This blog entry started out as a short Facebook post I was typing out while heading to work this morning. It was just meant to be a quick repost of an article one of my friends posted that I found illuminating, but as sometimes happens when I start writing, whether on the go or at my desk – words sort of just… appeared and kept coming, so as my finger hovered over the “post” button I realised it was too much for Facebook and needed its own space, because I wasn’t writing about the contents of the article itself which I was sharing, but on the wider lessons the article presented to me. The article topic is, ostensibly, about the solar energy sector in the US and the political challenge it faces in the future. This entry though? It’s about something else – it’s about the art of misdirection and how it’s very easy to be a well-educated, responsible, socially conscious human being, in possession of what you believe to be all the facts, and still fail to grasp the whole story.
The article I’m talking about, published on 21 August 2017 in the science section of WIRED by Nick Stockton, is called “Why the US solar industry doesn’t want government protection”.
It might be a dry read if you’re not someone who geeks out over economics, commerce, and trade news, but it’s well worth it to take the time, not just to educate yourself on the state of the solar energy sector in the US. This article gives good insight into how the politicking, double dealing, and statistical manipulation within an industry can lead to the misinformation and miseducation of the public – messages which are then seized by politicians to push their agenda.
In this example you have two US solar panel manufacturers who have recently claimed bankruptcy and are calling for government protection (in the way of import tariffs) against China based on the claim that China unfairly subsidies its solar power manufacturing industry. Does it subsidise it? Yes. Does it do so unfairly? More debatable. US companies also receive government subsidies. The ability of China to manufacture the same product at a cheaper price is not necessarily the result solely of government subsidies but a whole range of factors. So are cheaper solar panels from abroad undermining US solar panel manufacturers and threatening their jobs? Yes, clearly, if we have companies filing for bankruptcy. Would tariffs protect those jobs? Yes, in the short term.
Imagine you stopped reading here for a moment and draw your conclusions. Now keep reading and come back here when you’re done.
In the long term though, the efficacy of tariffs in protecting those jobs is less clear. Tariffs might protect the manufacturing jobs initially but simultaneously damage the solar panel industry in the US as a whole, and in the longer term this will have a knock-on effect on manufacturing jobs as demand for the panels declines due to their increased cost in assembly and installation.
As this article shows, only 19% of the jobs in the solar industry in the US are in manufacturing. The rest of the money and value and jobs come from their assembly and installation. Being able to source cheaper solar panels abroad may harm the 19% in the US who manufacture them but helps the other 81% of the industry that relies on being able to source cheaper solar panels, making tariffs more harmful than helpful. And for the investors that support tariffs? Well, check it out! The company that offered additional investment to one of the bankrupt companies stipulated that it would do so only on the condition that the manufacturer signed up to the petition for the imposition of tariffs against China. But at the same time the investor company wrote to the Chinese Chamber of Commerce demanding that it buy $55 million worth of equipment from its manufacturer and in exchange it would make the tariff petition go away (and incidentally withdraw its investment). Welcome to legal business exhortation.
Why is this important? Well, the article tells you that large-scale industrial solar panel installation (not the small fry like residential roof panels) accounted for at least one third of all newly installed electricity generation in the US. Much of this success has to do with the ability to source cheaper components from foreign competitors. According to one estimate, the proposed tariff could erase two thirds of expected solar installations over the next five years. This has two ramifications: it would devastate the solar energy industry sector in the US, and it would also have a negative impact on efforts to combat climate control and return marketing power to energy companies driven by non-renewable resources.
All this is before we enter the realm of politics proper. Push away the economists and the trade experts and welcome in the governors and state legislators of US states where these manufacturing companies are based. Politicians are always running for re-election. They aren’t going to care about the statue of the solar energy in the US as a whole because the US as a whole is not their constituency. They care that a factory in their constituency is shutting down. So it’s not in their best interest to tell people that a tariff on foreign solar panel components is actually going to damage the US economy in the longer term. They want to be able to announce that they supported a policy that saved a factory in their home town.
You know what? That’s ok – that’s expected from state politicians. Their concern is their corner of the country and they do what they need to do to fight for their own people (and their own jobs). It would be preferrable if they concentrated on education and upskilling programmes that would allow people to weather the loss of a manufacturing job and move into new work, but I can understand where they’re coming from and their motivation is clear.
But now dismiss the state level and zoom out to the federal level. The US government is meant to be the steward of the US economy as a whole. That means sometimes letting a small economic sector fail if it helps a larger economic sector to grow. A true conservative would shrug and point to free market consequences. A social progressive would say that the government’s role is to chaperone the national economy for the greater good of everyone, but also put in place a safety net for the people who are left behind. That means government-sponsored programmes to assist those local and state governments who are hit by the closure of those solar manufacturing plants by helping to retrain the workforce and make the location attractive to other business that can flourish. Either end of the spectrum requires a complete understanding of all the factors at play and be able to dismiss the appeals for action which are based on a myopic, distorted view of the bigger picture.
But that takes a lot of effort and hard work and clarity of the issues. It takes integrity. A commitment to public service not bound to the financial backers that put you in charge. And it’s also not sexy. It’s so much easier to just stand up and say “I helped save jobs!” and not bother to clarify that for every manufacturing job you saved you may have lost four other ones. And that’s before you get to the possibility of back room lobbying by the fossil fuel industry for solar energy tariffs because they know it will reduce their own competition domestically, damaging the whole climate change movement by reducing the economic viability of renewable alternatives.
Extrapolate the tale of the solar industry in this article to every other industrial sector in the US that’s being buffeted by the chaotic winds of the present administration – healthcare, transport, food, tourism – each of those has the exact same complex interacting layers of cause and consequence that can obscure the true picture. All have strong lobbies in state and federal governments. All have multiple divisions within the sector that could make more money by diminishing the players in the other division of the same industry (insurers versus hospitals, anyone?).
Now imagine how much work you have to do to educate yourself in order to be able to navigate the facts and come to the best decision you can as a voter on all the conflicting viewpoints. It’s daunting. It’s exhausting. And it’s utterly, utterly necessary in order to be a responsible civic participant in society.
So next time you’re reading an article, any article. Have a think about what the words and facts may be hiding. What if the article is only half the story? Go back to the break above where I asked you to pause reading. How do your conclusions differ now than what they were at that point?
Welcome to critical thinking. It’s hard. It’s important. We need more of it.
I could not decide how to illustrate today’s post, and it’s more fun if there’s a picture than when there isn’t. So after some thought, I decided to go with something from M.C. Escher, as a great example of visual misdirection. This particular piece is an extract of the larger lithograph called Ascending and Descending, first produced in 1960.