David Brooks is trying to do his best to help the Romney campaign, but apparently he hasn’t been getting the memos. Brooks’ column today is a diatribe against measures to promote clean energy. (That would be socialist items like tax credits for retrofitting buildings, solar panels, or fuel efficient cars. The same sorts of policies that were promoted under President Bush, albeit on a smaller scale.)
There are a number of things that are not quite right in Brooks’ piece, but my favorite is Brooks’ assertion:
The biggest blow to green tech has come from the marketplace itself. Fossil fuel technology has advanced more quickly than renewables technology. People used to worry that the world would soon run out of oil, but few worry about that now. Shale gas, meanwhile, has become the current hot, revolutionary fuel of the future.
… the oil and gas sector is investing a whopping $490 billion a year in exploration.
Oh no, Governor Romney has been running around the country trying to tell people how President Obama’s horrible energy policy has blocked drilling for fossil fuels and sent gas prices soaring and now David Brooks is telling us that the great breakthroughs in fossil fuels and massive amounts of drilling has caused energy prices to plummet. Brooks story is that the progress in drilling for fossil fuels in the Obama years has made clean energy uncompetitive.
This is horrible, Brooks is 180 degrees at odds with the Romney message. Someone better get Brooks with the program, even ardent Republicans might find it difficult to accept that energy prices are both too high and too low.
Okay, but there’s much more fun in this Brooks column. His big gotcha indictment of Obama’s clean energy program as a failure is:
The U.S. government wasn’t the only one investing in renewables. Governments around the world were also doing it, and the result has been gigantic oversupply, a green tech bubble. Keith Bradsher of The Times reported earlier this month that China’s biggest solar panel makers are suffering losses of up to $1 for every $3 in sales. Panel prices have fallen by three-fourths since 2008. … The U.S. share of the global market, meanwhile, has fallen from 7 percent to 3 percent since 2008.
Wow, what a disaster! Prices of solar panels have fallen by three quarters in 4 years. Those people in the Obama administration must feel really stupid. They thought their clean energy program would make alternative energy competitive, but look now, prices of solar panels fell by 75 percent in four years.
Okay, I’m tempted to spend the rest of the day dumping ridicule here, but I trust folks get it. The point, Mr. Brooks, was to have the price of solar panels fall. A 75 percent drop in prices in just four years is amazing. To put this in terms that Republicans can understand, if gas prices had fallen by 75 percent from their 2008 peaks, we would be paying about $1 a gallon for gas today.
Part of Brooks’ point is that China seems to have even larger subsidies than the United States, thereby undercutting our industry. This raises some important trade issues that aren’t really different in solar energy than in other sectors.
China wants to pay lots of money to subsidize its exports of solar panels. Does it make sense for us to take advantage of cheap panels from China or are we better off blocking them and allowing our own industry to grow? I have not examined the issue closely enough to have a good answer, but the idea that China’s policy somehow undermines the merits of Obama’s clean energy program makes no more sense than claiming it was a mistake for the United States to have a steel industry if China began to massively subsidize its steel exports. This just doesn’t make any sense.
It should already be clear that this column is swinging for the fences and missing bigtime, but wait, there’s more:
Then, in 2008, Barack Obama seized upon green technology and decided to make it the centerpiece of his jobs program. During his presidential campaign he promised to create five million green tech jobs. Renewable energy has many virtues, but it is not a jobs program. Obama’s stimulus package set aside $90 billion for renewable energy loans and grants, but the number of actual jobs created has been small. Articles began to appear in the press of green technology grants that were costing $2 million per job created.
Why wouldn’t renewable energy create jobs? When people put solar panels on rooftops, aren’t those jobs? I think there’s some problem with how conservatives use the word “jobs.” They also constantly tell us that government doesn’t create jobs, so apparently teachers, firefighters and construction workers employed by the government don’t have “jobs.” Now we learn that people employed in renewable energy don’t have “jobs.” There seems to be some definitional issue here that is not easily resolved.
The logic that the rest of us used is that there were millions of workers left unemployed as a result of the collapse of the housing bubble. In the absence of government stimulus, these workers would be doing nothing. (Okay, I’m assuming that the confidence fairy would not magically reemploy them.) This means that the government could use spending to remploy them doing almost anything. One of the things that these workers could do is putting solar panels on roofs and retrofitting buildings. What’s the problem with this logic?
Also, let’s give Brooks and his friends in the Romney campaign a little kick in the face for telling us about “$90 billion for renewable energy loans and grants.” Umm, there is a big difference between loans and grants. if we want to just mix and match, we have had over $4 trillion in government loans and grants for housing in the Obama years. (Virtually all of that is lending guaranteed by Fannie and Freddie and the FHA.)
In fact, if we want to mix loans and grants we can talk about $16 trillion in loans and grants provided by the Fed, Treasury, and FDIC to the Wall Street crew to keep them from going belly up during the financial crisis. Using the Brooks-Romney methodology, President Obama committed an amount that was less than 0.6 percent of the Wall Street bailout to promoting clean energy and stopping global warming.
As far as Brooks’ line that:
articles began to appear in the press of green technology grants that were costing $2 million per job created
well, as we know, you can print pretty much anything you want these days. If Brooks has a specific study, I’ll take a look at it.
Okay, there’s more here, but it doesn’t get better. I should probably mention a cheap effort to sleaze Al Gore. Gore has invested in green technologies. The government has subsidized green technologies. Brooks produces zero evidence that Gore used his connections to benefit from these subsidies in a way that any other rich person could not have done. This doesn’t mean that Gore didn’t use connections. I have no idea whether he did or didn’t. I’m not generally inclined to defend Al Gore, but Brooks has nothing on the former VP. It’s just straight sleaze.
The long and short is that Obama’s investments in green energy have in fact been modest. They have produced some real dividends as Brooks inadvertently highlights with his complaint about the plunging price of solar panels. They have not revolutionized energy production, but what would we expect from an amount of loans and grants that is equal to 0.15 percent of GDP over the last four years and less than one fifth of what we spend each year on oil and gas exploration?
Dean Baker is co-director of the Center for Economy and Policy Research. He also writes a regular blog, Beat the Press, where this post originally appeared.