Green Jobs: Innovative or Wasteful?

Obama's energy, jobs plan ahead

Ken Silverstein | Sep 05, 2011

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The creation of jobs tops the political agenda. But the methods by which the two parties hope to achieve that is a source of contention. 

 

When President Obama delivers on Thursday his revived plan to bolster the economy, he will reiterate that the construction of green jobs remains integral but that success will not be immediate. Just as computers and the internet have edged their way into American lives, the clean technology sector will do the same. As the economy regains its muster, there will be room for such innovation -- the kind of creativity that can be exported around the world. 

 

“If we don't lead, we will have to trade importing oil for importing clean technology,” says Vice President Joe Biden, in a speech. “Innovation and energy will go on whether or not we join, and no nation which expects to be a leader of other nations can fall behind.”

 

Those green businesses are now dependent on tax breaks and subsidies. And that’s money that the conservatives in Congress say the nation just doesn’t have. The paradox that the Obama administration faces is how to grow the sustainable sector while still funding key projects at adequate levels. 

 

The Congressional Budget Office just released its analysis of how well the federal stimulus plan has performed in the second quarter of this year. Generally, it says that when compared to how the economy would have done without such a stimulus, CBO estimates that Gross Domestic Product has risen between .8 percent and 2.5 percent more. 

 

It adds that those policies have reduced the unemployment rate between .5 percent and 1.6 percent from what it otherwise would have been. And, the stimulus increased the number of people employed between 1 million and 2.9 million. 

 

It projects that the Obama plan will increase gross domestic product next year by .3 percent while increasing employment levels between 400,000 and 1.1 million, as opposed to without a stimulus. In due course, many more jobs will come, making the investment look increasingly attractive. 

 

Conflicting Ideas


Critics will suggest dividing the total stimulus by the number of jobs created. Doing so, they say, will show that it may have cost hundreds of thousands to create a green job -- jobs that in some cases that were simply redirected from elsewhere. 

 

The latest whipping boy as far as wasted government monies is California-based Solyndra. It just declared bankruptcy but not before it collected a $535 million loan guarantee. The U.S. Department of Energy is defending the award, saying that the private investors risked $1 billion on the solar manufacturer. 

 

But are renewable energy jobs overhyped? A 2009 study from Madrid’s King Juan Carlos University found for every green job the government creates, 2.2 jobs are lost in competing industries. That is because factories will downsize to compensate for higher energy costs. 

 

Oil, coal and natural gas have dominated their respective markets because they are “superior” to anything else -- not because of their subsidies, says Ken Green, a scholar with the American Enterprise Institute. “If that were the case for wind and solar -- that they were superior -- those technologies would already be widely adopted but in fact, they are not.” 

 

The Obama administration’s take is much different. While green projects have lingered for decades, the commitment to expand them is recent. Some government-funded ventures will fail. But the White House is pointing to 40 other solar businesses that it says are on pace to create more than 60,000 jobs. 

 

From where else might new jobs come? A Clean Energy Standard, which is challenging this country to produce 80 percent of its energy by 2035 from the renewable sector as well natural gas, nuclear and “clean coal” -- all pursuits requiring federal funds. Another idea: Retrofitting homes and businesses to make them more energy efficient. The country would then get double the benefits: cleaner communities and more jobs, says the Center for American Progress

 

“We continue to believe the clean energy jobs race is one that America can, must and will win,” says Dan Leistikow, public affairs head for the Energy Department.

While the private sector has the capital, it is not spending it and therefore the federal dollars are still needed, the administration reasons. But that notion conflicts  with the desires of the opposing party, which is not only demanding more budget cutting but also reducing taxes and streamlining regulations. A compromise would seem to be in the offing. But with the presidential election around the corner, don’t count on it. 

EnergyBiz Insider has been named Honorable Mention for Best Online Column by Media Industry News, MIN. Ken Silverstein has also been named one of the Top Economics Journalists by Wall Street Economists. 

Follow Ken on www.twitter.com/ken_silverstein

 

energybizinsider@energycentral.com.

 

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Comments

Fantasy

 

I have spent my entire career in renewable energy development, but one has to face reality. The green jobs movement is a fantasy. While we should do everything we can to develop renewable energy, the notion that it will create lots of jobs is nonsense, especially when we see what China is doing to our wind and solar manufacturing companies, namely putting them out of business. Manufacturing is the backbone of a healthy economy and we have systematically dismantled it for short-term profit and long-term economic disaster. If we want to create energy jobs that the Chinese can't steal, we unfortunately have only one place to turn to. We have to develop the oil, natural gas, and coal that is OUR energy and will create jobs here in the U.S. If you want to see that just look at the boom in jobs creation going on right now in oil fields in North Dakota. The number of jobs that will be created in the Marcellus natural gas area alone will outpace all the green jobs projected. It's time for the green movement, as much as I favor it, to just get over it. We need jobs in the U.S. We cannot continue to survive in a situation that allows the Chinese and other countries to steal our jobs with their phony currency and government declared war on our economy that is aided and abetted by the greedy short-term thinking of most large companies, both manufacturing and retail.

Furthermore, there is one issue that the green power advocates don't want to talk about. The increased costs of energy due to adding green power is a tax on the poor and lower income people on which they don't have a vote and that some may not be able to afford. What do we do about that - create another entitlement program?

 

Ron Corso

 

"Green Jobs: Innovative or Wasteful?" - The Smoke Screen

Dear Mr. Silverstein,

 

I am writing this correspondence in response to your article titled "Green Jobs: Innovative or Wasteful?", dated September 5, 2011. First, I will preface by stating that as a recognized leader and pioneer in the industry, there are many things we as a nation are doing wrong. I don't like to focus on the negative aspects, but we cannot continue to bury our heads in the sand, as a nation. Furthermore, there is very little that we as a nation are doing right. The statistics and results speak for themselves. And, I think we can stop publishing the contrived unemployment data as the math simply does not hold. That is, we cannot have a linear positive slope in lost jobs and report a static unemployment rate of 9.2 to 9.4%.

 

Now, when you point to President Obama's energy jobs plan ahead, do you really know what that means? I certainly don't.

Albeit, he is a gifted orator. However, I do not see him as a) an effective leader, b) a creative thinker, c) a solutions oriented individual, or d) an informed or in-touch executive. Additionally, his actions indicate that golf is more a priority than the condition of our nation and its future as related thereto.

But, I can tell you that if the President’s plan is based on past performance, what a treat we have in store. We might as well begin our exodus to France, because it will become the model of what we “hope” to be when this all shakes out.

 

First, let me say what a fine job the federal government has done for us. The job they were charged with executing has been poor at best. But instead of securing our borders and the sovereignty of our nation, they somehow feel we are better served with the government functioning as the Job Corp in conjunction with indiscriminately spending our money funding nations that detest our very existence and way of life.

To that, I say:

1) Enforce the immigration laws we have in affect,

2) Send the bill to offending nations,

3) Stop spending my money for superfluous / ridiculous causes,

4) ESTABLISH AND ENFORCE ACCOUNTABILITY,

5) BRING INDUSTRY BACK TO THE U.S.,

6) Stop acting as though China is our friend (China is still #1 with espionage and active assault on our nation, in all respects),

7) Collect on the outstanding debts other nations have with the U.S. so that we can pay off our deficit,

8) Take the oil from the middle-east to pay back our expenditures,

9) Allow business to do what it does best,

10) Stay out of business - Washington got us in the mess in the first place....How could we possibly think the root-cause of the problem could possibly be the solution,

11) Keep government out of business,

12) Eliminate lobbyists and special interests from having the strangle-hold on Washington,

13) Give preference to "MADE IN AMERICA"...Other nations are quite active in supporting their own industries; We need to do the same. Our government has systematically supported the dismantling and exportation of business and industry. It is their responsibility to rectify that condition. I further propose a "No exit" scheme wherein those in office WILL BE HELD RESPONSIBLE FOR THEIR FAILURES. Just as we in private business have a risk-reward response to our actions, our officials should be obligated for the same. None of this, "I don't recall...I gotta go, now! business. You goofed...You pay!

 

Now, as an American citizen (born and raised), I tell you I am done with rhetoric and empty promises. Furthermore, we the people are done with the convoluted mobius, i.e. circular logic distraction perpetrated by Washington.

WE NEED TO FOCUS ON EDUCATION.

WE NEED TO FOCUS ON BRINGING INDUSTRY HOME.

WE NEED TO FOCUS ON AMERICAN JOBS AND LABOR

WE NEED TO FOCUS ON STOPPING OUR HEINOUS GOVERNMENT SPENDING

WE NEED TO ENFORE ACCOUNTABILITY IN GOVERNMENT OFFICES

WE NEED TO DRATICALLY REDUCE AND MAKE EXISTING GOVERNMENT JOBS AND BENEFITS REFLECT THAT OF PRIVATE SECTOR. Government creates NOTHING! It is a drain on the economy!

GOVERNMENT OFFICIALS SHOULD HAVE THE SAME BENEFITS AS PUBLIC EMPLOYEES SUCH AS TEACHERS (this includes insurances, benefits, retirement, etc.)

WE NEED TO MAKE THE AMERICAN NATION THE PRIORITY

WE NEED TO MAKE OUR NATION WHOLE AND FORGET ABOUT TRYING TO PARENT THE WORLD

WE NEED TO FOCUS ON LONG-TERM PLANS, GOALS AND OBJECTIVES AND NOT TRY TO BECOME A MUNDANE NATION

WE NEED TO HOLD OUR REPRESENTATIVE OFFICIALS ACCOUNTABLE. When they fail to represent our interests and continue to operate for personal gain, I suggest implementing the juris-prudence system through trial by the public, not by the government and their peers. The preceding is the fox watching the hen-house.

ENFORCE OUR IMMIGRATION LAWS. Make the governments responsible to pay restitution for their offending citizens.

IMPLEMENT THE HIGHEST FINES FOR OFFENDERS OF THE ABOVE. Consider violations as felony crimes of sedition and enforce the sentences swiftly and completely.

STOP SENDING AMERICANS TO FIGHT THE BATTLES FOR THE REST OF THE WORLD! LET THEM HANDLE THEIR OWN.

 

Now, ask yourself...What exactly are "GREEN JOBS". Where is the education? Who stands to make the profit? What role is government playing?

Again, the prospect of government involvement is not sensible, as history has proven. The federal government needs to focus on what they were charged to do.

Let private industry do what we do best. Leave us to nurse ourselves back to health. If we are allowed, we will!

 

Thank you for affording me the opportunity to share my thoughts.

 

 

Richard A. Farkas

 
 
 
 
 
 

Green jobs and flawed assumptions

 

Green jobs are not a way to grow the economy because it is based on a series of flawed assumptions. The most basic flawed assumption is that government is good at allocating society’s resources to create economic growth. In reality, government has been shown time and again to be a bad allocator of society’s resources. Green jobs is just the latest incarnation of this flawed idea. If central planning worked, the USSR would still exist and be an economic powerhouse, and China would have not had explosive economic growth after it reduced the role of central planning in its economy.

 

The reason that many people still believe that government jobs programs can work is that it is easy to see the jobs “created” by government programs but it’s hard to see the jobs lost throughout the economy as a result of government actions.

 

In the last two weeks in Texas we have had another example of society failing to account for all the costs of a ‘green energy’. Texas has 10,000+ MW of wind power representing an investment of $20+ billion. During the recent heat wave, this 10,000+ MW wind power capacity was typically only providing 300-400 MW of power (3-4% of capacity). The recent power shortages in Texas are the predictable result of trying to operate a 100% dependable electric grid when a significant portion of the power generating capacity has an equivalent forced outage rate of 65+%. Remember that a wind turbine's capacity rating is normally at a wind speed of ~32 mph. At a wind speed of 16 mph (which is a pretty stiff wind), a wind turbine will typically only produce ~25% of rated power output. 

(basic physics: kinetic energy = 1/2 mass times velocity squared)

 

The problem with government programs isn’t just the graft. There is also the basic economic incompetence of politicians. Then there is also the problem that all organizations tend to devolve into being primarily driven to satisfy the organization’s internal needs rather than customers. For example, it often appears today that unions are run more for the benefit of union officials than for the benefit of union members. In corporations, the market place forces companies to be customer focused. However, in government there is no way to hold the bureaucracies accountable except through elected officials (and in some isolated cases, the Judiciary). As government bureaucracies get larger and larger, it becomes more and more difficult for a limited number of elected officials (basically Congress and the President) to hold the bureaucracy accountable. For example, it has been known for years that Medicare waste and fraud is on the order of $50 billion per year, yet both Republican and Democratic administrations have been unable to find a way to motivate the bureaucracy to seriously attack this problem.

 

The idea that only government has the resources to “prime the pump” may have been valid in the 1930’s, but not today with the tremendous amount of cash held by corporations. I would point out that while 75% of historians say that FDR’s New Deal programs helped the economy grow, only 50% of historical economists believe the New Deal helped shorten the Great Depression. Thus, even in the vastly different economic times of the 1930’s, the validity of Keynesian economics is in doubt among historical economists.

 

I personally think that FDR’s New Deal was neither all good nor all bad. For example, the creation of the FDIC and FSLIC were necessary to provide a foundation for a stable banking system and stop fear from driving ‘runs’ on banks. Similarly, the Glass-Steagall Act was and the creation of the SEC were necessary to reduce systematic risk in the financial system and restore investor confidence. On the other hand, the huge alphabet soup of economic planning agencies stifled growth. You know something is big time wrong when a tailor in Philadelphia was jailed for offering to dry clean suits for 35¢, instead of the minimum price of 40¢ that a bureaucrat in Washington deemed was the appropriate minimum price. In retrospect, some New Deal ideas like having farmers burn their wheat crops and dump milk to force food prices up while other Americans were malnourished now seem not only incredibly stupid, but bordering on the immoral.

 

Even in the 1930’s when there were many obvious needs to spend on infrastructure and defense, the government made some poor spending decisions. For example it paid men to dig post holes and fill them up again. In late 1942, during the desperate fight for Guadalcanal, the US Navy had only one operable aircraft carrier, the USS Enterprise. Do you think building more aircraft carriers might have been a better investment than digging post holes to fill them up again?

 

It is important to recognize that a program that made sense at one time may actually facilitate problems in a different time and place. For example, the FSLIC was helpful in the 1930’s but actually helped facilitate the savings and loan crisis of the 1980’s.

 

For a take on why Keynesian economics no longer works see

 

http://www.washingtontimes.com/news/2011/sep/5/and-now-a-word-from-a-job-creator/

 

 

Recession

The federal government has historically used our resources to help lift the country from recession. We save for a rainy day and folks, it's been raining. Funding the research and creating the laws is a good start but the actual technologies may take years. The jobs won't be there for years. People need help now. It's not a Tea Party for the unemployed. 

Innovative or wasteful?

Ken, I would say wasteful. There seems to be no perception that we use a lot more energy than the rest of the world per capita. The focus should be on REDUCING consumption to create short term jobs, not increasing the cost per Kw to maintain the currrent level of consumption. We should be focused on ways to get usage down by about 50%, rather than adding capacity. To do this, the money should be invested in a new smart grid. THis should lead to intelligent appliances and heating and colling systems that make us more competitive. What we DON'T need is new high cost energy sources that also require new high cost, low use grid segments to INCREASE our cost per kw and leave demand constant. There are selected areas, like rooftop solar that may make sense.

"Renewables" as we know them today are not wind and solar, they are primarily hydro and biomass.