Fool Me Twice

by Aaron Klein

  The Center for American Progress had also proposed a public Green Bank in May 2009. CAP’s John Podesta and Karen Kornbluh saw the creation of a Green Bank as critical to the progressive Big Green agenda.89 Such a bank, they wrote, “could lead to the steady and reliable creation of clean-energy jobs and would be a crucial element of the transition to a clean-energy economy.” The Green Bank would magically open credit markets and “motivate businesses to invest again” and would enable clean-energy technologies (wind, solar, geothermal, advanced biomass, and energy efficiency) to be “deployed on a large scale and become commercially viable at current electricity costs.” It would allow the U.S. to “lead the world in the transformation to a global economy powered by low-carbon energy,” Podesta and Kornbluh claimed.

  As a jobs creator, this plan is more pie in the sky. Moreover, in our chapter on “green energy,” we show in detail how the Obama administration’s green loan guarantees have, to date, been a supersized bust for taxpayers, while those receiving billions of dollars in federal backing have literally made off like bandits.

  The BlueGreen Alliance, in addition to a Green Bank, also wants a Green Manufacturing revolving loan fund. BGA claims this would create 680,000 manufacturing jobs and 1,972,000 additional jobs over five years.90 BGA also wants a new regulation—the National Renewable Electricity Standard—which would mandate production of 25 percent of the country’s electricity from renewable energy sources by 2025. BGA projects the creation of 850,000 jobs in existing manufacturing firms and even designates eight of the largest American states with the “greatest potential”: California, Illinois, Indiana, Michigan, New York, Ohio, Pennsylvania, and Wisconsin.

  The chairman of the U.S. Senate Energy and Natural Resources Committee, Sen. Jeff Bingaman (D-NM), introduced the Clean Energy Standard Act on March 2, 2012. Bingaman’s bill would inaugurate a Clean Energy Standard, or CES, beginning in 2015.91 Utilities “would need to sell a percentage of their electricity from clean energy sources, and each year would need to sell a slightly greater amount of clean energy.”92 Bingaman and Sen. Sam Brownback (R-KS) had introduced the same bill two years earlier. But Michael Williams, the legislative representative for the BGA, had complained in September 2010 that the previous bill “does not meet the targets laid out in our report [Building a Clean Energy Assembly Line], but understanding the difficulty of passing nearly anything this year, Bingaman-Brownback may just thread the needle as evidenced by the bill’s diverse and large number of cosponsors.”93

  In reality, this is a backdoor plan to introduce cap and trade legislation. The tipoff is: “All generators of clean energy would be given credits based upon their carbon emissions.”94 The BGA’s Williams added that there were “other pieces of legislation that can move with the CES. Home Star and Building Star are residential and commercial energy efficiency measures with strong bipartisan support.” The BGA proposal for residential energy efficiency includes a Weatherization Assistance Program (WAP), Home Star, and Rural Star. Home Star alone was predicted to generate 168,000 jobs based on a proposed $6 billion two-year rebate program.95 The Center for American Progress was yet more rapturous. It claimed passage of Home Star, Building Star, and Rural Star legislation would create 250,000 new jobs a year.96

  BGA calls for yet another federal mandate: the National Energy Efficiency Resource Standard. NEERS would “encourage more efficient generation, transmission, and use of electricity and natural gas,” et voila, would create 220,000 jobs over ten years. CAP’s plan imagines that just generating 20 percent of power using wind would create more than 500,000 jobs. But CAP does not provide a time frame.97

  Many more blueprints for “green jobs” have appeared since 2009. Most of them differ only in their imagination of the number of jobs they will create. In an Obama second term, you can be sure you would see and hear about various schemes tucked into another bill that could never pass Congress on their own. That is how we got all the lovely hidden aspects of ObamaCare.

  5

  IT’S BACK! FDR’S WORKS PROGRESS ADMINISTRATION AND OTHER OBAMA JOB NIGHTMARES

  THE NATION IS facing a jobs crisis unlike any in our history. This crisis goes far beyond any temporary fluctuations in official unemployment statistics.

  It begins with millions of American youth who are not even included in the standard employment indices. Some 6.7 million are “neither enrolled in school nor participating in the labor market.” They are not “investing in their human capital or earning income,” according to a January 2012 report of the White House Council for Community Solutions and the Corporation for National and Community Service.1 The bad news was only partially revealed in the report’s conclusion: in the 16–24 age group, at least 6.7 million (17 percent) are currently “opportunity youth.” Actually, the White House–generated crisis scenario is short of the mark. Bureau of Labor Statistics data for February 2012 showed teenage unemployment (partially a lower age bracket) at 24 percent, higher than the White House estimate by more than one-third.2

  Many of the “opportunity youth,” according to the administration’s report, have dropped out of high school or college and been unable to find work. Others have become involved in the criminal justice system. Some have mental or other health conditions. Others have care-giving responsibilities to their families. The White House report estimated a “chronic opportunity youth” population of approximately 3.4 million, as well as an “under-attached opportunity youth population” of about 3.3 million.

  In its own January 2012 report, the leading “progressive” think tank, the Center for American Progress, predicted that full-time national service programs could produce jobs for 60,000 youth.3 But given an “opportunity youth” population of 6.7 million, 60,000 jobs—even if taxpayers could afford to create them out of thin air—would hardly make a dent.

  One “progressive” economist, Heidi Shierlolz at the Economic Policy Institute, stated in September 2010 that in order to get “the national unemployment rate back to 5 percent, where it was before the 2008 downturn, the economy would be required to generate about 17 million jobs—or about 285,000 a month for five straight years.”4 A partnership of three progressive think tanks—the Economic Policy Institute, Demos, and the Century Foundation—working together under the rubric of Our Fiscal Security, produced a budget blueprint in November 2011 for “economic recovery and fiscal responsibility”:

  Jobs and economic growth are essential to our capacity to reduce deficits.

  [ … ]

  There should be no across-the-board spending reductions until the economy fully recovers. We believe there should be no consideration of overall spending reductions until unemployment has fallen to 6% and remained at or below that level for six months.5

  But if six months of continuous 6 percent unemployment—let alone the pre-downturn rate of 5 percent—is the goal, then that goal would never be reached and the spending would never end.

  EXPERTS BEG TO DIFFER

  Barack Obama claimed in his 2012 State of the Union address that jobs creation would be the driving force behind his second term. “Join me,” Obama said, “in a national commitment to train two million Americans with skills that will lead directly to a job.”6 In response, a warning was issued by David B. Muhlhausen, of the Heritage Foundation:

  Before Congress signs off on any new initiatives, we must recognize that President Obama wants to add several new programs on top of the 47 job-training programs already operated by the federal government. Further complicating the matter, the U.S. Government Accountability Office has concluded that there is little evidence that these programs are effective.7

  Muhlhausen, who has been expounding on the Job Corps scheme for at least five years, directs our attention to the abject failure of the federal government’s “flagship program for hard-to-employ youth.” Participants in the Job Corps, he wrote, earned fewer high school diplomas than non-participants; were no more likely to attend or complete college; earned only $22 more per week than a control
group; and only earned $0.22 more in hourly wages than the control group.8

  But the failure of federal jobs training is an old story. More than twenty-five years ago (in 1986) James Bovard—dubbed by the Wall Street Journal as the “roving inspector general of the modern State”9—penned an article about it for the Cato Institute.10 Bovard’s opening salvo looked back a further twenty-five years to the 1960s, to John F. Kennedy’s “New Frontier” and Lyndon Johnson’s “War on Poverty” programs. The results of these programs were brutal:

  Federal job-training programs have harmed the careers of millions of Americans, failed to impart valuable job skills to the poor, and squandered billions of dollars annually. For 25 years, government programs have warped work ethics, helped disillusion generations of disadvantaged youth, and deluged America with fraudulent statistics. After spending over a hundred billion dollars on manpower programs we have learned little or nothing: today’s programs merely repeat the mistakes of the early 1960s. Federal programs have reduced the incomes of millions of trainees and have helped create a growing underclass of permanently unemployed Americans.

  “Even worse, government-funded jobs training diminishes the available job pool for the private sector and damages the economy,” Bovard wrote.

  “Instead of adding new programs to an already bloated job training system,” Muhlhausen concluded, the president and Congress “should stop wasting taxpayer dollars by terminating these programs.”11

  WASTED “JOBS TRAINING,” WASTED “JOBS CREATING”

  A failed Keynesian concept even more harmful than government “jobs training” was described by the Cato Institute’s Thomas DiLorenzo at about the same time. In a February 1984 paper, The Myth of Government Job Creation,12 he wrote:

  The “cost” of government jobs programs, regardless of how they are financed, is therefore best viewed as the reduction of private sector production and the employment that production creates. Those who believe that government jobs programs can create jobs fail to realize or acknowledge that they also destroy jobs elsewhere in the economy. Government jobs programs alter the composition of jobs in the economy—more government employment, less private employment—but do not increase the number of jobs. Some may prefer a larger government sector relative to the private sector—and this is what government job programs give us—but it is misleading to pursue this objective under the guise of creating jobs.

  “More government employment and less private employment”—a progressive’s dream! And so, in the fourth component of its December 2009 American Jobs Plan, the progressives called for the government’s direct creation of jobs “by putting unemployed people to work in jobs that will benefit their communities.”13 “If the private sector can’t put people back to work, then the public sector must,” the Economic Policy Institute declared.

  Clearly, if unrestrained by Congress during a second term in office—or using the power of the presidency to circumvent Congress and issue executive orders—Obama would inevitably push these jobs programs or a variety of others like them.

  ONWARD, JOBS PROGRAMS, ONWARD

  As for terminating any existing programs, Democrats inside and outside Congress are adamantly opposed. In fact, the progressive Democrats’ game plan is to introduce, re-introduce, and cut and paste jobs legislation until—like the 2009 stimulus package and the gargantuan 2010 ObamaCare bill (“Let’s pass it and then we’ll find out what’s in it”)—they manage to force through more and more taxpayer-funded government-controlled jobs and entitlement programs.

  A good example of government-as-job-provider boosterism comes from Dr. Philip L. Harvey, professor of law and economics at Rutgers University, who champions the “direct creation” of jobs in his 2011 Demos report, Back to Work: A Public Jobs Proposal for Economic Recovery:

  The advantage of the direct job-creation strategy lies in its unique ability to serve the goals of anti-recessionary fiscal policy at the same time that it is serving the social welfare needs of jobless workers. There is no other anti-recession strategy that can do either of these things as well as a direct job-creation program, let alone combine them in a single programmatic initiative.14

  Clearly a Keynesian economist, Harvey claims that the direct creation of jobs by federal spending includes a “multiplier effect” of more jobs created per dollar because the government can target where jobs are needed at who needs them most. The government, he claims, can make jobs available immediately. And all this will be paid for without raising the federal deficit. Evidently Harvey envisions a revival of FDR’s New Deal. Participants would fulfill community needs such as “construction work (e.g., the rehabilitation of abandoned or substandard housing), conservation measures (e.g., caulking windows and doors in private dwellings), the construction of new affordable housing units, the improvement of existing public parks, the construction of new parks, and the beautification and maintenance of indoor and outdoor public spaces.” Then it could be expanded to improve “the quality of public services in areas such as health care, child care, education, recreation, elder care, and cultural enrichment.”

  And who would operate and oversee such massive programs for the necessary 8.2 million jobs Harvey projects would be required to reduce the unemployment rate to 4.5 percent? Government, government, government: federal, state, and local. Participants would be paid at “approximately the same wage that persons with similar qualifications and experience reasonably can expect to receive in the regular labor market.” But individuals would not be guaranteed the same wages they’d enjoyed in their last jobs. Rather, they would be paid the “prevailing wage for the positions they were offered based on their qualifications and experience.”

  In his estimation, Harvey includes employer-provided health insurance and child-care services for the workforce. He presumes participants would have access to affordable health insurance and all workers would be guaranteed paid sick leave. Additionally, Harvey states the “easiest way to guarantee access to affordable housing would be to turn the Section VIII housing voucher program (or its equivalent) into a legal entitlement”—at an estimated annual cost of about $50 billion. Ultimately laying bare his socialist roots, Harvey calls his wage policy nonessential, but “the equal pay for equal work principle argues in its favor.” New Dealers, he concludes, generally favored reducing the number of hours worked rather than reducing the hourly wage.

  CUT, PASTE, REGROUP, PUSH ON

  Not to worry. Progressives in Congress have all this covered.

  When the U.S. Senate voted on it, October 7, 2011, Barack Obama’s sweeping jobs bill—the American Jobs Act of 2011—failed to pass.15 Ten days later, October 17,16 Sen. Robert Menendez (D-NJ) reintroduced the first piece of legislation from the package, the $447 billion Teachers and First Responders Back to Work Act.17 But three days later, the Senate also voted this down.18

  Later that week, October 20, Democrats returned with another piece of the president’s defeated jobs bill and introduced the $60 billion Rebuild America Jobs Act. It would have provided “an infusion of funding to rebuild roads, bridges, airports and rail, and create a national infrastructure bank that would leverage private and public capital to finance projects.”19 On November 3, the Obama administration “strongly supported” passage of the bill, claiming it would “put hundreds of thousands of construction workers back on the job and modernize America’s crumbling infrastructure.”20 The bill would have poured an immediate $50 billion into U.S. highways, transit, rail, and aviation—but was defeated 51–49 in the Senate the same day.

  The August 2011 progressive blueprint of the BlueGreen Alliance (BGA)—Jobs21! Good Jobs for the 21st Century—uses similar language. It calls for investment in America’s highways, rail, transit systems, and biking and walking infrastructure to make America “more energy independent and globally competitive.” BGA claims 13,700 jobs would be created or sustained (more jobs “created or saved”) with a mere $1 billion investment. It also calls for a whopping six-year, $550 billion reau
thorization bill to create a total of 7.7 million jobs.21 (It’s unclear how that multiplier works.) BGA also calls for a $1 billion investment to create or sustain 20,000 jobs for high-speed passenger and freight rail—and to reduce oil dependence and pollution.

  BGA’s claims are based on a group of progressive reports, principally The Job Impact of Transportation Reauthorization: Research and Ideas for Shared Prosperity, by Ethan Pollack of the Economic Policy Institute (June 2010), as well as another June 2010 report by Pollack, a May 2010 report by the Economic Policy Institute and the BlueGreen Alliance, and an October 2010 report by EPI’s Pollack and Becky Thiess.

  BULLET TRAINS TO BANKRUPTCY

  In the original “stimulus” bill, Obama included $8 billion for high-speed rail and called for $1 billion per year for five years in his proposed budget to get his projects “off the ground.”22 Grant awards were designated to lay the “groundwork for 13 new, large-scale high-speed rail corridors across the country … part of a total of 31 states receiving investments, including smaller projects and planning work that will help lay the groundwork for future high-speed intercity rail service,” as the White House claimed in April 2009.23

  Grant awards were not announced until nine months later (January 28, 2010). Almost two years after that, in November 2011, the U.S. Department of Transportation announced that 2012 was “shaping up to be the year of significant high-speed activity.” Contracts had been let by states for design work, planning work, construction materials, and supplies.24

  A closer look at one of these high-speed rail projects is instructive.

  Stanford University economist Thomas Sowell wrote at the end of January 2012 about California’s prospective “Bridge to Nowhere.”25 Sowell pointed to Japan’s famous high-speed rail system between Tokyo and Osaka, in “one of the most densely populated countries in the world.” The “bullet train” carries 130 million riders a year. He compares this to the proposed first leg of California’s system, the route between Fresno and Bakersfield. Tokyo has a population three times that of San Francisco and Los Angeles combined. Fresno and Bakersfield are much smaller communities in the agricultural San Joaquin Valley. The 2010 population for all of San Joaquin County was 685,306.26 “You can bet the rent money that high-speed rail traffic between Fresno and Bakersfield will never come within shouting distance of covering the operating costs,” Sowell wrote. “Some people have analogized putting such a rail line between these two towns to the infamous ‘bridge to nowhere’ in Alaska.”