Hillary Clinton Craps on my Dreams of a Glorious Trump v Sanders Debate
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Earlier today I posted on the layoffs announced by wind turbine manufacturer Vestas and the electric car battery manufacturer A123.
These two companies are only the tip of the iceberg. What they represent is one of byproducts of cargo cult economics, that is, when venture Marxists set industrial policy to the benefit of rent-seekers and corporate cronyists.
To be clear, we have flushed billions of dollars we don’t have down the crapper pursuing a will 0’ the wisp in the form of green jobs and green energy. This is not to say the goal is laudable, it is. But good intentions do not compensate for squandered wealth, squandered opportunities and squandered lives.
The root cause of this mess is the Obama regime. It has waded into a marketplace it neither understands nor likes and has tried to develop a new industry out of whole cloth. The language boggles at attempting to describe the hubris necessary to undertake this endeavor. To add insult to injury, in a large number of these cases, over 71% of the cases if one want’s to put a number on it, the winners just happened to be major Obama donors and supporters.
This topic was touched on briefly in the Vice Presidential debate:
Joe “The Rain Man” Biden: I love that. I love that. This is such a bad program, and he writes me a letter saying — writes the Department of Energy a letter saying, the reason we need this stimulus — it will create growth and jobs. He — his words. And now he’s sitting here looking at me — and by the way, that program — again, investigated — what the Congress said was, it was a model: less than four-tenths of 1 percent waste or fraud in the program. And all this talk about cronyism — they investigated, investigated; did not find one single piece of evidence. I wish he would just tell — be a little more candid.
Everyone, except apparently Joe Biden, has heard of Solyndra. They were the subject of a Congressional hearing. The FBI has raided their offices. The Treasury Department IG is investigating the loans. The Chicago Tribune says Solyndra smells like Chicago. It seems there is some evidence.
But if we are pressed for another example, one that is inextricably linked to Joe Biden’s personal actions, let’s look at BrightSource Energy which received $1.6 billion (that is with a “b”) to develop a solar electric project in the Mojave Desert.
BrightSource is populated by heavy Obama fundraisers, some of which are now serving in the Obama administration. The full cast of characters is here.
This by way of RealClearMarkets:
Yet an email from BrightSource Energy’s subcontractor, Bechtel Systems and Infrastructure, dated December 2, 2009, said that Biden met weekly with Energy Secretary Steven Chu to discuss Energy Department loan guarantees, to wit: “apparently VP Biden meets with Secretary Chu and [Matt] Rogers (in charge of loan program) on a weekly basis to push progress on all DOE loan guarantees…BrightSource would like to see if we can help get VP Biden to focus on the tasks that DOE needs to accomplish and have him help drive DOE…”
Bernard Toon, Biden’s former chief of staff when he was a senator, was a principal vice president and manager for Bechtel. In an email to BrightSource CEO John Woolard dated December 3, 2009, Toon wrote, “Calls are in to Biden’s staff and I will be approaching the political affairs office at the White House tomorrow as well, as this project could benefit two [Democratic] Senators who are in cycle and whose races will be tough next year-[Barbara] Boxer [CA] and the Majority Leader, Sen. Reid [NV].” Both won reelection in 2010.
A month before the loan guarantee was approved, on March 8, 2011, Arthur Haubenstock of BrightSource wrote to Woolard, “We have a lot of force gearing up to leverage them now, including the WH and VP office, [New Mexico Senator Jeff] Bingaman, [Nevada Senator Harry] Reid and [California Senator Dianne] Feinstein, and Gov. Brown.”
These are simply cases of the Obama regime using money we have borrowed from ChiCom to pay off their supporters while convincing the rubes of the scientifically and technologically illiterate left that they are actually accomplishing something worthwhile.
In the same debate Biden also claimed:
VICE PRESIDENT BIDEN: Let me tell you it was a good idea. It was a good idea — Moody’s and others said that this was exactly what we needed that stopped us from going off the cliff. It set the conditions to be able to grow again. We have — in fact, 4 percent of those green jobs didn’t go under — or went — went — went under — didn’t work. It’s a better batting average than investment bankers have. They have about a 40 percent — (inaudible) — loss.
Is that true?
Again, according to a RealClearMarkets:
Biden appears to be saying that 4 percent of Energy Department-supported projects were unsuccessful, compared with a higher failure rate for private investors.
This is false. Government-supported energy companies have had a notoriously unsuccessful track record. Of the 33 energy loan guarantees made since 2009 under the Energy Department’s programs, I calculate that 30, or over 90 percent, have shown signs of trouble. “Trouble” ranges from missed production goals to bankruptcy filings.
The effect on the economy is not benign as the Germans, long touted as the leaders in green energy have found out.
(Let me digress for a moment, why is it that Democrats look around the world and find America inferior to every country and culture they view. Tom Friedman loves China’s infrastructure despite the fact that it is shoddy and serves no useful purpose. Obama likes China’s government despite – or maybe because of – its genocidal tendencies. Nicholas Kristoff likes Cuba’s health care never mind that no one but Hugo Chavez has ever flown there for treatment. Hillary Clinton famously touted “it takes a village to raise a child” notwithstanding the rather abundant evidence in the culture where that saying originates that villages don’t raise good men or women in measurable numbers. And they want us to compete to be like these losers.)
While employment projections in the renewable sector convey seemingly impressive prospects for gross job growth, they typically obscure the broader implications for economic welfare by omitting any accounting of off-setting impacts. These impacts include, but are not limited to, job losses from crowding out of cheaper forms of conventional energy generation, indirect impacts on upstream industries, additional job losses from the drain on economic activity precipitated by higher electricity prices, private consumers’ overall loss of purchasing power due to higher electricity prices, and diverting funds from other, possibly more beneficial investment.
Proponents of renewable energies often regard the requirement for more workers to produce a given amount of energy as a benefit, failing to recognize that this lowers the output potential of the economy and is hence counterproductive to net job creation. Significant research shows that initial employment benefits from renewable policies soon turn negative as additional costs are incurred. Trade and other assumptions in those studies claiming positive employment turn out to be unsupportable.
In the end, Germany’s PV promotion has become a subsidization regime that, on a per-worker basis, has reached a level that far exceeds average wages, with per worker subsidies as high as 175,000 € (US $ 240,000). …
Although Germany’s promotion of renewable energies is commonly portrayed in the media as setting a “shining example in providing a harvest for the world” (The Guardian 2007), we would instead regard the country’s experience as a cautionary tale of massively expensive environmental and energy policy that is devoid of economic and environmental benefits.
There is substantial evidence that far from creating jobs, green jobs sponsored by government subsidies retards economic growth:
Subsidizing green energy also turns out to be a job killer. In 2010 researchers at King Juan Carlos University calculated that nearly nine jobs are destroyed in the rest of the economy for every one [emphasis mine] created by solar subsidies. Similarly, researchers at the Bruno Leoni Institute, an Italian think tank, found that each green job cost five in the rest of the economy [emphasis mine]. A 2009 report from the Rhine-Westphalia Institute for Economic Research, a German think tank, concluded that green energy subsidies were “resulting in massive expenditures that show little long-term promise for stimulating the economy, protecting the environment, or increasing energy security.”
Charles Lane addressed this in an op ed in today’s Washington Post titled Liberal’s green-energy contradictions:
But that’s not the worst contradiction in the Democrats’ doing-well-by-being-green ethos. Green energy is not cost-competitive with traditional energy and won’t be for years. So it can’t work without either taxpayer subsidies, much of which accrue to “entrepreneurs” such as Gore, or higher prices for fossil energy — the brunt of which is borne by people of modest means.
Consider California’s “net metering” subsidy for solar-panel users. As the New York Times reported in June, the program hugely benefits well-off consumers who can afford to install photovoltaic panels. They get sun power for their homes — plus an excess supply that utilities must buy. Thus utilities must also pay to keep them on the grid. Those costs get passed along to everyone else — including low-income customers.
For a sense of where this may lead, look at Germany, whose crash program to replace nuclear power with wind and solar is boosting electricity rates. Der Spiegel reports that 200,000 long-term unemployed lost power in 2011 because they couldn’t pay their electric bills.
Democrats try to square this circle by talking up “green jobs,” but expensive electricity is bad for industry, as Germany is discovering. Fact is, subsidies for green energy do not so much create jobs as shift them around.
The “smart grid” was a $3.4 billion item in the 2009 stimulus bill, touted as the key to vast new efficiencies in power distribution. Maybe that’s a good idea, but one way smart grids work is by making human meter-readers obsolete — just as solar panels put coal miners out of work.
Small wonder that the United Mine Workers of America — a core Democratic constituency if there ever were one — has refused to endorse Obama in 2012 as it did in 2008. The union hasn’t backed Romney, but he is campaigning hard for rank-and-file votes. That a private-equity baron is getting a hearing in the coal fields should give liberals pause.
Obviously, creative destruction is part of what makes capitalism go. There’s no inherent reason to protect coal mines any more than buggy-whip makers. The biggest threat to coal country comes from vast new supplies of natural gas, not from wind and solar.
The point remains: Government, with its inevitable susceptibility to lobbying and favoritism, should not be picking winners and losers, whether through green subsidies or tax breaks for oil and gas.
It’s one thing to lose your job because a competing firm built a superior mouse trap; it’s quite another, justice-wise, to lose it because a competitor talked the government into taking its side.
And as in so many of the do-good projects engaged in by the left, the real bill payer is the low income citizen while the real beneficiaries are the cronies of the venture Marxists handing out our money.
● About 40 percent of the funding — roughly $4.3 billion — went to 36 wind farms. At the peak of employment, these firms employed 7,200 workers. But these were temporary jobs, as is almost always the case with stimulus money. Now these 36 farms employ 300 employees. If you do the math and calculate the cost per job, you may well fall off you chair.
● Very few local people were employed in these “new jobs” because they lacked the technical skills to work in these high-tech factories. This is an increasingly well-documented story about why stimulus money doesn’t create as many jobs as it hopes to: High-skilled jobs require high-skilled workers, and you can’t just hire anyone from the unemployment lines to do these jobs.
● The American Wind Energy Association successfully lobbied the government to get $7 billion of the Section 1603 funding between 2009 and 201, claiming it would create thousands of jobs. Yet, the industrypayroll declined to 75,000 in 2011 from a peak of 85,000 in 2009.
Were we simply talking about borrowed money the conversation would be academic or even trivial. But the real impact is on lives. Unless the requisite tax breaks are reauthorized in December, thousands of Americans, trained for bogus jobs in a bogus industry, will be out of work. If the tax breaks are renewed, thousands of Americans will continue to work in bogus jobs, producing bogus products, and serve as an anchor on whatever economy we may still have after Obama leaves office.