Mr. Obama on Thursday called it “a vote of historic proportions … that will open the door to a clean energy economy” and green jobs. “It will create millions of new jobs,” Ms. Pelosi insisted.
From: WSJ Link
This makes absolutely no sense to me. It refers to a recent House vote that clears a hurdle for passing a cap and trade bill. I’ll give Obama the claim that it will lead to green jobs. Of course, when you effectively tax carbon through a cap and trade system, it will cause a shift to renewable “green” energy sources. This will likely lead to the creation of green jobs.
Pelosi’s claim that enacting cap and trade will create millions of jobs makes 0 (zero) sense. First, just think about that claim–millions of jobs. We’ve been losing hundreds of thousands of jobs per month. Charging companies for emissions is going to create millions of jobs?
Yes, thousands of jobs will be shifted to other, possibly new, industries, as Obama’s comment indicates. Millions of jobs are not going to appear because of a RELATIVE change in price.
Example: Ketchup becomes more expensive than mustard. The condiment industry employs 100 people. The relative increase in cost of ketchup is not going to cause the total jobs to go to 120 (for instance). Instead, as demand for mustard goes up to lower costs, production will increase for mustard and fall for ketchup. A relative price increase will not effect overall consumption in a way that will dramatically change the total level of employment. Some ketchup folks will move to the mustard industry.
This example is simple, but the logic holds, in my opinion, for analyzing a cap and trade scheme. Especially, against such a ridiculous claim like creating millions of jobs. Shifting jobs is far appropriate.
Alternative example would be an absolute change in price, something that effects overall productivity. If condiments become cheaper, people will change their buying habits to buy more overall. This will increase the employment level because overall production increased. This example could include where mustard benefits more than ketchup and the mustard industry DOES uniquely create a bunch of new jobs.
This post was supposed to be short, but just realize Nancy Pelosi said something ridiculous.
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spencerb






I would still buy ketchup over mustard.