By now, everyone who pays attention to politics has heard of the Green New Deal being proposed by the left-end of the Democratic Party. Being flogged as not only an environmental necessity, but as a means of achieving social justice and support for the poor by it-girl and self-established party policy-maker Alexandria Ocasio-Cortez, the medley of radical economic and infrastructure changes, government heavy-handedness, and income/wealth redistributions, is absurd on its face, and would be laughable were it not being embraced by the front-running candidates for the Democratic presidential nomination.
The inevitable questions, beyond those that justifiably express shock and incredulity, coalesce around “How will you pay for all this?”
AOC, who’s learned, quite well, the “never back down, never go on defense” lesson that Trump the campaigner taught politics a couple years go, used to wave off questions of cost by asserting that, if the world’s going to end in 12 years because of global warming, it’s absurd to worry about the cost. When she got mocked for her misstatement about the world ending, she doubled down, and instead of dismissing cost, actually started asserting that the plan would create wealth.
At the end of the day, this is an investment in our economy that should grow our wealth as a nation, so the question isn’t how we will pay for it, but what will we do with our new shared prosperity,
and,
First of all it’s just plain wrong, that idea that we are going to somehow lose economic activity,” said Ocasio-Cortez.
It’s inevitable that we will create jobs. We can use the transition to 100 percent renewable energy as the vehicle to truly deliver and establish economic, social and racial justice in the United States of America.
It’s claptrap, gibberish, and handwaving. And, it’s a classic “broken windows” fallacy. Frederic Bastiat, a French economist and brilliant classical liberal thinker, related a tale of how a man’s son breaks a window, and how the community falsely concludes that the boy did the community a service, since the man will stimulate the economy by paying for the repair.
On the surface, people might nod and say “yes, the glazier is earning money, with which he can feed his family or invest in his business.” It ignores the broader elements of the activity. The process starts with the destruction of an asset of some value i.e. an existing window. That’s a debit against whatever economic activity the repair creates. Furthermore, the glazier’s economic gain is directly offset by the father’s economic loss. No new wealth is created in the transaction, and the father receives no voluntary benefit from the exchange. And – the glazier’s time is spent on reversing the loss of wealth instead of creating new wealth. Yes, the window’s owner gets a new window pane, which is arguably more valuable than the old one, but there’s still a debit to repay and it still doesn’t add up as productive use of time and capital.
The Green New Deal would entail wealth destruction on a truly massive scale. The facilities and equipment that produce nearly 90% of the nation’s power, facilities and equipment of substantial value, would be rendered worthless. Ditto for the existing distribution grid, which the plan calls for replacing. Ditto for gasoline-engined cars and trucks. And, almost every one of the nation’s 100+ million homes would be subject to “green” upgrades that would in many-to-most cases not amortize via energy savings for decades.
To assert that such wholesale destruction of wealth would actually create prosperity is to wholly ignore basic economics. Is AOC that ignorant? Possibly, but it’s also possible that she’s selling the moon in the expectation of making more modest “gains.” Gains which would still result in massive destruction of wealth and do enormous harm to the economy. That damage may not be of great importance to her, given how she also offers up social justice language in defense of the plan. If it’s truly an economic win, it shouldn’t need an additional selling angle.
It’s not a win, however. That is without dispute. It’s a ruinous plan, even if executed only in part, even if only considered as a non-binding goal or as a general roadmap. It violates economic laws, laws that are as unchallengeable as gravity. Break a window, and society is poorer for it. Throw away a perfectly good gas generator or shut down a functional nuclear power plant, and you’ve disappeared millions or billions of dollars. Disappeared, goodbye, gonzo, no longer in existence, burned, vanished, ceased to exist. Decades of capital investment, poof. Ditto for all those cars, trucks, and buses that will have to be replaced. And so forth.
That economic destruction is calamitous enough before we consider the inefficiencies of the new way of doing things. Renewables cannot replace carbon energy at the same levels of production efficiency, except in geographically advantageous locations (e.g. solar in the Nevada desert, and even then, it’s not certain). And, it’s before we consider the destruction of the value of all the oil and gas reserves America has. And, before we consider countless other ancillary effects. For example, if we’re all forced onto trains and buses, our travel times to and from work will be increased, doing enormous damage to economic productivity. And, of course, to our living standards.
But, living standards and economic realities don’t matter much to do-gooders like AOC. Their righteousness armors them from all the slings and arrows of reality.
Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience. They may be more likely to go to Heaven yet at the same time likelier to make a Hell of earth. — C.S. Lewis
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