Gasoline will hit $4 a gallon soon. Millions of mortgage holders face foreclosure and the usual nostrums from the Federal Reserve Board aren't working. Everyone thinks we are headed for a recession because consumers can't keep spending if their wages have stagnated and their houses are depreciating.
People are looking for some quick fixes, some pixie dust, some magic potions -- perhaps even some snake oil. But the exciting -- if frustrating -- thing is that a fix has been right at hand all along.
We need to accelerate the shift to a green economy and focus on making sure that, as we create it, we generate good, green jobs at the same time.
If Congress had raised fuel-economy standards a decade ago, we would be using much less gasoline to get to work -- and the price of oil would never have hit $100 a barrel. Yes, Detroit would have had to hire hundreds of thousands of workers to modernize its auto plants -- but it wouldn't instead be shutting them down.
In Sunday's New York Times Business Section, Alan Binder proposed to revive a New Deal Federal Agency, the Home Owners' Loan Corporation, to buy out defaulting mortgages from the banks at their fair value, then refinance them for the home owners. Binder's idea has been endorsed by Senator Chris Dodd and others, and it sounds like a good one -- but he should consider adding a wrinkle. In exchange for having the government help them stay in their houses, homeowners should have to retrofit them for energy efficiency -- with capital loaned by the same agency. Their utility bills would drop dramatically, increasing the odds that they would be able to make their mortgage payments -- and millions of new building trades jobs and manufacturing jobs would be created producing and installing the news windows, insulation, furnaces, etc. (You can't outsource the job of installing windows on your house.)
At a meeting Tuesday of the Apollo Alliance, whose main focus is green jobs, people pointed out how crazy it is that once again this winter we are spending billions of dollars helping low-income families pay their heating bills, when for the same amount of money we could have helped them permanently reduce their bills to an affordable level with energy retrofits. It turns out that three percent of our building stock is either rebuilt or substantially remodeled each year; if we could ensure that all of those were efficient, and retrofitted another three percent a year, within 11 years every house and commercial building in America would be modernized, while millions of Americans would have had good jobs on the project.
The new congressional leadership gets it. The House yesterday voted 236-182 to keep the solar and wind industries alive by extending their tax credits. But almost no one is certain that the Senate can muster 60 votes to overcome the filibuster that thus far has blocked this effort, even though these industries could become huge new job machines for the American economy. In fact, the White House is threatening to veto the bill to protect huge subsidies for the oil industry, which is exporting jobs to the Middle East rather than creating them here at home.
So we have a lot of public education to do. The Sierra Club, Apollo, and the United Steelworkers are sponsoring a major conference in Pittsburgh in March, designed to launch the green jobs revolution. This could be one of the most important steps we take this year -- its very clear that the economy is going to be the focus of this year's elections, and that green jobs are the key to fixing the economy.