Sunday, May 24, 2009

Unintended Consequences Part II

(For Part I, click here.)

Every action has reaction, and that reaction is often not what the action was supposed to cause, not at least by the people who planned/executed the action. There are people, however, interested in the action and or its resultant reaction but having no say in its planning nor execution: a third party, you might say. These third party people often see the unintended, negative consequence before the action is to take place and warn the ancion implementers. They often get totally ignored, or worse, ridiculed. And when that unintended consequence actually happens instead of intended consequence, they are often still ignored, ridiculed, or worse, attacked as agents of bad outcome as if they are the ones who caused it. All the cool-headed third party could do is to say "I told you so".

Spanish experience shows so-called "green jobs" cause more job and money losses:

The March 2009 Study of the effects on employment of public aid to renewable energy sources says

  • Every job created in renewable energy sector that the State (Spain) managed to finance, 2.2 jobs were lost from the non-subsidized sectors.
  • Spain spent 571K Euro per each green job since 2000; 1 million Euro per wind power job.
  • Only 1 in 10 green jobs resulted in permanent position.
  • Spanish citizens should expect to pay higher utility rate (31% higher) or pay higher taxes in order to cover the cost of subsidizing the inefficient renewable energy generation.
  • Spain runs the risk of being straddled with obsolete, inefficient legacy assets (particularly in wind and photovoltaic).
  • The executive summary is titled "Lessons from the Spanish renewables bubble". It's a green bubble.
  • Spanish experience is what President Obama cited as model.

Government and cutting-edge technology usually don't go together. But I was encouraged to see the word "bubble". Here we go! We need a new bubble so that we can re-inflate the economy, right?

To be fair, Germany says green job will shorten recession. I lived in Germany for a brief period (6 months or so). I rented an apartment. What I still remember is several huge dumpsters in the apartment courtyard, where the residents were supposed to sort out 5 or 6 different types of garbage. Most residents didn't have that kind of time - they were busy making a living. So what seemed to have happened was they brought down the garbage, in paper or plastic bags and just left the bags outside the bins. Every week I saw piles of these bags in the courtyard, outside the dumpsters. The only thing that was sorted out was newspaper. I'm sure they had a surge of employment at garbage sorting facilities.

Britain's wind farms stopped working during this January's cold spell, though it was blamed on UFO. Seriously.

Proposed crackdown on offshore tax havens and the so-called "tax cheaters" upset the British bankers.

And they are threatening to throw out the US clients because it will be too expensive to service US clients if the new international tax proposal by the Obama administration (it's in the budget proposal) gets enacted.

If I remember right, the Brits, from the prime minister on down, were openly and enthusiastically supporting the candidate Obama. They now have to be prepared to take the whole package, I'm afraid, and that may include a US invasion of the UK territory (Cayman Islands), as expressed by a US journalist (see my post, 2nd half).

Standard and Poor threatened the UK with downgrade.

And they ended up scaring the US financial markets and threatening the US dollar. The stock market lost interest in going up, the yields on longer-dated Treasuries skyrocketed, and the US dollar index sank to a multi-month low, to a 20-year support level.


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