Jobs

Boehner’s Calculated ‘So Be It’

Date: February 16, 2011
Author: Bob Griendling
Categories: Democratic Message, Economic Policy, GOP message, Jobs

The Washington Post buried the story about Speaker Boehner’s remarks on the possible loss of federal jobs resulting from reduced spending. The story is inside the Metro section, probably because he was talking about government jobs, of which many are local. It’s a stretch but that’s the only reason I can see for its placement.

But Dana Milbank writes about the comment on the op-ed page and in it states a truth that should be part of this debate but this is the only time I’ve seen it stated.

Let’s assume that Boehner is not as heartless as his words sound. Let’s accept that he really believes, as he put it, that "if we reduce spending we’ll create a better environment for job creation in America." A more balanced budget would indeed improve the jobs market – in the long run.

But in the short run, the cuts Boehner and his caucus propose would cause a shock to the economy that would slow, if not reverse, the recovery. And however pure Boehner’s motives may be, the dirty truth is that a stall in the recovery would bring political benefits to the Republicans in the 2012 elections. It is in their political interests for unemployment to remain higher for the next two years. "So be it" is callous but rational.

The strategy is canny. First focus on discretionary spending where you can cut ideologically. Republicans are hoping to kill programs they don’t like before they tackle the real problem, entitlements. I’m sure their strategy then will be to cut entitlements for the poor and middle class while preserving them for the truly entitled.

A proven communications strategy is to accuse your opponent of something you think they will hit you with, so when they do, it seems calculated by your opponent and becomes easy to fight back against. Obama and Democrats ought now to start charging the GOP with killing jobs by cutting spending, so when it happens, you can say, “I told you so.” Because killing jobs is just what the GOP wants.

Lost Investments

Date: January 15, 2011
Author: Bob Griendling
Categories: Bob McDonnell, Economic Policy, Education, Jobs, Mark Warner, New York Times

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.

What President Should Say Tomorrow Night

Date: June 14, 2010
Author: Bob Griendling
Categories: Green energy, Jobs, Obama, Oil spill in Gulf Coast

Assuming the peg for this speech is the Gulf disaster, I think the president needs to follow the advice of Bill Maher from his last show of the season Friday night.  (see: http://videocafe.crooksandliars.com/node/37689).  (The relevant part starts at 2:10 into the video and continues to the end of the 6+ minute segment.)

This has bugged me for a long time.  Whenever we want to move forward and take meaningful steps to actually address and fix some of our problems, invariably someone says we can’t because of “jobs.”  This is Maher’s point.  According to Maher, there are about $58,000 oil industry jobs in Louisiana.  Sen. Mary Landrieu (D-La.) says there are 300,000 jobs related to the oil industry.  The Louisiana Mid-Continent Oil and Gas Association estimates that “each exploration and production job represents four supporting jobs in and around the region.” 

Meanwhile, 46 percent of Gulf Coast jobs are in tourism–http://www.enewspf.com/index.php/opinion/16748-oil-industry-holding-gulf-jobs-hostage, an industry that has taken a beating because of the spill.  It would be humming along nicely about this time of year if there were no oil drilling in the Gulf.  Don’t those jobs count?

You hear the same argument from lawmakers who pass appropriations bills for defense spending the Pentagon doesn’t want.  Congress says we must continue producing planes no one wants because otherwise jobs will be lost.

Moreover, the jobs “related” to the oil industry include caterers who service the oil rigs and many others that are dependent on those oil rig jobs but could service other energy jobs.  In other words, they are service related that don’t necessarily need to be servicing oil  jobs.

Which brings me back to Maher and the president’s speech.  Basically, Maher said, “fuck those jobs.”   That was a little inelegant, but he has a point that I wish President Obama would articulate tomorrow night.

We cannot continue to support programs that are destroying our environment as well as other industries such as fishing and tourism in the Gulf Coast just because jobs will be lost.  As Maher put it, “Maybe your job needs to go when in it starts killing things.”  Or in a more graphic comparison, he notes there are jobs in the kiddie porn industry, but we prosecute offenders even if jobs might be lost. 

What we need to do is create jobs in clean energy industries where those displaced oil rig workers can work in the green energy field.  I don’t know his source, but Maher says the 58,000 oil industry workers in Louisiana alone would require $5.5 billion to pay them their same salaries in the clean energy field.  Can’t their skills, such as they are, be used in clean energy?  Isn’t $5.5 billion a drop in the bucket to begin transforming our energy industries?

The president needs to make that case, and not only about the oil industry.  The same holds true for mining jobs, aircraft mechanics and other skilled labor jobs that can easily be adapted to new energy industries.

An oil spill of this proportion will not come again soon, but it will come.  Obama needs to make the argument that we need to prevent it by moving to green energy and taking the oil industry workers with it.  But we can’t save jobs that are hurting the country.  He needs to say that upfront.  It’s time for leadership, Mr. President.