The following is an elaborated version of the brief talk I gave at my Netroots Nation panel.
The U.S. economy is in serious trouble, mired in a period of slow growth and high prices -- i.e., stagflation. Worse, high prices can largely be traced to escalating fossil fuel costs that are almost certain to continue rising for the foreseeable future.
Our trade debt is enormous, as we, in Gore's words, borrow money from China to buy oil from Saudi Arabia. We're shedding jobs -- according to economist Dean Baker, it's increasingly possible that total job growth under eight years of Bush will come in under the average single-year job growth under Clinton. Median wages have barely kept pace with inflation. The inequality gap is enormous and growing. Consumers are swamped in debt and losing confidence. This generation may be the first in a long while to leave the U.S. worse off than they found it.
It's grim. What should be done?
We have to attack both sides of the stagflation problem, by boosting growth and taking the sting out of energy costs.
Where can we find new sources of economic growth?
One obvious answer is energy itself, which according to VC guru John Doerr is a $6 trillion global business (makes IT look like peanuts). Right now that industry is almost completely dominated by fossil fuels (80 percent worldwide, 85 percent in the U.S.), and every country on the planet is looking to rapidly diversify. In other words, there's a market for non-fossil energy sources and energy efficiency that is, for all intents and purposes, unlimited.
And the shift away from fossil fuels is just getting started. That means there's a chance to get on board the rocket just as it takes off. Three strategies suggest themselves (sketched here in the most general terms):
These strategies will create new industries and new jobs, allow us to reduce the trade deficit, strengthen the dollar, and give the U.S. economy a stability and resiliency it can never achieve while its fate is tied to the vagaries of increasingly brittle international fossil fuel markets.
If you think of the U.S. "productivity recipe" as some mix of labor, energy, and capital, you can think of the way forward as using less energy and more labor. (The fossil fuel sector demonstrates extraordinarily low labor intensity. A dollar of investment moved from that sector to virtually any other -- in this case R&E -- yields up to seven times more jobs, according to Skip Laitner, an economist at ACEEE.)
Consider, for instance, retrofits: If we kick off a nationwide effort to retrofit the building sector for energy efficiency, we're trading a whole bunch of work (i.e. jobs) for a whole bunch of energy. With energy prices rising and a jobs crisis looming, that's an increasingly smart trade -- and as a bonus, money that would have gone to scarcity rents paid to foreign owners of oil will now go to productive domestic work. We'll be moving from a low-wage, high-waste economy to a high-wage, low-waste economy, and getting economic growth, security, and resilience in the bargain.
As economic development policy, as industrial policy, as urban policy, it's a no-brainer. And here's the punchline: Nowhere in the pitch do I use the word "green." Nowhere do I mention climate change or polar bears. You don't need them, and they don't help.
As Van Jones once told me, "For people with a bunch of opportunity, you tell them about the crisis. For people with a bunch of crisis, you tell them about the opportunities." America has a bunch of crisis. These are the opportunities.
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