The Schwarzenegger Plan For Indefinite Depression

Senate Democrats have sent a letter to Governor Schwarzenegger asking him to reconsider his veto of the renewable energy standard and subsequent executive order. The strongly worded letter has about as much currency as the eleventy billion-dollar bill, but it does explain why the Governor's hypocritical action is a bad deal for California.

Respectfully, an Executive Order does not have the force and effect of law. Additionally, such a proclamation will only cause confusion and uncertainty to California's energy markets, jeopardizing California's role as the world leader in renewable energy development and green jobs.

As you noted when you signed AB 32, the landmark "Global Warming Solutions Act of 2006," administrative actions are no substitute for a statute that is permanent and enforceable.

Directing the California Air Resources Board to implement an RPS program is a fundamentally flawed approach. The CARB is not an energy agency; it is an air quality regulatory agency. There are numerous provisions of law which impair the CARB's ability to implement a renewable portfolio standard. Assigning this new responsibility to the CARB will not result in new renewable energy being built soon--it will only lead to litigation, regulatory confusion, and delay.

In our view, it is essential to green businesses and the renewable energy investment community which bring jobs and capital into California, that California's 33% RPS be statutorily established and not subject to the whims of changing administrations.

There's only one reason that Schwarzenegger gave the CARB the ability to implement a renewable energy standard - so he can go on talk shows and crow that he's instituted an environmental achievement. Except, as is explained here, it won't. It will get tied up in court challenges and confusion, without a clear mandate for the standard or penalties thereto.

Schwarzenegger has responded to this by calling the Legislature's bill "protectionist," and saying that if we get water from the Colorado River, we should be able to get renewable energy from other states as well. The difference is that a commodity is not the same as a job. The twin goals of a renewable energy standard are to spur the usage of renewables as a means to lower greenhouse gas emissions, and to build a green-collar economy that will create millions of new jobs. Schwarzenegger would rather give those jobs away. And given the perilous state of the economy here in California, we simply cannot afford that.

Job losses in the public sector will prolong the economic pain in California through 2010 even as a recovery gets under way nationwide, two forecasters predict.

Jeff Michael, a forecaster at the University of the Pacific, said Tuesday that California's recession will be over before the end of the year. But the cutbacks in state and local government, along with the continuing fallout from the mortgage meltdown, will make 2010 feel like another year of recession, Michael said in UOP's latest quarterly forecast.

Similarly, the newest UCLA Anderson Forecast predicts a sluggish recovery because of the weak public sector. UCLA senior economist Jerry Nickelsburg is more optimistic than Michael about the housing market, and says California will outperform the U.S. economy starting in 2011.

Yet both economists say Californians can expect continued high unemployment for a couple more years or so. The unemployment rate is currently 11.9 percent in California and 11.8 percent in greater Sacramento.

And yet here is Arnold Schwarzenegger vetoing the only major bill that would produce any semblance of an economic recovery for California.

Patriot Store

I flagged this when it happened but never wrote about it because I wanted more information. Tula Connell from the AFL-CIO got it.

We heard Bill O'Reilly is having trouble finding American-made T-shirts to sell in his Patriot Store. We know he's heartbroken because, after all, what good is a Patriot Store if its products are made in El Salvador or Haiti? (Especially if you're selling red, white and blue "American Patriot" T-shirts, like the one on the left.)

We heard he can't find made-in-the-USA T-shirts because O'Reilly said so himself (h/t to D-Day). In his "Mailbag" segment on May 22, O'Reilly took the following question from Stewart Hollins in Rio Rancho, N.M.:

Mr. O, great looking mugs. Terrific bold and fresh shirts. Where are the items made?

And O' Reilly responded:

Mugs are made in the USA, Stewart. The shirts in Central America. We cannot get the volume of shirts we need made in America, sadly.

Yes, he's selling Central American shirts in his Patriot Store.

It's going to take a while to find out the conditions at the factory where these shirts are being made, but I hope they do. As Connell notes, plenty of manufacturers in America can handle Mr. Patriot Store's volume. There's no question that this is a cost issue, and the workers get left holding the bag on that.

The Thorny Green Jobs Issue

I truly recommend this David Leonhardt interview with President Obama. Regardless of where you stand on his policies, you can agree that he understands the issues and can articulate a sharp vision. Here he talks about the need for a more balanced economy.

That’s why I don’t just want to see more college graduates; I also want to specifically see more math and science graduates, I specifically want to see more folks in engineering. I think part of the postbubble economy that I’m describing is one in which we are restoring a balance between making things and providing services, whether it’s marketing or catering to people or servicing folks in some way. Those are all good jobs, and we’re not going to return to an economy in which manufacturing is as large a percentage as it was back in the 1940s just because of automation and technological advance [...]

But the broader point is that if you look at who our long-term competition will be in the global economy — China, India, the E.U., Brazil, Korea — the countries that are producing the best-educated work force, whose education system emphasizes the sciences and mathematics, who can translate those technology backgrounds or those science backgrounds into technological applications, they are going to have a significant advantage in the economy. And I think that we’ve got to have enough of that in order to maintain our economic strength.

I think a healthy economy is going to have a broad mix of jobs, and there has to be a place for somebody with terrific mechanical aptitude who can perform highly skilled tasks with his hands, whether it’s in construction or manufacturing. And I don’t think that those jobs should vanish. I do think that they will constitute a smaller percentage of the overall economy. And so what we’re going to have to do is, with a younger generation, find new places for that kind of work.

The possibilities are there, though. I spoke during the campaign of this company that I visited, McKinstry, in Seattle, where you’ve got a bunch of welders and tradesmen who are now retrofitting buildings. They’re not performing the same kind of manufacturing that their fathers might have, but with similar skill sets they are now making hospitals and schools and office buildings much more energy efficient, and then that’s providing enormous value to the economy as a whole.

Interestingly enough, the current issue we're having with green jobs is that we're retaining the construction and labor sector but losing the knowledge sector, precisely the opposite of the President's proposed vision.

As the Obama government gets ready to raise a protectionist wall against offshoring, the US firms seem to be shipping more jobs to India.

The US firms have offshored 22,000 green technology jobs to India since January 1, 2009, Doug Brown, co-author of the influential 2009 Green Outsourcing Report, informed TNIE [...]

Noting an interesting irony the authors of the report say, “In the US, green stimulus plan is creating low-wage installation and construction jobs.” But, in India, which is usually associated with cheap and low-skill work, “…New green jobs include higher dollar engineers, strategic business management and support technicians charged with designing innovative environmental friendly solutions,” they add.

A country that can employ all these laborers to retrofit homes and build out the smart grid has some chance of stability, but only at the low-wage end. But the design and engineering sector has floated away to India.

And while providing green jobs in low-income communities may breathe economic life into those areas, the people living there may not be able to, well, breathe.

A read of the "Justice in the Air" report would maybe change that perspective. Using data from the EPA's Toxics Release Inventory and Risk-Screening Environmental Indicators reports, researchers were able to locate where toxic air pollution from industrial facilities is strongest. They also determined the percentage of racial minorities and low-income families who live in those heavily impacted areas. To no surprise, they found that African-, Latino- and Asian-Americans suffer the worst health risks. For example, 69 percent of those whose health is impacted by ExxonMobil's pollution are minorities [...]

So, how exactly can a green-jobs movement alleviate poverty without equal concern for pollution exposure and health consequences? What good is giving a person a job if their frail health from toxic pollution will affect their productivity? Most of the jobs that have been tagged for the poor -- you know, the ones that "can't be exported" and "don't require a diploma" -- are outdoor jobs. So if you're installing a solar panel on a roof, weatherizing a building, cleaning up waste, or doing urban garden work, chances are in America (if you're poor and/or black/Latino) you'll be doing this in an area prone to air pollution.

We need to address these issues of environmental justice. At-risk communities bear the brunt of toxic pollution. Heck, even James Inhofe sponsored a black carbon bill, so it's not like we need to drop these concerns for political expediency.

The green jobs movement makes some intuitive sense, but there are larger questions that need to be addressed, through regulating the air we breathe, through improving our educational competitiveness so all of the green economy can stay in America.