Friday, September 16, 2011

Marketplace Last Night

Last night's Marketplace touched on a couple of FLG's hobbyhorses:

FIRST:
Green jobs ain't gonna help with the recovery. FLG does go further and argue that green jobs as awesome economic engine is in fact bullshit.

Take a look at this section:
Kate Gordon, from the progressive think-tank Center for American Progress, says there's been another set of roadblocks for green jobs. Simply: demand.

KATE GORDON: We have not put into place any of the national policies that other countries that other countries that are beating the tails off of us in this area have put into place.

We don't have any national guidelines about how much of our electricity should come from renewable sources. We don't have any sort of carbon tax to encourage greener choices.

GORDON: My concern is that we're getting as far as we can right now, but we're not going to be able to really ramp this up until we make some of those commitments.

As FLG has written countless times before, if we have to issue guidelines or taxes that force people to make s choice they otherwise wouldn't, then he has a hard time believing people would be better off economically because of them.

Think of it this way: if we initiated a 100% tax on black shoes and used the proceeds to support brown shoes, then there'd be a bunch of jobs "created" making brown shoes. But are we really better off because of this? Probably, people who were making black shoes now just make brown shoes. People who like black shoes are screwed. And since they don't like brown shoes as much will probably buy less of them.

Replace black shoe versus brown shoes with dirty versus clean energy. Sure, these jobs are "created," but other jobs are destroyed. Now, in complete fairness, the color of the shoes example misses an important wrinkle. Carbon emissions from fossil fuels have negative externalities. So, we as a society could be better off if we include quality of life, health, and environmental effects if a carbon tax shifts us to greener technology.

Look, FLG has repeatedly mentioned that he is on-board for a carbon tax. What he has a massive fucking problem with is the idea that the economy will be better off because of this change. That these so-called green jobs are some sort of panacea to our economic woes. They're not. For that to happen, these jobs would have to be in an industry that people willingly purchase products and services from without a tax, subsidy, or regulation.

FLG guesses that some of you are saying right now, "wait, FLG lots of industries benefit from some form of taxes, subsidies, or regulations." Benefits from is one thing; requiring them for the existence of the industry another.

And spare me the infant industry argument. Green energy is going to be an infant for a long time. So long, in fact, that FLG doubts there will be an positive net present value for these policies, unless of course you include the reduction in negative externalities in the return.

SECOND:
Time horizons and Keynes.

Ryssdal: I suppose you can't really talk the history of economics and economists without talking about John Maynard Keynes, right?

Nasar: Mmm.

Ryssdal: He is, of the moment -- has been for a couple of years now -- both praised and criticized a lot for his ideas of stimulus spending.

Nasar: He is often castigated, but it wasn't that he didn't understand the long run -- it's that he refused to take the attitude that the short run didn't matter. And why? Because he saw in the aftermath of World War I, which destroyed the prosperous globalized economy that had developed before World War I, and he saw that democracy and free markets absolutely could not tolerate extreme inflation or extreme unemployment. So in the Great Depression, he said this is a short run problem; it doesn't mean that the long run dynamism has died out, but we need to deal with this.

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