Paperwork, Solar Panels and Job Creation

by James A. Bacon

So… according to today’s reports, the U.S. economy failed to produce any jobs in August and unemployment remains stuck at 9.1%. Why would that be? Is it still all George Bush’s fault? Are we dealing with the lingering after-effects of the Japanese tsunami? Or could Obama administration policies be somehow to blame? I present two random data points that I came across this morning: one regarding the impact of excessive regulation and the other the non-impact of Obama’s stimulus spending.

Small business owners say that regulations issued by the O Team is stifling job creation. “There are more than 4,200 new environmental, financial, labor and other regulations pending at the federal level today, which are causing uncertainty and ultimately harming small businesses and their ability to create jobs,” says former U.S. Senator Blanche Lincoln, who chairs the Small Businesses For Sensible Regulations initiative, an initiative of the National Federation of Independent Businesses. “This is simply unsustainable in our struggling economy.”

According to a report conducted for the Small Business Administration’s office of advocacy last year, government regulations cost $1.75 trillion a year in a $15 trillion-a-year economy. Over the last five years, there has been a 60 percent increase in pending federal regulations that are defined as “major” or “economically significant” – costing the economy $100 million or more. Even if those numbers are exaggerated, as lefty think tanks say they are, the actual number is still huge.

In the video above, Mike Bucci, a former Capital One employee-turned-Richmond-entrepreneur, tells how new paperwork requirements have hindered the expansion of his new business. The way I figure it, small business owners have a better handle on what they’re dealing with than the White House spinmeisters, very few of whom have ever had to meet payroll.

Meanwhile, President Obama’s soon-to-be-announced jobs plan is expected to call for cranking up stimulus spending — without calling it stimulus spending. He will call it investing in “innovative infrastructure ideas” to put people back to work, such as more money for green jobs. The crash of solar-panel manufacturer Solyndra, recipient of some $500 million in federal  backing, apparently has not dissuaded the Big O from the conviction that he can do a better job of picking winners and losers than the U.S. venture capital sector can.

In a mundane example closer to home, Wall Street Journal contributor Stephen Moore writes about the dispensation of $300,000 under the 2009 stimulus bill to install solar paneling on the roof of a library in Arlington County:

Arlington officials boast the project will save $14,000 in annual electricity costs, but the solar panels have a life span of no more than 10 t0 15 years. So the feds spent $300,000 to shave at most $150,000 off the net present value of Arlington’s electric bills.

I don’t blame Arlington County. Hey, if someone is handing out money, why not take it? But that is lousy national economic policy. The American economy might have received a fleeting, $300,000 jolt from the construction of those solar panels, but it got an offsetting $300,000 jolt to the national debt — adding incrementally to the uncertainty and insecurity associated with the debt. Moreover, that “investment” didn’t create economic value, it destroyed economic value. More “investments” like that will drive the economy deeper into a hole.

Dear Lord, please deliver us from those who would save us.

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14 responses to “Paperwork, Solar Panels and Job Creation”

  1. 4200 new regulations that negatively afect small business:?

    How did the most incompetent president in decades accomplish such a thing? is there a list somewhere, or is this an empty claim? How many of these are clarifications to previous regulations that some businesses found ways to skirt?

    The bulk of the laws and regulations we live under have existed in their basic or for decades, and multiple administrations, how is it that now they are suddenly a huge burden? Especially, when so many of them have been put in place at the express insistence of business operators?

    Solyndras problems wer en ot of the presidents making. The owners also lost substantial money when it went under, and none of them saw the problem either. Their loss is EQUALLY a loss in national wealth, it is merely a question of whther there is a private name on it or a public one.

    I have a few losers in my investments, too, but over all I am maing money, so I don’t point to only my my losses OR my gians as examples of my choices, or my ability to make them.

    Somehow I doubt Obama had a direct hand in that investment, but in any case the record of government actually helping businesses is far better than this example suggests. And that includes governments prior to the current adminsitration.

  2. Deliver us from thase that would save us.

    You mean like those government employees climbing a hundred flights of stairs?

    If you ar drowning and I throw you a life peserver, I might miss. Would you hold that against me? or would you rather I not try?

  3. it’s not only an empty claim.. it’s not backed up… and it constitutes the continuing anti-govt/anti-regulation narrative that conservatives are on a binge about with this particular Prez.

    here’s a chart just released worth looking at:

    here’s the latest chart just posted by Economix:

    anyone who looks at this and wants to blame Obama can do that because it’s true that he’s not been effective in dealing with it but I seriously question the current crop of challengers ability to do much different.

    does anyone seriously think that Obama’s “regulations” caused this or even prolonged it?

    the problem with conservatives right now is that they live in a bit of a dream world pining away for the days of Reagan….

    I don’t blame Bush per se except that he clearly was asleep at the switch and when our buddies the Republicans wanted to fight two wars and not pay for them – he said ‘fine” and then said ” hey…we can PAY for these wars with supply-side economics by cutting taxes”.

    now we can blame Obama for not being effective.. I would agree.

    and we can blame him for the stimulus which did not “work” – or was the recession so bad that it could not work give the sheer debt and damage?

    but look at what the Republicans and Bush did – rather than not being effective they were PROACTIVELY idiotic by taking on enormous debt, refusing to pay for it and claiming some cockamamie supply-side idea would pay for it – with absolutely no Plan B is it did not work.

    And look at them right now. They refuse to own the debt. All they want to do is blame entitlements for the debt when the military budget has DOUBLED in 10 years!

    Right now – the DOD + Homeland security budget EXCEEDS how much we pay in individual income taxes.

    think about that. All the individual income taxes – do not total up enough to pay for the DOD/Homeland security budget…

    and this is Obama’s fault?

    Conservatives are downright delusional these days.

    about the only one who has half a brain is Ron Paul…

    and note this.. the few Republicans who actually might be capable of leading the country – they won’t touch the primaries with a 10 foot pole!

    who in the heck wants to be a member of the Republican Roller Derby / Cage fight?

  4. here’s how Dems raise taxes:

    ” we need to fix our roads so we need to increase taxes because they have not been indexed to inflation and the money is now worth 1/3 it’s original buying power”

    Here’s how Republicans deal with taxes:

    ” No way in hell are we going to raise taxes…on anyone…we have a spending problem not a revenue problem”

    then they sneak around by raising fees on insurance premiums and using those revenues to pay off billions worth of debt they acquired to pay for roads.

    which is the more honest approach?

  5. Larry, I agree with you on that last comment. The Rs will bend themselves into pretzel shape to avoid raising “taxes.” But the difference between a tax and a “fee” is often semantic. Any fee that raises more money than needed to provide a service to the public becomes a tax. It is an area where the Rs are intellectually dishonest.

  6. One more thing: While I agree with the Rs in their opposition to general tax increases, I think they are intellectually incoherent on taxes (user fees, call them what you will) for roads. If you want to raise money for roads, structuring the revenue enhancements as genuine user fees, even if that fee is a gas “tax,” makes more sense than taxing insurance, or taxing general sales, or dipping into the General Fund, where there is no connection between the tax and the roadway consumed whatsoever. The Rs refuse to raise the gasoline tax, as if it were the moral equivalent of the sales tax, property tax or income tax. It isn’t.

  7. Infinite Solar Avatar
    Infinite Solar

    Mr. Bacon,

    Most contemporary solar PV panels have production guarantees of 25 years minimum. Panels typically have useful life well after 30 years. Efficiency loss in these systems is typically lower than increases in the CPI for retail electric rates. The Arlington Library can probably expect an real (excluding government incentives) ROI of 21 years while making our country a cleaner place to live.


  8. The current mantra will likely be successful and reduce Taxes and Regulations – until it hurts someone,.

    At which point the Tea Party, radical government haters, and economic darwinists will slide into noisy oblivion.

  9. The Arlington County tidbit is one reason so many people in McLean, both Republicans and Democrats, did not want to be included in legislative districts that were largely Arlington based.

  10. If too much regulation is the problem, how come canadian banks are doing better than american banks?

  11. Infinite solar:
    ROI is not measured in years, but break even point is.

    To calculate ROI You would not exclude the fed and state contribution, but instead add them to the Arlington cost. Take this total I itial cost a.d add up the future value of all the electricity produced during its useful life and subtract whatever maintenance ce and operating costs are incurred, plus the cost of disposal.

    That gives you an IRR or internal rate of return for this project. Even if it is a positive number, it does not mean the project is a good deal. That depends on whether the county hazard any other uses for the money that produce a higher IRR.

    Excluding the state and fed contribution makes the IRR on the county’s money artificially high.

    If separated, then you have to consider that the state and fed IRR is zero, since they get no electricity from the deal.

    Consider if the feds GA e the money and Arlington was free to use it for whatever. By putting strings on the gift that it be used only for solar, the feds may have precluded a better use for Arlington money and produced a net loss in national wealth. At the same time the feds may have had some other projects that would have yielded a higher IRR for its funds, but that choice was precluded by legislators pushing for perks for their districts.

    Every use of money had some cost and some benefit. When we advocate in favor of a single cause, such as solar, it is almost a certainty that we are lobbying against the best possible use of funds.

    1. Infinite Solar Avatar
      Infinite Solar


      Of course the IRR doesn’t factor in all the environmental externalities from producing dirty energy.

      I agree we shouldn’t have a singular focus- always anti-regulation, always pro-regulation conversations are rather useless. We shouldn’t singularly focus on one energy source, nor should we singularly focus on IRR.

  12. LarryG –

    Please read this:

    A crazy bleat from a Tea Party loony? Hardly. A simple and straightforward analysis from Barnie Day.

    I am confident that Barnie is a Democrat (to the extent that he can be categorized at all).

    Hope you took his advice and unloaded the gun before you read this.

  13. I might even agree that regulations have gotten out of hand. What I disagree with is attributing them to individual politicians which I think is intellectually dishonest.

    If someone is going to make such a claim ..for GOD’s SAKE back up your assertions so I don’t get the idea that you’re just another whacko tea party idiot.

    I’m persuaded by facts and unimpressed with blather…

    the truth is ..unfortunately that the father of each and every regulation is USUALLY a person who feels that they were wronged by another person or business and quintessentially believe “THERE OUGHT TO BE A LAW”!

    of course the law to assuage your ox that got gored is not the same one that gored your neighbors Ox.

    so we have our regs we like and we have our regs that we don’t.

    but not even the most hide-bound … neanderthaled GOPer would really be happy with NO regulations….

    it’s always about the Goldilocks conundrum…

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