Green New Deal



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.

  1. 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.
  2. 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.
  3. 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 has shown, this is the single most dramatic step we could take towards energy efficiency.plug-in-hybrid
  4. 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.

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27 Responses to Green New Deal

  1. farkinga says:

    Can the NASA model be a policy vehicle for accomplishing these goals? …or perhaps something akin to the Department of Homeland Security? The Works Projects Administration?

    In other words, must there be a big-government cabinet-level or congressional-controlled clearing house for government contracts/grants to coordinate with big business, start-ups, and universities?

    …or, has the NASA and DHS experiment proven to be wasteful of resources?

    …is it okay to be “wasteful” in the interest of accomplishing these goals within a certain time period? I’m going to venture an answer: “yes.”

  2. Seth says:


    Your #3 isn’t so different from Obama’s old Healthcare for Hybrids plan — when you consider that the healthcare/pensions burden carried by the Big Three plays a big role in their financial condition.

    Something about the New Deal narrative Krugman is presenting doesn’t quite compute for me. He’s right that massive stimulus was required. It’s true that WWII got us back on our feet. But something he doesn’t mention is that WWII flattened our industrial competitors. How much of our post-war prosperity depended on holding an exorbitant share of industrial markets?

    This is important because our industrial preeminence is a thing of the past. We’ll have to scramble just to avoid falling farther and farther behind.

  3. commonsguy says:

    w/r/t point #3:

    I’d put two components into the societal ROI that the Big Three would need to agree to. I agree with your general sentiment about the plug-in hybrids, though I’d expand it to any system that does not have carbon-based fuel as the primary power source (plug-in hybrid, pure electric vehicle, fuel cell, Kamen’s Stirling engine, compressed air, etc.).

    However, we also need a reworking of CAFE, with fewer loopholes and…drum roll please…continuous improvement. CAFE is pretty much toast once we get into true alt-fuels (i.e., not ethanol) because we aren’t measuring fuel input in gallons anymore. While we’re reworking the calculations, we need it to keep increasing. Call it 10% improvement per decade for 50 years, then 5% improvement per decade afterwards.

    And, clearly, the penalties for slipping CAFE have to increase. The fines are paltry for missing CAFE standards — DaimlerChrysler paid a record amount for the 2006 model year, and that record was only about $30M. That’s not nearly enough to get firms to pay attention, unless there are other penalties beyond these fines.

  4. woodnsoul says:

    It seems that this administration is trying to secretly spend us into insolvency lining their buddies coffers before Obama gets a chance to do much of anything.

  5. rhbee1 says:

    Is there a tipping point in this borrowing against the future strategy that can be agreed upon because I do agree with Jon, the Chinese are headed in the right direction. I’ve long held the opinion that the Chinese economy has been on an accelerated pace. Bikes to autos to smog to green tech for infrastructure just like that.

    Meanwhile, I read somewhere that there is a fear that by using state and local evaluations and plans for existing projects as a quick start stimulus that there is the danger of pork and ear marks, but that that should be an acceptable risk. Is that your drift, Farkinga? If so, then local and state independent oversight is mandatory but will feed into the conservative meme that Demos just add to the beauracrazies and waste tax money the Repubs could be spending on themselves. Jon, what did the old Federalists do about this problem?

  6. farkinga says:


    Yep – the pork risk.

    How much pork was involved in the Apollo program, and was any of that “bad pork?” After all, the project worked

  7. JT says:

    It seems to me that what this new administration needs to do is very clearly set priorities and then find people who can really solve problems. They certainly have a good handle on the transition, maybe that kind of efficiency will carry over.

  8. Rick Turner says:

    I think…well, I hope…the transition presages the administration. For one thing, he’s not afraid to start establishing his power now. How do you thing GW felt about hosting the guy who ran against his phantom 3rd term in such an outspoken manner? Intimidated, I’d wager. Whether it was real or not, you know that GW was seeing Obama measuring the drapes and thinking about who was about to take over which space and which office in that White House.

    BTW, an ancestor of mine, slightly off to the side, James Hoban, was the architect of the White House. My maternal grandmother was a Hoban. I can’t imagine what she’d have thought, though I think my mother voted for Obama from whatever Unitarian heaven there may be.

  9. Hugo says:

    Pefect by me, Jon. Perfect.

  10. Ken Ballweg says:

    Like the US steel industry, I’m not sure there is anything there worth salvaging.

    Putting them on a respirator, while keeping the management teams that brought you the Hummer, the hybrid Escape (which used the technology to increase torque for acceleration not milage), and the aerodynamics of the chrysler 300???

    Electric cars? Remember, these are the folks who marketed trucks and truck bodied SUVs to escape CAFE standards.

    What we have here is the potential to make AIG’s post bail loan excesses look like child’s play.

  11. Ken Ballweg says:

    I say make ’em submit a business plan and allow Warren Buffett to decide if we (tax payers) should play VC for them. If Warren says he would invest, we fund. If he says he wouldn’t, we give them one more try. If they fail that, we chum the waters and turn loose the sharks.

    I’m really tired of bailing out stupidity; especially arrogant stupidity.

  12. len says:

    “How much pork was involved in the Apollo program, and was any of that “bad pork?” After all, the project worked…”

    Not as much as one might think. It comes down to the program managers and their values.

    The Apollo program:

    1. Reused the Air Force work on the main engines for the Saturn V main stages and reused the work on the Redstone (which reused the work on the V2/A4) for the Saturn I test vehicle launch assembly.

    2. Used a prototype design method where all of the design, fabrication and assembly was done locally until a full-up test could be performed. At that point, the engineering managers had all costs precisely determined. Then and only then was it released to contractor manufacturing. That was one reason the contractors worked politically to get rid of the Old Timers at the end of the program. They couldn’t play the games they had learned in the auto industry with those men in the loop.

    3. The themes of “zero defects” and “waste anything but time” were applied simultaneously. While costs mushroomed during the program, the program time was shortened considerably and longer cycles tend to be more expensive than the shorter higher bursts.

    If Apollo has a major flaw it was that even though documented, most of what was learned was thrown away when the program ended or put on media that can’t be recovered. The Ares managers went on a massive attic hunt here and in the other centers trying to find the documentation since the majority of the engineers have passed away. When Demi McClure’s house on Monte Sano was torn down in the seventies, there were hundreds of NASA closed-environment system documents that he had kept which went straight to the furnace.

    Use it or lose it.

  13. Jon Taplin says:

    Ken-I love your idea of making Rick Waggoner submit a business plan for getting to a Green GM. That exercise alone would be worth bringing them to the table. And I think the American people should see the plan before our representatives vote on a loan package.

  14. Hugo says:

    Right on, Jon.

    My only quibble with your otherwise flawless, visionary piece is your selection of Google as somehow exemplary. Google is, for my money, the 21st-Century equivalent of TR’s “malefactors of great wealth”. They are still The publicly traded company running the highest ratio of Capitol:Vapor, and I don’t trust them to walk their lofty talk any more than any of us trusted Jobs in, say, 1987. They consisted have feasted on the corpses of the finest companies Silicon Valley ever produced (consider Silicon Graphics; consider ALZA Corp.), and they sold our Constitution to the bloody, bloody ChiComs. Fuck ’em.

    For now.

  15. Hugo says:

    And Jon, going forward, let’s please bear in mind that although it’s simply vulgar to refer to vulnerable human beings as capital, nevertheless, in an Information Age of service economies driven by communications, education, including mass pedagogy, constitutes a vital “infrastructure” also.

    Thank you.

  16. Jon Taplin says:

    Hugo- You may be right about Google as the new J.D. Rockefeller.

  17. Dan Renaud says:

    Add some of Michael Pollan’s ideas into the Green New Deal and you have a good mix. How about a “Farmsteading” movement to repopulate the middle of the country? Implementing his food transparency idea would be a huge boon for IT.

  18. Hugo says:

    Jon, thanks for the cautionary tip about JDR Le Nouveau. I’m more a Winthrop man, myself.

  19. Hugo says:

    And Jon, there’s a brilliant and sincere game theorist in charge of Sandia’s incomparable sim unit who’s ever-ready to civilianize his gaming and simulation-modeling capacity for a good cause, such as forecasting outcomes of proposed structural changes in the delivery systems of public education. We’ve only to ask, and to ask credibly. The DOE money is already there for it.

  20. Rick Turner says:

    The biggest problem in California’s public education system is simply inadequate understanding and handling of the influx of students who do not come from English speaking backgrounds and homes. No Child Left Behind is one of the worst offenders as a means for dealing with this as it penalizes under-performing schools…which just coincidentally happen to be the ones with very high percentages of Spanish speaking kids. Those schools should be getting more money to bring those kids up to grade level in English.

  21. Hugo says:

    Agree fully, Rick, except that I’m reluctant to superlatives or even to rank the 10 or so biggest problems in California public schooling. I’d as soon leave the rankings to David Letterman’s staff, and meanwhile to throw my shoulder against e.g. the massive challenges you name.

  22. Hugo says:

    …excuse me: “to [name] superlatives…”

  23. len says:


    My wife (teaches special ed) says the same problem is happening here. The hispanics entering the system cluster the same way the blacks did during the integration years. The teachers aren’t trained to help them and as a result, factions are building fast. Language training helps but it will take a generation. Meanwhile, there also has to be training for handling the situations at hand. This can be handled though because these kids tend to be from the families that came to set up businesses and find employment.

    We are having epidemic problems in the rural counties with hispanic gang’s meth production and prostitution.

    @Hugo: Silicon Graphics did themselves in. They guessed badly and didn’t get off the high end platforms fast enough. Early on they did smart things but then they failed to realize the PC and the web were here to stay. Others made the same mistake, Digital being a notable in that set.

    Google is symptomatic of the larger problem that we witlessly adopted the Internet without a sane approach to policy regarding aggregation and intellectual property. They may or may not be evil, but they certainly don’t mind burgling and that is symptomatic of the valley culture of Pirates R Us where if the law interferes with profit, the law must be wrong. That thought knows no party allegiance except the party of opportunism.

    Information policy is something we must take seriously. The “Content Wants to Be Free” culture did more to damage privacy rights than anything the Republicans could do. These mistakes were made in the 90s. Serious professionals tried to explain it but it is another example of the idiocy of crowds when greed for money or fame dominates a small group and everyone else just wants to ride the train together.

    Vint Cerf, Berners-Lee et al should have taken strong positions early. It’s a mystery to me that what was so obvious was so blithely ignored but I believe the mushrooming of the web took them by surprise and then they didn’t want to speak up for fear of being marginalized. Pretty much anyone who did was.

  24. Ken Ballweg says:

    Education, like all infrastructure in the US, has been neglected and it’s costs marginalized with the myth of “it gets enough money, just cut the waste.” The fact that this is impossible, since any excessively large human endeavor will have waste and stupidity somewhere in it’s ranks, is ignored and taxes are voted down.

    Another myth, this time on the consumer side, is that there is an entitlement to a perfect education for my child, and the system’s and other children’s needs can take the left overs.

    “Teacher pay is too high.”
    “Teachers are fine, but administrators are overpaid.”
    “We can’t afford it.”
    “It’s not where I want to put my money.”
    “It’s godless, so I’m pulling my kid and my money to teach values I want.”
    “It’s all a bunch of whining minorities, who need to STFU and be out in the fields working, especially those damn freeloading [fill in your favorite straw-boogie man here]”

    The net effect is that we don’t value education. We value the concept of a free (as in I don’t pay for it) educational system that is no different than our bridges, roads, sewers, power grids, etc. etc.

    Because taxes hurt business.

    Underfunded. Falling apart. All for the sake of flat screen tvs. Good plan that.

  25. Ken Ballweg says:

    Any nation that invests more into malls than into schools gets what it deserves.

  26. Hugo says:


    Sure, SGI did itself in, or rather Ed McCracken, Bill Clinton’s favorite biz whiz, did the company in. And Johnson & Johnson destroyed proud ALZA while all biomed, all pharma and all Silicon Valley watched in wonderment at J&J’s flawless incompetence and perfect lunacy. Meanwhile Google, a superego missing an id, smugly made its plans to pick up those companies’ dropped gas masks, canteens and ammo belts. To veterans of the first two waves of Silicon success, the name Google always will stand for something like a Quisling or an Arnold. But on the other hand, the junta in Beijing love those punks. And, as everyone knows, the Chinese are the smartest people in the world…

  27. Hugo says:


    I truly don’t relish disagreeing with you all the time, but…

    The schools could stand to prove much more, with much less. I mean nothing but appreciation for teachers, for whom I have worked in earnest and whom I wish nothing but improved prosperity. However, I myself am working overtime to demonstrate the urgent efficacy of more-for-less, and I mean to do it on a dare; a dare to any urban school, anywhere, that can bake (yes, bake), borrow or steal its way to about ten thousand dollars cash together with about three shopping cartsful of (mostly art) supplies available at any WalMart. (OK, or else a suitably PC Target store.) With that and a lot of free advice — made free under L’Ideale Universite, which is, essentially, that all learning is either free or else it is held in rude captivity — I fully believe that any urban school or school system can be turned around on the basis of sheer Love, which, as we all remember from the tunes, is beyond price.

    Call me a Romantic, but in reality I pre-date those fops, as I am but a mere & humble friar of the Twelfth Century.

    Peace unto us all,

    Hugh de Ste-Victoire

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