ABC TV reported yesterday that a lot of the economic activity funded by new federal money for "green power" has actually gone to China and certain other foreign countries, creating new jobs there rather than in the U.S. In particular, an upsurge in demand for wind turbines is being met in large part by non-U.S. producers.
What did surprise me was the way ABC reported the situation, especially in the video version featuring reporter Jonathan Karl and news anchor Diane Sawyer. Because they basically stopped there, gnashing and wailing (and ol' Diane perpetually looks as if she's about to burst out crying) - gosh, new jobs in China, isn't that just awful?
I'm quite sure the report as given is true, but I'm not at all surprised by it. The part ABC missed was that it's predictable, and that it probably couldn't have been prevented by anything in the legislation passed last year. (Incidentally, legislation specifying "buy-American" is rare anyway because it runs against our international trade obligations.) The real problem is long-term and multifaceted:
For decades, economic policies (both private capital and to a lesser extent government) have encouraged sending manufacturing jobs offshore so Americans could do cleaner work (like opening nail salons and flogging dubious investment instruments).
A combination of forces has operated, also over decades, to shackle attempts to broaden our energy sources beyond fossil fuels.
Finally, companies focused too narrowly on the short term have often been unwilling to invest in newer technologies if they could not see a very large and immediately developing market -- for example, that's why Applied Materials effectively sidetracked its solar energy division -- so I think we'll find that at the moment, there's nobody in the U.S. ready to produce turbines except on a relatively small scale. (Those small U.S. producers, as was reported also in the ABC segment, are getting some orders, so some American workers are being hired or rehired.)
So we've made our own bed, and we've lain in it so long it won't be easy to get out of it. In the long term, federal support for the growth of this market may help American firms to jump in and compete for it. Meanwhile... well, most people are familiar with the response notorious bank robber Willy Sutton gave when he was caught and some reporter asked why he robbed banks: "Because that's where the money is." Why buy wind turbines in China? In large part, because that's where they build them.
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