The Corner

A PR Disaster for ‘Green Jobs’

President Obama has a serious problem on his hands. First, in August, the New York Times printed an acknowledgement that the administration’s “green jobs” initiative — which the president promised would create 5 million green jobs over ten years — had failed. The backdrop for the story was California’s Bay Area, where green jobs have actually been lost, not gained:

In the Bay Area as in much of the country, the green economy is not proving to be the job-creation engine that many politicians envisioned . . .

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.

Now, as this great NR homepage editorial shows, things are getting even worse for the administration with the failure of Solyndra. As the editors write:

Solyndra was an irresistibly juicy piece of bait for stimulus-happy progressives. President Obama, like all Democrats, labors under a special challenge when it comes to economic affairs: His economically illiterate base spends its time decrying “corporations,” but urban-gardening cooperatives don’t create a lot of jobs, and community-based nonprofits by definition don’t create any profit, and therefore no investment capital, and therefore no economic growth. You want to see some real, sustainable, long-term jobs created, your best bet is to look to a “corporation”—“corporation” simply being the word for a business that has grown large enough or profitable enough to require the legal organization of its affairs. But if you’re Barack Obama, not just any corporation will do: It has to be just the right sort of corporation.

Solyndra was one of the administration’s favorite companies to point to as a green-jobs success, which is why its failure should prove to be a PR disaster.

The Washington Post has an equally devastating story about the Solyndra failure, which points out its potential $535 million cost to taxpayers.

A company that served as a showcase for the Obama administration’s effort to create jobs in clean technology shut down Wednesday, leaving 1,100 people out of work and taxpayers obligated for $535 million in federal loans.

Solyndra, a California solar panel maker, had long been an administration favorite. Over the past two years, President Obama and Energy Secretary Steven Chu each had made congratulatory visits to the company’s Silicon Valley headquarters.

Although Wednesday’s announcement came as a surprise, House Republicans and government auditors had questioned the wisdom of the administration’s loan guarantees to the company, backed by capital from billionaire Democratic fundraiser George Kaiser. In July, a House subcommittee subpoenaed White House documents related to the guarantee, and after Wednesday’s developments, Republican lawmakers vowed to continue investigating.

Interestingly, the Post makes the case that Solyndra failed because of uncertainties brought about by the policy and regulatory environment.

“This was an unexpected outcome and is most unfortunate,” Solyndra chief executive Brian Harrison said in a statement. “Regulatory and policy uncertainties” made it impossible to raise capital to quickly rescue the operation, he said.

This story shows once again that the government can’t pick winners and losers and successfully create green jobs — or any other kind of jobs. Government can’t create sustainable jobs, and when they do, or even when they try and fail, it is at the expense of taxpayers, who are left footing the bill. Unfortunately, administration after administration refuses to learn the lesson. 

I know next week is a big week for the president, with the launch of his new job-creation program, so I hope he’ll take a little time to think about the process of job creation before he gives his big speech. He might realize that creating jobs is a complex process, and that one thing we do know about job creation is that government isn’t good at it.

The good news is that there are things the president can do to create jobs. For instance, he can pursue fundamental tax reform by harmonizing the tax base and lowering the marginal rates; reform the corporate income tax by lowering the rate and moving to a territorial tax system (which would allow him to get rid of loopholes); and get rid of the Alternative Minimum Tax. He can also reform the regulatory regime in place in today, which imposes costs and uncertainties on companies.

Update: A friend emails me the following:

Do you know what the CEO meant when he said “regulatory and policy uncertainties”?  What he meant was that the federal government had failed to pass “cap and trade” which would have raised the cost of energy thereby making solar more economically competitive with fossil fuels.

I am thinking that he is right. That makes a lot of sense–no matter how distressing it is.

Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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