Green Jobs – In the Stimulus Bill, But Not In Reality
Posted February 18th, 2009 at 9.46am in Energy and Environment.
Supporters of the just-passed stimulus bill have called it a lot of things, but one thing they can’t yet call it is a success. Only time will tell if the measures actually jump- start the economy as promised or instead prove to be a costly drag on it. History and economic common sense strongly suggest the latter, as the Heritage Foundation has repeatedly warned.
Among the promises made is that the energy and environmental measures in the stimulus- 43 billion in direct outlays and 20 billion in tax measures - will create many so-called green jobs, for example those who build and install the wind turbines and solar panels that are now being encouraged through generous tax credits. There is reason for doubt that this is a workable jobs program. For one thing, those billions in tax dollars needed to support energy alternatives cost jobs elsewhere. Add to that the fact that the energy from these sources is more expensive to produce and transmit, and high energy costs are also job killers.
Overall, the green jobs agenda could cost more jobs than are created. The real world evidence seems to prove this out. Those places that have done the most to push green jobs – California and western Europe – have higher unemployment and weaker economies than the U.S as a whole.
In any event, before we know how the new stimulus bill will turn out (and quite possibly because we don’t) proponents of the green jobs argument are already treating it like a success and are trying to repeat it in other measures that will impose more of the same. For example, expect an energy bill in the next two months that will pile on additional favors for wind and solar power, including a national requirement that more of it be used. Even hyper-expensive cap and trade bills designed to reduce carbon dioxide emissions from fossil fuels have been touted by some for the jobs created as businesses take steps in order to comply.
The green jobs logic is dubious, to put it mildly. At the very least, we should wait to see how the stimulus unfolds before we expand this agenda.
- Author: Ben Lieberman
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February 18, 2009 Tom Nally, New Orleans writes:
Ben said, “Overall, the green jobs agenda could cost more jobs than are created.”
True, Ben, but incomplete as currently stated. A more accurate statement would be this: “All federally sponsored programs cost more jobs than they create.”
It can be no other way! The reason is quite simple: it costs the federal government $1.25 to procure the same amount of goods and services that can be procurred in the private sector for only $1.00. The reason is that government regulation adds to the cost of procuring goods and services without adding a commensurate amount of value to that which is procurred.
This $0.25 loss, multiplied billions and billions of times, represents hundreds of thousands of jobs that will never come into existence because the federal government is spending those dollars instead of the private entities who generated those dollars in the first place.
I don’t know if this phenomenon has a name, unless one merely wants to call it “inefficiency”. I prefer to identify it using a more descriptive phrase: “the degraded purchasing power of federal dollars”. With degraded purchasing power comes degraded job-creation power.
The bottom line is this: the “Stimulus Plan” as a whole is not a job creator. On the contrary, it will destroy jobs compared to the alternative. The alternative is to allow those those private entities who created those dollars to spend them in the manner that serves their interests.
Only in doing that will the job-creating power of spending be maximized.
—Tom Nally, New Orleans