Over the weekend I tossed out some thoughts about how energy efficiency might serve as one response to the housing/credit crisis. As it happens, many other folk have tied the financial crisis to green(ish) considerations. Here's a roundup.
First, the inimitable Tom Friedman turns his Mustache of Understanding on the bailout, agreeing with yours truly that it does not obviate the need for serious public investment:
Indeed, when this bailout is over, we need the next president -- this one is wasted -- to launch an E.T., energy technology, revolution with the same urgency as this bailout. Otherwise, all we will have done is bought ourselves a respite, but not a future. ... The Bush team says that if this bailout is done right, it should make the government money. Great. Let's hope so, and let's commit right now that any bailout profits will be invested in infrastructure -- smart transmission grids or mass transit -- for a green revolution. Let's "green the bailout," as [Van] Jones says, and help ensure that the American Dream doesn't ever shrink back to just that -- a dream.
Yvo de Boer, head of the U.N. Climate Change Secretariat, also says the bailout needn't prevent new investments in clean energy.
Ex-Treasury Secretary Lawrence Summers makes roughly the same point:
The idea seems to have taken hold that the nation will have to scale back its aspirations in areas such as health care, energy, education and tax relief. This is more wrong than right. We have here the unusual case where economic analysis suggests that dismal conclusions are unwarranted and recent events suggest that in the near term, government should do more, not less.
...
Indeed, in the current circumstances the case for fiscal stimulus -- policy actions that increase short-term deficits -- is stronger than ever before in my professional lifetime. ...
The economic point here can be made straightforwardly: The more people who are unemployed, the more desirable it is that government takes steps to put them back to work by investing in infrastructure or energy or simply by providing tax cuts that allow families to avoid cutting back on their spending.
Economist Dean Baker makes it yet again: "If the bailout proves to be an obstacle to effective stimulus in future months and years, then the bailout could lead to exactly the sort of prolonged economic downturn that its proponents claim it is intended to prevent."
And Larry Mishel, president of the Economic Policy Institute, makes it yet again:
There is much to be angry about the unraveling financial system and the taxpayer rescue. One aspect that is far too rarely discussed is how the potential costs of the bailout are being used to force the next president to pare his goals, presumably for lack of money. (In Barack Obama’s case, so this new wisdom goes, he'd have to hold back on enacting his health insurance plan, his infrastructure and energy efficiency initiatives, on an early childhood education and so on.) ... This really gets to me. House Financial Services Chairman Barney Frank wisely notes that on September 10th 2001 there was no money for anything but somehow we managed to conduct two wars thereafter. So true.
In a new ad, Friends of the Earth -- which strongly opposes the bailout -- compares subprime loans with the loan guarantees for nuclear power Congress is now trying to ram through. Then there are defaults, and there will be, taxpayers will get stuck with the bill again:
Mindy Lubber, head of Ceres, says the failure to heed risks on home loans should make Wall Street more cognizant of other risks, particularly "subprime carbon assets that may prove toxic in the future."
Climate expert Terry Barker fears that governments are underestimating climate risks just as they underestimated credit risks, and says that massive investment is needed to reduce those risks.
Carl Pop of the Sierra Club asks what else $700 billion could do.
Larry Beinhart says the problem is that we've moved from a production economy to a consumption economy, and "you can't borrow your way out of too much debt. ... The ultimate problem is remaking ourselves into a production economy."
And finally, Chalmers Johnson makes a semi-green point that is dear to my heart:
Spending hundreds of billions of dollars on present and future wars that have nothing to do with our national security is simply obscene. And yet Congress has been corrupted by the military-industrial complex into believing that by voting for more defense spending, they are supplying "jobs" for the economy. In fact, they are only diverting scarce resources from the desperately needed rebuilding of the American infrastructure and other crucial spending necessities into utterly wasteful munitions. If we cannot cut back our long-standing, ever-increasing military spending in a major way, then the bankruptcy of the United States is inevitable. As the current Wall Street meltdown has demonstrated, that is no longer an abstract possibility but a growing likelihood. We do not have much time left.
Word.
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Comments
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Jon Rynn Posted 4:29 am
30 Sep 2008
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Russ Posted 4:38 am
30 Sep 2008
Should that second "climate" be "economic" or "credit" or "debt" or something?
Great stuff, all of it. I especially like Johnson's take on the fraudulence of the military-industrial complex as the best job generator. Has anyone done a study comparing the ratio of federal spending to job creation in various Keynesian scenarios vs. the military and weapons procurement?
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Jon Rynn Posted 4:55 am
30 Sep 2008
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GreenEngineer Posted 5:18 am
30 Sep 2008
On the other hand, the bailout as it is currently conceived must necessarily cost us money. If it doesn't, it will fail. This is because the root cause of the bailout is excessive lending: lots of money has been injected into the system which has no wealth to back it up (high leverage ratios), and poor prospects of creating that wealth in the near future (poor lending decisions) even if you ignore the problem of trying to grow the economy while energy supplies shrink.
What we are seeing now is the mother of all market corrections: We're confronted with the fictitious nature of the wealth created during the housing bubble. And I think we're still carrying alot of false wealth from the dot-com bubble, which was never allowed to properly deflate (the housing bubble picked up where it left off).
The crisis is the sudden realization that the emperor has no clothes, or more to the point, no money. It's the abruptness of this correction that makes it so dangerous, and so likely to have long-term impacts on the economy. A bailout plan that recognizes this essential truth will not attempt to avoid financial pain, or to prevent the destruction of wealth on paper; it will simply try to spread the pain out over a long enough time that it doesn't cripple us in the short term.
However, the bailout as it is being presented is all about avoiding this pain, and trying to get back to business as usual. This is doomed to fail, because it's ignoring the root cause of the problem, and the essential remedy that is required: real wealth and the money supply must come back to equilibrium. Any program that tries to avoid this rebalancing, and the pain associated with it, is simply putting the inevitable off to the future. And as with anything painful that you postpone dealing with, it will be worse later.
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GreenEngineer Posted 5:20 am
30 Sep 2008
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David Roberts Posted 5:49 am
30 Sep 2008
grist.org
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Russ Posted 6:13 am
30 Sep 2008
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Delay And Deny Posted 10:49 am
30 Sep 2008
The energy efficient family would be living in a semi-rural, semi-suburban home, powered by solar cells that create hydrogen.
They would have enough capital so that no one has to leave the home for too long to go to "work". In fact, traveling to work like a robot every day has become an anachronism.
Thanks to the big payoffs from research during 8 years of Bush, nanotechnology allows 100 percent conversion of solar to hydrogen.
The family communicates with its community via WiMax, that serves for all voice, text and video data -- one channel, no wires -- very efficient.
The dynamic actions of the Fed will put more money into the hands of more Americans so we can regain our economic independence. Big time enslavement by Libs using light rail and massive government spending works are successfully defeated by the people.
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Sam Wells Posted 11:15 am
30 Sep 2008
Including green, renewable energy sources.
Anyone who has faith that a trillion could solve the current financial dilemma is probably smoking something really good. There is 43 trillion in funny money around the globe. Yet we still hold onto our dreams, promised, and visions. I guess it is the American thing to do.
Onward through the fog
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stevenearlsalmony Posted 10:08 pm
30 Sep 2008
Have the self-proclaimed Masters of the Universe among us adopted a behavioral repertoire characterized by unconscionable super-human greediness, the likes of which this world we are blessed to inhabit has never before endured and cannot much longer sustain?
What is to become of our children, whose future is being mortgaged once again this week and threatened more seriously with every passing day?
When is my not-so-great generation of rapaciously consuming and relentless hoarding elders going to stop its disturbing behavior of dropping problems of our own making into the laps of our children?
The financial engineers who manufactured the spurious business models and Ponzi-like schemes that are undermining the functioning of the global economy today need to take some responsibility for their greedy behavior rather than pass along the colossal debt derived from their subterfuge for our children to repay.
Steven Earl Salmony
AWAREness Campaign on The Human Population, established 2001
http://sustainabilitysoutheast.org/index.php
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