How to end the recession? Renewable energy

            This recession should have been the perfect excuse for our country to work towards mitigating climate change.  Granted, if carbon emissions were couched in purely environmentalist terms, most Americans would wonder why we should care about the polar bears and melting glaciers—have become the iconic face of global warming—when thousands of people are losing their jobs each month.  Instead, the Obama administration has tried to frame the debate in terms of economic opportunism: as globalization has exported U.S. jobs in manufacturing overseas, clean energy technology could prove to be a source of pride and growth for the United States.  In the coming decades, we could be known not just for our universities, our biomedical research, and our defense technology, but also for our renewable energy infrastructure.

            The president has made the correct decision to attend the Copenhagen climate change talks next month with a loose set of commitments that the United States is willing to make to mitigate climate change.  Although Obama’s target—a 17 percent reduction from 2005 greenhouse gas levels by 2020—is less than what the Europeans (and American environmentalists) desire, it is probably the number that is politically feasible at home.  Hopefully, the promises of China and India, two rapidly-developing economies, to curb their emissions will dim conservatives’ outcry that the U.S. cannot cap emissions unless our Asian competitors agree to do the same.

            In reality, though, Obama should have called early in his presidency for a new American challenge.  Similar to his desires to have every American attend college or technical school and to give back to their communities by volunteering, he should have called on the country to reduce their energy consumption, ask their power companies to generate electricity from renewable sources, and ask themselves how to lessen their impact on the planet.  Under different circumstances, the people of this country might have seen this entreaty as a way to save money, conserve natural resources, and support small-scale renewable energy projects in neighborhoods and cities.  Instead, it’s highly probable that this message would have gotten hijacked by Tea Partiers who believe that it would be a step toward rationing, raising the price of electricity, and harming middle-class families.

            But now is the time to make that call to action.  If Americans are worried about how high unemployment, a Middle Eastern quagmire, and the rise of China are destabilizing America’s power, this is an easy way to get back on top.  Right now, China is the world’s leader in solar cell production; France and the Netherlands are working with African countries to export wind technology.  The United States ought to divert some of our defense spending for research and development to making these technologies affordable to produce and install.  (After all, our energy supply is as much a national security issue as is fighting insurgents in Kandahar.)

            Just as Silicon Valley came to host a booming information and communications technology industry at the end of the twentieth century, there is no reason why the entrepreneurs and their capital cannot center their operations first and foremost in America.  If we do not jump at the opportunity to lure these business ventures to the United States, all of the intellectual and mechanical expertise on the renewable energy front will congregate overseas.  We may not have to worry about the military strength of any of our rivals, but it should be a serious embarrassment to the United States if their economic strength in the coming years is propelled by this new sector.

            In a sense, China has a huge incentive to push for worldwide greenhouse gas reductions: while renewable technology is not cheap for them domestically, all of the European nations and the United States seeking to fulfill their pledges on emissions reductions will be shopping on the Chinese solar market.  Unless we want to remain permanently indebted to China, the president ought to order a substantial retooling of our economy.  Let all the money that is wasted on failing American automakers—which can’t compete with the Japanese and German industries—and on Wall Street trading—which only serves to fatten the pockets of executives—be put toward something worthwhile: creating a worldwide market for our technology.

            If the United States takes the lead post-Copenhagen, Europe will see us as a partner in the climate change battle and Asia will see us as a competitor in the race to renewable energy production.  Unlike Afghanistan, this is a fight we can win—and the entire world will benefit.

Newspapers: too necessary to fail

            Blogs are very democratic.  They are a way of giving and getting opinions faster than ever before—in real time and raw delivery.  Do you think Nancy Pelosi sucks?  You can get on the Web and say so.  Do you think I suck?  You can reply to this post and get in my biznazz.  Sure, the Internet is a virtual playground for rabid partisanship, anonymous ad hominem attacks, and enticing but unsubstantiated pieces of news, but isn’t that how we like our information—reactionary and with a built-in bias?

            That is certainly what we receive from most modern forms of communication.  Talking heads on CNN are actually quoting from websites and from Twitter—as if what Joe Sixpack.blogspot.com says about energy policy has equal weight as Secretary Stephen Chu’s remarks on the matter.  Not to mention that shouting matches, visible disgust, and partisan hackery are the staples of cable news commentary.  That’s why I loathe cable news—it’s not news at all.  Everyone has an agenda, and those who don’t simply seek to aggrandize themselves at the expense of truly investigative journalism.  There is a disheartening cycle taking place in the mainstream media: anchors tell us what they think, then report on what we think they think.

            Call me old fashioned, but if I want accurate news reporting that’s not sneered at or otherwise agenda-driven, I still turn to the dying breed that is the American newspaper.  Bloggers could not function without newspapers—they provide the research and the analysis to which we react.  They station reporters in state capitals and in city council meeting rooms to ask questions and pore through documents that my staff of one has neither the time nor the credibility to access.

            Some journalists are bloggers, but most bloggers are by no means journalists.  What we do is essentially creative writing that seeks to persuade, mock, or champion.  I write about government policy, but I doubt that I could get the mayor of my town to provide his analysis for this website, much less a member of the United States Congress.  Newspapers provide the institutional memory and the ability to work through the backchannels of power to investigate the claims of those in charge and seek rebuttals from those who aren’t.

            Unfortunately, the newspaper business model is suffering.  Ad revenue is drying up because news and opinions can be found for free on the Internet.  Which is a shame, because print reporters have a long legacy of uncovering wrongdoing from the Bush administration all the way back to the Revolution, when pamphleteers spread the news of British retribution on the troublesome colonies and mobilized a confederation of Americans into action.

            Television and blogs are great for the up-to-the-date scorecard reporting that dominates political discussion: Who’s ahead?  What are the Republicans saying?  How are Obama’s poll numbers?  Don’t get me wrong: on television, many an influential guest can reveal their true self under direct pressure.  And there certainly exist witty, intelligent bloggers who want to share their professional knowledge among a wide audience.

            However, there are types of information that a laptop-toting citizen journalist or a camera-lugging television crew cannot access.  Until I can hire a cadre of editors, fact checkers, and muckrakers, I will continue to rely on the newspaper and know that the people behind these stories aren’t yearning for face time on TV or anonymously assailing an ideological opponent online.  Rather, they are letting us know what is wrong with our society and leaving us to debate on how to fix it.

Bogus bonuses at AIG

            In 1787 Thomas Jefferson responded to Shays’s Rebellion—a revolt of small farmers in Massachusetts from heavy taxation—by writing, “I hold it that a little rebellion now and then is a good thing,” and that “The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”  More than half a century later, Karl Marx reacted to the rise of industry and the gulf between the wealth of capitalists and the wealth of workers by noting that the bourgeois class has “resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom—Free Trade.  In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation” of the working class.

            Fortunately, a full scale revolt of the working class has never occurred in the United States, but that is not necessarily a sign that all is well.  Exhibit A is the outrage over $165 billion worth of bonuses and “retention pay” that is being awarded to AIG Financial Services employees, the people who were at the heart of the global credit collapse.  Congress is apoplectic, people are sending death threats and staging protests, and President Obama has the unenviable job of trying to calm nerves on both sides.

            What Americans are beginning to realize is that the belief that “what is good for business is good for the country” is a complete myth.  Loosely regulated financial institutions with complex derivatives trading?  Salmonella in peanut butter products?  Drug companies believing they are not subject to state protections laws?  Twenty percent of Americans holding 84 percent of the country’s wealth?  CEOs making 344 times the pay of the average worker?  Whenever politicians (usually Republicans) argue against policies that would tax carbon emissions, or allow workers to unionize, or protect consumers, they say that any additional burdens on corporations would be bad for business.

            Why should we care what’s bad for business?  I want to know what’s good for the employee, the consumer, the ordinary citizen.  We have a capitalist culture that is only concerned about quarterly profits, the ups and downs of the stock market, and short-term gratification.  And it is not just business managers: every American is concerned with the here-and-now in a world of instant communication, easy credit, and globalized consumption.  What is needed in this country is an attitude shift: consumers ought not to spend money they lack on goods that are superfluous.  And corporations should invest their profits into their labor force (creating generous benefits and a sense of personal worth) and ensure that their products and production processes leave as positive an impact on society as possible.

            Now, regarding the bonuses of AIG employees: the CEO claims that the company needs to retain those employees who created the derivatives in order to unwind the complex deals to avoid further catastrophe.  The concern is that “talented” leadership would be drawn elsewhere in the corporate sector if bonuses were not awarded.  Furthermore, $400 million were negotiated in 2008 for Financial Products employees, and the Treasury Secretary acknowledges that AIG would face lawsuits if they did not deliver those payments. 

            How on earth could you call an executive “talented” when the government now owns an 80 percent stake in AIG and the world economy is just beginning to spot the road signs for Depressionville?  I was under the impression that salaries are performance-based; these bonuses should only be awarded when the economy rebounds in the years ahead (that should apply to Congress as well).  You know, there are probably some countries in which any person who made this large of an error would be chained to a desk with a gun pointed to his head, being forced to work until the problem was corrected; the taxpayers would not put up ransom to “retain” them.

            The rule of law is paramount in a republic, but the American people have been complacent too long in a system that is against social responsibility and against the welfare of workers.  Our society does not punish via executions or beheadings; I think asking for the taxpayers’ money back is a civilized and symbolic compromise.

A stimulus for the rest of us

            The nearly thirteen-figure stimulus bill is not perfect, but since the pragmatists in the Senate (all four of them) took to streamlining it over the weekend, it is the best option for fixing what never should have happened in the first place.

            The package should not consist of all tax cuts, since it is doubtful that people will actually spend the money in favor of hoarding it in to weather the recession.  It should not consist of all Keynesian spending, although there should be a hefty chunk going to states to stop the hemorrhaging of funds to social services, Medicaid, transportation, education, and law enforcement.  And it should not consist solely of Democratic agenda items—like funding family planning and computerizing health records—mostly for political purposes, but also because those important issues should be considered on their own merit during regular appropriations process.

            There is some danger in allowing states to distribute funds to “shovel-ready” projects.  In a rush to create jobs by building new roads and completing McMansions and office buildings, there will be no way to ensure that those projects are part of the sustainable paradigm that Obama has pledged in other sectors.  He has talked about the importance of weatherizing homes and modernizing our energy grid, but will more roads do anything to wean us off oil or promote mass transit?   Paying for more Amtrak service is more well-suited to being environmentally-sound than paying for another lane on an interstate.  And how are we going to correct our trade deficit if we do not start pouring money into an area in which we should have a comparative advantage: research and development of renewable energy on a large scale?  Hopefully, the money to save our universities and aging infrastructure will translate into a fresh way of doing business that will create new industries and prop up exports again.

            Anyway, I am sure that the stimulus will pass despite the behavior of some Democrats and Republicans.  It seems that change, like our economic policy for the past eight years, is still a trickle-down process.  While Obama was wining, dining, pleading, convincing, cajoling and compromising with dozens of Republicans, Democrats in the House had sufficiently shut their opposition out of the process to the point of provoking a solid “nay” vote on the bill.  Meanwhile, Barbara Boxer on the Senate floor blamed Lindsey Graham (R-S.C.) and John Thune (R-S.D.) for helping George W. Bush to run the country into the ground.  Not that the Republicans behaved any better: Pete Sessions’s (R-TX) comment about learning from the Taliban how to conduct an insurgency infers that the minority party takes some pleasure in being the radical obstructionists, rather than being open-minded.

            Let’s hope that our leaders stop feigning indignation and realize that this plan is going to be carried out no matter what—and the least they could do is voice their opinions respectfully and with minimal grandstanding.

Governor Kaine smokes ‘em out

        I wonder what would it take for Virginia’s Republicans to raise the cigarette tax. It’s obvious that an increased risk for lung cancer in smokers and for heart disease among those who breathe secondhand smoke is not reason enough. Nor are the increased health care costs associated with such ailments. Maybe if cigarettes were linked to homosexuality or atheism, legislators from the Grand Old Party would put their foot down. But as it is, they are resisting the governor’s attempt to target cigarettes for a new source of revenue.
        Tobacco in Virginia dates back to the days of the Jamestown colony. And it was in 2004 that Altria Group (which owns Philip Morris) moved its headquarters from New York to Richmond, where over 6,000 are employed in the cigarette plant making Marlboros and Virginia Slims for domestic distribution.  By 2010 Richmond will be Philip Morris’s only domestic producer of cigarettes.  Consequently, Virginia has the fourth-lowest cigarette tax in the country at 30 cents, well below the national average of $1.19. Speaking of dollars and cents, it may be worth noting the that Republican gubernatorial candidate, Attorney General Robert McDonnell, has already received $15,000 from Altria; two state legislators competing for the Democratic nomination have each received $5,000. Furthermore, last year Altria gave $93,000 to Republicans (including the chairmen of the committees on finance and health in the House of Delegates) and $65,000 to Democrats in Virginia (an 18% difference).

        Republicans say that it is unfair to single out one industry for tax increases and that jobs could be in jeopardy if cigarettes became more expensive. So let me get this straight: the governor can cut thousands of jobs in transportation, social services, the prison system, and force counties to eliminate positions or freeze salaries, but heaven forbid that the demand for cigarettes be in any way inhibited? Raising the tax by thirty cents would generate $150 million per year, which does not come close to the projected $3 billion deficit; however, it will dissuade people from smoking and reduce the state’s health care expenditures.
        And higher taxes on cigarettes are not unfair targeting, they are just another form of regulation. Carmakers must include airbags and seatbelts; gun shops must do some sort of background check. At this point, denying that secondhand smoke is not harmful is like denying that carbon emissions do no damage. We can limit where people smoke but can only attempt to regulate how much they smoke by making smoking more costly than quitting.
        It may not be fair that smokers will have to pay a little bit more, but they are disadvantaged by choice. The state has a duty to ensure the health and welfare of its citizens, and smokers are putting themselves and others at risk through their behavior. By proposing a tax raise, Governor Tim Kaine (D) is allowing the legislature to show their hand in an economic hard place: what is more important, cheap cigarettes or healthcare and education for our children?
        The Republicans may try to deny that dichotomy, but it is real. Even for a party that is appalled at the idea of any tax increase whatsoever, forcing smokers to cut down on their consumption is a lot more palatable than budget cuts to worthwhile programs statewide.