http://online.wsj.com/article_email/SB10001424052702304778304576377910368783474-lMyQjAxMTAxMDEwMzExNDMyWj.html
***************
"The true spirit of conversation consists in building on another person's observation, not overturning it." (Edward Bulwer-Lytton)
***************
On average, the 54 economists in the current Wall Street Journal survey (published 6/13) expect the economy to add 2.2 million jobs over the next 12 months. That's the good news.
The problem with that projection is that there are 125,000 new entrants into the workforce every month (high school grads, college grads, etc.) and that's a minimum figure. Some estimates run as high as 150,000 new entrants per month. Let's take the low number. Over one year, there will be 1,500,000 new entrants into the U.S. workforce. So, that leaves the 2.2 million jobs created number only 700,000 positive relative to others looking for work. There are currently 14 million people unemployed.
Those same economists are estimating that the current unemployment rate will drop from 9.1% now to 8.2% in June of 2012. Based on what? That's a rhetorical question.
Within the survey itself, 21 economists said that the biggest risk of a "double-dip" recession was a slowdown in hiring. So, if the economists are even slightly off in the job projections cited above (which are, essentially a "push" anyway), we're there. Oh, and housing is doing what?
The consensus of the WSJ economists is that there will be a GDP "bounce-back" in the second half of 2011. Based on what? Again, a rhetorical question.
According to Lawrence Summers (Washington Post, 6/12/11), the United Sates is now half way to a lost economic decade: from the first quarter of 2006 to the first quarter of 2011, the U.S. economy's growth rate averaged less than 1% per year. During that time, the share of the population working has fallen from 63.1 to 58.4 percent, reducing the number of those with jobs by 10 million. According to Summers, "Huge numbers of new college graduates are moving back in with their parents this month because they have no job or means of support."
Summers states quite simply that, "It is false economy to defer infrastructure maintenance and replacement when 10-year interest rates are below 3 percent and construction unemployment approaches 20% ... Recent presidential directives regarding relaxation of inappropriate regulatory burdens should be rigorously implemented ..." He makes other recommendations as well and he's right about all of them. For me to say that Summers is right is difficult because he is so lacking in humility. But this is no time to indulge in personalities.
I'd like to close by building on Summers' reference to "relaxation of inappropriate regulatory burdens" and relate it to a WSJ Editorial Board article 6/13/11 entitled (quite appropriately) "The EPA's War on Jobs" (subtitle: "Coal is from Earth, Lisa Jackson is from mercury.").
As I've referenced in a prior post, Jeff Immelt's Presidential Jobs Council has made some recommendations on lifting hiring and strengthening the economy. Unfortunately, the EPA does not seem to have heard the message.
The EPA is currently conducting a campaign against coal-fired power and one of its most destructive weapons is a pending regulation to limit mercury and other hazardous air pollutants like dioxins or acid gases that power plants emit. The 946 page rule mandates that utilities install "maximum achievable control technology" under the Clean Air Act - it is the most expensive rule in the agency's history.
The rule has numerous errors including an overstatement of U.S. mercury emissions by a factor of 1,000!
It gets better: according to the EPA's own numbers, every dollar in direct benefits costs $1,847. The reason is that electric generation (including coal) results in negligible quantities of air pollutants like mercury. And, mercury is on the decline: in 2005, the entire U.S. coal output emitted 26% less than the EPA predicted.
The real goal of the EPA rule is to shut down fossil fuel electric power in the name of CLIMATE CHANGE. The consensus estimate in the private sector is that the utility rule will force the retirement of 60 0f the country's current 340 gigawatts of coal-fired capacity. If this happens, reliability downgrades will hit the South and Midwest where coal energy is concentrated.
So, what will that cost in jobs? 50,000 jobs will be lost directly and another 200,000 down the supply chain. Per the WSJ: "Astonishingly, EPA Administrator Lisa Jackson claimed in March that the utility rule is 'expected to create jobs' because 'it will increase demand for pollution control technology' and 'new workers' will be needed for that. In other words, the government should harm an industry and force it to ruin working assets so maybe other people can clean up the mess."
Again, from the WSJ: "Such theories help explain why the economic recovery and job creation are far weaker than they ought to be, but the good news is that even many Democrats are beginning to push back against the EPA's willful damage."
Is it not true that China is building one new coal-fired power plant per week? Let's give China credit for spending more on "clean energy" than any other country in the world, but they need power (and jobs) and they're pragmatic about it so they're building the coal fired plants now.
What are we doing? We're regulating.
W
Subscribe to:
Post Comments (Atom)
The fact remains that the EPA does not create the law. If Congress wants to repeal the Clean Air act, they can go ahead and try. Good luck with that. The industry-captured, Bush-era EPA refused to implement the MACT rule, were harshly rebuked for it by a 2008 Federal Appeals court ruling, and ordered by the court to implement it.
ReplyDeleteIt has been so long since we have seen it work properly but *this is what regulation looks like*.
Change the laws if you can, but I am glad that our govt is refusing to let industry fight rearguard actions to try to stop enforcement of what the Congress/people and the Courts have said must be done.
We have this elaborate system of checks and balances in which it takes an eternity to get anything done. Yet when something IS managed to be done and goes through all the approvals and upholdings etc but is seen to threaten the bottom line of an incredibly powerful and wealthy industry, we're just going to throw that law out or postpone it into oblivion?
What is the point of democratic institutions if not to do what is being done in this case?
McClain - it's hard to argue against your perspective on this. If I could translate your position into mine, I'd like to see regulation that pays attention to "jobs" and retraining. Legislation, and its enforcement, never does and we lose "generations" in the transition to new ways of doing things.
ReplyDeleteIt is no more complicated than different parts of government not sufficiently coordinating. Limited policy development resources rarely permit attention to such low profile issues.
ReplyDeleteGreat point! To me, there are two kinds of Presidents: those who "lead" and "those who don't." Then we add those who decide based on what will get them re-elected. The "leaders" make sure their cabinet departments cooperate on the issues that need cooperation. And, "leaders" lead by example.
ReplyDelete