Today’s Washington Post acknowledges what everyone already knows, and what Spain learned the hard way as well — green-jobs subsidies are sinkholes. When Barack Obama loaded his 2009 Porkulus with nearly $40 billion in subsidies to the green-tech industry, he promised that it would produce an explosion of jobs in a new, green US economy, starting with 65,000 directly created from his largesse. With half of the money gone, how many jobs has Obama’s investment created?
A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show.
The program — designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans — has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies. …
Obama’s efforts to create green jobs are lagging behind expectations at a time of persistently high unemployment. Many economists say that because alternative-energy projects are so expensive and slow to ramp up, they are not the most efficient way to stimulate the economy.
That may be the understatement of the year. Even with Obama’s initial promise of 65,000 jobs created (or “saved,” which makes zero sense in this context), that would still come to $593,846 per job, which is hardly an efficient use of capital. If a private-sector business had that kind of capital, it could easily create five jobs from that amount with $100,000 in compensation each, with enough left over for a substantial profit margin.
But the actual results in this case are much worse. With $17.2 billion spent on these programs, the cost per actual job created comes to $4.853 million. That kind of capital could launch entire new businesses, let alone multiple jobs. Any company that ate through $4.853 million to create a job would shortly become a former company … kind of like Solyndra, where $535 million disappeared and took 1,000 jobs along with it.
Inefficiency isn’t the only problem with this model, either. Taxpayers will have to pay off the bonds created to give away this cash, which means the cost won’t just be the $4.853 million, but also the interest we have to pay on each $4.853 million over the next ten years or so. We also have to count the opportunity costs as well. Had we not borrowed this money to feed Obama’s green-jobs-explosion delusions, taxpayers in the future would have that capital to invest, expand and create businesses, and create jobs that make far more efficient use of the capital than $4.853 million per worker. We have not only failed in the present, we have set ourselves up for failure in the future as American capital has to get redirected into paying off the debt Obama hung on us for his green-jobs subsidy program.
That’s Obamanomics in a nutshell. Which is, by the way, exactly where it belongs.
Update: The WaPo article didn’t have the exact amount of funding that had gone out the door, so I used their “almost half” and split the allocation down the middle. Jim Hoft checked the DoE Loan Program website and found that the funding already spent amounted to $17.2 billion. That puts the cost per job at $4.853 million. I’ve changed the headline and the references in the post from $5.44 million.