Bjorn Channels Bastiat to Expose the "Green Jobs" Myth

Bjorn Lomborg, "the skeptical environmentalist," has a good piece in Slate taking on the myth of the "green energy" economy -- which should be required reading for all those who are still drinking the "new energy economy" Kool-aid peddled by one former Colorado governor. The claimed economic benefits are largely an illusion, Lomborg explains, which results from studying only one side of the ledger, a common mistake among economic illiterates.

Lomborg's analysis is straight out of Bastiat, the free-market pamphleteer and popularizer who explained this oft-made mistake in a famous essay, "What is seen and what is not seen." Wikipedia explains Bastiat's point as follows, for those who aren't inclined to read the essay:

"One of Bastiat's most important contributions to the field of economics was his admonition to the effect that good economic decisions can only be made by taking into account the "full picture." That is, economic truths should be arrived at by observing not only the immediate consequences – that is, benefits or liabilities – of an economic decision, but also by examining the long-term consequences. Additionally, one must examine the decision's effect not only on a single group of people (say candlemakers) or a single industry (say candles), but on all people and all industries in the society as a whole. As Bastiat famously put it, an economist must take into account both "What is Seen and What is Not Seen." Bastiat's "rule" was later expounded and developed by Henry Hazlitt in his work Economics in One Lesson, in which Hazlitt borrowed Bastiat's trenchant "Broken Window Fallacy" and went on to demonstrate how it applies to a wide variety of economic falsehoods."

The "green energy economy" is an illusion generated by looking at only one side of a multi-sided equation -- by focusing on the apparently-obvious benefits and beneficiaries, while ignoring the less-obvious costs and economic casualties that stem from a government-ordered reallocation of scarce resources. The economic illiterate applauds the new job being "created" in the wind turbine plant -- a job being subsidized by federal or state "incentives" -- but ignores the job that's destroyed at the coal mine or on the drilling rig, all because politicians decide that they know better than the market does about how to organize the energy sector.

True "economic literacy" requires an ability to see not just what seems obvious, but what is harder to see but is just as consequential. When you see the picture in totality, the "green jobs" delusion disappears.

Maybe We Should Call Him Slickenlooper

Microbrewmeister John Hickenlooper is touted as the most business-savvy of the gubernatorial candidates. It's this quality, above all others, that earned him the endorsement of The Colorado Springs Gazette and the city's Chamber of Commerce. But you can have success as a businessman while also being an economic illiterate, as Hick seems to be proving with his half-baked proposal to boost state subsidies for higher-ed through a "voluntary" hike in the severance tax paid by energy companies. The idea is naive in several ways.

The Ritter administration has been on a 4-year crusade to make life miserable for energy companies operating in Colorado: I'm not sure, if they ever return in force, that they'll be in the position or the mood to engage in education philanthropy at the state's urging. That's not their job. And they would be completely justified -- to echo one Rhode Island politician -- in telling the new governor to take his severance tax hike and shove it. The energy sector has no more obligation to help fund higher education than any other industry. It just seems like the most convenient cow to be milked. Why doesn't Hickenlooper ask micro-brewers to volunteer to pay a special "higher education" tax on every pint sold, if he's taking us down the road to coerced corporate "philanthropy"? The nexus between beer drinking and college students seems much stronger to me.

But here's the truly troubling part. Hickenlooper must understand, even vaguely, that these additional severance taxes wouldn't come out of the company's till, but will be funded by energy consumers -- meaning us -- in the form of higher energy prices. Energy companies may somehow be gulled into going along with the scheme, given the relish with which big government and big business bed down together (see the Clean Air-Clean Jobs Act), but they will really be "volunteering" to help keep higher ed fat and happy on behalf of their customers, who won't be polled on the matter. We'll be paying for this whether we volunteer or not.

What Hick really wants is to "volunteer" Colorado energy users to bankroll a higher ed establishment that refuses to economize, refuses to cut costs, refuses to change the way it operates. But he's afraid to ask us point blank, or to say that he wants to raise energy taxes, so he opts for this subterfuge.

And we all know what happens in this country when you don't "volunteer" to cooperate with politicians and regulators: those friendly overtures have a nasty habit of becoming threats, and then mandates. If this is what we can expect from Hick The Business Wiz, we may come to look back fondly on the Bill Ritter years.

Fed-Fighting Governor Served Wyoming Well

I've written before of my admiration for Wyoming Gov. Dave Freudenthal, a Democrat with a strong independent streak who did the Cowboy State proud by bucking Washington when it was in the state's best interests. I'm disappointed, therefore, to learn that he won't be seeking a third term. A non-conformist to the end, Freudenthal shrugged off any talk of a "legacy" at the announcement. "We don't do that legacy stuff," he said. "This legacy stuff is incredibly dangerous."

He does leave a legacy, though, which was probably best summed-up by State Sen. Eli Bebout, a former political rival who narrowly lost to Freudenthal in the 2002 governors race. "I think he really tried to represent Wyoming against the intrusiveness of the federal government, and he did that," Bebout said. That led to clashes with Washington over energy policy, reintroduced wolves, the sage grouse (which was granted some new federal protections this week, but not "threatened or "endangered" status, thank goodness) and, most famously, the Preble's meadow jumping mouse.

The mouse is listed as a protected federal species in Colorado, but not in Wyoming, not coincidently, thanks to Freudenthal's persistent efforts to fight the listing and expose the fraudulent science behind it. Maybe this absurd split decision never would have occurred if Colorado had a governor who was more protective of the state's interests, vis-a-vis the federal government.

And unlike Colorado Gov. Bill Ritter, who has waged regulatory war on the traditional energy sector, while touting "new energy economy" fantasies, Freudenthal managed to strike a sensible balance between environmental protection and economic development in Wyoming, leaving the state on a sound financial footing. "When we had huge energy development, he did the balancing act," said Sen. Kathryn Sessions, a Democrat from Cheyenne. "He tried to preserve those things that we hold most dear in this state -- our water, our air, our mountains, our open space," she told the Casper Star-Tribune, while serving as a "balancer between all of that and industry and money and all the stuff on the other side."

Freudenthal leaves quite a legacy, even if he characteristically would never brag on it. I hope for the Cowboy State that it finds a worthy successor.

Dangerous Liaisons

There are worse things than having a governor slip quietly out of sight, and out of the country, for a romantic rendezvous with a woman other than his wife, in my opinion. Arguably more alarming is when your governor is jetting off to that den of inequity, Washington D.C., to have flirtatious fundraising liaisons hosted by some of the city's most powerful lobbyists -- here and here -- and the only reason you find out about it is because a group of union goons is following the governor around, tossing a tantrum about something.

Mark Sanford's betrayal of his wife raises questions about his personal integrity, but has little relevance to the question of how well he functions as governor, in my opinion. Bill Ritter's dalliance with Washington lobbyists and out-of-state donors, by contrast, raises serious questions about his political integrity, and could directly impact the decisions he makes as a politician and a governor.

But Mark Sanford's dangerous liaison in Argentina likely will ruin his career, while Bill Ritter's fundraising trip to Washington will help his (unless his Colorado constituents begin to wonder why he's attracting so much interest and money from liberal Democrats out of state). I see some ironies in that.

Mark Sanford fell for a woman other than his wife. Bill Ritter is seducing, or being seduced by, out-of-state donors and organizations that expect some policy payoff for their political support. Sanford acted out of love and passion, apparently. Ritter acted out of lust for campaign contributions and his burning political ambition.

Which is the more serious breach of the public trust -- and which individual is the bigger reprobate -- in your view? Who's the bigger whore, in short? Just a question to ponder as we wander the foggy borderlands between personal and public morality.

Bill Ritter Frags Fort Carson

Bill Ritter flunked the "governorship test" Tuesday, when he signed a bill that bars the state of Colorado from leasing or selling state land for the future expansion of Fort Carson. It shows that he'll never evolve beyond the pupal stage of political development, because he's incapable of making a decision that's politically risky, in a partisan sense, but the right thing to do for the state as a whole. Choosing what's right for the whole over what's smart politically is the ultimate test of governorship, of "statesmanship." It's what separates the bona fide "leader" from the political climber. And Ritter just can't make the transition, as this signature shows.

This won't necessarily cost Ritter the governor's job. Plenty of garden variety politicos can rise through the ranks, if individuals with more integrity, more courage and a bigger vision don't step up to challenge them. But it does open another avenue of attack, and point of contrast, for Republicans in the state, if they can pull it together and take advantage of such missteps.

It's clearly a betrayal of Ritter's Inauguration Day pledge to represent the interests of all Coloradans, not just those who voted for him. And it lends a hollow ring to words he spoke only a few weeks ago, when he was asked about the hand-stenciled signs that have been popping up along I-25, asking "Why does Ritter Hate El Paso County?" "I'll put my attention that I've paid to El Paso County against any governor in my lifetime," Ritter bragged to The Gazette. "Every part of the state matters and counts. And it doesn't matter to me what the vote is."

This signature indicates otherwise, Governor.

I've already explained the political calculus behind Ritter's decision, here and here. No point in repeating myself. But some parts of the state clearly matter more to the governor than others. Paso County is expendable because our voter rolls are heavily Republican and he has little to lose by giving us the shaft. The governor was warned that endorsing this gratuitous slap at the Pentagon could put Fort Carson at risk, by sending anti-military signals back to Washington. The possible repercussions were made clear to him -- here, here and here -- in time to have drawn a veto. But he signed the bill anyway, even as the potential fallout was beginning to be felt.

There's no way to describe this but "reckless." It's something the governor should be reminded of each time he comes to town. And if Republicans can't use this to their advantage, when the next election season rolls around, they really are beyond hope.

U.S. Rep. Mike Coffman, who fought valiantly to keep Fort Carson's options open, has a typically-forceful piece on the subject in today's Denver Post. I recommend reading it -- and filing it away, against the day that Bill Ritter comes calling, asking for our votes.

The Politics of Pinon Canyon, Part 2

There's no more waffling, straddling, hedging, obfuscating or equivocating on U.S. Rep. John Salazar's part. He's declared that the U.S. Army will never make a compelling-enough case for Fort Carson expansion to win his approval, according to today's Pueblo Chieftain. Pinon Canyon expansion isn't going to happen while he's in Congress, Salazar says he told the Army's chief of staff, who had asked the congressman to keep an open mind on the issue. Salazar's mind is officially closed, apparently. End of story. Take your soldiers elsewhere to train. Preserving cattle culture in Southeastern Colorado must take precedent over national security and military preparedness, in his view.

Salazar also said -- and this might be the real news in the story -- that he's certain Gov. Bill Ritter, also a Democrat, will sign HB1317, a bill passed by the Colorado statehouse that attempts to erect yet another obstruction to expansion by barring the state from selling or even leasing state lands for that purpose. "I spoke with Governor Ritter this week and he indicated he will sign the state lands bill," Salazar told the newspaper -- which is a pretty definitive statement on the subject.

I also believe Ritter will sign the bill, for reasons presented in an earlier post. But this situation does present Republicans with a potential wedge issue to use against Salazar and Ritter when reelection time comes around. Former U.S. Rep. Scott McInnis, a Republican who once represented Salazar's district and is planning a run at Ritter in 2010, recently laid down a marker on the issue, by publicly urging Ritter to veto HB1317, in the interest of preserving future options and not sending anti-military signals back to Washington. If he can paint Ritter as just another anti-military Democrat, who's indifferent to the fate of important military bases (and jobs generators) in the state, McInnis might get some traction out of the situation.

How the issue plays for -- or against -- Salazar is a little more fuzzy. Clearly, Salazar is counting on his anti-expansion stance winning him votes in rural Southeastern Colorado and in the Democrat stronghold of Pueblo, where the Chieftain's editorial page has egged-on the obstructionism. But not a huge number of votes come from Southeastern Colorado. Pueblo can't be completely indifferent to the long-term fate of Fort Carson, due to proximity, and since many Carson soldiers live and shop there. And whether Salazar's pandering to anti-Army sentiment plays well in other parts of his sprawling district, especially the more conservative Western Slope, is an open question.

Remember: That was, until relatively recently, a Republican-leaning district, represented by McInnis. And the former congressman's continued open mind on the issue, in contrast to Salazar's now-adamant opposition to expansion, which could strike many of his constituents as unpatriotic or anti-military, could leave Salazar vulnerable if Republicans can put up a good challenger and frame the issue correctly.

It seems to me, early though it may be, that Pinon Canyon might be shaping up as a pivotal issue in at least two key Colorado races in 2010, if somewhat demoralized, on-the-defensive Republicans can bring effective fire to bear on the Democrats who seem to care more about cows than about combat-readiness.

Ritter Called Out on Questionable Jobs Claim

Like many a politician, Colorado Gov. Bill Ritter is prone to exaggerating the blessings his policies have bestowed on constituents. His over-selling of the state’s “new energy economy” – a windy catch-phrase Barack Obama has appropriated, without attribution – offers the best case in point. But thankfully there's at least one skeptic in the Colorado media who will bring the governor back down to earth when he embarks on these flights of fancy.

Ritter last week told energy conference attendees that his push for renewable energy and energy efficiency had directly or indirectly created 90,000 jobs in Colorado -- 90,000 -- citing an un-published report by the American Solar Energy Society. “We're quickly becoming a national and international hub for renewable energy," Ritter said of Colorado (though I've read or heard a lot of other governors make similar claims).

I’ve written before about this phantasm called “the new energy economy,” so I’m alert to Ritter's hucksterism on the issue. But apparently I wasn’t the only one taken back by the audacity of Ritter’s claim. Vincent Carroll, editorial page editor of the Rocky Mountain News, on Friday called Ritter out on the issue, in one of his always-incisive columns.

Here’s Carroll’s column, for readers who may have missed it.

"Gov. Bill Ritter made the startling claim this week that "the renewable energy industry is creating directly or indirectly 90,000 jobs" in Colorado - in other words, 20,000 more than the estimated employment associated with the booming oil and gas industry.

Is that possible?

Probably not, even if the figure does eventually appear in a study scheduled for release in a few weeks by the American Solar Energy Society in Boulder. Ritter got a sneak preview of the results - little wonder, as his office co-commissioned the research - which reinforced his New Energy Economy theme. So he started trumpeting the findings.

Let's put the figure of 90,000 jobs in perspective. It's nearly twice the number of cops, firefighters, security guards and prison guards in Colorado - combined. It's more than the combined total of every teacher in K-12 schools together with every lawyer and paralegal.

Ninety thousand is twice the waiters and waitresses in this state, twice the number of fast-food workers, and only 10,000 or so less than the total for all major health-care occupations (see the Bureau of Labor Statistics for the occupational employment totals).

Here's another reality check: After the legislature increased the renewable energy standard for utilities last year from 10 percent to 20 percent for 2020, the League of Conservation Voters - not known for soft-pedaling the impact of green energy - told its members that the measure would create a grand total of 4,100 jobs.

So what's up with the 90,000 claim?

For a clue, go to the American Solar Energy Society Web site and review a report called Renewable Energy and Energy Efficiency: Economic Drivers for the 21st Century. The first thing you'll realize is that Ritter defined the industry more narrowly than the study apparently will. It will measure jobs not only in renewable energy but in the "energy efficiency" industry, too - which casts a very wide net.

The report admits that the energy efficiency business is "much more nebulous and difficult to define" than renewables, but that doesn't stop it from trying. For openers, its definition includes "partial segments of large industries such as vehicles [those considered energy efficient], buildings, lighting, appliances, etc." And don't sneer at that "etc." because it covers a lot of ground, too, including "insulation sales" and the recycling industry.

Never mind that people have been blowing insulation into walls for decades: That activity has now been drafted into the New Energy Economy, where it can be displayed by politicians as a trophy of their economic leadership.

According to the solar energy society, "one in four jobs in 2030" could be in the renewable-energy and energy-efficiency industries. One in four! You could be an autoworker, plumber, architect, welder, bureaucrat, furnace salesperson - you name it - and apparently be counted.
"Do you have a green job?" the society asks. "You will."

Now, there is always a certain amount of stretching and reaching in a study whose purpose is to magnify the importance of a particular activity. If the authors become too greedy, though, the exercise begins to take on the features of a farce. Maybe there are 500 renewable-energy companies in Jefferson County, as the governor also said - three times the number of public schools - but it's going to be interesting to see just what that list includes.

Who knows, maybe you're in charge of one and didn't even know it."

Carroll is at something of a disadvantage, trying to critique a report that isn't out yet. But it's not hard to anticipate that the conclusions will be skewed to advance Ritter's agenda, given that it's a state-funded "study" conducted by what's obviously an advocacy group.

A guess the next question should be: Is this an appropriate use of taxpayer money?