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Obama's Code-Green Economy


By Rich Lowry
National Review Online
December 5, 2008


It’s always a mistake to believe that government
can “create” jobs.

Former Homeland Security Director Tom Ridge was
widely ridiculed for color-coding the nation’s
terror-alert status. The Obama administration
wants to color-code the economy.

Barack Obama promised during the campaign to
create 5 million “green” jobs in a decade, and
they will constitute at least $15 billion a year
of his stimulus package. Putting people to work
weatherizing homes, building wind farms, and
constructing a new electrical grid will
supposedly save the planet and revive the
economy all at once, in a lavish, politically
correct free lunch.

Michigan Gov. Jennifer Granholm explained on
PBS’s NewsHour the economic elixir of wind
farms: “You need people to know how to build the
turbines. You have to have people install the
turbines. And turbines have to be connected to
the grids. Those are all jobs that can be
created if we make a smart investment right now.”

To this point, construction jobs have not been
widely viewed as the future of our advanced
service-based economy. They once were dismissed
as jobs “Americans won’t do.” Never mind. The
fundamental problem is that biofuels and wind
energy are less efficient and more expensive
than coal (which provides more than half the
nation’s electricity) and oil (which powers
essentially all of its cars).

Currently, 1.8 million jobs in the economy
relate to oil and gas (half of them at gas
stations). Why layer more than double — if the
Obama goal can be taken seriously — that number
of “green” jobs on top of already existing
energy jobs? Even if all the traditional energy
jobs disappear, we will have succeeded only in
employing more people in energy than otherwise
necessary.

The “green” jobs enthusiasts are making a
classic error illustrated by the 19th-century
French economist Frédéric Bastiat. When a
railroad was under construction from France to
Spain, someone in Bordeaux suggested that there
be a break in the tracks to boost the town’s
economy with all the extra work for porters to
cart luggage between trains, etc. Bastiat
pointed out that if breaks in the tracks were
such an economic benefit, every town should have
one and France should build a “negative
railroad” consisting entirely of interruptions.
Of course, the French economy benefited much
more from a real railroad delivering the
efficient and cheap transport of goods. The push
for “green” jobs is about creating a “negative”
energy sector — hampering the energy sector we
already have to create one that requires more
labor.

To make people buy biofuels or wind power,
either these energy sources have to be
subsidized (draining resources away from more
productive uses) or traditional sources of
energy have to be taxed or regulated, which is
what Obama proposes with his cap-and-trade plan
on carbon emissions. The latter policy will cost
jobs in the traditional energy sector and leave
consumers with less to save and spend elsewhere.
As Iain Murray of the Competitive Enterprise
Institute points out, advocates of “green” jobs
always emphasize the gross rather than the net
job figures because a more complete picture
shows they are ultimately subtracting, not
adding.

Creating “green” jobs isn’t a new policy. The
federal government basically invented the
American ethanol industry, with subsidies, tax
credits, and a tariff to protect it from foreign
competition. Ethanol still is only two-thirds as
efficient as gasoline and requires about as much
energy to produce as it provides. The federal
government has invested billions of dollars in
its own “flex fuel” fleet of cars, but 92
percent of the fuel for the cars is standard
gasoline.

Jimmy Carter launched a kind of “green jobs”
program a full three decades ago. He poured $3
billion into a Synthetic Fuels Corporation that
was an embarrassing bust.

It’s always a mistake to believe that government
can “create” jobs. It only creates jobs by
taking resources from the economy, and therefore
destroying jobs out of sight. It should attempt
to create a favorable business climate and leave
the rest, including the color-coding, to the
market.

 

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