If you have watched the Olympics at all, you have likely seen the Obama commercial promising:
"The hands that install roofs can also install solar panels. The hands
that build today's cars can also build the next generation of
fuel-efficient vehicles. Barack Obama [will] ... create 5 million jobs developing homegrown energy technologies."
A few reactions:
- Private individuals, not politicians, create jobs
- Job promises like this are never incremental, nor can they be. If the hands that build current SUV's can build electric cars instead, then we haven't added any new hands, we've just changed what they are working on.
- It strikes me that this is the broken windows fallacy writ large. In effect, Obama promises to make much of our perfectly-serviceable transportation and electrical generation installed base obsolete, requiring an enormous effort to replace it. But the resources to fund this huge new investment have to come from somewhere. Industries that flourish and grow under this government enforced shift in capital will be offset by those that are starved. Every other part of the economy will slow due either to higher taxes or higher prices (or both) that subsidize this effort. But since it is harder to find and count the latter than the former, it makes for a good, un-auditable political pledge
- I'll bet that 5 million number focus groups really well, but does it make any sense at all? Here are some current employment numbers for the US as of January, 2008:
|Construction of power generation facilities:||137,000|
|Power generation and supply:||399,000|
|Production of power gen. equipment||105,000|
Production of transportation equipment (planes, trains, autos, boats,
OK, so the total employment of all these industries that might be related to an alternate energy effort is about 2.28 million. So, to add 5 million incremental jobs would require tripling the size of the utility industry, tripling the size of the utility construction and equipment industry, tripling the size of the auto industry, tripling the size of the aircraft industry, and tripling the size of the shipbuilding industry. And even then we would be a bit short of Obama's number.