Obama's Green Jobs Snake Oil

Obama's Green Snake Oil
Obama ignores the cost of his global warming plan.
01/28/09 - Reason Online by Jacob Sullum

[edited]Obama says that his plan to reduce global warming is actually a way of stimulating the economy. The plan immediately spends for weatherizing buildings, alternative energy production, and more power transmission. He ignores the enormous cost of reducing carbon dioxide emissions. He falsely portrays this economic burden as a boon.

Consider this to see the fallacy: If Obama could snap his fingers and make global warming disappear, should he do it? By his logic, no, because then we'd lose all those wonderful green jobs that will help pull us out of the recession.

Obama: "Climate change could result in violent conflict, terrible storms, shrinking coastlines, and irreversible catastrophe." Does Obama's cap-and-trade proposal make sense? We need to know how likely are those outcomes, how costly they would be, and whether his plan would prevent them.

Critic Bjorn Lomborg wrote "Cool It: The Skeptical Environmentalist's Guide to Global Warming." He argues that adapting to climate change is much less costly than trying to prevent it. Prevention is unlikely to have any measurable impact. I'd like to hear why Obama thinks this criticism is wrong.

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Dispelling the Global Warming Myth

There is a close correlation between global temperature and solar output. See the graph.

Minimum Wage Prosperity

Suddenly, McJobs are Good
07/24/09 - Blogs.DailyMail by DonSurber

[edited] Labor union officials and their handmaidens in Congress, including former congresswoman Solis, derided any increase in employment under a Republican president, calling them "McJobs". They derided them, even if they were above minimum wage, because new jobs do not pay as much as old jobs.

Now that Obanomics has turned a mild recession of 7.6% unemployment into 9.5% unemployment, in just 4 months, we have Solis praising a 70 cents an hour increase in the minimum wage as an economic stimulus.

Solis says that raising the minimum wage to $7.25/hour is going to help the economy and increase employment. I hope she doesn't mean it will help the economy while decreasing employment. Or, hurt the economy while increasing employment.

Where are the studies and information about the ideal minimum wage? Maybe the sky is the limit. Why not set the minimum wage at $50/hour? That would send funds to poor people while lifting the economy, right? (sarcasm)

The minimum wage is just another way of saying: "Fire that person unless you can pay them $7.25 per hour. We would rather that they be out of work, than work for less than we think is polite."

The government cannot help people by restricting their choices.

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A Minimum Wage Equals Minimum Jobs
07/30/09 - Reason.com by John Stossel

[edited] Politicians declare that workers should get a raise, and people assume they will actually get it. But, government can increase wages by decree only if employers set wages arbitrarily. You have to believe that employers are arbitrarily stingy.

Say an employee produces $4 of value each hour after all business expenses, and the employer offers just $2. Another employer will hire him away for $3 or more. Competition drives wages up to the the worker's level of productivity.

Several years ago, Santa Monica, CA made the town a workers' paradise by requiring everyone to be paid at least $12.25 an hour. Restaurant owner Jeff King complained to me, that the law would "dry up the entry-level jobs for just the people they're trying to help."

He was right. It's why gas stations no longer hire teenagers to wash your windshield. Wage minimums tell employers: "Don't give a beginner a chance." The people of Santa Monica later woke up and overturned the "living wage."

If minimum-wage advocates really believe wages are set arbitrarily, why do they favor only a $7.50 or $14 minimum? Why not $100? At those levels, even a diehard interventionist knows that workers would be hurt. But, the principle is the same at lower levels. Wages follow productivity, not whim. If the minimum wage is set above productivity, those workers will be harmed.

Low Skilled Workers Are Not Helped
07/26/09 - Cafe Hayek by economist Don Boudreaux

[edited] Uncle Sam has hiked the minimum wage, raising the hourly cost of employing low-skilled workers by 10.7%. This is always unwise, and more so when unemployment is rising.

Say that Uncle Sam passed a minimum-salary statute for economists, requiring that every employed economist be paid at least $300,000 annually. I would, of course, love to earn this much by teaching economics. My more accomplished colleagues would benefit, such as Tyler Cowen and Walter Williams. But, I would lose my job.

Using the Minimum Wage to Hamper Your Rivals
07/24/09 - Econlog.Econlib by David Henderson

[edited] Forty years ago, politicians who pushed for the increased minimum wage did not hide their motives or their knowledge of who the victims would be.

In a 1957 Senate hearing, Senator (and future President) John F. Kennedy of Massachusetts said:

Having on the market a rather large source of cheap labor depresses wages outside of that group, the wages of the white worker who has to compete.

When an employer can substitute a colored worker at a lower wage, it affects the whole wage structure of an area, doesn't it? There are, as you pointed out, hundreds of thousands of colored workers looking for decent work.

Exploiting the Minimum Wage
07/24/09 - Open Market by Ryan Young

[edited] Young people with little or no work experience may not be able to offer $7.25 per hour worth of productivity. No wonder so many of them are having trouble finding summer jobs. The law says that they have to be paid more than they are worth [if they are hired]. Wage floors reduce the number of jobs.

Raising Rival's Costs
7/24/09 - Marginal Revolution by Alex Tabarrok

[edited] Some employers benefit from an increase in the minimum wage because it raises the cost of labor for their rivals. This is why unions have typically been in favor of the minimum wage even when their own workers make much more than the minimum.

Windmill Jobs are Expensive

Tilting at Green Windmills
06/25/09 - Washington Post by George F. Will (via Cafe Hayek)

[edited] Gabriel Calzada is a professor of economics at Universidad Rey Juan Carlos, Spain. He has produced a report that is inconvenient for Obama's green agenda and for budget assumptions that are dependent upon it.

Spain is the leading country in aggressively supporting production of electricity from renewable sources. Calzada says Spain's huge spending on wind farms and other forms of alternative energy has indeed created jobs. But his report concludes that they are often temporary and have cost $752,000 to $800,000 each in subsidies, and $1.4 million each in the wind industry. Each such new job also destroys 2.2 other jobs in other industries because of the inefficient political allocation of capital.

European media regularly report "eco-corruption" leaving a "footprint of sleaze", such as gaming the subsidy systems and profiteering from land sales for wind farms. Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs elsewhere in Spain's economy.

Robert Gibbs is the president's press secretary. It is weird that he dismisses this report as false witout reading it. He can't believe that some American importers are cashing in on the U.S. government's promotion of wind power, despite this being an economically unproductive project.

Calzada has come to conclusions that he, as a libertarian, finds ideologically congenial. And his study was supported by a like-minded U.S. think tank, The Institute for Energy Research, for which this columnist has given a paid speech. Many Spanish critics have impugned his patriotism because he faulted something in Spain which Obama has praised. But, they have not tried to refute the content of his report.

Phony Jobs Claims

The Media Fall for Phony 'Jobs' Claims
06/09/09 - Online.WSJ by William McGurn

The Obama Numbers Are Pure Fiction.

[edited] "Saved or created" has become Barack Obama's signature phrase. Obama declared yesterday that the stimulus had already saved or created 150,000 American jobs.

He announced faster stimulus spending so he could "save or create" an additional 600,000 jobs this summer. Obama promised earlier that his recovery plan would "save or create three to four million jobs over the next two years."

Tony Fratto was a senior member of the Bush administration communications office. He sees a double standard at play.

We would never have used a formula like "save or create". To begin with, the number is pure fiction. The administration has no way to measure how many jobs are actually being 'saved.' If we had tried to use something this flimsy, the press would never have let us get away with it.

The inability to measure Mr. Obama's jobs formula is part of its attraction. Never mind that no one actually measures "jobs saved". Neither the Labor Department, the Treasury, nor the Bureau of Labor Statistics does it. The New York Times delicately reports that Mr. Obama's jobs claims are "based on macroeconomic estimates, not an actual counting of jobs." Nice work if you can get away with it.

Harvard economist and former Bush economic adviser Greg Mankiw writes:

The expression "save or create" is political genius. You can measure how many jobs are created between two points in time. There is no way to measure how many jobs are saved. Even if things get much worse, the President can say that there would have been 4 million fewer jobs without the stimulus.

Non-Union Businesses Grow Faster

What Happened to American Unions?
02/12/09 - Econlog.Econlib.org by Bryan Caplan From Brink Lindsey's "Nostalgianomics":

[edited] Henry Farber of Princeton and sociologist Bruce Western of Harvard report that the main cause of declining union membership as a fraction of all workers, has been the slower growth of unionized workplaces compared to nonunionized.

Between 1973 and 1998, employment at
- nonunion companies grew at 2.8% a year
- unionized companies declined at 2.9% a year

Keeping up unions membership would have required organizing new workers at the rates of the early-1950s. But, organizing rates have declined steadily since then. Percent union membership has declined steadily since the 1970's.