Will another campaign to generate more money for government subsidies on green technology, especially electric vehicles, impress voters in 2012? Not exactly, according to today’s Rasmussen poll. Some may call it crony capitalism, Scott Rasmussen calls Obama’s policies “trickle-down environmentalism,” but either way it doesn’t impress voters at all:
As president, Obama called for putting 1 million electric cars on the road by 2015. He backed that call with more than $5 billion in taxpayer subsidies to jump-start the electric car industry. The president also put in place a program that gave $7,500 to anyone who would actually buy an electric car. Despite that support, sales were minimal in 2011, so his new budget proposes hiking that subsidy to $10,000 a car.
Voters are skeptical. Just 29 percent favor the $10,000 subsidies, while 58 percent are opposed. When told that reaching the goal of a million electric cars on the road could cost taxpayers $10 billion in subsidies, opposition reaches 65 percent. Voters are looking to reduce federal spending, not increase it.
But there’s an important detail suggesting the president’s plan could be an even bigger loser in the court of public opinion. The CEO of General Motors said recently that the average income of those buying Chevy’s electric Volt is approximately $170,000 a year. That puts electric car buyers in the same league as BMW buyers or those who drive a Mercedes-Benz. It may not be the 1 percent, but it qualifies in the top 7 percent of all American earners. That’s a more elite group than those who buy Cadillacs or Lexus cars.
Such trickle-down environmentalism is hardly appealing to voters. Seventy-three percent believe those who earn $150,000 or more should pay the full cost of the car themselves. Only 13 percent think a government subsidy is appropriate.
The Wall Street Journal takes a more in-depth look at the impact of government subsidies on job creation, and finds that voters’ skepticism is well-founded:
Companies have received more than $10 billion to create jobs and renewable energy by building wind farms, solar projects and other alternatives to oil and natural gas under section 1603 of the American Recovery and Reinvestment Act of 2009. The program expired in December, and President Barack Obama proposed last week that Congress revive it in the 2013 budget.
On federal applications, companies said they created more than 100,000 direct jobs at 1603-funded projects. But a Wall Street Journal investigation found evidence of far fewer. Some plants laid off workers. Others closed. …
The 1603 program gave $10.7 billion to 5,098 businesses for 31,540 projects, according to the Treasury Department. Recipients were generally reimbursed 30% of their costs after projects were finished.
Those businesses claimed on federal applications that they created 102,883 jobs directly. But the Journal found evidence of far fewer.
About 40% of the funding, $4.3 billion, went to 36 wind farms. During the peak of construction, they employed an average of 200 workers apiece—a total of roughly 7,200 jobs.
Now, those projects employ about 300 people, according to the companies and economic development officials. Their parent companies employ many more, both in the U.S. and abroad.
In Texas, the state comptroller estimated the Cedro Hill wind farm would create 531 jobs directly and indirectly during construction in 2010 and taper down to 44 jobs this year, according to computer models and information from developers.
But county officials said few locals were hired.
Here’s a cautionary tale from the Obama administration’s attempt to pick winners and losers in the energy markets with these subsidies:
Private-equity firm Wayzata Investment Partners created neither jobs nor energy with the $6.5 million it received for a plant in Thompson Falls, Mont. The facility had state permits to burn coal and wood for energy, and Wayzata had invested more than $20 million to comply with government rules, said a person familiar with the matter.
After finishing the work, this person said, Wayzata told Treasury officials the plant would burn only wood; coal-burning plants don’t qualify for 1603 money.
But Wayzata found it couldn’t make money operating the plant on just wood without investing millions of dollars more in equipment improvements, said three people with knowledge of the project.
Wayzata submitted its application to the Treasury Department and in June 2010 received its payment. By then, the plant had not produced power for months, regulatory filings show. The facility, which still doesn’t produce power, is for sale. Wayzata representatives declined to comment.
Well, Obama spent $6.5 million to get them to stop burning coal. And it worked! Too bad everyone lost their jobs, but hey, you have to break a few million eggs to make a coal-free omelette, or something.
Speaking of which, just where do people think they’ll get the electricity to run those million-plus electric vehicles? Michael Ramirez, the two-time Pulitzer Prize-winning editorial cartoonist for Investors Business Daily, reminds us that all of the new demand for electricity will need a power source capable of supplying it. And that means …
Also, be sure to check out Ramirez’ terrific collection of his works: Everyone Has the Right to My Opinion, which covers the entire breadth of Ramirez’ career, and it gives fascinating look at political history. Read my review here, and watch my interviews with Ramirez here and here. And don’t forget to check out the entire Investors.com site, which has now incorporated all of the former IBD Editorials, while individual investors still exist.