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April 19, 2010

Green Jobs FAIL

Posted by Gregory of Yardale at April 19, 2010 9:24 AM

The Obamunist must have figured they needed a bubble to lift the economy out of permanent recession. Bill Clinton's economy was lifted by the Tech Bubble, Bush's by the Housing Bubble. So, the Central Planners of Obamunism's five-year plan (one of whom is Jeffrey Immelt, whose company is the world's largest producer of wind turbines) thought that they could order a "Green Jobs" Bubble to lift the economy.

AnnaLee Saxenian, a professor at the University of California, Berkeley, who studies regional technology clusters, says the nationwide push could produce plenty of service jobs and some manufacturing jobs, but it's unlikely to replace the millions lost in autos and steel and semiconductors to overseas producers. "People are jumping on a bandwagon," she says. "Washington needs something to sell. It can't be a panacea for everyone."

So far, this has failed, and I think I can figure out why.

The Tech Bubble succeeded because, for the most part, it was driven by market developments in technology... although the two trillion spent because of the Y2K scare was definitely a factor. (My brother is an electrician, and he was working overtime in 1999 helping people install emergency generators because they thought the lights would go out when the computers thought it was 1900 and not 2000.) Clinton was also helped out by a global oil glut that drove petroleum prices to record lows, and by a Republican congress that restrained spending and forced his administration to be more moderate and pro-business than it otherwise would have been.

The Real Estate Bubble did, in large part, result from Government policies. Specifically, the Government socialized the risk of making bad mortgage decisions and privatized the rewards of those risks. This naturally led to an over-inflated market that collapsed under its own weight, helped along by a massive global spike in petroleum prices. It was worsened by the massive expansion of private debt as consumers treated their home equity like an ATM machine.

Chairman Zero's Regime is trying to repeat the worst excesses of the Bush Era policies while learning none of its lessons. They are replacing a massive expansion of private debt with a massive expansion of public debt. And they are subsidizing "green jobs" through grants and subsidies that socialize the costs and privatize the benefits of green energy, thus distorting the market.

We may be on the verge of a revolution in bio-fuels or some other green technology. If we are, then this Government spending is a waste of resources because the market will move people to green technology. If we are not, then this Government is wasting resources because the costs of implementing green technology through Government fiat outweighs the benefits; elsewise, the market would move people to green technology anyway.