My question for conservatives is this: Do you want the government deeply involved in the economy and picking winners and losers, or do you want to create a lot of jobs—paying $300 a month?
That is a question that arises out of this story of Evergreen Solar and its industry. The company took $43 million from the taxpayers of Massachusetts to develop a new solar technology. It created jobs in the Bay State, virtually all of which, three years later, are moving to China.
But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.
,,,Although solar energy still accounts for only a tiny fraction of American power production, declining prices and concerns about global warming give solar power a prominent place in United States plans for a clean energy future — even if critics say the federal government is still not doing enough to foster its adoption.
Beyond the issues of trade and jobs, solar power experts see broader implications. They say that after many years of relying on unstable governments in the Middle East for oil, the United States now looks likely to rely on China to tap energy from the sun.
Evergreen, in announcing its move to China, was unusually candid about its motives. Michael El-Hillow, the chief executive, said in a statement that his company had decided to close the Massachusetts factory in response to plunging prices for solar panels. World prices have fallen as much as two-thirds in the last three years — including a drop of 10 percent during last year’s fourth quarter alone.
Chinese manufacturers, Mr. El-Hillow said in the statement, have been able to push prices down sharply because they receive considerable help from the Chinese government and state-owned banks, and because manufacturing costs are generally lower in China.
“While the United States and other Western industrial economies are beneficiaries of rapidly declining installation costs of solar energy, we expect the United States will continue to be at a disadvantage from a manufacturing standpoint,” he said.
Apparently Massachusetts didn’t strike much of a bargain when negotiating the investment. The jobs were good but temporary. I suspect Gov. Bob McDonnell of Virginia, as probably did his predecessors Tim Kaine and Mark Warner, is giving away the farm in his attempt to lure businesses to the Commonwealth.
To American business the bottom line is the bottom line. We expect individual citizens to have a responsibility to this country and to make sacrifices but allow businesses to operate under a different set of rules: get as much as you can as fast as you can. Individual profit over national prosperity.
To be fair, however, when solar power becomes cheaper that fossil fuels, Americans will install it. The Wal-Mart generation seems to evaluate products based on price alone. And there’s not much we can do to stop it. Americans are not going to “buy American” if that means spending more, Nor can middle class Americans afford that patriotic luxury. So if Evergreen Solar stayed in Massachusetts and continued to grow jobs at $5,400 a month, it’s not likely solar power would become a viable business for the company when the Chinese can make it as well and much cheaper.
No amount of giveaways to businesses will reverse this economic axiom: cheaper sells better.
So it’s foolish for governments to invest in businesses in the vague, and as we saw with Evergreen, ephemeral attempt to create manufacturing jobs unless Americans are willing to work for $300 a month.
Better that governments invest in the businesses that can’t easily exported: the knowledge businesses. Education is the one investment that government, which is to say all of us collectively, should make to create jobs here. We need to develop the intellectual capital that can be exported to help other countries who may likely be more efficient, which is to say cheaper, than we can here.
Otherwise, more states and the federal government will be like Massachusetts, once the bloom is off the rose, hat in hand asking for its money back.
Michael McCarthy, a spokesman for Evergreen, said the company had already met 80 percent of the grant’s job creation target by employing up to 800 factory workers since 2008 and should owe little money to the state. Evergreen also retains about 100 research and administrative jobs in Massachusetts.
The company also received about $22 million in tax credits, and it will discuss those with Massachusetts, he said.
Good luck with that.