Eighteen months ago, I gave a lecture at USC about The New Federalism, in which I made the outrageous claim that within five years WalMart’s sourcing model would collapse. The cost of bringing cheap goods from China with $100 per barrel oil would not work. Turns out, we didn’t have to wait five years.

The cost of shipping a 40-foot container from Shanghai to the United States has risen to $8,000, compared with $3,000 early in the decade, according to a recent study of transportation costs. Big container ships, the pack mules of the 21st-century economy, have shaved their top speed by nearly 20 percent to save on fuel costs, substantially slowing shipping times.

The study, published in May by the Canadian investment bank CIBC World Markets, calculates that the recent surge in shipping costs is on average the equivalent of a 9 percent tariff on trade. “The cost of moving goods, not the cost of tariffs, is the largest barrier to global trade today,” the report concluded, and as a result “has effectively offset all the trade liberalization efforts of the last three decades.”

The effect of this on globalization is profound. Ikea recently opened their first American factory and I think that almost any company making consumer durables is going to have to consider moving their production closer to the world’s largest consumer market. I have written recently about the deindustrialization of America, but the possibility of the re-industrialization of our country is a far more optimistic story. As many of the correspondents on this blog have pointed out, a new ethic of manufacturing quality goods that last could be a complete break with the “planned obsolescence” history of recent American manufacturing.

The second key break needed is clean power for all these new plants that could spring up across the country. Obviously we have talked a great deal about the Moore’s Law type power gains in solar and wind technology that are doubling output at the same price in the 18 month cycle. Because of this, money is flowing from both Silicon Valley VC’s like Kleiner Perkins as well as reformed oil men like Boone Pickens. What is needed is the storage medium for these “spiky” power sources. Although we have had some questions already about new breakthroughs, I am reasonably confident that these efforts will bear fruit.

Storing energy is a crucial but expensive component of plans to turn intermittent sources of energy, like wind and sun, into reliable replacements for coal and natural gas. But two new scientific papers show progress in materials science and chemistry that could cut the cost.

The advances apply to the process of converting electricity into hydrogen for storage and then converting the hydrogen back to electricity when needed. The first half is done in an electrolyzer, which splits a water molecule into hydrogen and oxygen, and the second half in a fuel cell, which puts them back together.

Such a process would make a power system based on sources like sun and wind more reliable because it could be counted on regardless of weather or hour.

The great psychologist Erich Fromm, wrote a book in the late 60′s called The Revolution of Hope;Towards a humanized technology. In it he put forth the idea that for societal change to occur we needed hope, faith and fortitude. Fromm writes,”Faith like hope, is not a prediction of the future; it is the vision of the present in a state of pregnancy.” I know the Republicans are spending a lot of money on ads this week mocking “the audacity of hope”, but I think Fromm’s description of the current “state of pregnancy” is quite appropriate. The possibilities of a complete transformation of American society are close at hand. There is no technological barrier to an economy with lots of good jobs, that don’t require a college education at factories run on a totally clean energy system that does not rely on Saudi oil and does not contribute to Global Warming. But as Fromm points out, hope and faith without courage–fortitude–are useless. As an analyst, Fromm believed that it is very hard for individuals to keep hope alive when a general air of hopelessness pervades a society. When 78% of the country believe we are “on the wrong track”, you are defining hopelessness, a condition in which “many lose hope, faith and fortitude and love their servitude and dependence.”

That last phrase jumped out at me when I read it. Here we are, “pregnant” with possibility. The rational mind says that Americans would embrace the hope and faith of a better, more just society, in which the citizen and not the special interest is in charge. The only hope of the ruling elites of the Republican party is to break down your courage for change. John Heilemann recently wrote about Steve Schmidt and McCain’s other managers.

They’ve concluded, in other words, that even if McCain may not be able to win the election in any affirmative sense, he might still wind up behind the big desk if he and his people can strip the bark off Obama with sufficiently vicious force.

Maybe Fromm is right. Maybe many Americans “love their servitude and dependence” on forces seemingly not in their control. Maybe fear rather than hope and faith will triumph in November. But if a society does not grow, it will decay. We have lived through eight years of fear and decay. Will we find the courage to embrace hope and growth?