Employment woes puncture hope for green energy jobs

Bob Tippee
Editor

The latest failure of liberal employment remedies should encourage the oil and gas industry.

According to liberal theory, governments create jobs by spending money. History suggests otherwise.

When governments spend money to create jobs they move funds and workers into activities with limited or no ability to create wealth. Whatever economic goodness comes about proves unsustainable.

Governments must raise taxes to pay for the increased spending. Businesses, anticipating the new burden, trim spending. Then employment suffers as economic activity slows, and governments face new fiscal pressures.

While governments can employ many people, they can’t create jobs. New jobs require new wealth, which requires profits. Governments don’t generate profits. They employ people with money taxed away from profitable activities in the private sector. They don’t expand the workforce; they nationalize part of it.

In the latest demonstration of these effects, stimulus spending by the US government has failed spectacularly to create jobs.

As Rea S. Hederman Jr. and James Sherk of the Heritage Foundation point out in a Sept. 4 report, new job numbers refute promises by the Obama administration that spending would halt unemployment and lead to labor-market recovery by the third quarter.

According to the Bureau of Labor Statistics, the unemployment rate rose to 9.7% in August from 9.4% in July—well above the administration’s prediction of an 8% peak. The number of workers employed fell by 216,000.

BLS data further debunk recent administration claims about 500,000-1 million jobs created by stimulus spending. In fact, the share of the workforce represented by newly hired workers fell to 2.9% in June from 3.2% when Congress approved the spending spree in February, which was down from 3.8% before the recession began.

These failures do more than discredit liberal assumptions about governments and job creation. They also discolor those green jobs the administration touts in support of its state-centered energy program.

As a job creator, federal money channeled to noncommercial energy can be no better than broad stimulus spending. An important difference is the way hollow promises for green jobs become proposals for big tax hikes on oil and gas.

(Online Sept. 4, 2009; author’s e-mail: bobt@ogjonline.com)

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