thanks for joining us. the question of whether and how government, particularly the federal government, directs tax dollars to specific industries was a discussion in last night's presidential debate, and it's become an important and ongoing theme in the current presidential campaign. the term on which washington assisted the finance and auto industries have also been the focus of intense debate, but probably the most contentious example of all is the one on which diana furchtgott-roth, manhattan institute senior fellow, and our speaker this afternoon, focuses in her time and important new book, "regulating to disaster: how green jobs are damaging america's economy." in it, she subjects the assumption and policies which led to such a faded federal investments as solyndra solar panel manufacture as was that a

123 collector car battery manufacture to a waiting analysis which we of the institute have come to expect from this oxford trained economist who served as chief of staff for the council of economic advisers. sorry. during the administration of president george w. bush. in her book, she helps us understand why the failures of such direct investments in private firms are both significant problems in themselves and cautionary tales for those who would have the government rather than private investors allocate capital. the publication that regulates the disaster caps diane mr. shear as an institute senior fellow, i'll year in which has been prolific and influential. cited by reuters reporters, talk show host, across the country. i think in particular of her many, many contributions to our series called issues 2012,

ranging from her analysis demonstrating that even adjusting for the state of the economy, a number of americans receiving food stamps is at an all time high. we've heard that ago in the campaign. to another in which she made clear that oil companies so vilified for some politicians are not monopolies controlled by a few wealthy internationalists, but rather an important source of wealth and income for millions of average americans. whether it's unreal clear markets in the "washington examiner," tax notes or testify before congress, as she is quickly us to do, diana as a powerful and effective voice in economic policy debates. as i know you will agree, after her talk this afternoon. diana furchtgott-roth holds degrees in economics. in addition to position for president george w. bush she has served as will on the staff of domestic policy council for president george h. w. bush, and

as a staff economist for the council of economic advisers during the reagan administration. in 2003-2005, she was chief economist of the u.s. department of labor. she's also the author of this past july of women's figures, a guide to the economic progress of women in america. please join me in welcoming senior fellow diana furchtgott-roth. [applause] >> thank you very much, howard, for that very kind introduction. and thank all of you for coming. i'm really grateful that you could be doing so many of the things today and coming to listen to me, but yet here you are, listening to me talk about green jobs and the fallacies of green jobs. i'd like to thank the manhattan institute not only for supporting this research but for organizing this talk. i'd also like to thank john, a

mechanical engineer, who is here and to advise me on the technical aspects of energy in the book, and to read the whole manuscript to check on the scientific details of it. well, this is an appropriate day, talk about regulating the disaster because last night president obama promised once more to develop the entity sources of the future. now, when any administration, republican or democrat, decides to develop energy projects, taxpayers had better watch out. governments get in the business of picking winners and losers which leads to cronyism and wasted taxpayer dollars. this is a question of industrial policy. whether the government should support business in new technologies that are unable to secure private funding. government appears to be worse

at this and private, from the records we have over the past five years. in contrast, industries in california in may, mitt romney said, quote, the president doesn't understand when you invest like that in one solar energy company, it makes it harder for solar technology generally, because the scores of other entrepreneurs in the solar field suddenly lost the opportunity to get capital. who wants to put money into a solar company when the government puts half-billion into one of its choice? excellent question. and i wrote this book because we are not just spending half a billion. we are spending about $12 billion a year to make electricity more expensive rather than cheaper. that's about 6 billion in tax breaks, and about 6 billion in direct expenditures.

we are pursuing a vision of green jobs that makes no sense and that hurts low income americans. we brainwash our children to think that green is good, and think uncritically about green product and green jobs. and yet we can't even define what a green job is. let's start with green jobs. the bureau of labor statistics has five definitions of the three-point 1 million green jobs that it has counted. namely energy from renewable sources, energy efficiency, energy pollution reduction and removal, natural resource conservation, and environmental compliance, education, and training, and public awareness. when i was testifying on capitol hill before the house energy and commerce committee, they had a paper cup in front of me. often they just have a bottle of

water, but this time they had a bottle of water and a paper cup. and a paper cup said -- power to save energy on the other side. so since this cup fit the definition of education, training and public awareness, the workers who made it had green jobs. if the coverage is said architect of the capital or if it just been a plain white cup, then the people who made it would not have had green jobs. and when i wrote this book, "regulating to disaster," about environmental issue, while i was doing it i had a green job, and perhaps i still do right now but because i'm talking about it. but if i had been writing, as i've been writing about social security, an action at same time i was writing my book, women's figures, and no straight guy did economic progress of women in america, if i just did working on that i would not have had a green job.

if they installed regulatory, they don't have green jobs. if the install low flow toilet, they have green jobs. farmers, if they grow corn for ethanol, they have a green job. if they grow corn for ethanol and corn for people to eat, they have a green job. if they just grow corn for people to eat, even though they are farms, they don't have green jobs. salvation army workers, if they recycle used clothing, then they have green jobs, too. well, there are 4665 people who produce renewable energy and utility companies, according to the bureau of labor statistics. they just report which came out in april. they are clearly green but you have to ask, are they making energy more expensive or are they making it less expensive. well, it's clear that they're making energy more expensive.

the average level has cost entering service in 2017 according to the department of energy is it there till by natural gas which cost $66 per megawatt hour, for wind, $96 per megawatt hour, for solar power, $153 per megawatt hour. well, five years ago in 07 when the energy loan guarantee program is put in place in all of these many subsidies for solar and wind, we didn't know that we're sitting on 200 years of inexpensive natural gas. so maybe it was logical for people than do think we need to be independent, or as independent as we can be of the middle east. in fact, the first president who coined the phrase energy independence was richard nixon, a republican. so maybe it was logical to think

well, if we make our own energy, then will be more independent and self-sufficient. but this was before we found that we had all this inexpensive natural gas, around $2.75 a sense per million btu. so now we're in the middle of a new american energy revolution. we found that we have all this. and as john maeda keynes once said, when the facts change, i change my mind. the facts have changed. we have an expensive energy right here without having to ask iran or saudi arabia to send it over to us. we have so much natural gas that i would talk about exporting liquid natural gas as daniel yergin describes an op-ed in today's wall street do. it's so cheap that chemical manufactures are being attracted back to america. it's so cheap that russia is

worried that its hold on the eastern european economy is going to fail because we can now supply them with natural gas instead of russia being their sole supplier. in this environment, subsidizing wind and solar makes no sense. also five years ago, we thought that china and india, and other emerging economies, my sign-on to emissions reductions, and, therefore, that if we reduced emissions, perhaps global temperatures would be reduced. and i don't think it does but i don't tak take a position on whr mandated emissions caused global warming or not, but if we are reducing our emissions and china and india, which make up 37% of the worlds population, are not doing so, when i pointed any affect on the global temperatures. and then the first chapter of the book i talk about geoengineering solutions, that

nobel prize-winning weiner thinks we can reduce global temperature if we just do it on our own. painting russ whitehurst like the sun's rays. what we are doing with a 12 and dollars were spent on alternative energy is pushing people into cars that they don't want to buy, we are raising electricity costs. we are -- we're getting rid of incandescent lightbulbs in favor of fluorescent lightbulbs. and the cost of this falls proportionally on those who are least able to afford it. the lowest fifth of the income distribution, according to recent data last month published by the bureau of labor statistics, spend 24% of their income on electricity, natural gas, and gasoline. that's right, a household in the

bottom fifth spends 24% of its income on energy. compared to an average of 7% for american households in general. the top fifth, 4% of income is spent on energy. it's just strange that well-intentioned people who purport to represent the interests of the poor are advocating policies that will do them harm rather than good. well, in addition to hurting the poor and putting taxpayer money at risk, industrial policies to promote solar and wind are also undesirable because they create opportunities for political influence on what should be decisions on the merits your take brightsource energy, for example, an oakland california company that received $1.6 billion in energy department loan guarantee. e-mail specifically for the vice president joe biden's involvement in the 1.6 billion

grant. it's for the proposed solar project in the desert in southern california. an e-mail from brightsource energy subcontractor, dated december 2, 2000, said joe biden met weekly with energy secretary steven chu to discuss the energy department loan guaranty. burner tuning, who was joe biden's chief of staff when he was a senator in the senate was a principal vice president and manager of back till. in an inner -- e-mail to john ward at december 3, 2009, he wrote quote calls are in to biden's staff and though the approaching a political affairs office at the white house tomorrow as well. of the project could benefit two democratic senators and whose races will be tough next year. barbara boxer of california, and majority leader senator reid from nevada.

both won reelection in 2010. over a year later, in marc march 2011, brightsource still have no loan. brightsource ceo said in an e-mail to jonathan silver, who was an executive director of the energy department's loan guarantee program. he was responsible for making sure that these are loans went through. woolard wanted silver to draft, to review a draft e-mail that john bryson, is chairman of the board of brightsource energy, was planning to send to william daley, who was then chief of staff to president obama at the white house. quote, and this is from e-mail, either e-mail or call when you can with suggestions, woolard wrote. the e-mail stated quote, the white house needs to focus on finalizing the loan guarantee for will be the largest solar thermal project in the world.

brightsource energies project was conditionally approved more than a year ago and is in the final stages of being completed. we need a commitment from the white house regarding that loan closure. at a house energy and commerce subcommittee meeting last may, chairman jim jordan said toward, quote, you are asking the guy who's in charge of making a final decision to proofread an e-mail that your chairman was going to send to the white house chief of staff, and you say there's no political involveme involvement? well, in another coincidence or not, the loan received final approval and may 2011, a month after silver refused the proofreading request, which he reviewed as the e-mail as can be seen from his personal account, his personal e-mail account, not his department of energy again. the draft e-mail to daily had

served its purpose but after all, if a political appointee in the energy department knows that the white house chief of staff is concerned about a loan in his portfolio, he will quickly deal with it. as we all know, the white house involvement in brightsource energy was not an isolated incident. the energy and commerce committee of the house of representatives has published e-mails which specifically for the biden and his staff as advocating for solyndra, the solar panel company that received $528 million in loan guarantees before declaring bankruptcy in said timber 2011. solyndra was rushed through in september 2009 so vice president biden could appear at the opening on september 4. on august 31, 4 days beforehand, a communications age of the vice president asked them to speed

this up. and there was pushed back from career staff at the office of management and budget. carroll, chief of the office of management and budget's energy staff replied quote, i would prefer that this announcement be postponed. this is the first loan guarantee, and we should have a full review with all hands on deck to make sure that we get it right. well, they didn't get it right, and 528 million taxpayer dollars were lost. it can be seen that the energy loan guarantees have been notoriously unsuccessful record. of the 33 energy loan guaranteed projects made since 2009, i calculate that over 90% have shown signs of trouble. trouble ranges from missed production goals to bankruptcy filings. a report by the government reform and oversight committee

said that 27 of these 33 loans were judged as junk or bbb, a low investment grade, because of their low ratings, slow credit quality. well, we have an election two weeks from today, and american voters have a clear choice. are they going to vote for greater government support for such assistance? or are they going to let the private sector manage on its own? and i think there's an indicator of the right way to go, all we have to do is look at north dakota. north dakota where the unemployment rate is 3%, because of all the hydrofracking of oil and natural gas that is going on, on privately held land. every state wants to be like north dakota. and it's interesting that mitt romney would dissolve the decision as to whether to explore on land or not to the individual state, he let each

individual state decide. so virginia, for example, the one to look for oil off its coast would be allowed to do so. that was revoked by the obama administration even though it was granted by the bush administration previously. alaska wants to do more oil exploration. everybody wants to get sources of energy in their state. so not going to be able to get the job of getting it out go but also to attract chemical manufacturing companies with low energy price. so this is the choice we're going to have before us. to me it seems clear the way to go. i'd like to thank all of you for listening, and i'd be very happy to take any questions ipod ma mac. >> if i could just lead off with one question. among the natural gas reserves that you refer to of course our raise substantial reserves in

the state, upstate new york. if i some fluke you had a year of governor cuomo regarding the potential for hydrofracking, and the decision that he is facing, what might you say kim? >> i would serve as a to look at the example of pennsylvania, which has created many, many jobs through hydrofracking, is doing very well in that regard, and they haven't experience environmental problems. and with new york's budget deficit, it seems obvious that hydrofracking is the way to go. and, of course, governor cuomo is free to set whatever regulations he wants about that to ensure the safety of quality and other things that residents are concerned about. i would say that the project should proceed. it's brought benefit to other states. there's no reason that new york should be left behind. >> okay.

right in front. wait for the mic a fun. >> you get very good examples of unsuccessful creations of new green jobs. had also looked at elimination of existing jobs like really good cost-benefit analysis done for regulations? >> the cost-benefit analysis for mercury was a travesty. if you look at the cost-benefit analysis carefully, all the benefits from reducing mercury came from getting rid of particulates and particulates were not the focus of that particular regulation. and what was interesting is the benefits focus on additional days of school. in other words, a few days of schools miss, two days of work missed because of lower levels of particulates, and

particularly because a particular relation to asthma. what's interesting is that over the past 25 years, the level of particulates in our air has gone down tremendously. mostly because of the switch from unleaded gasoline. but at the same time the incidence of asthma is going up. so the centers for disease control on its website does not have, show strong link between asthma and particulates. but that was the basis of the mercury rule. and this has resulted in very large calls the coal mines, more bands will happen because of his. we've already had 110 coal-fired plants close since january 2010. and is also interesting, but where's epa's seems very concerned about airborne retreat, they don't seem to be concerned about as bringing it into houses, and fluorescent

light bulbs. so if you look at the epa website it is strict instructions what to do if you're one of these fluorescent bulbs that breaks. because apparently it contains mercury. according to the website, your to clear the room for 50 minutes. you are not allowed to sweep up the broken bowl. unita moisten a paper towel to pick up the bits are take some sticky tape. then you need to take the entire broken bulb to the recycling center. now, how many people in the breakaway ball are going to be bothered to do this? this is because the lightbulb contains mercury. so wide they are bring it into peoples homes if they're so concerned about it has closed many minds and coal-fired plants. it doesn't make any sense. >> thank you, diana.

the department of energy a year ago loan guarantee program, is a still operating, and how do they still get money? once the funding flow of the program? and do you think there should be such a program at all? >> they have to spend all the money i last attended. there are still projects that are out there, many of them are experiencing difficulty. and i think that there should not be a program at all. i think they should be an even playing field between all forms of energy. they should all get the same domestic manufacturing production, which is 90%, and they shouldn't have any special tax breaks. the problem is that we're subsidizing this energy. we are paying for it and it's making everyone lives worse off. it is making our utility bills more expensive rather than less expensive. this isn't something we want to be doing. >> [inaudible]

>> well, the losses are already hitting it as, for example, the 528 million that won't be repaid, and we're hearing about more bankruptcy. so as these companies go bankrupt we will be incurring losses. some of them might succeed, and in that case we did the -- i don't think any of them will result in big games for the come. and the reason is that any company that can get alone from a bank or can get support from a venture capitalist or an entrepreneur will do that. so the government is basically left with the dredge of the project that's why they have a lower success rate than the ones out in the private sector. they sat out with a bias. >> stanley goldstein. to what extent are republicans responsible for this? this was before the house for

two years, without any allocation of funds. >> i think that the republicans are more at fault because during the last decade we actually put in place the loan guarantee program. we put in place and mandates to use ethanol. 13 billion gallons each year. moving up to about 30 billion gallons. so we originated this, and i'm a little bit embarrassed to say that when i worked at the white house in 2001-2002, there was very much awareness of environmental issues and there was stuff done because one of the environment to like us. and the republicans should just do the right thing. everyone should just do the right thing, without worrying about that kind of mentality, who is going to like us, who isn't going to like us. so there's an idea of appealing

to these particular groups. it was difficult for the house republicans these past two years to stop any spending the way that these large spending bills were at once a program is in the system, people who just keep it going. and a time, what we need to do right now at the end of year, a lot of these tax credits are going to expire. the wind credit and solar credit. we should just let those expire. in fact, some wind companies already are laying off workers because they don't expect the wind tax credit to be extended. we really need to get rid of the ethanol mandate, because it's getting what's called the blend of war. we're using less and less gasoline, but the requirements for using ethanol is going up and we only use 10% ethanol in our gasoline. and so there isn't anyway to use the amount that congress mandates back in the last decade. that's also something that needs to be changed.

>> and david. if i recall correctly, i believe it was the eisenhower administration that put in the interstate highway system. i might be mistaken, but -- >> that's right. they started it. >> is there a way, or she think there is a way in which the federal government could provide an infrastructure such that the automobile industry could shift to natural gas, for example, or even batteries? if people wish to have the, on a national level. >> so, the government already provided grants to battery companies, and lastly another one went bankrupt, a 123 battery company. compact power run by lg -- battery company that is laying

off workers. i'm not sure the government has a role. as far as natural gas goes, gm and chrysler have announced, gm and ford have announced they will be making dual fuel pickup trucks using natural gas and gasoline, and many fleet of trucks, and buses now run on natural gas. ..

the wrong technology will be a drain of the taxpayer and will add to our trillion dollar deficit. [inaudible question] >> thank you. i would like to know, to which to greedy peak says the united nations look in that 21st century that has contributed to the conservation of political power in the hands of the green lobby? >> well, un has always been very encouraging of the green lobby, and this green jobs issue is not just an issue here in the that states but the issue also in europe, being encouraged by the

u.n., meetings in real over the summer, but europe is also finding that green jobs are not all they thought there would be. spain has just stopped its subsidies for solar power and if it does not work in sunny spain it probably will work anywhere. germany has also stopped the subsidies for solar power which is a little more understandable because there are a lot more clouds in germany, even though the economy is that cloudy and all. the u.n. has had a very strong influence on the u.s. crashes, sir. >> you are probably not all the natural member, but jimmy carter did -- give lots of money, billions of dollars to alternate energy projects. >> i do remember. >> any of those plans still exist? i don't think it lasted more than a couple of years.

secondly, are you familiar with another carter program when he gave money to build five different steel mills, four of which went bankrupt almost immediately, and the fifth put out of business the plan in kansas city that they blame on spain. >> well, jimmy carter's program did not work then, as i mentioned. i remember waiting in the 1970's in gas lines to fill up with gasoline in the western d.c. area. just as these programs did not work then and are now working now, they're unlikely to work in the future. it is just that government is not good at winning -- picking winning projects. they probably would not have thought of picking the apple iphone five, something expensive that people wait in line because they want to buy. it is not necessarily technology that is an expensive that people want. it is something that people want that they're willing to spend

money on, and we don't know what it is. there are other smart on to bring yours and many in the audience to a better idea than the folks down in washington. >> would you be in favor of significantly higher gasoline tax to address the hidden social costs of pollution, what economists refer to as externalities'? >> if i thought that gasoline were underpriced and i would be in favor of a carbon tax, not just gasoline, but energy. i don't believe that energy is underpriced and the united states. there are many benefits to more job mobility, talking about gasoline, people being able to drive on trips, people being able to drive to get to work in places where public debt protection does not run. and though a price energy attracts manufacturing back and then it -- the united states.

as a type of energy becomes more scarce we see the price rising of its own accord. almost twice what it was when president obama took office, although as many people point out, that is partly due to the weakening dollar. when they're is a shortage of one type of energy price rises and people switched to other kinds. i don't think that there are negative externalities' in using energy and coming in fact, if we don't pass any more energy regulations our air will continue to get clean as old equipment is taken of of the road through age in new equipment is brought on. if i were to say get rid of my 95 cheapened by a 2005 jeep the air would be cleaner without any other regulation which is true of parts and other equipment also. >> one more question. >> us, sir.

>> i believe you said a moment ago that since 2010 over 100 coal plants -- >> january 1st 2010. 110 coal-fired power plants shut down. >> that's a very large number. have now seen as written up. the degree of prominence. articles of individual plant-closing with nothing but the magnitude. >> i can get back to you with that letter. we have gone from producing 40 percent of our electricity to 30%. interestingly enough, one of the

rules that the environmental protection agency put out over the summer said that this car rule would have no cost of the coal industry. the answer was, they were not expecting even one additional coal-fired plant power plant to be built. there is no cost on the call to cut coal industry. assuming coal out of the picture, and my colleague has written extensively about this. very interesting that president obama's says we should be more like china. they produce 70 percent of the electricity from coal and less than 2% for renewal. they're making a solar panels and wind turbines, exporting them to us for our use. our electricity becomes more expensive, and manufacturing, because of the price of electricity here goes over to

china. very smart of these chinese and completely legal, not as though there are engaging in anything underhanded, and we are doing this to ourselves. britney to use our own resources , focus on the benefits of expensive energy. >> you mentioned exports before and the possibility for exports. we have a project of the power and growth initiative, which you are aware of, of course predicated on the eddy that america can be will recall the new middle east. i wonder if you could talk of of bit about why you feel exports of energy and natural gas, oil, actually is practical at this point. >> what we used to import, we import is a lot of natural-gas, and what is interesting is to see the forecast to or three years ago for imports of natural gas. those were headed steadily. instead of the forecast we are down, there are many -- there

are companies that now want to export, and it is not just important because it brings as revenues. it's good for our trade balance, but it is also good for geopolitical reasons enabling us to offset the power, economic power of countries such as russia that have other countries such as its former satellite republics, the eastern european economies under its thumb. this is going to bring as a tremendous benefit. we want to import oil from canada through the keystone pipeline which gives more jobs our refineries in the gulf of mexico because the supplies of oil they are getting from venezuela and mexico are dwindling. and so we can also be exporting oil, oil products that we don't use here in the united states but that are used elsewhere in the world. >> the name of the book is

"regulating to disaster." it is available in the back. i suspect they will be willing to assign your copy. thank you very much. [applause] >> you're watching book tv on c-span2, 48 hours of nonfiction authors and books every weekend. >> two familiar faces to regular c-span and book tv watchers. their most recent book, even worse than it looks, how the american constitutional system collided with the politics of extremism. mr. ornstein, what is the premise of your book? >> i have to say we have been with c-span since the beginning and have pictures of moderating sessions on the fifth anniversary of c-span which is a very long time ago. >> and i was on the panel. >> of very young and newt gingrich, among others.

[laughter] a very thin and newt gingrich, too, but that is a different story. this is a book about the reality that in 43 years the two of us have been immersed in politics of washington from one in the pennsylvania avenue to the other we have never seen it this dysfunctional. it is at a critical mass, and we felt we had to speak out about how the problem is, as the book says, even worse than it looks. we have to talk about who is at fault and what we can do to get out of it. half the book is about how we can get out of this mess. the argument basically is 2-fold. one, we have now polarized political parties. internally homogeneous very much at loggerhead, much like parliamentary parties, vehemently oppositional, but they have to work in a constitutional system that is

based on separation of powers and checks and balances. the mismatch between our parties and our governing institutions is problem number one. problem number two which is the toughest thing for us to say and for many people to hear is that the parties are not equally implicated in this. we have something called asymmetric polarization in which the republican party has in recent years has become almost a radical insurgency, quite prepared to repeal 100 years worth of public policy. we don't know how to cope with the situation when both of our parties are not operating in the mainstream, and the book is written to help people understand why this is happening

and what we can do about it. >> was not there are times when the democrats with a party that was asymmetrically out of balance with the rest of the nation? >> that has been true many times in history, most recently in the late 1960's over vietnam and other issues, but you can go back to the 1890's, the last time of dramatic polarization with the democrats were off the rails on the left. we come out of these terrible problems, but it can take a decade or more, and we don't think we have a decade or more, so there is a sense of urgency in what we wrote. a blunt this that has not been characteristic of a lot of our work but we feel it was necessary. >> did the 2012 election clarify anything? >> by all appearances it was the status quo election, returning us to the division of power from obama in the white house,

democrats in control of the senate, republicans of the house, but appearances can be deceiving, and in this case are. the most important reality of the election is that the republican effort to oppose anything and everything proposed by obama, almost like a parliamentary party was not rewarded. taking the debt ceiling hostage was rewarded. calling the obama health care plan which was there room only a few years earlier socialism was not rewarded. that means, they have to begin to rethink themselves. importantly, democrats will not automatically embrace the same tactics in the opposition. i think that was an important change that creates a