From Robert J. Samuelson, Washington Post, “Obama’s Economic Mirage“:

Together, health care and energy constitute about a quarter of the U.S. economy. If their costs increase, they will crowd out other spending. The president’s policies might, as he says, create high-paying “green” or medical jobs. But if so, they will destroy old jobs elsewhere. Think about it. If you spend more for gasoline or electricity — or for health insurance premiums — then you spend less on other things, from meals out to home repair. Jobs in those sectors suffer.

The prospect is that energy and health costs may rise without creating much gain in material benefits. That’s not economic “progress.” Rebating households’ higher energy costs (as some suggest) with tax cuts does not solve the problem of squeezed incomes. Given today’s huge and unsustainable budget deficits, some other tax would have to be raised or some other program cut.

Read the whole thing. But then, with a Samuelson column, that’s always good advice.

On the eve of destruction.

From Bloomberg, “Job Losses From Obama Green Stimulus Foreseen in Spanish Study“:

March 27 (Bloomberg) — 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.

U.S. President Barack Obama’s 2010 budget proposal contains about $20 billion in tax incentives for clean-energy programs. In Spain, where wind turbines provided 11 percent of power demand last year, generators earn rates as much as 11 times more for renewable energy compared with burning fossil fuels.

The premiums paid for solar, biomass, wave and wind power – - which are charged to consumers in their bills — translated into a $774,000 cost for each Spanish “green job” created since 2000, said Gabriel Calzada, an economics professor at the university and author of the report.

Bloomberg adds that Acerinox SA, the steel company, decided against expanding in Spain because of energy costs, choosing the United States and South Africa instead.

South Africa, the land of rolling blackouts? Spain must be really bad to make more South Africa attractive to heavy electricity consumers like a steel mill.

(Hat tip: Chris Horner.)

On Thursday, the White House blog previewed the Philadelphia meeting of the Adminstration’s Middle-Class Task Force with this post, “Green job spotlight: Energy auditor“:

Green jobs are going to be one of the primary ways the middle class benefits from the economic recovery. That’s why they’re the focus of the Middle Class Task Force’s first meeting tomorrow, in Philadelphia.

But even though the American Recovery and Reinvestment Act was just signed, there are previews of the impact all over the country.

The Philadelphia Inquirer today profiles Suechada Poynter, a 39-year-old woman who is a home energy auditor — she checks for air leaks and improperly functioning furnaces to make buildings more energy efficient — exactly the kind of job the ARRA will create:

“Green jobs have opened a lot of doors for a lot of lower-class people to get into this field,” said Poynter, a Thai immigrant and mother of seven who lives in Philadelphia’s Logan section and earns $11 an hour for her work.

“”I’d tell him to open more doors to get more people into this field,” she said. Passionate about the environment, she is studying architecture in college. “This is just the beginning of a bigger door,” she said.

Thing is, Ms. Poynter works for the Energy Coordinating Agency, a non-profit corporation. Worthy, socially useful work, but…

Are jobs with non-profits really the model on which to build a strong, resilient economy? How much stimulus does one get if “home energy auditor” is “exactly the kind of job the ARRA will create?”

David Leonhardt of the New York Times was on NPR this morning, discussing his Sunday NYT Magazine piece, “The Big Fix,” a rumination on the economy, industry and infrastructure.

“Green jobs” are no panacea, Leonhardt said this morning:

“They’ve oversold green jobs a little bit.”

He notes that the president has talked about green jobs “almost like they’re a free lunch — that they will bring a huge economic boom, and they’ll bring these environmental and political booms.”

Obama’s energy policy, according to Leonhardt, is actually aimed at making “dirty energy” more expensive to encourage the use of cleaner energy technology. “And raising the cost of dirty energy isn’t a great force for an economic boom,” he said.

The he turned to a discussion of the institutional and political forces that discourage economic growth a transformation, citing the work of Mancur Olson.

We’ve always appreciated Mancur Olson because he was a North Dakota farm kid who made it big in the field of economics. (New York Times obit.) In his Sunday Magazine piece, Leonhardt finds continued relevance in his works:

Olson, a University of Maryland professor who died in 1998, is one of those academics little known to the public but famous among his peers. His seminal work, “The Rise and Decline of Nations,” published in 1982, helped explain how stable, affluent societies tend to get in trouble. The book turns out to be a surprisingly useful guide to the current crisis.

In Olson’s telling, successful countries give rise to interest groups that accumulate more and more influence over time. Eventually, the groups become powerful enough to win government favors, in the form of new laws or friendly regulators. These favors allow the groups to benefit at the expense of everyone else; not only do they end up with a larger piece of the economy’s pie, but they do so in a way that keeps the pie from growing as much as it otherwise would. Trade barriers and tariffs are the classic example. They help the domestic manufacturer of a product at the expense of millions of consumers, who must pay high prices and choose from a limited selection of goods.

Olson’s book was short but sprawling, touching on everything from the Great Depression to the caste system in India. His primary case study was Great Britain in the decades after World War II. As an economic and military giant for more than two centuries, it had accumulated one of history’s great collections of interest groups — miners, financial traders and farmers, among others. These interest groups had so shackled Great Britain’s economy by the 1970s that its high unemployment and slow growth came to be known as “British disease.” (continue reading…)

Virginia Gov. Tim Kaine gave his State of the State address to the Legislature yesterday, an event reported in today’s Washington Post under the headlines, “Economic Recovery A Priority For Kaine — Governor Pushes For Green Jobs as Legislature Opens.”

“Green jobs” is a recurring theme for Governors and Legislatures as the 2009 sessions get under way across the country, an emphasis on transforming the economy in the pursuit of new employment, national leadership and a sense of purpose. (See the relevant passage from Kaine’s speech.)

It’s this decade’s “smart growth.”

Remember smart growth? A dozen years or so ago, governors and states were touting their smart growth agendas, claiming that a new emphasis on planning, urban density and environmental sensitivity would create a better world, with shorter commutes, more time for the family and simply a better, less-polluting way of life. Initiatives, planning groups, grants, spending and spending and spending resulted. It was a moment in the sun for land-use planners, academicians, and those who wanted to direct the economy away from the vicissitudes of the free market. (The National Governors Association was a fan, and Maryland Gov. Parris Glendening led the way, in the process creating a post-governor gig for himself.)

Now?

The advantage of smart growth as a political platform was that no one really knew what it meant, and its lack of specificity allowed politicians to claim victory no matter the outcome.

Today, “green jobs” is serving the same function for elected officials. Yes, we all want jobs, and good jobs, and environmentally sensitive jobs. Sustainability, etc., great!

But without a clear definition, “green jobs” lacks accountability, efficiency and ultimately public support. It could well prove itself to be a fad, doing nothing to improve the long-term competitiveness of the U.S. economy.