The Everyday Economist

An IBD editorial hits the nail on the head:

The thinking is that we can radically alter our economy and at the same create millions of well-paying “green-collar jobs.” Even some business groups embrace the idea.

“The one thing that the Chamber of Commerce and the Sierra Club agree on,” notes energy lobbyist Scott Segal, “is that the answer to climate change is transformative technologies.”

Maybe so. But claims that spending on green technologies will create “millions” of new jobs, as both Hillary Clinton and Barack Obama have repeatedly claimed, are false.

Such assertions rest on fallacious economic logic that sounds good on the stump but in reality results in a lower standard of living and fewer jobs for all Americans.

When Bill Clinton recently suggested that “we just have to slow down our economy” to cut greenhouse gases, he accidentally uttered the truth: The brave, new “Green Society” being planned for us now in the nation’s capital would be better called the “Lean Society.”

As any economist will tell you, adopting new green technologies isn’t cost-free; it requires trade-offs. Money spent on curbing greenhouse gases is money that can’t be spent elsewhere, so opportunities will inevitably be lost.

Perhaps these legislators should read some Bastiat.

Jeff Tucker channels Bastiat:

…the first assumption that we live in a free-market world is simply not true. In fact, it is sheer fantasy. How is it that journalists can continually get away with asserting that the fantasy is true? How can informed writers continue to fob off on us the idea that we live in a laissez-faire world that can only be improved by just a bit of public tinkering?

The reason is that most of our daily experience in life is not with the Department of Labor or Interior or Education or Justice. It is with Home Depot, McDonald’s, Kroger, and Pizza Hut. Our lives are spent dealing with the commercial sector mostly, because it is visible and accessible, whereas the depredations of the state are mostly abstract, and its destructive effects mostly unseen. We don’t see the inventions left on the shelf, the products not imported due to quotas, the people not working because of minimum wage laws, etc.

Because of this, we are tempted to believe the unbelievable, namely that government serves the function only of a night watchman. And only by believing in such a fantasy can we possibly believe the second assumption, which is that the problems of our society are due the to the market economy, not to the government that has intervened in the market economy. [Emphasis added.]

With every disaster, there is always someone who makes a comment like this:

“In the odd nature of economic accounting, this will probably be a stimulus,” said Alan Gin, a University of San Diego economist. “There will be a huge amount of rebuilding in the next couple of years, financed by insurance payments.”

Somewhere, Bastiat is frowning.

HT: Mises.org

“In our days, certain sentimentalist schools reject as false all social science that does not go the length of establishing a system by means of which suffering may be banished from the world. They pass a severe judgment on Political Economy because it admits what it is impossible to deny, the existence of suffering. They go farther—they make Political Economy responsible for it. It is as if they were to attribute the frailty of our organs to the physician who makes them the object of his study.”

— Frederic Bastiat, Harmonies of Political Economy