Coyote Blog

A:  Start with 10 million current jobs.

Kenneth Green argues that Obama's claim that obsoleting current infrastructure and requiring its replacement with new, greener infrastucture creates jobs is just the broken windows fallacy  (where have you heard anyone else say that?)

If Obama's energy promises rely on questionable science, they rely on even more questionable economics. We are to believe that replacing conventional energy sources (especially coal) with renewables (especially wind) will create 5 million new "green jobs." The hope is that armies of workers will be enlisted to build
tens of thousands of windmills; to manufacture and deploy solar-power installations; to harvest, transport, and process huge amounts of biofuel feedstock; and to string the power lines that will allow the U.S. power grid to incorporate a major expansion of intermittent energy.

Unfortunately, the idea of government "job creation" is a classic example of the broken window fallacy, which was explained by French economist Frédéric Bastiat way back in 1850. It is discouraging to think that nearly 160 years later, politicians still do not understand Bastiat's basic economic insight...

Now consider Obama's "green jobs" plan, which includes regulations, subsidies, and renewable-power mandates. The "broken windows" in this case would be lost jobs and lost capital in the coal, oil, gas, nuclear, and automobile industries. Currently, these industries directly employ more than 1 million people.
Conventional power plants would be closed, and massive amounts of energy infrastructure would be dismantled. After breaking these windows, the Obama plan would then create new jobs in the renewable
energy sector. The costs of replacing those windows would ultimately be passed on to taxpayers and energy consumers.