Friday, 10 August 2012

Bob Lutz on the "green jobs" scam

Bob Lutz, the legendary automotive industry top executive, explains why "green jobs" are - and will remain - a failure: 

But as result of the belief that fossil fuels are bringing on global warming, governments, federal and state, have created a new job category called “green.” This category flies in the face of all accepted economic theory, in that the goal of this employment is not to increase economic efficiency (thereby providing lower costs, higher profitability, an increase in capital which, in turn, permits more investment and still more jobs) but, instead, to DISPLACE energy sources that are cheaper and more readily available.
“Green” job creation, almost always supported by massive government subsidies, does not further economic activity — it is actually harmful. Assigning massive amounts of capital, private or government, to a business or industry with a negative payback is a misallocation of resources, much like a car company spending hundreds of millions on a vehicle that either fails to sell, or sells at less than it costs to produce.
The wind turbine industry, as well as the current generation of solar cells, are prime examples of “new” industries created in the name of “sustainability.” With massive infusions of taxpayer capital, accompanied by mandates that energy companies have to use a certain percentage of the output “or else,” new “green” workers are hired. Their product costs more than the market price of traditional energy sources, so the economic effect is negative. Energy costs are the very core of a nation’s industrial competitiveness. High energy costs have what economists call a “multiplier effect”: they raise the downstream cost of every process in the system until the end product reaches the consumer. They suck wealth out of the system through lower sales, lower margins, reduced returns on investment and slower capital formation, which, in turn, reduces new investment and legitimate job creation. This is not how the private enterprise system is supposed to work. Centrally-directed investment and job creation into activities that produce negative economic value is the stuff of Socialism. As history has proven time and time again, it only works until all the money is gone. That doesn’t sound like “sustainability” to this writer.
Read the entire article here

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