The Magazine

Recycling to Nowhere

The green economy meets the facts.

Aug 27, 2012, Vol. 17, No. 46 • By IRWIN M. STELZER
Widget tooltip
Single Page Print Larger Text Smaller Text Alerts

Diana Furchtgott-Roth, former chief economist at the Department of Labor and now a senior fellow at the Manhattan Institute (as well as a former colleague of mine at the Hudson Institute), likes to tilt at windmills, and in her latest book she has an opportunity to do so—and at actual windmills, no less.

Diana Furchtgott-Roth

Diana Furchtgott-Roth

In this year’s revised edition of her earlier work, Women’s Figures, Furchtgott-Roth marshals reams of data in an effort to debunk “the myth of women as victims”—an undertaking hardly for the faint of heart. Regulating to Disaster demonstrates equal courage: She attempts, successfully, to show that the concept of “green jobs” is a fiction, that the 3.1 million such jobs the Obama administration claims to have created include a reclassification of employees at bicycle shops, drivers of hybrid buses, and manufacturers of paper cups with a “Save Energy” logo (but not of those without that imprint). 

By simply “relabeling existing jobs as ‘green,’ ” the administration has sought to justify massive subsidies to wind, solar, and other “green” ventures, subsidies that are labeled as loans but are, in fact, venture capital allocated by bureaucrats convinced they can pick winners. That these subsidies often end up in the hands of contributors to President Obama’s campaigns is no coincidence, as the hearings following the bankruptcy of Solyndra demonstrated. But this is not a purely partisan attack: Furchtgott-Roth points out that legislation to promote green jobs began with George W. Bush. There is blame enough to go around.

Furchtgott-Roth is blessed with opponents who have no understanding of cost/benefit analyses. They see only benefits, so desirable that to measure costs would be substituting bean-counting for policymaking. For them, the inefficiency with which bureaucrats allocate capital to favored green enterprises is not a problem worth considering, and they ignore studies showing that the Clean Air Act “inhibited net [economic] growth because it shifted investment into less dynamic industries at the expense of successful industries, which were penalized by higher energy costs,” resulting in a 3 percent reduction in GDP when the amendments to the act were fully implemented. 

Furchtgott-Roth doesn’t just tilt at windmills and deflate politicians’ absurd claims about the job-creating potential of subsidies to “green” enterprises that waste scarce resources. She takes on what she characterizes as a theology that provides its advocates with a feeling of moral superiority, akin to that felt by Jimmy Carter when he advised us to confront oil embargoes by turning down our thermostats in winter and donning sweaters, his version of the ever-comforting hair shirt. The theological nature of the support for green policies (most greens typically capitalize “Earth”) places a huge burden on anyone who wishes to do more than preach to the choir.

Furchtgott-Roth meets that burden. And it is no easy thing, given the high moral standing of the green machine among those who feel good when recycling (despite the fact that its costs often exceed its benefits), who can afford hybrid and electric-powered vehicles (after reaping substantial taxpayer-funded benefits), and who genuinely believe they are inhibiting what, to them, is the impending catastrophe of global warming.

When it comes to shale gas, however, her lack of experience with private-sector energy operations shows. Shale gas is produced by hydrofracturing (fracking), which some say might contaminate water supplies. “Some of these worries,” says Furchtgott-Roth, “while conscientious, are misguided.” While the “some” is generous—there might be others among the conscientious who are not misguided—it doesn’t go far enough, for she fails to apply to the private sector the standards she  rightly applies to error-prone bureaucrats. 

The rare but well-publicized cases of water-table contamination occurred due to poor casing jobs or improper drilling techniques and were immediately prosecuted by the government authorities. .  .  . Hydrofracturing itself is not the villain. Sloppy drilling and casing are problems, but such problems are neither inevitable nor pervasive.