The White House’s National Economic Council’s September 2009 report, A Strategy for American Innovation: Driving Towards Sustainable Growth and Quality Jobs, informs us: “A strong economy, but too reliant on precarious, bubble-driven growth, is unsustainable.” And it is true: our government should not try and inflate bubbles in order to spur short-term economic growth. Which is why the White House should read today’s The New York Times article on the Spanish solar program that President Barack Obama so often holds out as a model for our country to follow:
Two years ago, this gritty mining city hosted a brief 21st-century gold rush. Long famous for coal, Puertollano discovered another energy source it had overlooked: the relentless, scorching sun.
Armed with generous incentives from the Spanish government to jump-start a national solar energy industry, the city set out to replace its failing coal economy by attracting solar companies, with a campaign slogan: “The Sun Moves Us.”
But as low-quality, poorly designed solar plants sprang up on Spain’s plateaus, Spanish officials came to realize that they would have to subsidize many of them indefinitely, and that the industry they had created might never produce efficient green energy on its own.
In September the government abruptly changed course, cutting payments and capping solar construction. Puertollano’s brief boom turned bust. Factories and stores shut, thousands of workers lost jobs, foreign companies and banks abandoned contracts that had already been negotiated.
According to a study from King Juan Carlos University in Madrid, for every “green job” created by Spain’s solar subsidies, 2.2 jobs in other sectors were destroyed and $758,471 was spent to create each green job. Germany is also paying dearly for their solar subsidies. A study commissioned by the Institute for Energy Research (IER), found per worker subsidies for solar industry jobs are as high as $240,000.
Spending six figures for temporary “green jobs” is not A Strategy for American Innovation.