Professor Mark J. Perry's Blog for Economics and Finance
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Here is an idea I have been putting out there, in case there is interest:The following would be a private/public effort created out of Washington DC but produced by the private sector? This would combine a number of agencies, corporations, and foundations that seem to be supportive of this idea but would need an advocate in DC. Small entrepreneurial business may be the largest immediate source of jobs in America!.Small companies are a reliable source of new jobs: While businesses with 50 or more employees have posted net job losses for the past six months straight, small-business employment has expanded every month since November 2002, according to payroll manager Automatic Data Processing’s recent study.Macroeconomic Advisers' Joel Prakken, a small-business owner himself, views even modest employment creation among small businesses as a sign that the U.S. is still innovating. "I'm always happy to see small-businesses numbers up, because it means that even in a soft economy, entrepreneurs are still looking for ways to expand and grow," he said. "A lot of dynamism in the U.S. economy comes from the creation of new businesses."So can green entrepreneurs save the nation’s economy? After discussion with a few City, State and Federal officials; We see that government does not readily see or comprehend start-up process because start-up culture is so distant from government routine culture. Thus, there is a need to re-power the biggest job source in the country but the expertise may be missing. Interest was expressed in supporting a way to rapidly get a green entrepreneurial national program in place but the private sector is needed to accomplish this. At least 800,000+ of the recently laid-off American’s are fully qualified to work at start-ups. Private sector can put this together in 20 days. Public agency process would normally take years to do the same thing.The idea would be that a minimal common government fund would eliminate the start-up fees that are the core hold-up for new green ventures and the start-ups would be regional combinations of collaborative groups, including schools, that review and launch submitted business plans much like VC’s (Who have retreated into non-activity) used to do. A new type of “quick-start” easy-IPO ($1000.00 filing fee- 20 page filing document- consumers can buy in online with credit cards) (Calif. State University, San Bernardino has a model similar to this already operating and SEC approved) might even be created so that regular people can create mini-IPO’s. Each qualified venture would get a $25,000.00 start-up loan from a government agency and $100,000 worth of services from private party sponsors in exchange for favored-nations ongoing work with the program. ALL of the staff/founders would get stock in the company and receive revenue share and equity ownership. Even the feds would get stock. The universities would build the prototypes for them. Green companies would get some kind of tax incentive. There is absolutely no seed money in America for start-ups anymore and America is about to dramatically lose its innovation edge because of this.Could this work? Is the interest there in DC? Who might be an advocate for this? All the new electric car start-ups can tie into this and the solar, wind, green building, etc. people too.
I still have my Carter WIN button too.
Scott,You also have to consider the number of businesses that fail. I believe that it's 4 out of 5 in the first 2 years of operation. The other drawback is limiting all of these companies to "green" technology. By creating a haystack of companies, the great "green" ideas will be like needles. They will simply be lost in the shuffle and cash starved which is what happened under the Carter admin. Nice thought but throwing money at a problem seldom works. Actually, there are a great many resources for small business available online and through NGOs. Came across an organization that pairs entrepreneurs with experienced business executives to help work on business plans, and develop strategies. Often businesses fail due to inadequate planning.
But the recession is perfectly willing to participate in you!
david:"I still have my Carter WIN button too."sorry, you can't blame jimmy for that one.it was the Gerald Ford admin that came up with the WIN button. he followed Nixon, who gave us wage and price controls. sadly, both political parties seem to be endowed equally with wrongheaded economic ideas.
“Green Jobs” Likely To Destroy More Jobs Than Are CreatedA study just completed in Spain finds that the creation of so-called “green jobs” doesn’t at all seem to be the employment panacea promised by their advocates. Optimistically treating European Commission partially funded data, we find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.Despite its hyper-aggressive (expensive and extensive) “green jobs” policies it appears that Spain likely has created a surprisingly low number of jobs, two-thirds of which came in construction, fabrication and installation, one quarter in administrative positions, marketing and projects engineering, and just one out of ten jobs has been created at the more permanent level of actual operation and maintenance of the renewable sources of electricity.The study calculates that since 2000 Spain spent €571,138 to create each “green job”, including subsidies of more than €1 million per wind industry job.Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro.Link
DavidIt was a FORD WIN button and I've still got mine too.
I still have the cardigan sweater Carter suggested we get...:-)
The answer does not lie in "green" energy like wind & solar which are hopelessly inefficient, high in capital cost and need massive subsidies because there is no return on investment. Wind and solar cannot provide consistent, stable baseload power and the cost of batteries to store power is currently uneconomic. Electric cars still need power meaning that one merely creates CO2 at the powerplant (unless it's nuclear or hydro-electric; neither of which is even considered green by the environmentalists) rather than out of the tailpipe. There are lots of technological innovations like improvements in ballast technology, increased efficacy (lumens per watt) in lighting, or old technology like insulation & energy efficient design (just don't put in as many windows which have an R value of 2). The U.S. is the world's 2nd highest per capita consumers of energy (all forms). That's the area where there is huge potential. It's the real simple stuff like getting rid of the second frig or buying an energy STAR appliance, washing your clothes with cold water formulated TIDE or insulating the attic with the pink stuff.
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Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan.
Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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