Not a jobs program at all

Despite the conventional wisdom of the Company pundits by their own petard they get the hoist:

There is a major national ad campaign, funded by the oil industry and other usual suspects, to convince the public that measures to reduce greenhouse gas emissions (GHG) and slow global warming will result in massive job loss. This ad campaign warns of slower growth and the loss of hundreds of thousands of jobs, possibly even millions of jobs, if some variation of the current proposals being debated by Congress get passed into law.

In fact, standard economic models do show that measures designed to reduce GHG by raising energy prices will lead to some cost in terms of slower economic growth. And slower economic growth implies fewer jobs, although the impact will almost certainly be less than indicated in these scare stories.

However, the oil industry’s scare stories about job loss are never put it in any context. In these models, any government measure that interferes with market outcomes almost by definition reduces efficiency, leading to less economic growth and fewer jobs. Efforts to slow global warming fall in this category, but so does almost everything else and many items in the everything else category have a much larger impact.

For example, defense spending means that the government is pulling away resources from the uses determined by the market and instead using them to buy weapons and supplies and to pay for soldiers and other military personnel. In standard economic models, defense spending is a direct drain on the economy, reducing efficiency, slowing growth and costing jobs...

Measure to slow greenhouse gas emissions by investing in development of carbon-neutral solar based renewable energy resources most certainly don't increase job loss. Far from it. Carbon emissions can be reduced without increasing the cost of fuel at the pump, which will skyrocket in cost anyway as the oil reserves are depleted.

Because, you see, the government does do somethings quite well: manage peer-reviewed research, for one thing. The NIH, for example, has been and will continue to be an engine for biotechnology and biomedical innovation that has nothing to do with an imperial war machine.

But this war?

...A few years ago, the Center for Economic and Policy Research commissioned Global Insight, one of the leading economic modeling firms, to project the impact of a sustained increase in defense spending equal to 1.0 percentage point of GDP. This was roughly equal to the cost of the Iraq War.

Global Insight’s model projected that after 20 years the economy would be about 0.6 percentage points smaller as a result of the additional defense spending. Slower growth would imply a loss of almost 700,000 jobs compared to a situation in which defense spending had not been increased. Construction and manufacturing were especially big job losers in the projections, losing 210,000 and 90,000 jobs, respectively.

The scenario we asked Global Insight to model turned out to have vastly underestimated the increase in defense spending associated with current policy. In the most recent quarter, defense spending was equal to 5.6 percent of GDP. By comparison, before the September 11th attacks, the Congressional Budget Office projected that defense spending in 2009 would be equal to just 2.4 percent of GDP. Our post-September 11th build-up was equal to 3.2 percentage points of GDP compared to the pre-attack baseline. This means that the Global Insight projections of job loss are far too low.

The impact of higher spending will not be directly proportionate in these economic models. In fact, it should be somewhat more than proportionate, but if we just multiple the Global Insight projections by 3, we would see that the long-term impact of our increased defense spending will be a reduction in GDP of 1.8 percentage points. This would correspond to roughly $250 billion in the current economy, or about $800 in lost output for every person in the country.

The projected job loss from this increase in defense spending would be close to 2 million. In other words, the standard economic models that project job loss from efforts to stem global warming also project that the increase in defense spending since 2000 will cost the economy close to 2 million jobs in the long run...

Why, yes, there are some jobs created due to the war. Building trucks, for example. But those jobs are a pittance compared to the resources squandered and the better jobs that can never come to exist because of an endless war.