Rebuttal to John Boesel, CEO of CalStart
Re: “Keeping A.B. 32 Assures Area Green Jobs,” Pasadena Star News, June 24, 2010
In 1977 the Eagles came out with their pop song “Hotel California.” No one thought at that time that the Community Reinvestment Act, which prohibited red lining of home loans, would lead to sub prime affordable housing loans that eventually would melt down our entire financial system and break the California state budget.
In the mid 2000’s, Pasadena became crazed with affordable housing like out of a scene of the famous Frank Capra 1946 movie “It’s a Wonderful Life.” In that movie the character George Bailey (Jimmie Stewart) persuaded the Board of Directors of the fictional Building and Loan to continue making loans to the working poor.
In Pasadena in 1997, Countrywide Bank spun off Countrywide Mortgage Investment as an independent company called IndyMac Bank. In 2006 Countrywide financed 20% of all mortgages in the U.S. equating to 3.5% of the U.S. Gross Domestic Product. Affordable housing became the tulip bulb craze of the U.S. and one of its evangelical centers was Pasadena.
In 2006, Pasadena’s Jill Shook wrote her book Making Housing Happen: Faith-Based Affordable Housing and launched her national ministry for affordable housing advocacy. Affordable housing became a mindless religion that was unconcerned about the long-term consequences on real people and the institutions that serve them.
From 2003 to 2008 during the Real Estate Bubble, we were financing with sub-prime loans not only affordable housing but many “hotel Californias” and other ill-advised real estate developments. During the Bubble, California passed Assembly Bill 32- the Global Warming Solutions Act – also known as the Green Power law, which is to be expanded in 2012 when the long-term electricity contracts from the 2001 California Energy Crisis elapse.
In late 2008 when our financial system collapsed, sub prime home loans comprised only 16% of all U.S. mortgages. By 2012, the green equivalent of sub prime loans, renewable solar, wind and geothermal power, are targeted to comprise 30% of California’s electricity use. As documented by many reputable energy experts, Green Power is redundant power and requires back up spinning reserve conventional power (“dirty power”) and thus will result in no real reduction in air pollution and will cost double the price.
This doesn’t deter John Boesel, CEO of CalStart, who doesn’t want the light switch of government financing turned off by suspending Assembly Bill 32 – The Global Warming Solutions Act – that will self-servingly provide jobs for those in the new green tech industries. It’s as if we have learned nothing from the recent collapse of our banking system. We remain myopically crazed with Green Power, just as we were living inside the Real Estate Bubble from 2003 to 2008. Only this time it is a Green Power Bubble and we’re playing high-risk poker in a fragile and deficit-plagued state budget.
Like the Real Estate Bubble, Mr. Boesel lists numerous new venture businesses and research and development projects, all government subsidized that are ongoing in San Gabriel Valley. None of these businesses or projects has proven that they will provide energy independence or drastically reduce pollution in the foreseeable future. They are “spec” projects that should be financed by the private sector. Mr. Boesel cites the National Venture Capital Association as opposing the halting of the Green Power law. But he doesn’t mention that even private financiers are addicted to government monies backing and securitizing their investments.
Ask yourself if you would trust someone such as Mr. Boesel who falsely claims in his guest editorial in the newspaper that air pollution “contributes to 19,000 premature deaths, hundreds of thousands of asthma attacks, and thousands of trips to the emergency room for California families.” As Joel M. Schwarz, professor in the Harvard School of Public Health, has definitively documented, while air quality has improved 70% since 1970, asthma rates have increased. Mr. Boesel is using fear tactics and quack medicine to scare Californians to vote against the halting of the Green Power law.
Neither does Boesel tell us that if there were to be an improvement in air quality from Green Power, it would likely not be in urban California but in the California desert or in Arizona or Utah where all of the “dirty” coal-powered plants and solar and wind farms are located.
Economist Lawrence Kotlikoff’s book “Jimmy Stewart is Dead: Ending the World’s Financial Plague” starts out with this humorous but serious fictional future scenario:
“Twas the year the country stood still. Not a car, truck, or bus rode the roads. No one drove to work, no one drove to shop, no one drove to visit. No one drove anywhere. The reason was simple. No one could buy gas. The gas stations had all gone broke.
Their owners had tired of netting pennies on the gallon. They wanted to surge their earnings. The big money, they learned from a bright young MBA, was in securitizing their services (or in electric car research and production). So they started selling GODs – Gas Options for Drivers.
Each GOD gave the drive the option to fill her tank for $4 per gallon. Drivers bought GOD’s religiously. And with gas selling for $3 a gallon, station owners didn’t worry.
Then the unthinkable happened. Gas prices skyrocketed to $6 a gallon, and drivers began invoking their GODs. Each GOD could save $2 per gallon per tank, and if you didn’t need gas, you held up a sign – “GODs for Cash!”
Station owners began cursing the GODs. They now had to buy as at $6 a gallon and sell it for $4. In short order, the owners went bust. They closed their stations and started looking for jobs in financial services (Green Tech industries). GODs became worthless. Overnight, there was no gas for the nation’s 250 million vehicle, and the economy ground to a halt.” [end quote]
The above analogous story is what happened to our banks in 2008 and may happen to our energy system if AB 32 is not stopped. The moral to be learned is don’t let government let banks gamble on risky affordable housing loans or Green Power projects or businesses. Don’t let Wall Street or government play craps with our financial or energy systems or our economy with our tax dollars. Once burned, twice shy.
And remember don’t get tricked by Green fear mongers and health quacks and Green Power advocates about how to vote for suspending Green Power. A YES vote is a NO vote for halting green power. Don’t be confused.
STOP Green Power by voting YES on suspending AB 32. The Green they are playing with are your tax dollars. Crazy is defined as doing the same thing over and over again and expecting different results. Let’s stop the craziness of government and business and vote YES on stopping AB 32. The price of Green jobs is too high – our economy, our banks, and our schools and government agency budgets.
Sources:
Larry Reisinger, Electric Grid Myths, Part II, Pajamas Media – http://pajamasmedia.com/blog/electric-grid-myths-part-ii-the-effect-of-alternatives/
Joel Schwartz, Does Pollution Cause Cancer?, Reason.com, – http://reason.org/news/show/does-pollution-cause-ashtma
Asthma Rates Are Rising Across U.S., MSN Health – http://health.msn.com/health-topics/asthma/articlepage.aspx?cp-documentid=100254984
Lawrence J. Kolitikoff, Jimmy Stewart is Dead: Ending the World’s Ongoing Financial Plague – http://www.amazon.com/Jimmy-Stewart-Dead-Ongoing-Financial/dp/0470581557