Tradeoffs

Robert Samuelson spikes the green energy kool-aid with some truth:

Together, health care and energy constitute about a quarter of the U.S. economy. If their costs increase, they will crowd out other spending. The president's policies might, as he says, create high-paying "green" or medical jobs. But if so, they will destroy old jobs elsewhere. Think about it. If you spend more for gasoline or electricity -- or for health insurance premiums -- then you spend less on other things, from meals out to home repair. Jobs in those sectors suffer.

The prospect is that energy and health costs may rise without creating much gain in material benefits. That's not economic "progress." To rebate households' higher energy costs (as some suggest) with tax cuts does not solve the problem of squeezed incomes. Given today's huge and unsustainable budget deficits, some other tax would have to be raised or some other program cut.

...We cannot build a productive economy on the foundations of health care and "green" energy. These programs would create burdens for many, benefits for some. Indeed, their weaknesses may feed on each other, as higher health spending requires more taxes that are satisfied by stiffer terms for "cap-and-trade." We clearly need changes in these areas: ways to check wasteful health spending and promote efficient energy use. I have long advocated a gasoline tax on national security grounds. But Obama's vision for economic renewal is mostly a self-serving mirage.

Public policy is mostly about trade-offs. To get something you have to give something else up. More spending on green energy jobs -- a rather nebulous term -- means less money for other things. Increasing productivity -- doing more with less -- is the secret to prosperity. Green energy is the opposite, doing the same -- or less -- with more.

Scott Grannis, meanwhile, notes that increased energy efficiency corresponds with rising imports of foreign oil. Anyone who thinks that more fuel efficient cars will produce the energy independence politicians keep promising ought to think again.