We know what caused the recession of 2008-09. It was the bursting of the housing bubble which created a financial crisis that endangered every large bank in the U.S. and many abroad. The federal government enacted Troubled Asset Relief Program (TARP), the program which sustained the liquidity of almost all of the large financial institutions, giving them time to deal with the enormous number of mortgages in default on their payments. An economic stimulus was enacted which succeeded in stabilizing the level of unemployed at about 9.2% of the workforce not counting involuntary part-timers and the number who dropped out of the labor force. Then much to the surprise of the administration’s economic team, employment fell, causing a substantial drop in the securities’ markets and concern to be expressed about the possibility of a double-dip recession.
Meanwhile, the eurozone had to face the possibility that Greece would not be able to pay its soon to mature sovereign debt much of it created to reduce man-made carbon emissions. The principal other country having difficulty managing its sovereign debt is the USA but fortunately its debt is expressed in dollars and it has the ability to print as much of it as it needs. Greece does not. The euro standard is much like the gold standard. If a country runs out of euros, there is nothing it can do except tighten its belt.
No one mentioned the fact that the reason that Greece was short of Euros with which to pay its debt was its international trade deficit which in 2010 amounted to an estimated €-14 billion. Of course it was not the only European country experiencing a trade deficit. What all the PIIGS had in common in 2010 were trade deficits: Spain, €-45.5 billion; Italy, €-48.5 billion; Portugal, €-15.9 billion; Greece, €-14 billion; and Ireland, €-1.1 billion. France likewise had a trade deficit, €-38.9 billions. But Germany had a trade surplus, €134.6.
It is worth mentioning a few countries at the extremes. China had a trade surplus of US$305.4 (€218.1) billion and the U.S. had a trade deficit of US$-470.2 (€-335.90 billion). The U.S. position versus China is the worst trade imbalance in the world.
And the PIIGS have, in common with the U.S., huge expenditures on anti-carbon policies, penalties or mandates on businesses using fossil fuels, and subsidies in the form of cash and tax credits. As George Will put it in 2007, “How much are they willing to pay—in direct expenditures, forgone economic growth, inefficiencies and constricted freedom—in order to have a negligible effect on climate change?” And that is the odd part. There is no evidence that the colossal burdens imposed on businesses and taxpayers changed the amount of carbon in the atmosphere one whit. So why are we doing this? Ask Al Gore who has gotten rich endorsing man-made global warming.
Spain was nearly bankrupted by expenditures on renewable sources of energy The Spanish economy is a wreck because the Spanish government led the world in embracing “GREEN’ sources of energy. About eleven percent of its electricity is produced by wind and solar plants. It is on the verge of bankruptcy. It has 20% unemployment. It announced last year that it would cut the subsidies to “renewable” energy and a host of vested interests, foreign and domestic, screamed to the high heavens for continuation of the subsidies. At the 4th Intl Conference on Climate change, Spanish economics professor Dr. Gabriel Calzada addressed the claims that green policies create large numbers of jobs. In Spain, he observed, “green jobs are created by green rain” — huge taxpayer subsidies: €570,000 per green job created (about US$774,000). The cost per job created in the U.S. by “green jobs” is similarly astronomical. As a result of the tax-subsidized increase in the use of renewables from 1998-2009, the price of electricity in Spain rose by 77 percent, he observed. Fellow panelist Dr. Carlo Stagnaro, an environmental engineer from Italy, corroborated the cost per job created, noting that for every green job, 6.9 jobs could be created in the industrial sector for the same investment.
Greece and Portugal and Italy and Spain and Ireland and the USA are in distress as a result of the foolish policies they adopted to fight man-made carbon emissions pursuant to the AGW theory which, it turns out, was a hoax from the beginning as was evident by many periods of global warming and cooling before man existed. All of them wasted billions of euros and dollars in wind and solar energy and bio-fuels, in research tending to show the benefits of anti-carbon emission policies. Bio-diesel gets a $1 per gallon subsidy in the U.S. Taxpayers get stuck with that subsidy and all the others.
The world-wide current recession is the result of trillions of dollars expended by governments all over the world, the costs to industry arising from mandates, and the loss of revenues from tax credits, all made pursuant to world wide acceptance of what is evidently a false theory, man-made global warming. A competitive theory the sun’s deflection of cosmic rays has already proven it can predict periods of warming AND COOLING. The man-made theory cannot explain periods of global cooling at all. It is a one-way theory. Which theory is right? History will tell but our bet is on the sun's magnetic cycle. Spanish literature tells us that regardless of which is right, we ought to stop tilting at – or wasting money on -- windmills.