President-elect Obama needs to be more ambitious.
Now that I’ve got your attention, here’s what I’m thinking about. The Chinese government has just announced it’s going to spend about 7% of its GDP on infrastructure investment in the next two years. Obama has mentioned numbers like $100 billion on infrastructure investment. If we spent 7% of our GDP in two years, it would come to $910 billion! As Paul Krugman reminds us this morning, FDR’s original New Deal fiscal stimulus was too timid and it wasn’t until the massive stimulus of war production that the economy really recovered.
Now I’m not saying all of this investment would come from the taxpayers, but rather that it’s going to take close to a trillion dollars to rebuild our broken infrastructure which has been starved for investment since the start of the Reagan administration. The central part of this investment should go toward putting the U.S. in the forefront of the green tech revolution–A Green New Deal. Here’s how I would get there.
- A phased in carbon tax that sets a floor for carbon based fuels so that investors in alternatives like Wind, Solar and Geo-thermal know there will be a market for their output. This would also encourage conservation. The gains that were made in the spring in conservation (number of miles driven, use of public transport) are already being frittered away as gas prices plunge.
- A massive investment in a smart grid for the nation’s electricity. The current grid is totally incapable of handling the long range transmission of power from solar farms in the Southwest and wind farms in the Midwest to the users in the rest of the country. In addition some of the amazing ideas in electricity storage that have been pioneered in Germany must be rolled out here.
- Our failing Big Three Auto companies must commit to producing plug-in Hybrids in large numbers by 2012 in return for government loan guarantees. As Google’s RechargeIT.org has shown, this is the single most dramatic step we could take towards energy efficiency.
- The U.S. Government must undertake to retrofit every building it owns with better insulation, energy efficient windows and lighting and where practical solar panels on the roof. It should install fiber optic cable in every facility. It should increase the tax benefits for every corporation that undertakes a similar retrofit program (see the Googleplex above).
The Obama administration must act audaciously while it has the mandate and the good will of a shaken country confronted by bankruptcy and foreclosure. As more chains like Circuit City fold, the necessity of the Green New Deal will become more obvious to reluctant Republican lawmakers. Even without 60 Democratic Senators, it is clear to me that Rahm Emanuel can push through a filibuster proof package in the first 100 days with the help of key Republican moderates.
There is no time to waste.