Progressives Get an ‘F’ in Economics 101

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I have recently exposed that progressive legislators do in fact intend to push a tax next year on heating oil and other non-electric fuels for home heating. Aside from the unfair regressiveness of these efforts that take away Vermonters’ liberties while increasing government waste and regulatory complexity, there is a bigger problem that must be addressed: they are economically silly.

The argument made by renewable energy proponents is that the world can be saved by switching a frozen Northern state like Vermont to solar-powered heating systems, and that this is also economically beneficial because it will “create jobs.” Both of these are false fantasies that reflect a lack of common sense and understanding of basic economics.

State Sen. Mark MacDonald repeatedly proclaims that Vermont imports billions of dollars of fossil fuels and that this is a drain on the economy of money going out of state. MacDonald has said this (at 26:15): “Vermonters spend 700 million dollars a year out of state paying for oil. If we didn’t have to buy that much oil, that’s 700 million dollars that gets spent in the state. You spend 700 million dollars in the state, you’re creating jobs. Weatherization is jobs. Installing heat pumps is jobs. And getting off fossil fuel is jobs. You’re not going to generate jobs doing the same thing we’ve been doing right along. You can’t ship 700 million dollars out of state every year just to heat people’s homes.

At another event Mark said the following (at 16:56):

Vermont spends … 1.45 billion dollars a year on fossil fuels for heating and on fossil fuels for operating motor vehicles. … And every time you purchase heating oil, you purchase propane, you purchase natural gas, that money goes out of state. The amount of money that goes out of state for heating oil could be replaced with other heating sources. It is staggering, and it drains this state’s economy. Refitting people’s heating systems with heat pumps … with electric heat is a job creator in this state. Producing electricity from solar and putting it to work to do functions that fossil fuels use puts people to work in this state and generates jobs in our economy.

The proposed progressive solution is to instead spend billions of dollars out of state on EV cars, solar panels, and heat pumps — and electricity generated in large part by fossil fuels. They argue the Vermont economy will benefit by the “business” of selling and/or installing these electricity-dependent technology products. This is absurd.

Economies grow by producing goods — even services depend on root economic production for the wealth to enable them. Service economies do not exist or thrive without underlying production. Jay Peak was lauded as a great economy-builder, but once the buildings were constructed, all that is left is jobs for Vermont service workers cleaning rooms or tending the water park, catering to tourists without producing any goods for export.

The electricity that will supposedly power heat pumps is derived largely from out-of-state fossil fuels. Vermont generates little of its own electricity, and zero nuclear power. The fantasy is that Vermont will create a massive solar infrastructure to one day become self-sustaining for that energy: but this is impossible. We are the sixth worst state in the country for “sun days”: the grid cannot function on solar arrays alone due to inefficiencies and intermittency. Rooftop solar arrays, such as those being regressively funded, are the most costly and least efficient form of solar collection. All of these “renewable products” are manufactured out-of-state using coal and other energy inputs (while depleting mined material and generating copious quantities of non-carbon pollution). Further, the absorption of natural resources necessary to manufacture and transport all these high-tech gadgets would decimate the planet in the making, and all of them will one day end up in landfills, creating a new environmental challenge for the future — they are not in any sense “renewable” from that perspective.

At a recent candidate forum, House Rep. Larry Satcowitz, D-Randolph, proclaimed the tiresome economic fantasy that a clean heat standard will help low-income Vermonters (at 19:30):

One of the things we need to do … that we didn’t do this past legislative session is to pass the clean heat standard, which would’ve really helped us. Instead we’re gonna have to go back and do it again next year, so we’ve lost time. The clean heat standard would allow us to slowly, incrementally over the next several years, move toward helping our thermal sector to move to alternative energy, and at the same time it would benefit the lowest income Vermonters the most.

This last part appears to arise from progressives’ claims that it is the poor who suffer most from climate change, as senators discussed last session (see video here, at 00:59).

But what of the realities that confront Vermonters? How will they heat their homes when the grid goes down, even for short periods? As fuel oil and other heating fuels escalate in price, Vermonters are rushing to put up firewood — how is raising fuel prices with a “clean heat standard” beneficial to the planet if it pushes people to burn wood? How do loggers and farmers produce food and products for export out-of-state without that out-of-state diesel and oil?

Vermont imports billions of dollars of fossil fuel energy to convert into very real products for export, as does every modern economy. Indeed, Teslas are manufactured in California using out-of-state oil and other materials. Electricity cannot replace those fuels, and importing manufactured Chinese products does not create an enduring long-term economy of any kind. Quite the opposite: it boosts out-of-state economic productivity and real growth while enslaving Vermonters to a future of dependency on tourists and federal handouts because we will produce fewer and fewer real goods to fund our over-bloated, out-of-control bureaucracy.

We must get back to basic economics — the progressives surely have lost any grounding in economic common sense.

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