As someone who generally opposes government intervention in the economy, I am highly skeptical about the efficacy of green job creation.  I believe government economic policy should foster an atmosphere where the forces of the free market are allowed to choose winners and losers.  However, I also believe government economic policy must focus on solving externalities by weighting incentives via taxation or similar soft-touch means. 

Nevertheless, when I read the sensationalist, straw-man editorial  about green jobs that current American Enterprise Institute Director of Economic-Policy Studies and former George W. Bush and John McCain presidential campaign advisor, Kevin Hassett, wrote for Bloomberg.com - and after cleaning the vomit out of my mouth- I felt the compelling need to distance myself from Hassett's argument.

Hassett opens by comparing the green jobs meme to Swine Flu.  He then goes on to make the preposterous claim that if there were a societal need for greener technologies, they would already have created themselves. 

His claim is absurd for a variety of reasons.  First, even the most free-market of free-market thinkers, such as myself, acknowledge the existence of externalities, and pollution is the textbook example of an externality.  Without legislation, there is no incentive for people to clean up their own messes (see: China). 

Historically, pollution has piled up until it starts negatively affecting a large enough portion of the economy to justify collective action (see: Boston Harbor).  The recognition of this truth serves as the basis for decades of environmental law and economics.  Hassett seems bent on undoing the cumulative progress of years of slow, steady, grassroots activism and returning to a world where people get cancer from their tap water. 

Second, the idea that things would already exist if they were truly more efficient is an absurd claim that ignores the mass-cooperation required to make those things a reality.  Furthermore, it begs the question, if the most efficient solutions automatically rise to the surface, wouldn't we be already living in a static utopia? 

Hassett suggests facetiously in his editorial that the best way to create green jobs would be if everyone started using rickshaws for transportation instead of cars, implying that coerced-cooperation necessarily makes us all poorer.  However, I would offer the counterexample of the National Highway System as coerced-cooperation making everyone richer.  There is no doubt the National Highway System is far more efficient than the oligopolistic, private system it replaced.

The third problem I have with the article is that Hassett dishonestly suggests that the Obama Administration's proposal is moving from the blissful, free-market fossil fuels paradigm to the hubristic, heavily-regulated green-jobs paradigm.  The fossils fuels market is oligopolistic, which means companies waste tremendous amounts of money creating brands and competing with each other.  Oil companies also collude, are used by the military and the White House for strategic purposes, hide their profits offshore, and are captive to sudden, speculative price jumps from an increasingly government-owned financial sector.  There is little "free" in the fossil fuels market. 

The fourth problem is that Hassett implies the Obama Administration's plan will be identical to the recent debacle in Spain that supposedly cost 2.2 jobs for every one it created, as well as relying heavily on the production of discredited biofuels.  To suggest that the administration will not take into account the failures of prior green initiatives is just silly. 

In my opinion, the government is frequently inept, and the law of unintended consequences is pervasive.  Congress and the Obama Administration must proceed with caution when directing a large portion of economic resources to any program.  However, let common sense prevail.  In a previous post, I attacked "Cash for Clunkers" on the ground that it ultimately destroyed wealth to no greater societal purpose.  I don't see the same results for a green jobs initiative, provided it is implemented cautiously and effectively, because, unlike "Cash for Clunkers", any green initiative is intended to correct an externality, rather than simply provide work for the sake of providing work.

The fossil fuels industry is undoubtedly responsible for externalities that will become more expensive the longer they are left alone.  To ignore this as Hassett does is counterproductive; to suggest that externalities will remedy themselves is foolish by definition; to argue that the fossil fuels industry is a capitalist dream is intellectual sleight-of-hand; and to conflate the Obama Administration's admirable goal of efficiently solving an externality with unrelated failures to that effect is attacking a straw man.

If Hassett wants to argue in favor of cap-and-trade or taxes to curtail global warming, there are plenty of rational arguments out there, but the AEI would never do that.  Hassett should make some valid points to that effect instead of engaging in rhetorical dishonesty and laziness.