When Barack Obama introduced us to his economic team in Chicago this week, you could almost hear an intercom blasting in the background: “Dr. Obama, please report to 1600 Pennsylvania Avenue, stat.”
The new advisors gathered around the President-elect looked like a crew of brilliant doctors about to go to work on a patient who is flat on his back and suffering a heart attack together with a bunch of strange and confusing symptoms — an apt description of the our economy today.
[JR: Thankfully, Barack is not cantankerous, misanthropic, and Vicodin-addicted, like a certain TV doc modeled after Sherlock Holmes. And hopefully, unlike both George Bush and Gregory House, team Obama won’t nearly kill the patient several times before finding the right cure.]
How the Obama team chooses to diagnose and treat the patient will mean everything for the long-term prognosis. The economy needs more than a jolt from a defilibrator; it needs a heart transplant. The doctors should use the paddles if they must, but the patient needs a lot more treatment, both short and long term.
As Obama’s team begins work on a recovery package, I hope they’ll keep a few guiding principles in mind.
First, there’s an important difference between economic stimulus and economic transformation, and the latter is what we need. The Big Three are a case in point. We shouldn’t give them an infusion of taxpayer money just so they can continue their unhealthy habits. Similarly, we should aim for fundamental changes in the old economic order; otherwise, sooner rather than later, it will go into cardiac arrest again.
Second, and closely related: There is an important difference between spending taxpayer money and investing it. On a personal level, buying a big-screen television is an example of spending. The purchase will enhance your couch time, but it won’t earn an economic return. Putting more insulation in your home, on the other hand, is an investment that gives you the equivalent of new tax-free income with every month’s utility bill.
The recovery package must be much more than another check to every household. Some type of instant relief on Main Street may be needed — but the much larger expenditure should be invested rather than spent.
Third, every dollar must multi-task. We cannot engage in trade-offs between a ruined planet, oil wars and a crumbling, third-world infrastructure. There are ways to solve these problems simultaneously and in the new White House, single-purpose investments should not be welcome.
Our transportation infrastructure is a case in point. Obama says his recovery package will include “rebuilding our crumbling roads and bridges.” There’s no denying that bridge safety is important and that traffic congestion harms productivity. But the principal goal of a recovery package should not be to accommodate more cars, with their oil consumption and carbon emissions. The goal should be to give people better alternatives to cars, including safe and convenient mass transit.
Energy efficiency is another multi-purpose investment. It has been our biggest source of “new” energy over the past 35 years.
Efficiency improvements reduce greenhouse gas emissions, take pressure off the electric grid and slow the hemorrhage of wealth from every household, automobile and community, as well as from the national economy. Efficiency is the economic stimulus that keeps on stimulating.
Fourth and finally, we must phase out investments in the old economy. There is no question that the federal government will have to go further in debt to finance an adequate economic recovery package. But Congress can avoid some of that debt by creating a “National Energy Subsidy Reform Commission” similar to the military base-closing commission of the 1990s. Its job would be to identify carbon subsidies that should be eliminated and reinvested in clean energy. Following the base-closing model, the commission’s recommendations would have to be accepted or rejected as a package.
In addition, Congress and the new administration should review and revise the government’s more than 200 loan, loan guarantee and grant programs to make sure that they are investing in a sustainable economy.
Not long ago, investments like these might have been considered radical medicine. Not any more. One indication that the idea of a new energy economy has moved into the mainstream is a letter sent to President-elect Obama on Nov. 20 from a part of the country whose economy was built on fossil energy production. The two top officers of the Western Governors’ Association — Republican Jon Huntsman of Utah and Democrat Brian Schweitzer of Montana, wrote:
An enormous national commitment is necessary to transform our energy infrastructure and our economy as we shift to low-carbon-emission energy sources that include wind, solar, geothermal, biomass, hydro and other renewables, as well as fossil fuels with carbon capture and storage.
With investments such as these, the economy not only will recover, it will emerge from the hospital stronger, more stable and richer with opportunity than ever before.
— Bill Becker
- A Strategy for Green Recovery
- Green investment does create jobs
- The intellectual bankruptcy of conservatism: Heritage even opposes energy efficiency
- Nicholas Stern: Recession is the time to build a low-carbon future
- “The Green Collar Economy” is a NYT Bestseller
- Green policies in California created 1.5 million jobs
- Mayors report: 4.2 million new green jobs possible
- What would a Green Recovery do for your state?