Saturday, January 30, 2010

Buying "Green" Jobs

As an economist, I'm always interested in the prices of various things. The latest is what it costs to buy a "green" job.

Suntech Power Holdings Co. plans to open a solar-panel manufacturing plant in Goodyear later this year and initially hire about 75 people. In order to persuade them to do that, they will receive subsidies from all level of government. The feds will put in $2.1 million, the state $1 to $1.5 million and Goodyear will add $500,000. In all $3.6 to $4.1 million.

Our government just paid between $46,667 and $54,667 for each of those jobs.


Seen Elsewhere

Mark Perry at Carpe Diem notes that restaurant owners are optimists.

Donald Marron explains where fourth quarter GDP growth came from (inventories.)

He also has an excellent post on the employment situation. Note that it is less about people getting laid off and more about the lack of job creation.

Labels: ,

Tuesday, January 05, 2010

Making FDR's Mistake II

Uncertainty reduces investment which reduces job growth.

I've been wondering if we'll get a double dip recession or merely a slow recovery. My concern about a double dip is that business investment spending has tanked and it could send us back into a recession. I think that the reason investment has tanked is because of uncertainty. This time it's not uncertainty about consumer spending, but uncertainty about the structure of the economy and the rules we'll have to live under.

Writing in the Wall Street Journal, Gary Becker, Steve Davis and Kevin Murphy see the uncertainty as leading to a slow recovery.

In terms of discouraging a rapid recovery, other government proposals created greater uncertainty and risk for businesses and investors. These include plans to increase greatly marginal tax rates for higher incomes. In addition, discussions at the Copenhagen conference and by the president to impose high taxes on carbon dioxide emissions must surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.

Congressional "reforms" of the American health delivery system have gone through dozens of versions. The separate bills passed by the House and Senate worry small businesses, in particular. They fear their labor costs will increase because of mandates to spend much more on health insurance for their employees. The resulting reluctance of small businesses to invest, expand and hire harms households as well, because it slows the creation of new jobs and the growth of labor incomes.

I am a bit less optimistic. I think we went through this process once before with another president and it wasn't pretty. Amity Shlaes wrote a book about it.

HT: Greg Mankiw


Monday, January 04, 2010

Local Conditions

Golf is big business in Arizona and it's been hit pretty hard by the recession.

As the commercial-real-estate crisis worsens in Arizona, many golf-course owners find themselves deep in the rough and struggling to stay in the game.

About a dozen golf courses in the state have gone through foreclosure or bankruptcy since commercial properties started facing serious financial problems in 2008, according to Mesa-based real-estate-analysis firm Ion Data, and many others have been listed for sale.

Hotels are also hurting although one area in the valley is looking up.

Hotel business in every part of the Valley plummeted with the economic downturn in 2009, except one: the West Valley.

The region was the only metro area in the Valley to have a month of positive growth in hotel occupancy compared with the previous year, Smith Travel Research reports.

Finally, a metalworking business changes its focus to survive the commercial building downturn.

When All Things Metal LLC director of operations Timothy Rock and owner Greg MacLiver opened a residential division in 2009, it was a last-ditch effort to save the 7-year-old business.

The Phoenix company had focused exclusively on commercial projects. But when the construction industry tanked, a lot of jobs got canceled as funding for projects evaporated. Rock said notices went to employees, warning that the staff of 49 would likely be reduced to four by July.

"We knew the commercial work wasn't going to carry us through," Rock said. "It was either do this or die."


Sunday, January 03, 2010

Supply and Demand