I’m tired of reading about the American economy’s “mysterious” non-recovery. The lack of recovery isn’t mysterious at all. The economy hates uncertainty, and Obama has introduced more economic uncertainty than we’ve had since Hoover and Roosevelt started violating the law of supply and demand 80 years ago.

Our present crisis was caused by federal policies demanding that banks make bad housing loans to people who couldn’t afford their mortgages. Fannie Mae and Freddie Mac’s $500 billion in mortgage losses still haven’t been added to federal red ink totals—and both are still out there incurring more losses. Consequently we don’t know what a house is worth, now or tomorrow.

Obama doubled the uncertainty about Bush’s costly Troubled Assets Relief Program—spending nearly a billion dollars in big-city Democrat “stimulus” gifts that didn’t create any real jobs. (Neither did Roosevelt’s “pump-priming” in the 1930s.) After TARP came the Democrats’ massive federal budget increase, sending our national debt into the stratosphere for at least a decade to come. How can we possibly pay for this without stealing investment from the private sector?

Since the stimulus failure and the soaring debt, Secretary of the Treasury Tim Geitner, keeps demanding still another massive stimulus, without even a clear idea where he’d target renewed debt-spending. Senator Harry Reid recently jumped on his bandwagon. Obama would sign whatever they could pass on the Hill.

Nobody understands Obamacare yet either—but it will impact one of the biggest and fastest-growing U.S. industries. The 1400 waivers granted so far make us wonder whether every existing private-sector health care program in the country will be dumped into the federal lap. The similar Massachusetts health-care program has ramped up government health-care costs without covering many more people or reducing emergency room visits.

Our President keeps touting the wonders of Green Jobs, but so far most of those have been created in China. Even companies he’s used as press-event backdrops have gone belly-up. Meanwhile, the global temperatures haven’t increased for the last 15 years. How long, O Lord, before we admit the climate future is uncertain—as it always has been?

Our Environmental Protection Agency’s new limits on coal-fired power plants are likely to boost U.S. electric bills sharply in 2014—as the first round of Obama’s promised emission cuts. He’s threatened coal companies with bankruptcy. Energy Secretary Chu said we needed gasoline prices as high as Europe’s—or about $8 per gallon—to prevent a global warming we aren’t getting. The Feds have now shut down coal and oil wherever they could, the better to get gas at least back above $4 a gallon.

What will electricity and gasoline cost five years from today? Those are very basic uncertainties. The public is ambivalent about giving up fossil fuels, but they already see it will be very expensive. British “energy poverty” will more than double, especially since we’re all supposed to keep slashing fossil fuel use until we reach zero.

People think Franklin Roosevelt “corrected” Hoover’s policies and ended the Depression. Wrong. Both Hoover and FDR were radicals. Hoover gave us tariff wars, government wage controls, an uncertain fiscal policy and big spending on “infrastructure.” Roosevelt drew praise for his constant “bold, persistent, experimentation.” Both gave us high tax increases, even bigger budget deficits—and more uncertainty. Job creation came at the price of the 2nd World War with its millions of deaths and the devastation of Europe.

Why would anyone investing today expect profits in America or Europe? China is a better bet—and more of the world’s investors are making that bet.

CHURCHVILLE, VA—President Obama has allocated $4 billion in “stimulus funds” to help advance the “smart grid,” which is intended to seamlessly integrate all our new solar and wind power into the national supply of electricity. Much of the $4 billion will be spent to install 20 million new digital “smart meters.” These meters will instantly tell the power company how to deploy its varied generating sources most effectively.

The “stimulus fund” goal is to create new “green” jobs. The Washington Post estimates that deploying the 20 million smart meters will create jobs for about 1,600 installers, and keep them employed for about five years. The manufacturing process for the meters will be highly automated, so only a few hundred jobs would be involved there. Still, 2,000 green jobs for five years, paid for by stimulus funds, must be good. Or is it?

Let’s think this through.  The smart meters report automatically to the power company. We’ll lose 28,000 existing, permanent jobs for meter-readers. The Washington Post says all our “green” energy efforts are likely to produce only tens of thousands of jobs, not the millions of jobs needed to keep America at full employment.

A good Spanish study, led by Dr. Gabriel Calzada of Juan Carlos University in Madrid, found that every renewable-energy job created by the Spanish government has destroyed 2.2 other energy-related jobs. Worse, every megawatt of expensive “green energy” has destroyed 5.39 jobs in non-energy sectors as products became too expensive for consumers to buy—or as manufacturing shifted to countries without energy taxes. President Obama has held Spain up as a country for us to emulate, which only emphasizes that Calzada’s study is likely an Obama-valid blueprint for our own energy future.  

Note, by the way, that China has already become the world’s major source of wind turbines, cutting further into Obama’s “green job” expectations. The wind turbine manufacturing will shortly be joined by our steel and aluminum industries, fertilizer plants and many other production facilities when the U.S. energy penalty taxes mount up.

Unfortunately, the $4 billion doesn’t replace our massive existing investments in coal-fired and gas-fired power plants, in gasoline refineries and service stations, in natural gas pipelines and drilling rigs. In reality, the renewables will subtract from our standard of living.

In 2007, U.S. subsidies to coal-fired electricity were 44 cents per megawatt hour, compared with $23.37 in subsidies for wind turbine megawatts, and $24.34 in subsidies per solar megawatt. That’s a fair measure of the added cost for renewables, except that wind and solar megawatts must also be billed for the additional costs of the fossil fueled plants that must be built and kept in “spinning reserve” in case the wind drops or clouds cover the sun. Denmark, a world leader in wind, has not decommissioned any fossil-power generators because of its “spinning reserve” requirement.

As Obama’s energy taxes force reductions in coal and oil production, the price of U.S. energy will double and triple—and so will the costs of the things we buy. Clearly, if the President wasn’t afraid of man-made global warming, we would not have spent the $4 billion on the “smart grid” at this moment of recession. Nor would we be planning massive and ineffective wind farms.

We might, instead, be designing new coal-fired power plants with the Department of Energy’s latest discoveries in clean-burn technology.

DENNIS T. AVERY is a senior fellow for the Hudson Institute in Washington, DC. He is an environmental economist and was formerly a senior analyst for the Department of State. He is co-author, with S. Fred Singer, of Unstoppable Global Warming Every 1500 Hundred Years, Readers may write him at PO Box 202, Churchville, VA 24421 or email to cgfi@hughes.net

 

Source: Gabriel Calzada; “Study of the Effects on Employment of Public Aid to Renewable Energy Sources,” Juan Carlos University, Madrid; March, 2009.