'll be on the right track to rebuild American strength, wealth, jobs, and opportunity. Will it be tough? Sure. But that's what makes us Americans: we do hard things, and we do them well . . . if we have the right leaders.h.i.+p.