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The Hands That Currently Produce Things People Actually Want Can Also Fix Broken Windows

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, etc)         1,637,000

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.

Posted on August 20, 2008 at 09:46 AM | Permalink


you have left out the vast number of new lobbying and administrative jobs "created" by a cap and trade system for carbon emissions. i shudder to imagine how many folks that will "employ"...

Posted by: morganovich | Aug 20, 2008 10:10:17 AM

I love this title

Posted by: OneEyedMan | Aug 20, 2008 10:12:41 AM

One notes that if you triple the number of people employed in the utilities sector, then unless we get an immediate commensurate increase in the amount of energy being used, then the cost of energy will have to go up in order to pay all these people! Unless we pay everyone 1/3 as much as we pay them now.

Obama says, "I will raise your energy prices! Vote for me!"

alternately, Obama says to the utility workers, "Vote for me! I will cut your wages by 67%!"

Posted by: Sameer Parekh | Aug 20, 2008 11:02:13 AM

Ah, but what will little Mrs C say if her putsch against O works in Denver? She will, won't she?

Posted by: dearieme | Aug 20, 2008 11:20:34 AM

This Obama commercial always makes me angry since it is based on the assumption that evil capitalists are stupid and can't see a wonderful business opportunity, only the enlightened government can see the proper way to configure the economy.

I've decided that I can summarize Obama's policies in three simple words:

Tax. Spend. Dictate.

Every one of his proposals falls into one or more of these categories.

Posted by: James Howe | Aug 20, 2008 2:33:22 PM

You're forgetting one thing: when a politician says he's going to create 100 jobs, what he usually means is that he's used an economic model (with tons of feedback) to calculate that what he intends to do will create X jobs.

If you create enough incentives for a company to hire 50 solar-panel-makers, the factory will need 5 janitors, so you're up to 55. 55 people will need 8 day-care workers to watch the kids. 63 people will need 3 hairdressers, and so on. (and, like I said, there's eventually feedback)

This is how a boondoggle "creates" hundreds or thousands of jobs.

Posted by: SuperMike | Aug 20, 2008 6:39:35 PM

Putting aside what these 5 million "new" jobs would or could be, adding 5 million people to the employment rolls would mean the unemployment rate would go from the current 5.5% to 2.3% (BLS labor numbers say there are 154,534,000 people in the labor force, 8,487,000 of whom are unemployed). A 2.3% unemployment rate is not only totally unrealistic, if it did happen inflation would be astronomical.

Posted by: James Burns | Aug 20, 2008 6:48:09 PM

You might also point out, as Tim Worstall (http://timworstall.com/) keeps hammering, that jobs are cost, not a benefit. What we need is someone to "develop homegrown energy technologies." and create no jobs whatever and even better, to destroy existing jobs. I want my energy for fewer man-hours.

Someone like Gates or Jobs might do it, and we'll pay them a kazillion dollars for it, they'll have earned it, and no government will ever come close.

Posted by: BlacquesJacquesShellacques | Aug 21, 2008 8:06:02 AM


"when a politician says he's going to create 100 jobs, what he usually means is that he's used an economic model"

Don't think so. After all the time-tested "just pull a number out of my ass" method is proven to work with journalists.

Posted by: Miklos Hollender | Aug 21, 2008 8:12:51 AM

The minds that can assemble the electronics necessary to create a TV can also assemble the electronics neccessary to have a TiVo. As a result, even though I've watched almost all of the olympics that are televised, I have seen almost none of the commercials - including those from Obama & McCain.

Posted by: mjh | Aug 21, 2008 12:16:28 PM

Apparently Obama's attempt to suggest alternatives to "our perfectly-serviceable transportation and electrical generation installed base" is far too costly.

On the other hand, for the U.S. to spend $3 trillion to enrich Halliburton and Blackwater "securing" petroleum in Iraq, and many billions more guarding pipelines in Ecuador, Turkey, etc... Well, that's OK. (The $3 trillion figure is a published estimate of the present cost of Iraq plus the future cost to restock the military, and treat the wounded.)

Does the phrase "straining at a gnat, swallowing a camel" sound familiar?

Aside from Iraq, the U.S. currently spends more than the rest of the world combined on its military, and has troops stationed in 144 nations overseas.

But that's a "perfectly serviceable" thing to do because it has nothing to do with the "installed base's" needs.... Yeah, that's the ticket! Gosh, why would we ever consider any alternative?! Make mine petroleum, barkeep!

Ya gotta love the logic of the addict. It's like those epicycles that explained how the sun really rotates around the earth. ("Take that, Mr. Copernicus! And another double of light Saudi crude over here, beertender!")

Our "perfectly serviceable" existing petroleum-dependent energy system has meant that in the last 40 years, petroleum imports have risen from 30% to nearly 70% of U.S. domestic consumption (and the price has gone from $1.75 to $120+ per barrel).... But pay no attention to the man behind the curtain, I say!

And land 'o goshen! How horrifying that a politician paints an excessively rosy picture of his program -- something that W or John McCain would never do! Shocking! Next: the pope is really Catholic! (film at 11)

Newer energy sources are in their infancy, relatively speaking, but we must demand these infants take on the time-tested conventional heavyweights in the ring, and feign disappointment when they fail! Damn those environmentalists! They must hate America!

EROEI (energy return on energy invested) indicates energy content for various sources. Middle East oil (or East Texas crude in the early days) can deliver as much as 100 times the energy spent in drilling for and refining it. Even the very-hard-to-get offshore oil in the Gulf delivers something like six or seven times the energy it costs to retrieve it.

While conservation can be competitive with conventional sources, renewable technologies like solar and wind can only produce 4 or 5 times the energy spent to produce them. Of course petroleum embodies millenia of solar and geological processes, so drilling for oil is only a small part of what actually produces petroleum's energy. On the other hand, renewables have to recover a much briefer period's energy. The real surprise is not that solar is so expensive, it's that oil is so cheap.

Mr. Coyote continues: "private individuals, not politicians, create jobs" ... OK, then what was the Manhattan Project? Or the space program (the origin of commercially-available silicon chips -- and yes, Fairchild produced them, but wouldn't had the government not bought them). Or Darpanet? (the origin of the internet) Or farm-to-market roads and interstate highways? Or the TVA? Sorry, this is misdirection, or deception, or both.

It's roughly like saying "lower taxes increase collections" -- the Grover Norquist lie. And pay no attention to those deficits! The truth: In the last 40 years, the "conservatives" have been dismantling the public realm, and "lowering" taxes (after lowering the rates on the top brackets, Reagan signed eight regressive tax increases to cover the enormous revenue losses), and -- with the exception of the Clinton years -- the U.S. has seen record-breaking deficits, and an increasing divergence of rich and poor.

Those of us who have passed puberty know that deficits are just taxes you haven't paid yet. If we take that into account, the so-called "tax fighters" on the right have raised taxes exponentially more than "liberals."

But pay no attention to that, I tell you! Be indignant that Obama promises a different path to regain some domestic control over the energy our economy needs! How dare he!

What's omitted from this post is awfully telling, too. Conservation -- say increasing the mileage standards for autos a couple of MPGs -- is certainly not a stretch, technologically speaking. It would deliver more oil, sooner than drilling in ANWR or offshore with one difference -- the oil it "produced" would never run out.

But I guess it's not bad enough that environmentally sensitive areas have to suffer (ocean dead zones are also up exponentially), or that our kids have to go die in some stinking desert because we need the oil for our Hummers. And it's not bad enough that the trends for imports are worse and worse, helped insignificantly by drilling in Alaska or offshore.

Nope! Indignation at the incompetence of government is what to attend to. And OK, McCain has eight homes, was one of the Keating Five, and has a private jet, but Obama is the elitist!

Junkie logic at its finest! Is there an oil-oholics anonymous meeting nearby?

Posted by: Yoshidad | Aug 22, 2008 7:40:38 AM


Have you never been told that false dichotomies are fallacious arguments?

"Apparently Obama's attempt to suggest alternatives to "our perfectly-serviceable transportation and electrical generation installed base" is far too costly.

On the other hand, for the U.S. to spend $3 trillion to enrich Halliburton and Blackwater "securing" petroleum in Iraq, and many billions more guarding pipelines in Ecuador, Turkey, etc... Well, that's OK."

Then there is your post hoc ergo propter hoc argument...

"Our "perfectly serviceable" existing petroleum-dependent energy system has meant that in the last 40 years, petroleum imports have risen from 30% to nearly 70% of U.S. domestic consumption (and the price has gone from $1.75 to $120+ per barrel).... "

Yoshi you are the definition of junk logic.

Posted by: Jay | Aug 22, 2008 10:12:49 AM

Not to mention that apparently government enriching First Solar is ok, but enriching Haliburton is evil.

Consistency is not one of your finer points.

Posted by: Jay | Aug 22, 2008 10:15:37 AM

Just shut the hell up already Yoshalist.

You’re a fucking idiot. Nearly everything you say is wrong.

Posted by: Mesa Econoguy | Aug 22, 2008 7:44:17 PM

Yoshi, the awful stabs at humor ("Make mine petroleum, barkeep!," "And land 'o goshen!," "Next: the pope is really Catholic! (film at 11)," "Is there an oil-oholics anonymous meeting nearby?," etc) you sprinkle throughout your posts makes reading them an absolutely brutal ordeal. Usually the rest of your missives are dumb enough to make me want to smash my head against a wall, but these bits of obnoxious, cutesy, tongue-in-cheek drivel you feel like inserting EVERY OTHER FUCKING SENTENCE are really sickening; it actually makes my stomach turn to know that they were written by a grown man not stricken with down syndrome (debatable). And yes, I have absolutely nothing to add to the actual discussion at hand, and am really writing for no other purpose than to tell you that you suck and I hate you.
To the rest - I'm sorry, I've been a reader of this blog for a while now and I just can't take it anymore - I think this is honestly the first time I've stooped to this sort of teenage message board flaming, so congratulations, Yoshi.

Posted by: AME | Aug 23, 2008 11:30:43 PM

I think Obama had two points... one to emphasize an interest in new energy and two, to encourage us to think about how to get people who make things involved in making a new energy future. The 5 million is kind of like Republicans and the deficits... who cares how big that number really is, I mean really... it's just a number. Stop worrying about it.

I would also agree that politicians don't create jobs, but then it's also true, that without a nation of laws and rules most businesses would be hopeless. I am always impressed by people who take advantage of the latest technologies, new laws, and existing regulations to start a successful business, and then think that they did it all themselves. No credit to the past efforts or others, or thankfulness to the country they live in, just whining about "government" (everyone's favorite abstract concept of blame)

Oh well, carry on with your encouraging words. Everyone should be so lucky to live in the nurturing cocoon of the the Internet's like minded communities.

Posted by: William | Aug 26, 2008 8:08:37 PM

Just amazing, who are you people? What are you all just flying around Arizona with one of the idiot mccains cause "a private plane is really the only way to get around Arizona"? More jobs means more services means more money coming in and more money going out,means I can raise my rents on my Apartment building,means I can hire guys to work on things, means the schools,god forbid,actually get better and I don't have to learn Chinese....geez,do any of you KNOW how things really get done?You all need to come to Chicago and see how things really work instead of making stuff up and then juggling numbers to prove it.You all sound like a bunch of republicans, next thing I'll be hearing is how McCoot's VP pick is smart and savvy,with two whole years under her belt managing a half a million drunken eskimos,crazy mountain men with lots of guns and frozen meat and their litters.Oh,right,she got some cops fired and lies a lot and is under investigation so big deal,what,she thinks that makes her big time? My mayor builds big things,moves 6 million people around everyday and keeps our streets and boulevards safe,beautiful and clean all the time.I would like to see either of those folks come here from Alaska or Arizona and get anything done at all.McCains face would finally explode and the beauty queen would have a nervous breakdown and go running back to Todd and his snowmobile.A hockey mom running my country,indeed.She needs to shoot someone in the face and lie under oath to get her "street creds".A hockey mom? Wow......

Posted by: gp | Aug 31, 2008 11:25:10 PM

"My mayor builds big things,moves 6 million people around everyday and keeps our streets and boulevards safe,beautiful and clean all the time"

You think that is good? The boss of my town coordinates toy production year round and then in one single night he jumps in his magical sleigh and delivers toys to all the boys and girls and moms and dads and single people too. 6 million? You ain't got nothing on my man S-Dawg.

I don't care how fancy your "mayor" is down there. Up here at the North Pole, our Mayor could kick your mayor's ass any day of the week. I don't care if your mayor is more magical than ours, I got my Glock 9 that says otherwise. whats up? yeah, i said what's up? He'll be seein' you and your comic book hero mayor in a few more days. We know who's naughty and nice in Chi-Town.

North Ptown Soldiaz

Posted by: AngryElf | Dec 8, 2008 2:50:24 PM

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