Free Markets, Free People

California

Green jobs? There’s just no market

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.

For example:

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?

Example two:

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.

Example three:

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.

~McQ

Twitter: @McQandO

California’s Amazon tax has been successful…

…In encouraging Internet entrepreneurs to leave California. Who saw that coming? Besides, you know, everyone outside of Sacramento.

Last month, news broke of one California-based online entrepreneur who had decided to ditch California and move to Nevada in the aftermath of Gov. Jerry Brown signing the law.  ”I always figured that in California, home to Silicon Valley and a million tech startups, they’d never pass a law like this,” said Nick Loper, who formerly operated ShoesRUs and has now opened a new venture, ShoeSniper.

Per the piece in which Loper is quoted, more than 70 affiliates had at that stage already left California, according to online businesses.

Then, last Thursday, another online entrepreneur, Erica Douglass, posted a mock “It’s Over” letter to California on her blog. Douglass, who sold an internet company she had built for $1.1 million in 2007 when she was just 26, cited multiple reasons for moving to Austin.  Among them were unnecessary paperwork requirements mandated by the state, and high taxes as well as business fees.  However, the straw that broke the camel’s back, was according to Portfolio, Brown signing the Amazon Tax into law.

Apparently, the thinking was that Amazon would never halt its California affiliate program—though they’ve done so in every state that’s passed a similar law—and, Lord, the money, it would start rolling in! And even if Amazon did close down the California affiliate programs, why, the affiliates would simply switch to other affiliate programs, and the state would still get it’s money. It was a win-win for everyone.

Well, Sacramento was right about one thing: The affiliates are switching. To other states.

To be fair, it was slightly more realistic than Sacramento’s other plan, which was that flying unicorns would swoop in to sprinkle magic pixie dust on the state’s economy. Sadly, that plan was tabled in the Assembly’s budget committee. At least if they’d gone with that, I’d still be able to make a little spending money off Amazon.

Is it just me, or is the Tree of Liberty looking a little…parched?

~
Dale Franks
Google+ Profile
Twitter Feed

Quote of the Day – Pecksniffian Progressive edition

George Will goes on a bit of a run today about "progressive puritanism." His current example is the attempt by California to limit minors from buying certain video games:

California officials argue that they should be allowed to limit minors’ ability to pick up violent video games on their own at retailers because of the purported damage they cause to the mental development of children.

The article Will references says that while the court seemed sympathetic to the aim of the law, it "has been reluctant to carve out exceptions to the First Amendment."

Interestingly, and as an aside, it brings us right back to the point about parents we discussed in the comments about the lip balm issue in North Carolina.

However, the point of the Will article is who it is that is constantly attempting to impose bans and restrictions on the rest of us and why. The money quote is:

Progressivism is a faith-based program. The progressives’ agenda for improving everyone else varies but invariably involves the cult of expertise – an unflagging faith in the application of science to social reform. Progressivism’s itch to perfect people by perfecting the social environment can produce an interesting phenomenon – the Pecksniffian progressive.

Indeed, I agree that progressivism is faith based – AGW being the most recent example of faith in science replacing the healthy skepticism one should always bring to any scientific inquiry. Will points out that scares, such as the video game one now being pushed by the Democratically controlled California legislature, are all too common in our past and were inevitably pushed by progressives and based in questionable science.

As an example, Will points to Fredric Wertham’s crusade against comic books in the early ’50s.  Will describes Wertham as “Formerly chief resident in psychiatry at Johns Hopkins, he was politically progressive: When he opened a clinic in Harlem, he named it for Paul Lafargue, Karl Marx’s son-in-law who translated portions of "Das Kapital" into French, thereby facilitating the derangement of Parisian intellectuals.”

Since 1948, he had been campaigning against comic books, and his 1954 book, "Seduction of the Innocent," which was praised by the progressive sociologist C. Wright Mills, became a bestseller by postulating a causal connection between comic books and the desensitization of young criminals: "Hitler was a beginner compared to the comic-book industry."

Wertham was especially alarmed about the one-third of comic books that were horror comics, but his disapproval was capacious: Superman, who gave short shrift to due process in his crime-fighting, was a crypto-fascist. As for Batman and Robin, the "homoerotic tendencies" were patent.

This is important because if you read this carefully, you can identify within this old progressive campaign the blueprint for almost every other that has followed it.  Based on pseudo-science and faith in that pseudo science,  progressives feel both the right and duty to do what is necessary – by whatever means – to save us from ourselves.  Never mind, as in the case of the great comic book scare and many other subsequent scares have never panned out as feared.  That faith remains undiminished as witnessed by the the California legislature’s attempt to do precisely what the New York legislature tried to do back then – take control of the process and only allow what government deems to be “safe” to be produced “for the children”.

This is the lip balm story writ large.  And even if passed, it only means minors wouldn’t be able to pay for these games at the retail counter.  It doesn’t mean older brother or sister of legal age couldn’t buy it for them.  Or that they couldn’t rent it elsewhere or any of a huge list of ways minors could and would gain access.  It seems as if the law is more for the lawmakers to feel good about themselves instead of actually accomplishing anything.  Much like AGW – most scientists note that even if we were to put drastic limits on CO2 and implement an extensive and horribly expensive cap-and-trade system, it would hardly make any difference at all.  That doesn’t keep the progressives from continuing to pursue that goal though, does it?

Will’s article is another glimpse into the progressive psyche and his observation is dead on.  They are Pecksniffian – always have been.  No surprise there.  The hypocrisy doesn’t bother them.  They simply know better than do you.  And they certainly know how to better raise and protect your child. 

“For the children” is a fairly recent catch phrase for the progressive left – but, as is obvious, they’ve been trying their “for the children” gig for quite some time.  They’ll trot it or a form of it out at the drop of a hat.

But it’s not about the children.  It’s about, as Will notes, building a “perfect social environment”.  One they define as they wish, not you.  They have all the faith in the world they can build that utopia and they’re bound and determined to do so by any means necessary.  “Science” is their anchor to credibility in their pursuit.  Science, after all, simply can’t be disputed – except when it contradicts the wanted outcome.

It is indeed interesting to apply the comic book scare of the ‘50s to the various more recent attempts to apply the same sort of tactical blueprint to other progressive causes.  It helps one understand where they’re coming from and what their aim is.  And it isn’t freedom, liberty, or smaller and less intrusive government by any stretch.

~McQ

[ad] Empty ad slot (#1)!

California Ballot Propositions for 2010

Once again, it’s time to review the ballot propositions for the upcoming election in California.  While this may seem like an item of limited interest to many of you, you should remember that these propositions, in the fullness of time, often appear in other states once California has passed them.

Proposition 19: YES

A YES vote on this measure means: Individuals age 21 or older could, under state law, possess and cultivate limited amounts of marijuana for personal use. In addition, the state and local governments could authorize, regulate, and tax commercial marijuana-related activities under certain conditions. These activities would remain illegal under federal law.

Drug prohibition has failed.  Although, I guess that really depends on your definition of failed.  If you’re the head of drug cartel that’s made billions of dollars by supplying prohibited drugs at prices inflated artificially by government action, then I guess it’s been a rousing success.  All depends on your point of view, I suppose.

In any event, marijuana, despite being a Schedule I drug according to the Feds, is probably the least likely candidate for continued prohibition.  Perhaps there’ll be horrific outbreaks of Reefer Madness if this passes, but, you know, I’m willing to risk it.  Besides, as of last week, you can’t even get arrested for it any more in California, as possession of less 1 oz is now an infraction that’ll get you a $100 ticket.  Not even a court appearance.  So, it’s pretty clear that, in the big picture scheme of things, marijuana is pretty small potatoes.

Besides, it’ll set up a really nasty legal and political struggle between California and the Feds, which I think would be fun and instructive to watch.

Proposition 20: YES

Removes elected representatives from process of establishing congressional districts and transfers that authority to recently-authorized 14-member redistricting commission comprised of Democrats, Republicans, and representatives of neither party. A YES vote on this measure means: The responsibility to determine the boundaries of California’s districts in the U.S. House of Representatives would be moved to the Citizens Redistricting Commission, a commission established by Proposition 11 in 2008. (Proposition 27 on this ballot also concerns redistricting issues. If both Proposition 20 and Proposition 27 are approved by voters, the proposition receiving the greater number of “yes” votes would be the only one to go into effect.)

California’s redistricting plans have traditionally been made with a keen eye to preserving safe districts for the aging hippies that run the place.  With Prop 11 in 2008, and this proposition, elected politicians will be essentially removed from the redistricting process. One hopes this will result in more bipartisan redistricting that results in more competitive districts.  If not, it can’t be worse than what we’ve already got.

Proposition 21: NO

A YES vote on this measure means: An $18 annual surcharge would be added to the amount paid when a person registers a motor vehicle. The surcharge revenues would be used to provide funding for state park and wildlife conservation programs. Vehicles subject to the surcharge would have free admission and parking at all state parks.

A new tax–excuse me, “surcharge”–on one of the most highly taxed population in the country?  Uh…no. Raising taxes is always the politicians’ answer to fiscal problems.  Instead, let’s force them to cut spending–especially the unsustainable pension agreements for public workers, some of whom can retire at 50 with 85% of their salaries.  The state of California is already taking a huge chunk of money from the taxpayers, and their cry is always for more.  It’s past time for our cry to be , “Enough.”

Proposition 22: YES

A YES vote on this measure prohibits the state from borrowing or taking funds used for transportation, redevelopment, or local government projects and services.  The state’s authority to use or redirect state fuel tax and local property tax revenues would be significantly restricted.

California’s General Fund tramples on every type of revenue in the state.  Local property taxes? Right into the General Fund’s maw. Fuel taxes to pay for transportation and infrastructure? Right into the General Fund. That has to stop.  I note that the teachers and firefighters unions, etc., are against it, so I assume it must be a good thing.

Proposition 23: YES

A YES vote on this measure means: Certain existing and proposed regulations authorized under state law (“Assembly Bill 32″) to address global warming would be suspended. These regulations would remain suspended until the state unemployment rate drops to 5.5 percent or lower for one year.

This proposition would, in effect, completely gut the global warming bill’s provisions.  Requiring an unemployment rate in California to remain at 5.5% for one year means that the bill will, as a practical matter, never be implemented.  So, the billions in costs for CO2 reduction, etc., will never be imposed.

Proposition 24: NO

A YES vote on this measure means: Three business tax provisions will return to what they were before 2008 and 2009 law changes. As a result: (1) a business will be less able to deduct losses in one year against income in other years, (2) a multistate business will have its California income determined by a calculation using three factors, and (3) a business will not be able to share tax credits with related businesses.

Another tax hike.  Go screw.

Proposition 25: NO

A YES vote on this measure means: The Legislature’s vote requirement to send the annual budget bill to the Governor would be lowered from two-thirds to a majority of each house of the Legislature.

I’m happy forcing a 2/3 majority for the budget, especially since California is a one-party state.  It’s really the only way to force bipartisanship on the legislature, and it gives the minority party a chance to do something besides getting run over roughshod.

Proposition 26: YES

A YES vote on this measure means: The definition of taxes would be broadened to include many payments currently considered to be fees or charges. As a result, more state and local proposals to increase revenues would require approval by two-thirds of each house of the Legislature or by local voters.

This makes it harder to raise fees or surcharges without explicit voter approval, or a supermajority in the legislature.  I have to live within a budget, let them try it for a while, instead of simply using my wallet to fill up the holes they create with overspending.

Proposition 27: NO

A YES vote on this measure means: The responsibility to determine the boundaries of State Legislature and Board of Equalization districts would be returned to the Legislature. The Citizens Redistricting Commission, established by Proposition 11 in 2008 to perform this function, would be eliminated. (Proposition 20 on this ballot also concerns redistricting issues. If both Proposition 27 and Proposition 20 are approved by voters, the proposition receiving the greater number of “yes” votes would be the only one to go into effect.)

Nope.  We already decided that we didn’t want politicians to create safe districts. Let’s keep this as a technical, bipartisan process.

Observations: The Qando Podcast for 03 Oct 10

In this podcast, Bruce, Michael, and Dale discuss the Meg Whitman controvery in California, public pensions, and Obamacare.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

[ad] Empty ad slot (#1)!

Observations: The Qando Podcast for 26 Sep 10

In this podcast, Bruce, Michael, and Dale are joined by special guest Clyde Middleton from Liberty Pundits to discuss Barbara Boxer, the controversy surrounding the DOJ’s Civil Rights Division, and the week’s Congressional antics.

The direct link to the podcast can be found here.

Observations

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

[ad] Empty ad slot (#1)!

California’s fiscal crisis provides a stark look at the difference between today’s left and right

The situation in California is critical with government there facing a 19 billion dollar shortfall and the budget yet to be passed. It pits an admittedly "moderate" Republican governor against a Democratically dominated legislature and their differences on how to close that huge budgetary hole.

The lack of a budget is forcing furloughs and the possibility of the state again issuing IOUs instead of payments to vendors, etc.

Until the governor and legislature negotiate that budget, not much will change. And the fight is classic:

Schwarzenegger has proposed slashing spending to balance the state’s books, an approach rejected by Democratic lawmakers. Their leaders in the state Senate and Assembly are trying to draft a joint plan likely to include proposals for tax increases to rival the governor’s budget plan.

There it is. Where the governor sees government as having to yeild and reduce itself, the legislature views government – at the size and scope it now occupies – to be a nonnegotiable necessity and entitled to more taxpayer cash to preserve it as is.

Funny that the "conservative" position in this fight – i.e. the attempt to maintain the status quo – is that of the "progressive" party in California.

However, the cut spending/more taxes fight is, in a nutshell, the difference between the two parties right now.  I used to say there isn’t a dime’s worth of difference between the two (and on many issues that’s still true) but in terms of how to balance a budget, the “reduce government/ reduce spending” approach seems to now be solely owned by the GOP.

Whether or not they’ll actually do that should they again find themselves in the position of power to do so is obviously another question entirely. 

In the case of the Democratic party – they’re now a wholly owned subsidiary of government unions, and their pandering to these unions is both short-sighted and destructive.  The party that used to be able to claim the mantle of the working man’s party is now almost exclusively the government union worker’s party.  And of course that means keeping government large and well funded.

It’s going to be interesting to see how this fight comes out – but even with Schwarzenegger representing the GOP side of things, it is clear which side is the taxpayer’s friend.

~McQ

[tweetmeme only_single=”false”]

California Bailout – Not Only “No”, But “Hell No”

I wondered why Arnie was recently extolling the virtues of all things Obama and telling us what a super  job he’s been doing.  It’s about the only transparent thing I’ve seen out of anything to do with government this entire last year:

Facing a budget deficit of more than $20 billion, Gov. Arnold Schwarzenegger is expected to call for deep reductions in already suffering local mass transit programs, renew his push to expand oil drilling off the Santa Barbara coast and appeal to Washington for billions of dollars in federal help, according to state officials and lobbyists familiar with the plan.

If Washington does not provide roughly $8 billion in new aid for the state, the governor threatens to severely cut back — if not eliminate — CalWORKS, the state’s main welfare program; the In-Home Health Care Services program for the disabled and elderly poor, and two tax breaks for large corporations recently approved by the Legislature, the officials said.

Tough beans. California spent its way into this deficit mess, it can cut spending to work its way out of the mess. Joe Sixpack in New Jersey has no responsibility for the profligate tofu eaters in the California legislature that have gotten the “Golden State” in the fiscal shape in now enjoys. And Joe shouldn’t be stuck with bailing them out. Joe’s state has problems of its own.

It is about time that fiscal reality began to dawn not only at a federal level, but at state levels as well. And that means living within a budget and keeping it balanced, just like millions of Americans are required to do on a daily basis. The fact that California has lived beyond its means doesn’t mean the taxpayer, via the federal government, is there to solve the problem when California can’t afford its profligacy anymore.

Bailing out California would also set a horrible precedent.  49 other states facing cuts in services or getting a hand out are going to be in line demanding theirs.  Whether it is 8 billion, 80 billion or 800 billion, the federal government has no business sending money it doesn’t have to a state that so poorly managed its finances. This was the state that was built on liberal ideas. Now they have to face the reality that those ideas cost real money. Money they don’t have. Let them figure it out and live with the results.

And Democrats, if you do decide to bail them out, you’re just adding a another deeply etched line to your electoral tombstone in 2010.

~McQ

[ad] Empty ad slot (#1)!