President Barack Obama spoke to and met with the Business Roundtable today in a speech that could be described as extending an arm, seeking agreement to work together for the common good. This could be a real challenge as, for example, Obama challenged business leaders to lead beyond the daily stock ticker and the quarterly profits report.
It is undoubtedly in the short-term interest of individual corporations to pay less in taxes and deal with fewer regulations. But it is in the long-term interest of all companies to do business in a nation that maintains the world's best research facilities and universities; a nation with public schools that graduate highly-skilled, highly-educated workers; a nation with functioning railways and airports; a nation that is not dragged down by crushing debt.
The tragic dilemma between short-term and long-term interests is an underpinning of how Corporate America works, with "The Street" quick to punish a business that sacrifices what is perceived to be too much today for what is seen as an uncertain payoff tomorrow. The variation of quarterly profits by a few percent has more meaning to too many investors (and too many financial talk show hosts) than significant opportunities or significant risks tomorrow (or, even worse, the day after tomorrow). In addition, other than 'goodwill' gestures receiving plaudits and good publicity, Wall Street doesn't reward businesses for perceived sacrifices for the common good.
These are tremendous challenge in getting businesses (and, well, the entire culture and nations) engaged in climate mitigation. The daily stock ticker, quarterly profit reporting, and the massive discounting of the future is no small part of that. There are very (very) few business enterprises which will truly thrive amid catastrophic climate chaos. Even so, as climate disruption mounts, the polar ice melts, and the risks of climate change become more apparent, there are few on Wall Street ready to embrace concerted action to mitigate climate change even as seizing a leading position in the clean energy revolution offers such strong potential for tomorrow's profits even while insuring against tomorrow's risks.
President Obama spoke to this opportunity and the fact that, with every passing moment, America is falling behind.
we need to build an economy where we borrow less and produce more. We need an economy where we generate more jobs here at home and send more products overseas. We need to invest and nurture the industries of the future, and we need to train our workers to compete for those jobs.
Nations around the world, from Asia to Europe, have already realized this. They're putting more emphasis on math and science. They're building high-speed railroads and expanding broadband access. They're making serious investments in clean energy because they want those jobs.
These countries know what's required to compete in the 21 century. But so do we. And as I said in the State of the Union, I do not accept second place for the United States of America.
A question to ask is whether America's business leaders are happy in a second-class nation. Sadly, too much of what we have seen in recent decades suggests that, for too many, the answer is yes.
Obama, in a backhand manner, reminded people that he is no socialist even as he reaffirmed a role for government.
Contrary to the claims of some of my critics, I am an ardent believer in the free market. I believe businesses like yours are the engines of economic growth in this country. You create the jobs. You develop new products and cutting-edge technologies. And you create the supply chains that make it possible for smaller businesses to open their doors. So I want everyone in this room to succeed. I want your shareholders to do well, and I want your workers to do well. Because I firmly believe that America's success in large part depends on your success.
But I also believe this: government has a vital, if limited, role to play in fostering sustained economic growth. Throughout our history, it has done so in three ways. ... Second, only government can make those investments in common goods that serve the general welfare but are too expensive for any individual or firm to buy on their own.
And, the President took a few minutes to address energy issues within the context of short-vs-long-term and the role of government. This included a direct call for pricing carbon, something that too many members of the Business Roundtable have ardently fought.
A competitive America is also an America that finally has a smart energy policy. We know there is no silver bullet here - that to reduce our dependence on oil and the damage caused by climate change, we need more production, more efficiency, and more incentives for clean energy.
It is a sign of Obama's understanding that he uses (often) the point that "there is no silver bullet". Now, sadly, "more production" for him includes fossil fuel production, but the fact is that betting on a "silver bullet" solution is a high risk bet while a diversified portfolio approach is more likely to lead to success in navigating the dangerous shoals of peak oil and global warming.
Already, the Recovery Act has allowed us to jumpstart the clean energy industry in America - an investment that will lead to 720,000 clean energy jobs by 2012. To take just one example, the United States used to make less than 2% of the world's advanced batteries for hybrid cars. By 2015, we'll have enough capacity to make up to 40% of these batteries.
This is a point that too few Americans realize, that the Stimulus Package is setting the stage for increased American competitiveness and that additional resources could insure that we stand atop that stage.
We've also launched an unprecedented effort to make our homes and businesses more energy efficient.
Sadly, this has been slow-rolled with slow hiring and other challenges but the process seems to be moving forward now.
We've announced loan guarantees to break ground on America's first new nuclear plant in nearly three decades. We are supporting three of the largest solar plants in the world. And I've said that we're willing to make tough decisions about opening new offshore areas for oil and gas development.
Well, unlike the State of the Union speech, at least President Obama mentioned solar. Now, to this audience, is expanded oil and gas development a "tough decision". To be honest, perhaps Obama can gain points in this audience by making it quite explicit, directly explicit, that he is willing to anger people who have thought through our energy and climate challenges opportunities (like me) in compromises to get cooperation from recalcitrants like many he spoke to today. Instead, he seems to be giving up concession after concession without first securing commitments from those he seeks to placate.
But to truly transition to a clean energy economy, I've also said that we need to put a price on carbon pollution.
This is important. President Obama didn't step away from putting a price on carbon ... whether that would be via some form of Cap & Trade or a direct fee.
Pricing carbon, pricing the costs of pollution within the traditional financial contract, is a critical step to enable business planning for more rapid moves toward a lower carbon emissions economy.
Many businesses have embraced this approach - including some here today. Still, I am sympathetic to those companies that face significant transition costs, and I want to work with organizations like this to help with those costs and get our policies right.
An olive branch: I stand ready to work with you and help you through the transition costs.
What we can't do is stand still. The only certainty of the status quo is that the price and supply of oil will become increasingly volatile; that the use of fossil fuels will wreak havoc on weather patterns and air quality. But if we decide now that we're putting a price on this pollution in a few years, it will give businesses the certainty of knowing they have time to plan and transition. This country has to move towards a clean energy economy. That's where the world is going. And that's how America will remain competitive and strong in the 21 century.
This is an important and truthful statement. Hopefully those in the room (and elsewhere around the nation) had their minds open to hearing and understanding this.