So far, the number of jobs created through Barack Obama’s green-tech stimulus programs have remained far below administration estimates, and at a far higher cost. Instead of creating 65,000 jobs with $38.6 billion, the first half of the money has created less than 3600 jobs at a cost of $4.85 million per position. Investors Business Daily notes that even this looks like a bargain compared to the deals that the Department of Energy is about to approve with the remaining funds in its green-tech subsidy programs:
The Department of Energy is set on Thursday to announce whether nine federal loan guarantees amounting to $6.5 billion for green energy projects will get final approval.
The number of full-time, permanent jobs they would create? According to the DOE’s own figures, a grand total of 283. That is nearly $23 million per job.
It’s also a drop in the bucket toward the five million green jobs President Obama promised as a candidate in 2008.
The DoE estimates that these guarantees will also generate 3650 construction jobs as well, but those will only be temp jobs for facility expansions. Even counting those as full-time permanent jobs only brings the total number to 3,933 jobs — and at $6.5 billion, that still works out to a cost of $1.65 million per position created. (It would be absurd to count these as part of the overall benefit, especially since that capital may have gone towards business expansion now or in the future had government not seized the capital.)
Oh, and here’s some good news:
In the last week, the DOE has approved three loans totaling $624 million and creating 110 permanent jobs. But two other big loan projects totaling nearly $2 billion reportedly fell through.
So now we’re down to $5.67 million per job! That’s a mere quarter of the cost of the rest of the projects under consideration. I guess Obama’s efforts to cut costs have really begun paying off.
Now, if a private investor saw these figures, they’d laugh the applicant out of the room — and that’s the point we should remember, says Bruce McQuain:
Where’s the private investment? Why are these companies having to seek federal loan guarantees so they can get loans? If they’re viable, as Jerry Taylor points out, the private sector should be willing to invest in them.
Why aren’t they?
In fact, why, given that it appears the private sector is not willing to do so, is the DoE even considering these loans?
Because there’s an agenda at stake here. This isn’t about market viability or sound economics, it’s about trying to save an agenda that promised 5 million green jobs, remember.
And this is what you get. A failed Solyndra and 9 companies the private sector won’t invest in which may create 283 jobs. May. Government estimates about programs it supports have never been known to be overly optimistic, have they?
As I wrote yesterday, government doesn’t pick winners and losers. They pick losers in order to create the perception that they are competitive with the winners. Winners don’t need government subsidies to compete in a marketplace, and viable and competitive technologies attract investors on their own without government help.
We have been giving the green-tech sector public subsidies for decades while politicians engaged in social engineering promise an explosion of world-leading technological leadership and massive energy production all along. Solyndra’s not the first indication that green tech has been a bad bet for taxpayers. We should end all subsidies and favors for energy production — and many of the barriers to it as well — and let the market and investors demonstrate what technologies work best to provide the energy security our economy requires.