Leaders Aren't Just Failing to Fix the Financial Crisis

All eyes are on the House of Representatives, which failed to pass a broadly unpopular but arguably necessary bailout of the U.S. financial sector. The consequences in the U.S. market began to be felt immediately, though in a hopeful sign, Asian and European markets didn't tank over night.

The House leaders, the President and the candidates have all been roundly condemned for failing to exercise enough leadership to approve the $700 billion bailout of Wall Street, without which -- the argument goes -- global capital will continue to seize up, starving economic activity for years as banks continue to fail.

Meanwhile, the House and Senate have been quietly failing to renew tax credits necessary for solar and wind energy research and development. Both houses passed an extension of the tax credits, which are demonstrably necessary for the growth and development of these industries. And the growth of these industries is demonstrably necessary for the twin goals of energy independence and global warming abatement.

And yet, as the New York Times put it: "The House and the Senate conceded Monday that they were in a stalemate over proposals to provide tax incentives for the production and use of renewable energy, leaving the future of the nascent industry in limbo."

This comes after Congress failed to agree to a compromise on offshore drilling that might have restricted access to near-shore areas, added additional environmental protections, or funneled royalties to renewable energy development. Instead, Congress just let its ban on offshore drilling lapse.

It comes as Congress appears to have let an Oct. 1 ban on oil shale development expire. This highly polluting method for extracting oil from stone is 180-degrees from the renewable energy investments virtually every long term strategist agrees we need -- for not only environmental reasons, but economic and national security reasons as well.

And it comes as news breaks that Congress is poised to strip $331 million in conservation spending from its bloated farm bill, removing one positive part of a flawed bill that will continue to amp up the overproduction of corn, with all its attendant pollution.

The importance of the renewable tax credits can't be overstated. Without these tax credits, investors won't bet on the new industries -- which need the credits to be cost-competitive with heavily-subsidized fossil fuels. The future of America, as an increasing number of thinkers agree, rests on revamping the U.S. economy to lead the world in renewable energy technology. That would free us from foreign oil, create millions of domestic jobs and new high-tech export industries and solve the global warming crisis to boot. It's a smart investment at a time when oil supplies are dwindling, fossil fuels are increasingly costing as much in dollars as they always have in environmental quality and the U.S. economy clearly needs to rely on a core of innovation in technology, not innovation in shadowy financial securities.

Ah, investment. Yes, without a fix for Wall Street's bad bets on bad mortgages, investors will be unwilling or unable to back a variety of economic activity, including new investments in renewable energy.

Congressional leaders, the President and the candidates have all said that lawmakers have to return to the table and craft some sort of bailout that is both effective and palatable -- one that, presumably, helps struggling homeowners more, costs taxpayers less and punishes those firms that enriched themselves by kicking the legs out from under the American economy.