"To announce that there must be no criticism of the president, or that we are to stand by the president, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public." -- Theodore Roosevelt

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Wednesday, February 10, 2010

Obama's Green Stimulus and the Job Losses It Will Cause

As Obama and Dems are revving up their mysterious follow-up to the ineffective $787 billion "stimulus" bill. Although the coming bill itself is murky (Michelle Malkin reports that "GOP Senate Minority Leader Mitch McConnell was on the Senate floor yesterday pleading to see the legislation), Rea Hederman of the New York Post has a short write up about it.

"As part of his promised new focus on jobs, President Obama yesterday hosted a bipartisan jobs meeting. But he has yet to propose many pro-employment specifics -- and his overall economic plan remains unmistakably anti-job.

"Other than a few odd ideas like using TARP funds paid by banks to fund more government programs, Obama's main push is for a 'jobs' bill like the $150 billion measure the House has already passed, which includes various tax credits and new spending to supposedly create jobs.


"One problem is that these aren't broad tax cuts -- which have had a job-creating effect in the past. Rather, they're specific bribes to businesses for doing a few specific things -- like boosting their payroll over a certain level. The same approach was an utter failure under President Jimmy Carter in the late '70s.

"Worse, the credits -- a total of perhaps $33 billion -- are dwarfed by the tax hikes that Obama and the Democratic Congress are promising for next year. How many businesses will change the behavior for a small carrot this year -- when they know they're about to be hit by a far larger stick?


"The good news is that the fundamental resilience of the US economy will boost employment -- eventually. But higher taxes and the drag on the economy from the exploding federal deficit will leave business struggling for the next several years: Slow job growth is virtually guaranteed.

"If there's a silver lining in all this, it's that -- by proposing tax credits to boost job growth -- liberals in Congress and the White House are finally admitting that high taxes can deter employment. Too bad they're not better at math: Sorry, guys, but $33 billion in tax credits pales in comparison to the $1.1 trillion in new taxes that the president proposes in his budget."

Wasn't the first stimulus supposed to save and create jobs? Ah, well...

There is also quite a bit of buzz about a new "green jobs" boost is in the works. Whether this boost is contained in this bill or not, Obama has left little doubt that he pushes green energy sources. I mean we all remember those "Hope & Change" commercials with those windmills, right?

There's an interesting article written by Gianluca Baratti back in March 2009 (h/t Carol and Carol's Closet) about Spain's own experience with subsidizing "green" power and the mess that unfolds.

From Baratti:

"Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain’s experience with windmills and solar farms is any guide.

"For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid.
U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.

"The premiums paid for solar, biomass, wave and wind power - - which are charged to consumers in their bills -- translated into a $774,000 cost for each Spanish 'green job' created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.

"'The loss of jobs could be greater if you account for the amount of lost industry that moves out of the country due to higher energy prices,' he said in an interview.

Spain’s Acerinox SA, the nation’s largest stainless-steel producer, blamed domestic energy costs for deciding to expand in South Africa and the U.S., according to the study.

"'Microsoft and Google moved their servers up to the Canadian border because they benefited from cheaper energy there,' said the professor of applied environmental economics."

A sign of things to come? In a way, it's already happening.

This article from ABC News by Jonathan Karl (h/t, once again, to Carol's Closet) describes how the wind power stimulus money has been going to overseas companies and jobs.

"Despite all the talk of green jobs, the overwhelming majority of stimulus money spent on wind power has gone to foreign companies, according to a new report by the Investigative Reporting Workshop at the American University's School of Communication in Washington, D.C.

"Nearly $2 billion in money from the American Recovery and Reinvestment Act has been spent on wind power, funding the creation of enough new wind farms to power 2.4 million homes over the past year. But the study found that nearly 80 percent of that money has gone to foreign manufacturers of wind turbines.

"'Most of the jobs are going overseas,' said Russ Choma at the Investigative Reporting Workshop. He analyzed which foreign firms had accepted the most stimulus money. 'According to our estimates, about 6,000 jobs have been created overseas, and maybe a couple hundred have been created in the U.S.'

"Even with the infusion of so much stimulus money, a recent report by American Wind Energy Association showed a drop in U.S. wind manufacturing jobs last year.


"Matt Rogers, the senior adviser to the Secretary of Energy for the Recovery Act, denied there was a problem.

"'The recovery act is creating jobs in the U.S. for American workers,' said Rogers, 'That is what the recovery act is about, that is what it is doing. Every dollar from the recovery act is going to create jobs for the American workers here in the U.S.'"

Yeah. Great response there, Matt Rogers.

So let's review here. In the short term, wind energy creates jobs for Europeans, so we're pumping stimulus money into their economies. I would not describe this as the best policy for creating American jobs. In the mid to long term, renewable energy is far more expensive (wind-powered turbine "generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels") which will drive even more American jobs away to cheaper pastures.

If this nonsense passes, better buckle down. Double digit unemployment percentages could be here to stay.


  1. Typical government.

    Does it work?
    Not really.
    Is it efficient?
    Not yet.
    Does it create jobs?
    Actually the opposite.
    Does it sate our base?
    Awesome! Do it!

  2. In Minnesota, a bunch of "energy saving" windmills have been inoperable for months because they freeze up in the bitter cold. (Nobody thought to ask.)

    But hey, if they work in Spain and California, where they grow oranges. . .