Various pre-election surveys suggest that “it was the spending, stupid.” Americans do not blame President Obama for the economy, but they do fault him for his response to it, increasing inefficiencies and debt to little avail. On net, he increased the downturn’s duration and extent. It is remarkable how quickly the public grasped the notion that debt equals taxes.
Cap-and-trade is now dead, having proven — as we predicted — to be the 1993 BTU tax redux. Members in the House voted on both measures on the assurance that the Senate would not leave them hanging, only to see their trust misplaced. As opposition grew more intense from the people — who were not at the table when their wealth was redistributed to various interests — the senators realized that they wanted to save jobs. Theirs, that is.
Combine these and we see that cap-and-trade’s ugly cousin, “green jobs,” is sure to be an obsession very soon. It also is sure to meet an unhappy fate.
The public will soon understand the bankrupting expense of green-jobs programs. In President Obama’s erstwhile model, Spain, it cost them $750,000 per (temporary) “green job,” placing the nation’s energy infrastructure and economy in peril and its politics in crisis. Once constituencies become dependent on these schemes, they are extremely difficult to halt. Yet all over Europe, Obama’s previously touted model states are struggling to rein in the subsidy schemes which threatened to expand the Greek “contagion.“ These are economic black holes paying small fortunes for each job created, crowding out private-sector growth, and displacing real jobs that respond to market forces with temporary jobs that disappear once the subsidy does. Meanwhile, they create higher energy costs, which make them much worse than other make-work programs like ditch-digging.
Still, just last week Obama’s Department of Energy claimed in the Washington Post that its own version of the scheme was an “unqualified success,” at half a million dollars per temporary job created — with all parties acknowledging in the article that the bubble has to be renewed annually or it will burst. That’s not really something you make up for in volume, even under this free-ice-cream economics. Somehow this disastrous failure proved to the Obama administration that “clean-energy investments [sic] are ready for prime time.” Oh, dear.
The coming “green jobs” binge is no more than WPA-style spending — which FDR confidantes admitted was a flop — and the debt it creates will delay the recovery further.
That is the “energy” debate in a nutshell, and how, in a rational world, it will play out. Fortunately, “green shoots” of rationality do seem to be popping up. The public realizes “it’s the spending, stupid” and grasps the illusory nature of economic activity predicated on such “stimulus”-style debt spending.