Who's Worse—Romney or Environmental Regulators?
Pop quiz: Which has done more to ruin other people's lives—Mitt Romney, or federal energy and environmental policy?
To liberals the answer is clear. They have already begun to portray Romney as a "vulture capitalist" whose work at Bain Capital, the private equity firm he co-founded, often left destitution in its wake.
That's not the story Romney tells, of course. He contends his skill at turning lifeless companies into profit volcanoes is just what a weak and battered country could use right now. But liberals—along with Romney's GOP rivals—tell a different story.
"As Romney's Firm Profited in South Carolina, Jobs Disappeared," according to an AP story. The piece concedes Romney turned around struggling companies but laments that "Bain's pursuit of profit" often left a "human toll."
CNN took a similar stab with a story asking, "Mitt Romney Rich from Layoffs?" And according to The Washington Post's " 'Destruction' or Progress?" Bain's interventions may have been "good for investors and, some experts argue, good for the broader economy…But for those who lost their jobs…the sting of seeing their companies turned into vehicles for greater efficiency is harder to live with."
The Washington Monthly has blasted Romney's "ruthless, job-killing business tactics." The website romneygekko.com purports to expose Romney's "campaign to 'strip and flip' America for profit." The Democratic National Committee already has held one event featuring a victim of Romney layoffs. Unless Romney inexplicably craters in the primaries, you can bet it will hold more.
To his credit, Romney acknowledges people sometimes lost jobs because of what he did, and he admits not all his efforts at Bain turned out for the best. This is more than you can say for many progressive advocates of government intervention, which they often portray as pure upside.
Just this week the Virginia Chapter of the Chesapeake Bay Foundation released a report on "Debunking the 'Job Killer' Myth." It asserts that environmental rules do essentially no harm and actually spur employment in such areas as pollution monitoring. "Environmental regulations," the group's president says, "will create jobs."
Maybe so. But just a couple of weeks ago the AP reported that "more than 32 mostly coal-fired power plants in a dozen states will be forced to shut down and an additional 36 might have to close because of new federal air pollution regulations." That estimate is based "on the [EPA]'s own prediction of power plant retirements." When a plant shuts down, people lose their jobs – regardless of whether the job losses are offset by gains elsewhere.
Or take claims about renewable energy. A couple of years ago the Center for American Progress (CAP), a Soros-backed liberal think tank, produced a study claiming that $150 billion in clean-energy investments would generate 2.5 million jobs. It boasts that its results were produced by "robust economic-modeling methodologies."
Not so fast, says the Institute for Energy Research. It contends that claims such as CAP's count "the positive spillover effects on job growth" but don't use "the same approach to account for the destruction of economic activity" by government spending, and "the CAP analysis neglects the adverse economic impacts that its recommended cap-and-trade system would yield, particularly for energy-intensive goods and services."
Okay, so the Institute has ties to the energy industry, which makes it just as biased as CAP. But then there's "Green Jobs: A Review of Recent Studies"—a meta-analysis by researchers at the University of Texas' Center for Energy Economics.
The Center's overview notes that green-energy cheerleading includes "no analysis of job destruction due to increased cost of energy." Furthermore, "there is no effort to balance the potential positive impacts with potential negative impacts of job destruction and higher energy costs. In a sense, these studies are cost-benefit analyses without any cost considerations."
Now, you can argue—the EPA certainly does—that environmental regulations which force coal plants to shut down make society better off in the aggregate. You also can argue, as the Bay Foundation does, that while environmental rules might cause job losses over here, they are more than offset by job gains over there. And you can likewise argue that, in the long run, Americans will all be better off if Washington forces the country to embrace green energy.
Just remember: If you do argue those things, then you are making the same point Romney makes about the "creative destruction" of leveraged buyouts: Over the long term, it makes everybody better off—despite the temporary "human toll."
There is one major difference, however. If you disapprove of what Bain and other venture-capital firms do to companies, you don't have to support it. That's one of nice things about free enterprise: You're free to choose. But if you disapprove of what the federal government's energy policies do to companies, too bad. You're going to take part—whether you like it or not.
A. Barton Hinkle is a columnist at the Richmond Times-Dispatch, where this article originally appeared.
