President-elect Barack Obama is set to take command a week from today. One of the programs he’s been touting from the beginning of his campaign is a massive green jobs initiative. Sounds great, doesn’t it? Obama can kill two birds with one stone with green jobs; he can solve our environment and recession concerns.
The bottom line, as economist Walter Williams puts it, is this:
Where does Congress get the money to create the jobs?” They won’t get it from the Tooth Fairy or Santa Claus; they must get the money from taxpayers. That means if Congress collects $100 from a taxpayer for highway construction, he cannot use that $100 for some other expenditure that would have created a job. If Congress borrows the money for highway construction, it causes interest rates to be higher and therefore less job-creating investment. The bottom line is that Congress can only shift employment or unemployment but cannot create net new jobs.”
Unfortunately, throwing the word “green” in front of jobs doesn’t make it any different. The Institute for Energy Research recently released its report, Green Jobs: Fact or Fiction? Among the key findings:
Obama’s green jobs plan] would likely increase consumer energy costs and the costs of a wide array of energy-intensive goods, slow GDP growth and ironically may yield no net job gains. More likely, [it] would result in net job losses.”
And they make a point similar to Dr. Williams:
[The Center for American Progress] estimates that this “fiscal stimulus” will result in the creation of two million jobs. Yet the CAP methodology treats the $100 billion as manna from heaven; it does not consider the direct and indirect adverse effects (including job destruction) of imposing higher costs on a wide array of energy-intensive industries and thereby raising prices for consumers.”
IER’s full economic report can be found here.