A Source Of The Nation’s Economic Weakness
Readers suggested this topic: “All the green jobs of the $1 Trillion stimulus are going ‘poof.’ How will this affect housing prices? Are these jobs in high concentrations in just a few markets (like Southern CA)? Did any of this money lower energy usage or lower the amount of imported oil? What do you tell your grandchildren 40 years from now on why they are still paying off this debt (with interest)?”
One said, “When I worked in the oil refinery, everything was boiled down to the basis of how much energy you would get if you burned it. Compare that to how much energy you have to input to make it and you have a very practical way to judge options and make investments. When we deplete oil to manufacture solar cells and wind turbines that will never pay back, that stuff is just gone. When we built houses and nail salons that are not needed, we also wasted huge amounts of energy.”
A reply, “I have posted a couple of articles showing that new wind projects produce electricity cheaper than coal, when coal prices rise they will produce it much cheaper. Solar prices are falling rapidly. Payback with incentives is less than 5 years now for a business.”
One added, “As the US continues to subsidize and develop alternative energies and their production, and feedback and improvements improve the design and output, they will become even more so. Keep in mind that when ‘hand-held’ electronic calculators first came out in the late sixties, they cost six hundred dollars– in 1968 dollars. Ten years later, they were on keychain giveaways. A 256 byte Sony computer system with AutoCad once cost my architect brother $5,000. And a laser printer, 14K. Now I can buy that printer in CostCo for $179– and the reproductions are just as clean if not a lot more vivid.”
“It takes awhile to get development scaled up for efficient industrial manufacture, but when it does, the technology takes off. I, for one, am glad to see it finally starting to happen in this country. Europe, Asia, Scandinavian, even Indonesia are far ahead of us in alternate energy technologies.”
“Research and development is a legitimate function of our government. Sometimes, it flubs big time. (Eight track tape, anyone? Betamax?) Sometime it changes our world. The internet? Birth control pills? Solid Stage Rocketry?”
Another said, “Why are we not building, developing and tweaking efficiencies to existing systems? And small nuke of course.”
One had this, “I only purchase Energy Star appliances. I have CFLs, double-insulated doors and windows, insulation up to R-25 and allow the local electric company to cycle off my central a/c as needed. Last year there were at least three times when they shut off the a/c and I either suffered or went to the mall. This year? Zip, zero, zilch, nada. (Knock on wood).”
“I attribute it in part to a slower economy, but to a larger extent to the proliferation of incentive-induced solar installations in the Left Coast OC. No electric bill this year over $100 in any given month. BTW, they pay me for the privilege to shut me down. Win-win!”
A reply, “I agree 100% on Conservation but can’t resist: It’s because the houses are empty!”
Finally, “”Residential power use has fallen even as the number of electronic devices has exploded because the devices themselves have gotten more efficient. In the 1970s, for example, refrigerators used 2,000 kilowatt-hours per year. Today, they use 500.”
“The first flat screen TVs used twice as much power as their widebodied ancestors, but they have been getting dramatically more efficient in recent years, according to Tom Reddoch, executive director of energy efficiency at EPRI.”
“Appliances are expected to get even more efficient over the next two decades. An EPRI analysis predicts refrigeration will get 29 percent more efficient, space heating will get 24 percent more efficient and TVs and computers will get 22 percent more efficient. Energy needed for lighting will decline by half.”
From Salon. “At present, the United States obtains about 40 percent of its total energy supply from oil, far more than any other major economic power. While a burst housing bubble and financial shenanigans lay behind the Great Recession that began in 2008, it’s worth remembering that it also coincided with the beginning of a stratospheric rise in oil prices.”
“Despite the great debt debate in Washington, oil is a factor seldom mentioned when American indebtedness comes up. And yet the United States imports 50 percent to 60 percent of its oil supply, and with prices averaging at least $80 to $90 per barrel, we’re sending approximately $1 billion every day to foreign oil providers. These payments constitute the single biggest contribution to the country’s balance-of-payments deficit and so is a major source of the nation’s economic weakness.”
The Orange County Register. “On Thursday night, the president told a Democratic fundraiser in Washington that the Pass My Jobs Bill bill would create 1.9 million new jobs. What kind of jobs are created by this kind of magical thinking? Well, they’re ‘green jobs’ – and, if we know anything about ‘green jobs,’ it’s that they take a lot of green.”
“German taxpayers subsidize ‘green jobs’ in their wind-power industry to the tune of a quarter of a million dollars per worker per year: $250,000 per ‘green job’ would pay for a lot of real jobs, even in the European Union. Last year, it was revealed that the Spanish government paid $800,000 for every ‘green job’ on a solar panel assembly line. I had assumed carelessly that this must be a world record in terms of taxpayer subsidy per fraudulent ‘green job.’ But it turns out those cheapskate Spaniards with their lousy nickel-and-dime “green jobs” subsidy just weren’t thinking big. The Obama administration’s $38.6 billion ‘clean technology’ program was supposed to ‘create or save’ 65,000 jobs. Half the money has been spent – $17.2 billion – and we have 3,545 jobs to show for it. That works out to an impressive $4,851,904.09 per ‘green job.’ A world record! Take that, you loser Spaniards! USA! USA!”
The Washington Post. “Bank of America, which reported an $8.8 billion loss last quarter, plans 30,000 layoffs out of a workforce of nearly 300,000. The Postal Service hopes to shed 120,000 of its 653,000 jobs. Such churning of the labor market would free people for new, more productive jobs — except that to reduce unemployment, the economy needs a 3 percent growth rate, triple today’s rate.”
“Consumers of modest means are so strapped that Wal-Mart is reviving layaway purchases for the Christmas season. The Wall Street Journal reports that Procter & Gamble, which claims to have at least one product in 98 percent of American households, expects hard times for a long time: It is putting new emphasis on lower-priced products for low-income shoppers.”
“Just as Obama administration policies have delayed the housing market reaching a salutary bottom, Europe’s policies designed to delay Greece’s default on its debt are making that worse. If the contagion reaches Italy or Spain, we will learn how hollow Europe’s banks are, and how U.S. banks are entangled with them.”
“During the debt-ceiling debate, The New York Times was aghast that the GOP risked causing the nation to default on debt. Now two columnists back slow-motion default through inflation: The Federal Reserve should have ‘the deliberate goal of generating higher inflation to help alleviate debt problems’ (Paul Krugman) and ’sometimes we need inflation, and now is such a time’ (Floyd Norris).”
“Ken Rogoff, a Harvard economist, suggests ‘trying to achieve some modest deleveraging through moderate inflation of, say, 4 to 6 percent for several years.’ This is an antiseptic way of saying we should reduce the weight of our indebtedness by reducing the value of the dollars in which it is denominated. But does the nation need more uncertainty? And note Rogoff’s serene confidence in government’s ability to control such things — inflation will be fine-tuned within a narrow band, switched on for just a few years, then off, like a government-approved light bulb.”
“Unemployment has been at least 9 percent in 26 of the 30 months since the stimulus was passed. Michael Boskin of Stanford says that even if one charitably accepts the administration’s self-serving estimate of jobs ‘created or saved’ by the stimulus, each job cost $280,000. After more than half a billion stimulus dollars in loan guarantees, bankrupt Solyndra has shed nearly all of its more than 1,100 workers.”
“The economic policy the ‘federal family’ should adopt can be expressed: Get. Out. Of. The. Way.”
The Plain Dealer. “Time magazine’s Massimo Calabresi and Stephen Gandel used Lakewood — where city officials have been busy tearing down abandoned houses in order to nip the cancer of vacancy before it can spread — as an example of what other communities should be doing. It’s going to take demolition — lots of it, nationally — to help the housing market recover, they argue. And until housing rebounds, the overall economy is likely to lag as well.”
