Support for a cap and trade national energy tax is dwindling and supporters have been throwing everything they can at the debate to see what will stick. You would think that saving the planet would be a sufficient sales pitch to justify destroying the economy, but most people aren’t buying that argument. In order to sell the American people on this dangerous legislation, some supporters are playing up the national security angle. The official name for the Waxman-Markey cap and trade bill that narrowly passed the House is, “American Clean Energy and Security Act of 2009.” The argument that hypothetical global warming is a national security threat is weak at best. The senate has decided to go for the “jobs” angle with their version.
The Boxer-Kerry cap and trade bill, sorry “Pollution Reduction and Investment” bill (wouldn’t want to confuse Senator Kerry with all that “cap and trade” talk), is called the "Clean Energy Jobs and American Power Act." Senator Kerry is also trying to use the national security argument for his bill as well since he is the chairman of the Foreign Relations Committee, but “green jobs” are the main talking point of this bill. President Obama said, "Make no mistake: this is a jobs bill…It will make possible the creation of millions of new jobs" referring to the Waxman-Markey bill last June.
Unfortunately, just as the “Stimulus” bill caused more job losses than the White House predicted
would be lost if they had not meddled at all, so too would subsidizing “green jobs” cost far more jobs than it would create. Subsidizing “green jobs” has the same effect as “stimulating” other areas of the economy; it takes money from the productive areas and gives it to the costly and unproductive areas. In this case, cap and trade energy taxes would cause productive fossil fuel energy to have increased scarcity and higher costs. To compensate for the energy lost from these sources, corporate welfare (i.e. subsidies) would be given by the government (at taxpayer expanse) to highly unproductive and costly energy sources such as wind and solar.
The “green jobs” that would come as a result of these new industries, are what Frederic Bastiat called “that which is seen.” These new jobs are a tangible result that politicians can point to as proof that they are creating jobs. However, this ignores the other part of Bastiat’s “Broken Window Fallacy
” by ignoring “that which is unseen.” The unseen consequences come from the job losses that come from the increased taxes and energy costs, as well as jobs that were never created because resources were squandered on unproductive “green jobs.” Money confiscated by the government and given to areas of the economy they deem worthy of this corporate welfare is money that could have been spent on other, more productive, goods and services. Companies will have less money to invest and expand. This will cause layoffs or stagnation for energy companies, but also for companies that depend on cheap reliable energy to compete in the global market. Ben Liebermen, senior policy analyst in the Thomas A. Roe Institute for Economic Policy Studies at the Heritage Foundation, wrote:
“[T]he billions of dollars in government subsidies to the wind industry siphon resources and jobs away from other parts of the economy.
Worse, the higher cost of wind-generated electricity and other alternatives kills even more jobs, especially in the manufacturing sector that needs reasonably-priced energy to compete in the global marketplace.”
A study at the Heritage Foundation
estimates a net job loss of 1,145,000 jobs
from the Waxman-Markey bill. These are the losses that come even after the newly created “green jobs.” These estimates are fairly abstract, however, because future estimates are never completely accurate and it is also impossible to account for the jobs that will never exist because of this legislation. To make these results more tangible, all one has to do is look to other countries that have enacted similar legislation.
Spain instituted an alternative energy policy that is being used as a model for the US. Unemployment in Spain currently stands at 18%. As Liebermen writes, “Gabriel Calzada, economics professor at Madrid’s King Juan Carlos University, estimates that each green job Spain creates prevents 2.2 other jobs from being created.” (Emphasis mine)
In Denmark, a study from the think tank CEPOS found than each wind energy job there costs the government $90,000 to $140,000 annually– much more than the jobs pay. Governments can only get money from taxing, borrowing, and printing, so every dollar spent on a “green job” is money taken from someone else, either now through taxation or inflation, or taken from our children through borrowing.
California has also been pursuing “green jobs” program that has been heralded by the environmentalists. The August 2009, California’s unemployment rate was 12.1% compared to the national average of 9.6%.
Not only do “green jobs” kill other jobs, they are unsustainable. Alternative energies can only exist in the market when they are given corporate welfare. If these jobs were productive and sustainable, they wouldn’t need handouts. As soon as the welfare ends, so do the jobs. Creating this new entitlement program does nothing but create a new group of people who are dependent on the government for the livelihood.
In Nancy Pelosi’s speech on the floor of the House in support for the Waxman- Markey Energy Tax, she said the bill would bring, “Jobs, jobs, jobs and jobs. Let’s vote for jobs.” Her misunderstanding of economics and reality is obvious in this statement; however, this statement should be passed on to the Senate when considering the Boxer-Kerry bill. The Senate needs to “Vote for jobs” by voting against this job killing legislation, because once this entitlement is started, there is no stopping it.
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