Prof Andrew Morriss sums it up nicely when he writes:
If you got an email offering you the chance to invest in a business that would create new profitable industries, employ millions of people, reduce energy consumption without reducing quality of life, and improve environmental quality, would you be skeptical? And if the email went on to claim that the technologies to do all this exist now and could save existing businesses billions of dollars in just a few years by reducing waste and energy use, would you wonder why no one was already implementing all these “common sense” ideas? If the email went on to promise that you could do this all at no risk by investing borrowed money, you’d likely be reaching for the delete key.
If we substitute “the federal government” or “the United Nations Environment Programme” or “the European Union” for “you” and change the email to a proposed law, however, we discover that politicians from Washington to Brussels are embracing measures to “green” the economy and create “green jobs” with an almost religious fervor, despite weak empirical support for these proposals. The Obama administration included billions of spending and tax incentives for green initiatives in its budget, and last spring’s “stimulus” bill poured $62 billion in transfers plus $20 billion in tax cuts into “green initiatives.”
The favorite narrative of President Obama's fans is that he is intelligent and sophisticated. But this is not rocket science. The free lunch that he (and many others) promise is an old fashioned political scam. Among Republicans, many (including Schwarzenegger) peddle the same nonsense. But Governor Arnold does not claim to be an Ivy League sophisticate.
Are these the sorts of policies (and policy makers) that will help us avoid stagflation when the bills come due? For their sake (and everyone elses) I can only hope so.