Two weeks ago the Spanish press went crazy over the revelation that $30.0 million went into the promotion of the Castellon airport in the Valencia region. The thing is this is one of the ghost airports that dots Spain after a decade of overbuilding in the belief that it would spark economic activity. Instead not a single passenger has even been through the airport which cost Spain's taxpayers $150.0 million to build. There are no less than 15 of these ghost airports in Spain that at one point must have felt like the answer, it was a lot of infrastructure spending, after all.

The thing about this kind of would-be stimulus is not only that white elephants are created but also that they cost a lot of money to maintain. The Castellon airport is no different.

$7.2 million to support full time staff of seven
$90,000 to maintain falcons and ferrets to keep out birds and rabbits

Final Bit of Evidence Against Government-Forced Alternative Energy

Last week's news that Ener1 was filing for bankruptcy at a cost of $118 million to American taxpayers was yet another blow against this notion that the time is right for alternative energy and that it is worthy of billions of our hard earned dollars getting flushed down the toilet. Yet the biggest red flag for the would-be blueprint that will salvage America came a few thousand miles away from the most recent alternative energy fiasco. Before I get to the ultimate warning about this path to prosperity, I have to say it's amazing the administration is still speaking with pride about doubling down on these projects that are only enriching campaign donors.

When Joe Biden was at the Ener1 plant touting its success and how it would be a model for the future, he called the company "Enron One" twice, which leads me to believe he had to own shares in that ill-fated scam. The thing is Mitt Romney is being demonized for investing money people entrusted to him to build companies. By the way, over the past weekend Amonix laid off 200 of its 300+ employees. The company only opened this very same plant in Las Vegas seven months earlier. The plant manager says workers will be hired back in the second half of the year. In the meantime, the company got $5.9 million from the American Reinvestment and Recovery Act in 2010. A drop in the Solyndra budget but another disaster nonetheless.

There are going to be so many more of these bankruptcies in the alternative energy space but even if they "worked" full time job creation would be miniscule.

The Perfect Roadmap

President Obama has been banging the drums on green energy, high speed rail, and public construction works. He insists this is the perfect game plan to ignite our economy, and he is so wrong. Don't take my word for it; take the data oozing out of Spain, which served as the template for the perfect infusion of government-directed central planning run amok. Spain served as the perfect proxy for President Obama who gushed at broad support for construction and production of electricity through renewable sources. In short, the White House couldn't get why the Spaniards got it, but Americans were so slow.

It turns out Spain was already at the point where it believed government had all the answers. With its former greatness as a world power long gone, it seems the country was content with being a minor player with a high standard of living. But even that is backfiring because in this world you can't be player and live like a king. Moreover, the country wasted so much money in solar energy, empty airports, and beautiful highways. So the biggest red flag when it comes to government spending billions of your tax dollars on alternative energy and other schemes isn't Solyndra or the other programs that have only enriched political donors. The biggest red flag were the jobs numbers out of Spain last week.

Spain plowed billions into new highways, airports, high speed rail, and solar panels.

Spain's unemployment now stands at 22.9% and a record 5.3 million people are out of work. 20% of people under 30-years old have yet to work their first job. Home prices are off 30% from the peak and experts say they will be off 60% before the dust settles. In the meantime, Spain has the longest high speed rail system in the world outside China and more solar than anyone but Germany. When I connect the dots it's clear that while there might have been a few construction jobs during the building off all those things, once in place there was no real economic force to maximize their use. In the meantime, Spain inches closer and closer to economic insolvency and mass implosion. According to a study done at Juan Carlos University:

* Since 2000 Spain spent $571,138 to create each "green job"
* Green job programs resulted in destruction of 110,500 jobs, or 2.2 jobs destroyed for every "green job" created
* Each "green" megawatt installed destroys 5.28 jobs on average elsewhere in the economy
* 8.99 Photovoltaic
* 4.27 wind energy
* 5.05 mini-hydro

Despite the obvious fact that the green economy is a farce in the free market and at best harms the non-green economy to the point of mass destruction, yesterday the European Council released a statement about growth-friendly consolidation and job-friendly growth. The release talks about the 23 million people unemployed and the need to create new jobs, including in the "green economy." Gulp! The release speaks of initiatives on employment, education, and skills. This is smart and honest and sadly could be too little too late. In meantime, there will be a move to cut non-wage labor costs to have an impact on labor demand of the low-skilled and young.

Shared Sacrifice

Comments

They should have their pay and benifits by 10%. It's my understanding they are paid 16% above their counterparts so they would still be over paid. Fred Nastasi on 1/31/2012 10:57:00 AM

It is a crock of **** that the Goverment sector and the Unions make more than the private sector! Mark Hopkins on 1/31/2012 10:57:15 AM

Yes, federal workers make too much money and there are way too many of them. What should be done? We-the-people should insist that the legislature limit its activities to the 21 enumerated powers we entrusted to it in Article 1, Section 8 of the Constitution and the Executive branch should limit its activities to the considerably fewer powers enumerated in Article 2. What business has the government in developing private sector jobs or in regulating education or energy or housing or most of the other things they do? NONE! It was envisioned by the framers that Congress should be able to accomplish its tasks in the three weeks between the first Monday of December and Christmas. They have grown that into a full time job. If they would stop meddling and do what they are supposed to do they would get a lot more done at considerably less expense, with a lot fewer bureaucrats much less intrusion into the lives and activities of the citizenry and they could accomplish all of that without usurping our inalienable rights. The federal government should have such little daily impact on the lives and activities of the general public that it should be almost invisible yet it is the 800 pound gorilla in most people's lives. In the case of government, smaller is better. We often hear the phrase "too big to fail". What we should all be asking is has the government grown too big to survive. George on 1/31/2012 11:08:21 AM

It depends on what Federal employees you are speaking of. To say all are anything is a mistake. Last time this argument was used congress separated themselves from the military so rules they made would not apply to them so my answer is, yes some are very overpaid while others are just making a living wage. To say all federal workers are overpaid is like saying all democrats are liberal or all republicans are conservative. cchambe296@aol.com on 1/31/2012 11:08:41 AM

a labour board should compare workers qualifications-education-skills-hours work plus performance to put government & private sector on a level playing field! we would have high unemployment in the congress! gino gene guerrera cfp on 1/31/2012 11:09:59 AM

What we should be more worried about is their ridiculous retirement benefits and how they will be paid. neil price on 1/31/2012 11:14:32 AM

Older public workers should be offered early buy-outs and retired and hire younger more aggressive workers at lower wages and drastically curb the benefits. Make the new workers participate in the health plans and etc. and maybe give them incentives if they stay at the job long enough and active certain goals. I personally have unemployed friends that would take government jobs at half the current rate and no benefits just to be working. My best friend just retired after working for our congressman who was a (D) and lost his job after supporting Obama's health care bill and my friend after 22 yrs is drawing around $130,000/yr in retirement. He actually got a raise his last yr and was making over $160,000 as an aide to our Congressman. Their salaries were published in our local paper in Tennessee and there was a lot of public backlash. Until they impose term limits, we are just kidding ourselves if we think the system will change. Barton Harrison on 1/31/2012 11:16:05 AM

First, end civil service protections immediately. No more lifetime guarantees. Second, government pay should be less than the private sector. They all talk about serving and the sacrifice of public service. Let them prove it. Third, roll back all federal budgets to 2000 levels (then they can't blame Bush). Give them a year to adjust and institute annual zero-based budgeting for all departments, including DoD. Finally, term limits for Congress, and no lifetime pensions for Congress or the President. They go back to being regular citizens like the rest of us. Paul Ertsgaard on 1/31/2012 11:19:18 AM

Determine what is the average pay level for corporate America and do an across the board slash of Federal employee pay to match. If taxpaying Americans are getting a paycut (which my husband did) then the Feds should also. After all, the boss doesn't make less than his employees. The Feds work for us? Or do they? Laurie Sargent on 1/31/2012 11:20:33 AM

I think at this point it would be difficult to cut government employee salaries since the Gov. has already given them their rate. I would however cut 10% of all employees in the government and encourage the remaining 90% to take up the slack. That's what we do in private business when costs get out of hand. Steve Thompson on 1/31/2012 11:23:02 AM

As Always - Charles, you are dead-on correct. But, I feel that you and others of great intellect are crying out in dark and people are not listening. Marvin Shelley on 1/31/2012 11:24:27 AM

Take them off their pension plan and put them on just SS. Let them pay at least half of their health plan. Walt on 1/31/2012 11:31:40 AM

Like all problems, top down solutions that try to address all the internal issues never work. I suggest that the gov 1st must limit and reduce dramatically what it spends for federal services. Prioritize the services, and fund them according, and/or close some. This will force the agencies to make the changes internally either through staff cuts or wage adjustments. Michael Crawford on 1/31/2012 11:33:24 AM

First, Bravo to Matt for his reference to the foundations of the country. I disagree with him on whether the Federation should be involved in job creation based on the preamble purpose of "promote the general welfare", but it has been taken way to far at the federal level. And the individual welfare programs are definitely unjustified above the local or state level. As for government pay, it is far too high when considered with benefits and considering the low productivity and lack of courtesy we see far too often. Rather than adjust pay down, let's put performance and pay back into the free market. Start by instituting an objective ranking of performance with corrective actions for the low performers. If they don't fix their performance, move them out like is done in well run private sector businesses. Once performance review is in place, then have new positions paid properly based on free market competition. Bob Graham on 1/31/2012 11:44:46 AM

Yes, definitely overpaid. The premise of Government work is primarily based on security, not superior earnings potential. Salary should be commensurate with risk, of which there is virtually none. You trade the ability to take risks on earning in the private sector for the safety of knowing you will get the pension and benefits. The private sector typically offers none of the security and therefore should pay more to mitigate the risk factor. CUT PENSIONS! NO DOUBLE DIPPING! Highdivr on 1/31/2012 11:52:26 AM

Assuming it is true, those salaries should be rolled back phasing in reductions over a maximum 3 year period, until such time as they do not exceed the private sector. Pay grades should be scaled back to provide that new hires cannot be hired at greater than 90% of the private sector equivalent, including benefits. We need a system of government compensation that is not perceived as a gravy train for life. If it is no longer so attractive, they can go find a private sector job. Frankly, it's not as though they need to pay competitive or high salaries to attact top talent. Bob Wunderlich on 1/31/2012 12:15:21 PM

Make them all take the time off to return to school and earn their high school diplomas. Frank in Chicago on 1/31/2012 12:41:55 PM

Government workers should be paid exactly what their skills and experience would get them in the open market. It may be too late for us. Dependency has taken hold, and young people like it and are beginning to demand it cradle to grave. Fran Touchette on 1/31/2012 12:50:10 PM

Start by prohibiting Government workers from belonging to a Union.. Dick on 1/31/2012 12:57:58 PM

Freeze salaries until the budget is balanced. Blitzer on 1/31/2012 1:10:47 PM

Give all federal workers a 10% pay cut, then freeze their salaries until comparable jobs in the private sector catch up. If there is more than a 30% differential, make the pay cut 20%. Marilyn on 1/31/2012 1:35:20 PM

Market-means all jobs with the private sector for pay-parity for the same work. Pay for performance - not longevity. Phase out current pension plan and migrate to a 100% 401K-style cafeteria plan. Increase personal stake in health with personal contribution to associated insurance comparable with private industry. Eliminate accumulation of pay for sick days and limit sick days to a rational annual number (5?) that don't carryover into future years and that are not convertible to cash. Apply all of the above to ALL Congressional members, including mandatory Social Security enrollment in lieu of their current pension plan. In other words, have people who work for US at all levels join the real world! Cliff on 1/31/2012 5:01:52 PM

put in 20% to 30% pay cuts just like we would do in the Corporate arena. If they leave hire new people looking for a job. Joe on 1/31/2012 5:51:14 PM

Sorry, but this question is too generalized to answer. Which federal employees? How is their effectiveness evaluated? What's the taxpayer's ROI on each employee as compared to the ROI for comparable private sector employees? This question is obviously worded to bias respondents to provide anti-government responses, which supports your own bias, so it provides no objective information. It's only value is in making your biases seem supported by popular concensus, which makes everyone who feels like you do feel smart. Art Fox on 1/31/2012 6:13:05 PM

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