Research Briefing

To Get Economy Back On Track, Obama Should Focus On Cutting Spending

Not His Failed Liberal Energy Agenda

“The President Plans A Cabinet Meeting Feb. 1 With Technical Experts On Energy And Innovation....” (Roger Runningen. “Obama Seeks To Rally Support For Innovation, Clean Energy,” Bloomberg, 1/28/11)

OBAMA’S CLEAN ENERGY PLAN HAS BEEN MET WITH BROAD SKEPTICISM

Industry Officials Question Whether Or Not Obama’s “Grand Plans For A Green Nation” Are Realistic.  “President Obama has grand plans for a green nation — 1 million electric vehicles on the road within four years and clean power sources providing 80% of the nation's energy by 2035. But a day after getting a surprisingly extensive shout-out in Obama's State of the Union address — he sees clean tech as the country's best chance to seize its ‘Sputnik moment’ — industry officials were less than enthused and questioned whether the ambitious targets were even attainable.”    (Tiffany Hsu, “Obama’s Clean-Energy Goals Have Industry Questioning Feasibility,” Los Angeles Times, 1/27/11)

• Clean-Tech Companies Are Still Recovering From The Recession And Facing Stiff Competition From China.  “The guarded reaction to Obama's speech comes as many clean-tech companies are struggling to recover from the recession and at the same time are facing aggressive competition from China. Many fear Obama's long range objectives will be distracting and take the focus off crucial, short-term projects.”  (Tiffany Hsu, “Obama’s Clean-Energy Goals Have Industry Questioning Feasibility,” Los Angeles Times, 1/27/11)

“Even Obama's Democratic Allies Say The Investment In A Clean-Energy Future Is Unlikely To Provide A Lot Of Relief To The Unemployed.”(Michael D. Shear And Steven Mufson, "Obama Sticks With Clean-Energy Goals," The Washington Post, 7/13/10)

• Spending On Green Jobs Has Less To Do With Jobs Than With The Liberal Agenda. "'There are good reasons to create green jobs, but they have more to do with green than with jobs,' said Alan Blinder, a Princeton University economics professor and former Federal Reserve vice chairman. 'There is no reason on Earth to think that spending money on green jobs is more effective than spending on other things.'" (Michael D. Shear And Steven Mufson, "Obama Sticks With Clean-Energy Goals," The Washington Post, 7/13/10) 

Obama’s “Environmental Agenda Is In Tatters” And “Green Jobs” Have Not Brought Down Unemployment. “Obama’s environmental agenda is in tatters. His green jobs plan has done little to make a dent in unemployment, which persists at close to 10 percent. Obama’s signature environmental initiative, cap-and-trade, died in the Senate in July. And, during the first year of Obama’s tenure, China massively outspent the United States on clean-energy technology.”  (Michael Shellenberger, “Cap And Charade” The Green Jobs Myth,” The New Republic, 10/14/10)

• Obama’s Green Strategy “Was Flawed From The Start.” “In truth, the president’s strategy was flawed from the start. Cap-and-trade would not have birthed a domestic clean-energy economy—indeed, it wasn’t designed to. Meanwhile, the administration’s green stimulus spending was split between short-term, if worthy, investments in green technology, to which far too little money was allocated, and overhyped public-works projects that would never have delivered the new industrial economy Obama promised as a candidate.”  (Michael Shellenberger, “Cap And Charade” The Green Jobs Myth,” The New Republic, 10/14/10)

GREEN JOBS HAVE NOT LIVED UP TO RHETORIC IN U.S. OR EUROPE

After $58 Million In Taxpayer Subsidies, Evergreen Solar Inc. In Massachusetts Will Lay Off 800 People.  “Evergreen Solar Inc. will eliminate 800 jobs in Massachusetts and shut its new factory at the former military base in Devens, just two years after it opened the massive facility to great fanfare and with about $58 million in taxpayer subsidies.”  (Todd Wallack, “Plan Will Shut After $58M In State Aid,” The Boston Globe, 1/12/11)

• The Lay Offs Are A “Major Hit” To Gov. Patrick Who Is Trying To Make Massachusetts “A Hub Of The Emerging Clean-Energy Industry.”  “The Devens closing is a major hit to Governor Deval Patrick’s efforts to make Massachusetts a hub of the emerging clean-energy industry. The administration persuaded Evergreen to build at Devens with a package of grants, land, loans, and other aid originally valued at $76 million. The company ended up taking about $58 million, one of the largest aid packages Massachusetts has provided to a private company, and the governor was the featured guest at Evergreen’s ribbon-cutting in July 2008.” (Todd Wallack, “Plan Will Shut After $58M In State Aid,” The Boston Globe, 1/12/11)

“Solyndra Was The Epitome Of What The Government Envisioned To Be Our Green Tech Future… Confidence Was So High That Solyndra Got A $535 Million Stimulus Program Loan To Build A New Factory Along I-880 In Fremont.” (David Louie, “Fremont Solar Panel Maker Solyndra Scales Back Expansion Plans,” The Oakland Tribune, 11/4/10)

• “Solyndra Inc., A Company Obama Touted As An Example Of A Green Energy Future Will Eliminate 155 To 175 Jobs In Fremont.” “Solyndra Inc., the high-flying solar panel maker once touted by President Barack Obama as a model for a green energy future, said Wednesday it has scuttled its factory expansion in Fremont, a move that will stop the company's plans to hire 1,000 workers. Solyndra said it will also close an existing factory in the East Bay. That will leave the company with one Fremont factory, a new plant visible from Interstate 880. The moves mean that instead of having 2,000 workers in Fremont, Solyndra will cap its work force at 1,000, which is about the current level. Solyndra also will, over the next several weeks, eliminate 155 to 175 jobs in Fremont.” (David Louie, “Fremont Solar Panel Maker Solyndra Scales Back Expansion Plans,” The Oakland Tribune, 11/4/10)

In Europe, "Climate-Change Legislation Means Green Unemployment." "The Europeans once believed the 'green jobs' myth too. Now, as blue-collar workers take to the streets, they have learned that climate-change legislation means green unemployment." (Editorial, "The 'Green Jobs' Myth," The Wall Street Journal Europe, 12/10/08)

• And In Spain, Every "Green Job" Destroyed 2.2 Jobs. "Subsidizing renewable energy in the U.S. may destroy two jobs for every one created if Spain's experience with windmills and solar farms is any guide. For every new position that depends on energy price supports, at least 2.2 jobs in other industries will disappear, according to a study from King Juan Carlos University in Madrid." (Gianluca Baratti, "Job Losses From Obama Green Stimulus Foreseen In Spanish Study," Bloomberg, 3/27/09) 
  
• Spain’s Unemployment Rate Is 20.3 Percent.  “The government says Spain's unemployment rate rose back above the 20 percent level in the fourth quarter, to 20.3 percent, the highest since 1997. That compares to about 19.8 in the third quarter, already the highest in the eurozone. The figures released Friday by the National Statistics Institute show Spain's unemployment rate has now risen for four straight years.”  (“Spain Unemployment Rate Up Again To 20.3 Pct,” The Associated Press, 1/28/11)

TO PREVENT ANOTHER ECONOMIC CRISIS,

CUTTING SPENDING SHOULD BE OBAMA’S MAIN FOCUS

The Washington Post: Obama “Failed To Present A Credible Plan For Long-Term Debt Reduction,” Putting Economic Growth At Risk.  “In his State of the Union address Tuesday night, President Obama failed to present a credible plan for long-term debt reduction. It's no secret that we think he made a big mistake. If America can't get a handle on its finances, everything else is at risk: military strength, the safety net for the poor, the ability to invest for future economic growth. But now that the president has punted, is there any conceivable path toward fiscal sanity?”  (Editorial, “Mr. Obama Has Chosen Not To Lead On The Deficit.  Is There A Plan B?”  The Washington Post, 1/29/11)

• The Washington Post: If U.S. Debt Is Not Addressed Soon, The Consequences Will Not Be “Easily Controlled.”   “The third, and scariest, possibility is this: The White House may have decided that debt reduction is so tough it has to await what officials, speaking not for attribution, have termed a "forcing event" - a spike in interest rates, a reluctance by foreigners to buy U.S. debt or some other market disruption that would frighten Congress into action. What's disturbing about this idea is that such "forcing events" tend to take on lives of their own; once a panic starts, it's not easily controlled.” (Editorial, “Mr. Obama Has Chosen Not To Lead On The Deficit.  Is There A Plan B?”  The Washington Post, 1/29/11)

Fed Chairman Bernanke Said If The Deficit Is Not Addressed, It Will Result In “Severe Economic Problems And Financial Turmoil For The U.S.”  “Federal Reserve Chairman Ben Bernanke offered lawmakers a more hopeful outlook on the economy and another stern warning on the budget deficit, noting that failure to address long-run deficit problems would lead to severe economic problems and financial turmoil for the U.S.”  (Jon Hilsenrath, “Bernanke Brightens Outlook, Warns On Deficit,” The Wall Street Journal, 1/7/11)

CBO Director Douglas Elmendorf Warned That If Interest Payments On Our National Debt Increase It Could Hurt Economic Growth.  “Congressional Budget Office (CBO) Director Douglas Elmendorf, who warned that interest payments on the nation’s record debt could ‘snowball’ and lead to a national crisis. Elmendorf said even a slight downturn in the national economy could lead to much higher debt payments that could hamper economic growth and sour investors on U.S. debt.”  (Erik Wasson, “Dem, GOP Suggest At Hearing That Obama Is Failing To Lead In Budget Crisis,” The Hill’s “On The Money” Blog, 1/27/11)