Green New Deal Would Cause a New Depression

Solar panelsThe legislation’s title is fitting. The original New Deal failed to create jobs and actually prolonged the Great Depression. This Green New Deal would be no different — it will destroy millions of jobs and push working-class Americans into poverty.

The bill seeks to transition America to nearly 100-percent renewable energy sources. Right now, those sources account for just 11 percent of America’s total energy consumption. To achieve this green future in just a decade, the proposed law would have to create huge subsidies for wind and solar power and place new restrictions on oil and natural gas drilling.

Such subsidies and restrictions have already been tried on much smaller, less ambitious, scales — yet they’ve still failed miserably.

Consider California. Back in 2015, the state passed a bill calling for a transition to 50 percent renewable energy by 2030. The Golden State required power plants to generate more electricity from green energy and lavished millions in subsidies on wind and solar companies.

California consumers are paying the price for those measures. From 2016 to 2017, electricity prices in California “rose three times more than they did in the rest of the United States,” according to policy group Environmental Progress. California now has the highest average electricity prices in the continental United States, according to my recent study from the Pacific Research Institute, a San Francisco-based think tank. The state also has the highest poverty rate and second-highest gas prices nationwide.

This big-government approach to fighting climate change isn’t merely expensive — it’s ineffective. States like West Virginia and Ohio, which haven’t enacted such policies, have actually seen greater emissions declines than the Golden State.

Germany’s renewable-energy push has similarly failed. “An average four-person household has to pay more than double for power in 2017 compared to 2000,” the head of a consumer lobbying group told German radio.

Despite spending billions to phase out fossil fuels and subsidize renewables, Germany is on track to miss both its European Union and national clean energy targets for 2020.

Ontario politicians’ green dreams have also turned into a nightmare for consumers. The Canadian province passed a law promoting green energy in 2009. From 2008 to 2016, electric prices spiked more than 70 percent — prices jumped 15 percent between 2015 and 2016 alone. The provincial legislature recently repealed the law.

The Green New Deal would replicate such failed schemes, but on a much grander scale.

If electricity prices surged here, working-class Americans would be clobbered. The poorest 20 percent of U.S. wage-earners spend nearly 10 percent of their income on electricity, while the richest 20 percent spend around 1 percent.

Fossil-fuels help keep energy bills affordable for working families. Natural gas production has surged roughly 50 percent in the past decade, causing electricity and cooking fuel prices to plummet. This production boom saved the average American family more than $1,300 in 2015.

The oil and gas sector also provides good jobs to working-class Americans. Oil and gas firms support over 10 million jobs across the country — the Green New Deal would eliminate nearly all these positions. By comparison, the Great Recession of 2007 to 2009 eliminated fewer than 9 million jobs.

The Green New Deal is an expensive exercise in futility. Its signature policies have already caused energy prices to soar from California to Canada. Scaling up these failed policies would wreck the U.S. economy and destroy millions of workers’ livelihoods.

This article was originally published by the Pacific Research Institute

Green New Deal Will Have Destructive Effect on Housing Market“The world is going to end in 12 years if we don’t address climate change.”  That’s what congressional newcomer Alexandria Ocasio-Cortez (D-NY) is saying about the latest existential threat to the planet (and the well-being of its inhabitants) – best known as global warming.  To back up her claims she recently presented a “Green New Deal” – a modern-day, environmentally friendly proxy for FDR’s Depression-era war on unemployment and poverty.  Yet, it’s nothing less than a plan to transform the U.S. society and economy as we know them.

The Green New Deal (“the Plan”) has sparked a nationwide controversy.  Maybe it’s for the clever “green” tapestry Ocasio-Cortez has hung on this mix of high-school-like platitudes and warmed-over Marxist ideals.  Maybe it’s the outrages, contentious designs or silliness expressed in the Plan, including proposals for federal compensation for even persons “unwilling to work” or to ban jet travel and flatulent cows by the end of the next decade.  Maybe it’s controversial because of the resolute defense Ocasio-Cortez – a controversial person herself – and other self-styled socialist Democrats have given to the Plan of late.

The Plan is also controversial for the things it says.  Like:

We spend billions every year . . . turning our planet uninhabitable while imposing the greatest harm on communities of color and the poor.  The Green New Deal will instead redirect that money to the real job creators who make our communities more . . . sustainable and secure at the same time.

Who are these “real job creators”, we’d like to know, and how are they making “our communities more secure”?

These controversies notwithstanding, the following concentrates just on what the Green New Deal does for the nation’s housing crisis, both indirectly and directly:

First, the Plan’s call for the availability of only renewable energy by 2030 will have a sweeping impact on housing affordability, particularly the Plan’s express prohibition against nuclear power and clean coal.  What remains – solar, hydro, geothermal and wind – by most sober estimates doesn’t generate nearly enough energy to power the nation.  So, at a minimum, much of what’s on the drawing board for new housing today won’t be viable under the Plan tomorrow.

Second is the profound dislocation of workers currently employed by a company or industry that will soon be forced to shut down due to the Plan’s scarcity of fossil fuels.  (Maybe this is partly why the Plan’s cost is estimated to run as high as $93 trillion over the next ten years).  And for the U.S., now having achieved the status of net exporter of energy – an important national accomplishment for a lot of reasons – the Plan would make that all but disappear.  This one aspect of the Clean New Deal will have an incalculable impact on employment in the country which, in turn, will be extraordinarily damaging to housing affordability.

Third, is the Plan’s answer to this dramatic rise in unemployment:  How about 20 million new public sector jobs – all funded by you and me – to close the wound?  And, to these job beneficiaries would also go a “living wage”.  Not surprisingly, the Plan stays away from determining a “living wage” or what qualifies as a bona fide living expense.  Take housing, for example.  Does the “living wage” recipient rent or own a home?  Or, would a family earning a “living wage” be able to decide what type of housing they dwell in on their own?  It seems quite likely this economic uncertainty will have a telling impact on housing markets.

Fourth, requirements of the Plan having a more direct impact on housing affordability are the energy-saving apparatuses – fixed or otherwise – to individual homes of the future.  For example, under the Plan, all existing buildings – commercial and residential, both – are envisioned to be physically upgraded to meet new energy standards.  That means retrofitting tens of billions of square feet of developed real estate over the next 10 to 12 years.  Even if it were possible to acquire the labor and materials to accomplish the task during that period of time, what would be the cost?  And, would local governments in California allow those costs to be passed through – in the form of rents – in the five million or so rental properties in the state?  What about new housing?

Fifth, since the new energy standards will require rooftop solar systems – much like California’s impending mandate for all new homes – how are the middle-income families living from paycheck to paycheck, barely making their mortgage payments each month, going to afford a dramatic cash hit to the family pocketbook?  It’s likely they cannot.  Nor can they afford the tax hike that’s sure to come to cover their lower-income neighbor’s higher rent or retrofitting expense when that household can’t pay.  What happens to them?

Finally, it’s been speculated that the “social justice” advocates will get the Plan’s framers to include tenant-friendly eviction protections and new rent controls.  Who’s covering those costs?

In the end, the Green New Deal will be so disruptive to the nation’s economy – and housing markets – that the trauma will weaken the country and further divide it with hostility and fear.  We, the people, don’t need it now or ever.

onsultant specializing in housing issues.

This article was originally published by Fox and Hounds Daily