Free Markets, Free People
“Going green” and “climate change” certainly are interlinked parts of a political agenda that have nothing to do with public opinion or will. In fact:
Seventeen years of continuous surveys covering countries around the world show that people not only do not care about climate change today – understandably prioritising economic misery – they also did not care about climate change even back when times were good. The new information comes in a study released by the National Opinion Research Center at the University of Chicago – a large, long-standing and respected non-profit. The NORC spokespersons said that decades of climate alarmism have had basically no effect on people’s attitude around the world.
Part of that has to do with the fact that they’ve heard it all before. Dire predictions about population growth that have come to naught. Warnings about using up the earth’s resources which have proven to be false. Ozone holes. Melting icecaps. Yatta, yatta.
Climate change is just the latest among the apocalyptic prophesies and as the real science – not Al Gore “science” – comes out, fewer and fewer people are staying on the bandwagon.
Of course the promise was a “green economy” in which everyone would benefit. How’s that worked out? Well we know how it has worked out in Spain. Germany is now finding out how mistaken they were to go in that direction. In fact:
Energy, manufacturing and agriculture are playing a major role in the corridor states’ revival. The resurgence of fossil fuel–based energy, notably shale oil and natural gas, is especially important. Cheap U.S. natural gas has some envisioning the Mississippi River between New Orleans and Baton Rouge as an “American Ruhr.” Much of this growth, notes Eric Smith, associate director of the Tulane Energy Institute, will be financed by German and other European firms that are reeling from electricity costs now three times higher than in places like Louisiana.
Interesting. It is another reason why they’re also putting manufacturing plants in the US, mostly in Red States. Skilled labor, right to work and cheap energy. Obviously neither the “right to work” nor cheap energy are part of any Obama administration design.
And how is it going for green jobs more locally? Well, the usual state can be consulted for an update on what such a move has wrought and demonstrate for all to see why “going green” is a foolish road to travel – at least in the near future.
It was supposed to be the next big thing. California built decades of broad-based prosperity from the Gold Rush, then Hollywood, then aerospace, and later Silicon Valley. At the turn of the century, “green jobs” were supposed to be the wave of the future. How is that going for them? According to the best numbers from the Bureau of Labor Statistics, fewer than 2,500 green jobs have been created in California since 2010.
Wow … bask in the success! Government again demonstrates how poorly it does picking winners and losers. Not that such failures ever hinder the central planners from using your dollars to try again. What’s Einstein’s definition of insanity?
Meanwhile, the “success” of green energy has brought California to a point where it will have to fish or cut bait very soon:
California is weighing how to avoid a looming electricity crisis that could be brought on by its growing reliance on wind and solar power. At Tuesday’s meeting, experts cautioned that the state could begin seeing problems with reliability as soon as 2015.
Of course, had we heeded the experience of others, we likely wouldn’t see California going through this nonsense:
The former chancellor Lord Lawson has urged the Government to keep Britain’s coal-fired power stations working for as long as was needed to avoid any short-term power shortages. In a House of Lords debate on energy policy and electricity generation Lord Lawson also called on ministers to give “every encouragement it can” to the quickest possible development of shale gas supplies. Lord Lawson urged energy and climate change minister Baroness Verma to assure the House that “if the need arises our coal-fired power stations will be kept open as long as is necessary, regardless of the European combustion plants directive”.
But our dauntless leaders never learn from others. Just as with healthcare, they seem bound and determined to recreate the failure of others.
We have abundant fossile fuel resources. They would generate both jobs and revenue for government. Wind and solar, while great in theory, have in practice been shown to be woefully inadequate to our needs. We even have communities wanting wind turbines taken down due to health concerns.
Yet our government and this administration continue to pursue an “energy policy” which is detrimental to the welfare of this nation despite a state that has done everything they want to do nationally and is a dismal failure because of it. They are bound and determined to make all 50 states Californias.
Another “told you so”:
WHEN is a job not a job? Answer: when it is a green job. Jobs in an industry that raises the price of energy effectively destroy jobs elsewhere; jobs in an industry that cuts the cost of energy create extra jobs elsewhere. You will hear claims from Chris Huhne, the anti-energy secretary, and the green-greed brigade that trousers his subsidies for their wind and solar farms, about how many jobs they are creating in renewable energy. But since every one of these jobs is subsidised by higher electricity bills and extra taxes, the creation of those jobs is a cost to the rest of us. The anti-carbon and renewable agenda is not only killing jobs by closing steel mills, aluminium smelters and power stations, but preventing the creation of new jobs at hairdressers, restaurants and electricians by putting up their costs and taking money from their customers’ pockets. –Matt Ridley, City A.M., 15 December 2011
The parallel-energy universe known as renewables, a place where dollars and economic theory know no bounds and make no sense, looks increasingly like a bubble set to collapse. Or, as I wrote here back in March of 2010: “That eerie hissing you hear may well be the air beginning to seep out of the green energy bubble. The sound is similar to the pfffffft and sshhhhsssssp noises we heard in the early days of the dot-com bubble collapse or the subprime mortgage meltdown.” –Terence Corcoran, Financial Post, 15 December 2011
But our rulers know better, don’t you know? That’s why they do so well picking winners and losers (I assume I don’t need to deploy my sarcasm tag here):
Workers in Germany’s once booming solar energy industry face a shakeout of major proportions following declines in the price of solar panels over the past year. A decision by the German government earlier this year to phase out nuclear energy has done little to reignite the sector. The resulting power gap is likely to be filled by coal and gas rather than solar and wind energy. – Sarah Marsh and Christoph Steitz, Reuters, 15 December 2011
Solon’s insolvency filing is likely to be followed by other high-profile German solar company failures, analysts said, as the blood-letting in the global industry intensifies. Shares in Solon plunged 58 percent on Wednesday after the solar module maker announced the filing late the previous day, becoming Germany’s first major casualty of a crisis in the sector. “Solar managers and experts warned already about further bankruptcies,” a Frankfurt-based trader said. –Christoph Steitz, Reuters, 14 December 2011
Like the man asked, “when is a job not a job?” When it kills other jobs and has to be subsidized by government to continue to exist.
But, you know, that’s old fashioned thinking — just like it was when the dot.com bubble was building. The laws of economics seem to always enforce themselves on an apparently unsuspecting or willfully ignorant elite don’t they?
The president’s Green Jobs loan guarantee program, which we’re hearing a lot about, thanks to the Solyndra fiasco, does not appear to be a complete bust. In all fairness, it has to be said that this program has been instrumental in directly creating jobs. Indeed, the Washington Post reports that, after having spent $17.2 billion of the original $38.6 billion appropriated for the green jobs program, the Administration can now claim the creation of 3,545 permanent new jobs as a direct result. That’s 3,545 of our fellow Americans who now have gainful employment, thanks to the Obama Administration’s Green Jobs program. I’m sure they, and their families, are grateful.
Of course, if you do the math, that comes out to a cost of $4,851,904.09 per job. That seems…inefficient. I’m pretty sure that if the government gave me $4.8 million, I could at least double that rate of job creation.
At this rate, once the entire $36.8 billion is spent, we may employ 7,000 people via the Green Jobs program. Or to put it in other terms, 4,000 fewer people than the increase in those who claimed unemployment compensation for the first time this past week.
If you don’t believe me, look at the California experience to this point. If there’s any state in the union more amenable to and focused on providing green jobs, it has to be the Golden State. Governor Jerry Brown pledged to create 500,000 of them by the end of the decade.
But as often the case when the central planners make their pledges, they are woefully ignorant of what the market wants. And so rarely does what they envision ever come to fruition. Green jobs in CA is a good example.
Remember Van Jones? Well, when Jones left the Obama cabinet as his “Green Jobs Czar” he landed in California and has been what the NY Times calls an “Oakland activist” apparently pushing for the creation of green jobs. And it’s not like California hasn’t tried. It has simply failed.
A study released in July by the non-partisan Brookings Institution found clean-technology jobs accounted for just 2 percent of employment nationwide and only slightly more — 2.2 percent — in Silicon Valley. Rather than adding jobs, the study found, the sector actually lost 492 positions from 2003 to 2010 in the South Bay, where the unemployment rate in June was 10.5 percent.
Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter, according to the State Department of Community Services and Development.
So a “stimulus” program that spent over $93 million dollars to create 538 jobs. Why so little in terms of takers? Well it seems the market wasn’t interested.
The weatherization program was initially delayed for seven months while the federal Department of Labor determined prevailing wage standards for the industry. Even after that issue was resolved, the program never really caught on as homeowners balked at the upfront costs.
“Companies and public policy officials really overestimated how much consumers care about energy efficiency,” said Sheeraz Haji, chief executive of the Cleantech Group, a market research firm. “People care about their wallet and the comfort of their home, but it’s not a sexy thing.”
You don’t say … the government didn’t have a clue at what the market potential of their boondoggle actually had, so they ended up spending $172,862 for each job. And you wonder where the money goes?
Job training programs intended for the clean economy have also failed to generate big numbers. The Economic Development Department in California reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one.
“The demand’s just not there to take this to scale,” said Fred Lucero, project manager atRichmond BUILD, which teaches students the basics of carpentry and electrical work in addition to specifically “green” trades like solar installation.
Richmond BUILD has found jobs for 159 of the 221 students who have entered its clean-energy program — but only 35 graduates are employed with solar and energy efficiency companies, with the balance doing more traditional building trades work. Mr. Lucero said he considered each placement a success because his primary mission was to steer residents of the city’s most violent neighborhoods away from a life of crime.
You see you can fund all the job training centers in the world and run umpthy-thousands through it. But if there is no market for the jobs, you end up spending a whole lot of money for nothing. Again, ignorance of the market and its demands means expensive mistakes. Of course Mr. Lucero thinks the program is a success – he got to spend free money, was employed and it didn’t cost him squat. It cost you.
At Asian Neighborhood Design, a 38-year old nonprofit in the South of Market neighborhood of San Francisco, training programs for green construction jobs have remained small because the number of available jobs is small. The group accepted just 16 of 200 applicants for the most recent 14-week cycle, making it harder to get into than the University of California. The group’s training director, Jamie Brewster, said he was able to find jobs for 10 trainees within two weeks of their completing the program.
Mr. Brewster said huge job losses in construction had made it nearly impossible to place large numbers of young people in the trades. Because green construction is a large component of the green economy, the moribund housing market and associated weakness in all types of building are clearly important factors in explaining the weak creation of green jobs.
Market timing is pretty important too, isn’t it? If you introduce a product into a market in the middle of a market downturn, chances are slim you are going to be successful. While it may all look good on paper and sound good in the conference room, the “buy” decision is still made in the market place, and in this case it is obvious that the market has no room for these workers. Something which should have been, well, obvious. In fact, there is precious little market for traditional construction jobs in a “moribund housing market”. Yet there they are spending money we don’t have on job skills that are simply not in demand.
Finally there’s this bit of word salad to feast upon:
Advocates and entrepreneurs also blame Washington for the slow growth. Mr. Jones cited the failure of so-called cap and trade legislation, which would have cut carbon pollution and increased the cost of using fossil fuel, making alternative energy more competitive. Congressional Republicans have staunchly opposed cap-and-trade.
Mr. Haji of the Cleantech Group agrees. “Having a market mechanism that helps drive these new technologies would have made a significant difference,” he said. “Without that, the industry muddles along.”
You have to admire someone who tries to cloak central planning jargon in “market speak”. Imposing a tax on thin air to drive, from above, a behavior government wants is not a “market mechanism”. And beside, California passed it’s own version of this “market mechanism” with AB 32 in 2006. How’s that working out?
This is how:
A SolFocus spokeswoman, Nancy Hartsoch, said the company was willing to pay a premium for the highly-skilled physicists, chemists and mechanical engineers who will work at the campus on Zanker Road, although the solar panels themselves will continue being made in China. Mayor Reed said he continued to hope that San Jose would attract manufacturing and assembly jobs, but Ms. Hartsoch said that was unlikely because “taxes and labor rates” were too high to merit investment in a factory in Northern California.
Irony … central planning fails in CA while jobs end up in increasingly capitalistic China. Again, ignorance of the market causes disappointing results. Somehow I feel this came as a surprise to Mayor Reed … after he’d spent whatever of your money he’d committed to this project.
And yes, I’m being snarky. The only folks that got anything green was the company that folded. The taxpayers, of course and as usual, got the shaft:
A Salinas car manufacturing company that was expected to build environmentally friendly electric cars and create new jobs folded before almost any vehicles could run off the assembly line.
The city of Salinas had invested more than half a million dollars in Green Vehicles, an electric car start-up company.
The “money trail”:
The start-up company set up shop in Salinas in the summer of 2009, after the city gave Ryan a $300,000 community development grant.
When the company still ran into financial trouble last year, the city of Salinas handed Ryan an additional $240,000. Green Vehicles also received $187,000 from the California Energy Commission.
So here we have government taking taxpayer money and picking "winners". Wonder how many police and fireman all that money would have paid? Wonder who the Salinas government is going to claim it has to lay off first when budget crunch time hits? Because we all know state and local governments in California are doing fine financially, don’t we?
Yet this sort of fiscal nonsense is rampant in government today. They seem to think it is their job, at all levels, to intrude in areas they have no business intruding and pick winners according to an agenda with little understanding, apparently, as to what it actually takes to succeed in doing so. You know, like there has to be a market, the firm has to be adequately financed (for more than a couple of months) and it has to have a long-term and viable business plan that actually passes a sanity check.
Instead it seems, at least based on this story, that “just words” got the Salinas government in a real “hope and change” attitude:
Last year, Salinas city officials said they were excited about Green Vehicles moving from San Jose to Salinas because they wanted to turn Salinas into a hub for alternative energy production.
City leaders wooed Green Vehicles to jump-start the sputtering local company and turn Salinas into an "electric valley." Donohue and Weir both voiced their high hopes for Green Vehicles.
The start-up company promised city leaders that it would create 70 new jobs and pay $700,000 in taxes a year to Salinas.
Green Vehicles was supposed to be up and running by March 2010 inside their 80,000-square-foot space at Firestone Business Park off of Abbot Street.
Ryan had lofty goals, listing his company’s mission as: "To make the best clean commuter vehicles in the world; To manufacture with a radical sense of responsibility; To engage in deep transparency as an inspiration for new ways of doing business."
Green Vehicles designed two vehicles, the TRIAC 2.0 and the MOOSE, which it planned to manufacture.
On July 12, Ryan wrote a blog post announcing that his company was closing.
"The truth is that not realizing the vision for this company is a huge disappointment," Ryan wrote.
So they invited a company that was obviously already underfunded with promises of money and a great mission statement? What could possibly go wrong with that?
Salinas Economic Development Director Jeff Weir said Green Vehicles flopped because of a lack of investors.
Uh, so as Economic Development Director for the city, Mr. Weir didn’t know that before they made the big offer and threw all the taxpayer money at the company? No indication of it when the company was in San Jose?
Salinas Mayor Dennis Donohue said he was "surprised and disappointed" by the news. City officials were equally irked that Ryan notified them through an email that his company had crashed and burned.
Oh, well yeah, that’s the important part to be “irked” about – not the half mil of taxpayer money they threw down a rat-hole in an iffy company that officials obviously didn’t check out.
This is why governments should be held to doing only those functions they’re best suited to do. If I were a Salinas resident, I’d be petitioning for recall elections for the idiots who threw taxpayer money away in a time of fiscal difficulty. When the mayor tells the people of that city that he’s going to have to lay off cops and fire fighters first, my reaction would be, “oh, no – we think the mayor and the Econ Dev Director should be laid off first since they just cost taxpayers a half mil in a stupidity tax”.
Yes, I know, radical idea – accountability.
Oh … and by the way, who names a car the “Moose”?
Why call it a scam? Because, as you’ll see, it isn’t creating jobs, it isn’t contributing the amount of energy it was claimed it would, and, essentially it can’t survive without massive subsidies.
If you’re looking for innovation, what is most likely to produce it – a big payday if you come up with a solution, or government subsidy which encourages the status quo?
Eventually, no matter hard one tries to wish it away, reality will smack you in the face. Hard.
As predicted was inevitable, today the Spanish newspaper La Gaceta runs with a full-page article fessing up to the truth about Spain’s “green jobs” boondoggle, which happens to be the one naively cited by President Obama no less than eight times as his model for the United States. It is now out there as a bust, a costly disaster that has come undone in Spain to the point that even the Socialists admit it, with the media now in full pursuit.
La Gaceta boldly exposes the failure of the Spanish renewable policy and how Obama has been following it. The headline screams: “Spain admits that the green economy as sold to Obama is a disaster.”
According to the Spanish government, the policy has been such a failure that electricity prices are skyrocketing and the economy is losing jobs as a result (emphasis added):
The internal report of the Spanish administration admits that the price of electricity has gone up, as well as the debt, due to the extra costs of solar and wind energy. Even the government numbers indicate that each green job created costs more than 2.2 traditional jobs, as was shown in the report of the Juan de Mariana Institute. Besides that, the official document is almost a copy point by point of the one that led to Calzada being denounced [lit. "vetoed"] by the Spanish Embassy in an act in the U.S. Congress.
The presentation recognizes explicitly that “the increase of the electric bill is principally due to the cost of renewable energies.” In fact, the increase in the extra costs of this industry explains more than 120% of the variation in the bill and has prevented the reduction in the costs of conventional electricity production to be reflected on the bills of the citizens.
Despite these facts, which quite frankly have been known for quite some time, the Obama administration is still planning to move ahead with its own policy based explicitly on the Spanish one. As Horner states:
That fight [over the "green economy" policy] begins anew next week with the likely Senate vote on S.J. Res. 26, the Murkowski resolution to disapprove of the Environmental Protection Agency’s attempt to impose much of this agenda through the regulatory back door without Congress ever having authorized such an enormous economic intervention.
Just as with the ObamaCare boondoggle that was rammed into law despite its (a) known problems that are only now being admitted to, (b) real costs that are only now becoming evident, and (c) unacceptability to the vast majority of Americans, Obama is going full steam ahead with this “green economy” nonsense. Regardless of facts or reality, this administration is dead set on re-creating America in the image it likes best (i.e. European social democracy), regardless of the costs. So long as we end up with all the bells and whistles that are the hallmarks of our European betters (e.g. universal health care, carbon taxes, depleted military, enhanced welfare state, overwhelming government controls of the economy, sufficiently apologetic “transnationalist” foreign policy), the actual results of that transformation are unimportant. We may end up an economic basket case a la Greece, but hey, at least we’ll have all the nanny-state accouterments necessary to commiserate with the cool European kids.
It’s gotten to the point where pointing out that the emperor has no clothes only results in naked orgies of Utopian spending. This cannot end well.