Excerpted fro”The Fallacy of ‘Green Jobs'”, by John Stossel,
September 10, 2008
Obama has a great twofer pitch: “green jobs.” … In one fell swoop he can promise to end unemployment and fix and save the planet from climate change.
“I’ll invest $150 billion over the next decade in affordable, renewable sources of energy — wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can’t ever be outsourced,” (http://tinyurl.com/64szf7).
Politicians always promise that their programs will create jobs. The fallacy is the same in every case: Even if the program creates jobs building bridges or windmills, it necessarily prevents other jobs from being created. This is because government spending merely diverts money from private projects to government projects.
Governments create no wealth. They only move it around while taking a cut for their trouble. Overlooking this fact is known as the broken-window fallacy (http://tinyurl.com/ydasa2). The French economist Frederic Bastiat pointed out that a broken shop window will create work for a glassmaker, but that work comes only at the expense of the cook or tailor the shopkeeper would have patronized if he didn’t have to replace the window.
Creating jobs is not difficult for government officials. Pharaohs created thousands of jobs by building pyramids. Our government could create jobs by paying people to dig holes and then fill them up. Would actual wealth be created? Of course not. It would be destroyed. It’s like arguing the hurricanes create jobs. After all, the destruction is followed by rebuilding. But does anyone seriously believe that replacing destroyed buildings creates wealth?
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According to his web site:”Obama will strategically invest $150 billion over 10 years”
Note that word “strategically.” It is there to suggest that Obama knows how best to “invest” the $150 billion. (Of course it is not his money, and he’ll have none of his own at risk, so from his perspective, it won’t really be investment.) But how does he know that the things he names ought to get the money?
Politicians have a lousy record trying to make “strategic investments.” Jimmy Carter’s Synthetic Fuels Corporation cost taxpayers at least $19 billion but failed to give us alternative fuels (http://tinyurl.com/5ex7v5).
Investing is about predicting the future, and the future is always uncertain … People who have their own money at risk — who face a profit-and-loss test and possible bankruptcy — are much better predictors than people who play with other people’s money. Just compare North and South Korea.
Mistakes are inevitable. Some investments will be errors. Mistakes in the competitive market tend to be on a comparatively small scale. If one company invests in plug-in hybrids and it goes bust, only a relatively few people suffer. The assets of the bankrupt firm pass into more capable hands.
When government makes a mistake, the bureaucracy can’t go bankrupt. Instead, failure twill justify increased appropriations.
If “green jobs” make so much sense, the market will create them. They will be created by private entrepreneurs and venture capitalists. The best ideas will rise to the top, and green energy will gradually replace coal and oil.
If politicians were serious about creating jobs and cleaner technologies, they would step aside and let the free market go to work.
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Full article:
http://www.realclearpolitics.com/articles/2008/09/green_jobs.html
Copyright 2008, Creators Syndicate Inc.
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Referenced web site worth browsing:
Foundation for Economic Educatiob
http://www.fee.org/
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