5 May 2010

Useless stimulus and phoney green jobs

I was talking to a friend, and he mentioned that he'd hired an extra guy under the stimulus program.

"Yeah, they are paying 80 percent of his wages and overhead. It's a win-win for him and me..."

"...but then I fired another guy; he just cost too much compared to the new guy."

So we get + 1 job - 1 job = 0 new jobs, more profits for my friend and more taxes for us.

None of this would have happened if my friend wasn't encouraged to take advantage of this new program to "get America back to work." I'm guessing that this is happening across the country.

Bottom Line: You can't make jobs where there's no demand, but you can sure waste money pretending that you know what you're doing!

In Five Myths about Green Energy (via JWT), we get this:
Is a job still green if it's created not by the market, but by subsidy or mandate? Consider the claims being made by the subsidy-dependent corn ethanol industry. Growth Energy, an industry lobby group, says increasing the percentage of ethanol blended into the U.S. gasoline supply would create 136,000 jobs. But an analysis by the Environmental Working Group found that no more than 27,000 jobs would be created, and each one could cost taxpayers as much as $446,000 per year. Sure, the government can create more green jobs. But at what cost?
But then the author adds a myth of his own:
The United States will continue going green by simply allowing engineers and entrepreneurs to do what they do best: make products that are faster, cheaper and more efficient than the ones they made the year before.
Remember that US carbon output has dropped because we displaced our pollution. Instead of making the product here, we buy it from China, where the same (or more!) pollution is produced in meeting our consumer demands.

Bottom Line 2: The carbon bubble, which I called 16 months ago, is getting bigger!

3 comments:

Michelle said...

OK, so someone gets that stimulus money, and it seems that in this case it doesn't go to a real new worker, but straight to the business owner in the form of money he doesn't need to pay his employee. The question, then, is what does he/she do with it. Obviously in this case not hire additional staff, though the potential exists. Expand the green business in some other way that allows for more greeness to happen in the world? Buy solar panels for his home? Buy other useless consumer goods? Save for retirement? I wonder. At least the guy is getting rewarded for having a green business, let's hope it truly is green. I'm all for subsidies if they are on the right thing - I'll be very happy to take the government money for insulating my building. Unfortunately, way too many are not on the right things...

W.E. Heasley said...

This is a very true statement and doesn’t get enough press time:

“Remember that US carbon output has dropped because we displaced our pollution. Instead of making the product here, we buy it from China, where the same (or more!) pollution is produced in meeting our consumer demands.”

David Zetland said...

@Michelle -- he doesn't run a green business, and remember that every $1 of stimulus money comes out of our pockets (now or later), at a cost of more than $1 (maybe $1.20?)

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