Employers, who pass taxes and other costs along until they can’t, leave for less inane political and economic environments. Like Kentucky, for example, as I detail in Power Grab.
So, yes, President Obama, let’s think of what’s happening in these European countries.
For the moment, put aside the spectacular irony of what the “green” agenda necessitates well before reaching its logical conclusion. There is a more important lesson here, as our policy sages in Washington seek to cram through a replica of Europe’s social democracy here before November, when voters get to weigh in on this form of “change.”
The key lesson to be learned from Spain: these glorified make-work schemes, which saddle the economy with boondoggles of massive physical redundancies, inherently create “bubbles.” The bubbles exist solely because of wealth transfers from taxpayers — meaning from productive uses to intrinsically uneconomic ones (again, they have to be mandated and subsidized to exist).
The bubbles only avoid bursting with constant infusions of redistributed taxpayer wealth. But simply existing is not politically tolerable to the constituencies that politicians create with the subsidy and mandate schemes. There is a reason that GE’s Washington lobbying budget tops that of all of Big Oil … combined. Once a “market” is created by government fiat, recipients of the largess pour tremendous resources into keeping the gravy train rolling, and gaining steam.
This is just what happened in Spain, where the public deficit threatened an economic default.
And in Denmark, where the politicians look to clear every inch of land they can find — even if it happens to be occupied or forested — to put up more windmills in the name of “creating jobs.”
We have learned from Obama’s models in Spain and Denmark (and also Germany) that no net jobs are — or can be — created by these financial rat holes. Opportunity costs and direct jobs lost due to the economic pain caused by higher energy prices and other restrictions on individual liberty harm the economy as a whole. And what the economy gets in return are temporary jobs requiring more debt — which means taxes.
The schemes drain the public treasury, passing off your hard-earned money to entrenched interests. And, now, they lead to clear-cutting forests and “takings.”
In a way — a particular way known mostly to Washington, but apparently also everywhere else the “market socialists” rule — it just makes sense.