The Green Jobs Debacle

Since the bankruptcy of Solyndra, there have been a number of articles about the failure of president Obama's green jobs initiative. It seems that many "experts" are once again surprised that the initiative has not produced more jobs. Of course, this leads to the essential question: where do they find these experts?

It is a basic fact of any market economy that companies prosper and jobs are created when the products produced by those companies are ones that people want and will buy. Think of it this way: the federal government could give subsidies to create businesses that make 15 inch platform shoes, but those businesses will fail once the subsidies end since no sane person would buy the product. Further, the federal government could subsidize a process to produce bread that costs $50 per loaf. Here too, once the subsidies end, no one will buy the bread since it is too expensive. This basic truth is the main reason why the green jobs initiative has failed. Obviously, people want the energy produced from wind or solar panels, but the cost is just too high. For example, Solyndra with its half billion dollars of federal subsidies could not produce solar panels that could compete on a cost basis with those from China, and even the Chinese solar panels cannot compete on a cost basis in producing electricity when compared to coal or natural gas.

To put it in the simplest terms: even government subsidies cannot create an industry when that industry cannot compete in the market. Eventually, the subsidies run out and the jobs disappear.

Obama seems not to have understood this basic truth. He has tried to create "green jobs" that will not last. He has tried to create high speed rail lines that will run forever at a loss. He has pushed GM to build electric cars that are cost prohibitive. And the list goes on.

It would be nice to have a president who would know when the "experts" were pushing an idea like green jobs that clearly could never have worked. That, of course, requires a president with some experience in private business, or at least one who understands economics in the real world. Maybe we will get such a president after 2012.