Hillary Clinton drew little attention when, on Monday, she discussed the details of her Green Jobs plan, which she promised would "stimulate economic growth, end our dependence on foreign oil and provide good-paying jobs" 5 million of them.
There's no better time for a plan like this, given the state of the economy. Robert B. Reich, Bill Clinton's Labor Secretary, wrote in an op-ed for the New York Times this week that consumer spending will not stimulate the economy, given that Americans are essentially overworked and deeply in debt. Bottom line: We can't just work, borrow or spend our way out.
His solution is to increase the wages of America's lowest earners. The best way to do that is to create a new class of jobs that pay well. And given the imminent threat of global warming, new economic investment in green tech is needed for more than economic reasons.
Hillary's $50 billion Strategic Energy Fund would be financed primarily by rolling back oil company tax breaks, new royalty payments for extracting natural resources on public lands and new requirements that those companies invest in renewable and alternative energy research and development. If $50 billion sounds big, consider that the economic stimulus package that President Bush just signed, which will essentially dole out some cash in hopes we all spend it quickly, will cost $168 billion more than three times Hillary's five-year plan, and with few of the lasting benefits.
For instance, Clinton's plan to invest in upgrading 20 million low-income homes would not only employ thousands of lightly skilled laborers but also reduce the average energy bill by an estimated $358 every year. That's as good as a tax break for those families, and it's a savings that looks sweeter and sweeter as energy prices climb. The tax breaks she envisions would be targeted at those who invest in ways to reduce energy use at home and in the car. And the investments she would have energy companies make in renewable and clean energy technologies would trickle down, as those technologies are manufactured and go mainstream.
Barack Obama, Clinton's competition for the Democratic presidential nomination, has a similar plan that would spend $150 billion with similar strategies. A $10 billion private-public Clean Technologies Deployment Venture Capital Fund would be created to bolster investment in clean and renewable energy technologies. (It's happening without the government, to an extent, as U.S. venture capital investment in clean-tech projects doubled, in the fourth quarter of 2007, to $1.14 billion.)
But is all this a fantasy?
Here's why I think it isn't.
Consider the renewable fuels standard that Congress has mandated, which requires an incremental boost to the amount of biofuels manufactured each year. This mandate is seen as flawed because it bows to the rich and powerful corn lobby to produce a polluting fuel that doesn't perform much better than petroleum. But it has ratcheted up investment in research into next-generation biofuels, such as cellulosic ethanol made from switchgrass.
The more important lesson is the ripple it caused through the economy.
Today, Deer & Co. reported $5.2 billion in first-quarter profits, 55% higher than expected, because it is providing farm equipment to farms that are making record investments.
Monsanto, the maker of genetically modified corn and soy seeds, saw its stock jump nearly 200% in a year, as its sales grew 36%.
Mosaic, the world's largest phosphate fertilizer producer, saw its profit quadruple.
Chemical giant DuPont saw its corn sales volume increase 52% recently, and expects double-digit earnings growth in 2008.
The value of the U.S. farm economy is expected to hit a record in 2008, $144.1 billion, 38% above the 10-year average.
There are serious side effects to this, from record pollution of the Mississippi River and Gulf of Mexico to food inflation to the lining of big industry pockets. But it shows a massive stimulation, if you will, of parts of the national economy with a swipe of the pen in Washington. (Arguably, there's more stimulation here than you get from oil company subsidies that helped the world's largest company, Exxon-Mobil, reap record profits of $40.61 billion in 2007.)
It's a cautionary tale, but a hopeful one. It is possible to make the economy grow by investing in next-generation energy research, development and deployment. But it will be a mess. Power players will profit, and environmentalists will expose serious side effects of the green energy revolution. But if it is done even half right, it can help save the economy in a way millions of Americans purchasing plasma TVs can't. It will move America closer to a sustainable future.
The first industrial revolution wasn't simple and clean, and this one won't be either. But it is necessary.
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