Joe Manchin Says He’s Pro-Job Creation, But He’s Lobbying the Fed to Increase Unemployment
Sen. Manchin has justified fossil fuel extraction because it “creates jobs.” He’s also pushing a policy that would cut them.
Sen. Joe Manchin (D-W.V.), claims on his website that creating jobs is his “top priority,” and has used this status as a “job creator” to justify his outsized role in blocking climate action, even as the human-made environmental crisis brings devastating storms and heat waves. According to Manchin, the coal industry must be protected, pipelines built, and regulations eased to secure the jobs of hard-working Americans.
Yet, there is another area where the senator is also bullish. He has also called on the Federal Reserve to raise interest rates — a policy explicitly aimed at responding to inflation by increasing unemployment levels and spurring a recession. In other words, Manchin, the self-proclaimed job creator, is pushing a policy that gets rid of jobs.
While they may seem contradictory, these policies share a throughline: Both the obstruction of climate action and the spiking of joblessness are beneficial to the fossil fuel companies that fund Manchin’s campaign — and that Manchin is directly invested in.
“I do think that it is important to expose his rhetorical hypocrisy,” says Thomas Hanna, research director at The Democracy Collaborative, a research organization that advocates for a democratically run economy. “But I think that the real meat of the story is not that he is a hypocrite, but rather, that he is a very rational protector and enforcer of capitalist class interests.”
Manchin isn’t just a proponent of “jobs” — he has made job creation central to his political identity, and to his efforts to support the fossil fuel industry. The most meager environmental protections are job killers, he has repeatedly argued, and must be struck down.
In 2017, Manchin cheered then-President Trump for overturning the Obama-era Clean Power Plan, declaring, “Today, coal makes up 30% of our electric portfolio and it will continue to power our nation for generations. To truly achieve an all-of-the-above energy policy, we must use everything we have — coal, natural gas, nuclear, solar, hydro, and wind — while also making sure that we are not adversely hurting our economy and taking away people’s livelihoods.”
Also in 2017, when Trump withdrew the United States from the Paris climate accord, Manchin hailed the decision, saying, “I do not believe that the Paris Agreement ensures a balance between our environment and the economy.”
In his campaign to push through the 303-mile Mountain Valley Pipeline, which would transport fracked gas through Virginia and West Virginia, Manchin has repeatedly cited the construction jobs the project would supposedly create. (Companies behind the pipeline are political donors to Manchin.)
As the Democratic swing vote in the Senate, and the chair of the Senate’s Energy and Natural Resources Committee, Manchin has played a pivotal role in obstructing policies aimed at addressing climate change. He was instrumental in the defeat of President Biden’s Build Back Better legislation, a public investment act that included significant climate provisions.
Manchin then sought to tie his cosponsorship of the Inflation Reduction Act — a mixed piece of legislation, recently passed, that includes climate measures — to passage of a bill aimed at permitting reform for energy infrastructure. The latter would have rolled back regulations for oil and gas permitting, as well as renewable energy projects, and would have greenlighted approval for the Mountain Valley Pipeline. That bill has been stymied for now, thanks to a progressive revolt, as well as some Republican opposition.
Manchin has a direct financial interest in this advocacy. In 1988, he co-founded a coal brokerage company, Enersystems, Inc., which made him $5.6 million from 2010 to 2020 (he joined the Senate in 2010). His son now heads the company, where Sen. Manchin still has significant holdings. Manchin has used his political influence to benefit his family coal business interests, a New York Times investigation found in March. Manchin is also a major recipient of political donations from the fossil fuel industry, including PACs that represent oil and gas.
But there is another arena where the senator also wields considerable power: the Federal Reserve. For more than a year, Manchin has been pressuring the body to “do more” in response to inflation. While he has hinted that this demand includes raising interest rates, in February, Manchin came out and said it, when he had the following exchange with Hoppy Kercheval, the host of the Talkline podcast, affiliated with MetroNews of West Virginia:
Kercheval: And you believe the Federal Reserve, and I know that you’ve hinted at this, the Federal Reserve should raise interest rates?
Manchin: Hoppy, it’s the only way they’ve ever been able to control this. I mean you’ve got to tap it [inflation] down. I mean if you don’t, it’s going to continue to rise. 7.5 percent, that’s the highest in four decades, forty years. It’s just unbelievable. And we’re not doing anything about it. We’re sitting back down and watching it.
When Kercheval asked a follow-up question about the economic consequences of such a policy, including higher interest rates for those seeking to buy a home, Manchin doubled down, arguing, “There’s gonna be some corrections that need to be done, Hoppy. It’s difficult.”
This exchange follows other public demands on the Federal Reserve by the senator. In an August 2021 letter, Manchin called on Jerome Powell, the chair of the Federal Reserve, to roll back economic stimulus, arguing that “it’s time to ensure we don’t over prescribe the patient by further stimulating an already strong recovery and therefore risk our ability to respond to future crises we are sure to face.” The letter, which Politico called “a rare rebuke of the central bank by a Democratic lawmaker,” strongly suggested that higher interest rates were needed.
As with climate policy, Manchin is a big player with the Federal Reserve. When he said in March that he wouldn’t support Sarah Bloom Raskin as a nominee for the chair of the Federal Reserve, over critical statements she made about oil and gas companies, she was soon forced to withdraw her nomination. And there are signs that Manchin has sought to use demands of the Federal Reserve as a bargaining chip in negotiations over Democratic spending legislation, as Politico revealed last year.
In pressuring this body, Manchin has insisted that he is a proponent of “maximum employment” and job stability. But raising the interest rates of the Federal Reserve is a policy specifically aimed at cutting jobs.
“When the Federal Reserve raises interest rates, the goal is to ‘cool’ the economy, a euphemism for driving up unemployment rates,” Hadas Thier, the author of A People’s Guide to Capitalism and journalist covering political economy, explained to Workday Magazine. “When interest rates rise, it becomes more costly to borrow money and therefore discourages corporations from investing in the production of goods and services. This leads to fewer available jobs and an increase in unemployment. Higher unemployment isn’t an unintended consequence of higher interest rates, it’s the goal.”
This is something the Federal Reserve has acknowledged publicly, as it has ratcheted up these interest rates. On September 21, Powell said, “Reducing inflation is likely to require a sustained period of below-trend growth, and there will very likely be some softening of labor market conditions,” comments that were repeated almost verbatim from remarks he made on August 26. Softening of the job market refers to job losses and low wages. Powell’s remarks prompted headlines like this one from CBS News: “Buckle up, America: The Fed plans to sharply boost unemployment.”
In contrast to what the Federal Reserve is doing, many on the left have been calling for policies that protect working people from the hardships caused by rising prices — by raising wages, implementing rent control, regulating prices and taxing the wealthy.
But, according to Hanna, companies and their advocates have an interest in keeping workers insecure. “Raising interest rates and causing a recession isn’t necessarily about causing unemployment as the end goal, rather it is about using unemployment to drive down wages and union bargaining power,” he says. When joblessness is high and wages are low, workers have less leverage to organize in their workplaces. Conversely, when unemployment is low, workers have more leverage, so employers will go to great lengths to avoid these “tight” labor conditions.
It would follow, therefore, that Manchin’s support for fossil fuel extraction in the name of saving jobs, and simultaneous support for cutting jobs by raising the Federal Reserve’s interest rates, are perfectly consistent positions. “He wants more jobs in the fossil fuel sector for supporting extraction reasons, but he wants those jobs to remain as low wage and precarious as possible,” says Hanna. “Both those things together boost corporate profits better than one or the other.”
The fossil fuel industry’s claims about job creation are routinely inflated, and more production does not necessarily mean more jobs. But the fact that one of the biggest industry champions, who justifies his actions by presenting himself as a job creator, is — at the same time — pushing to cut U.S. jobs, adds another layer to the false narratives enabling the climate crisis.
This crisis grows more acute by the day. The lethal intensity of Hurricane Ian was fueled by warming waters and other human-caused changes to the climate. Early March saw a scorching heat wave in India and Pakistan that affected one out of every eight people on the planet. And Europe had its hottest summer ever, with officials estimating there were thousands of excess deaths as a result. Scientists are clear that, to avoid the most catastrophic scenarios, in which crops fail en masse, the ocean rises 49 feet, and hundreds of millions of people die, human society must transition away from fossil fuels immediately.
Manchin is playing a pivotal role in blocking this transition, and using his false claims about supposedly supporting workers to do so.
This article is a joint publication of In These Times and Workday Magazine, a non-profit newsroom devoted to holding the powerful accountable through the perspective of workers.
Sarah Lazare is the editor of Workday Magazine and a contributing editor for In These Times. She tweets at @sarahlazare.