Yes, we're all excited about an Obama Presidency. But I think we sometimes underestimate just how enlightened his policies will be. By "enlightened", I mean, of course, similar to those we believe in.
As diariedby Watthead, Obama recently gave a full-length interview about his priorities as President.
And that brings us to this exercise. I have printed below two excerpts from that interview, and one each from Jerome A Paris and the great climate scientist James Hansen (actually, the Hansen quote consists of notes taken from a talk he gave).
Your job is to guess which is which.
What is the cause of the credit crisis?
One guy says
The biggest problem with our energy policy has been to lurch from crisis to trance. And what we need is a sustained, serious effort. Now, I actually think the biggest opportunity right now is not just gas prices at the pump but the fact that the engine for economic growth for the last 20 years is not going to be there for the next 20, and that was consumer spending. I mean, basically, we turbo-charged this economy based on cheap credit. Whatever else we think is going to happen over the next certainly 5 years, one thing we know, the days of easy credit are going to be over because there is just too much de-leveraging taking place, too much debt both at the government level, corporate level and consumer level. And what that means is that just from a purely economic perspective, finding the new driver of our economy is going to be critical. There is no better potential driver that pervades all aspects of our economy than a new energy economy.
while another one says
But we had an underlying solvency crisis from the start, given the unrealistic lending that had taken place... Asset prices were propped up only by the fact that people were able to borrow unreasonable amounts of money to bid for them, and were able to borrow such amounts only because they were seen to be acquiring valuable assets...
Now it's the same thing, in reverse. People cannot borrow, thus cannot bid for assets, whose prices fall down as they need to be sold - and those deep in debt need to sell (ar dump the assets to banks that then need to sell).
And the solution is simple: stop debt (this is happening on its own anyway). and boost income.
How do you do that when there isn't enough money around?
By creating real activity rather than the money-shuffling kind.
And, as it were, there is a sector that is "real" and has an urgent need for action: infrastructure, and in particular energy-related infrastructure.
OK, before you peek, which is which?
Now let's talk about how we might spur an energy economy. One way to do this is with tax policy-- taxing carbon-intensive goods and services, in order to spur innovation in low-carbon goods and services. But, ideally, the tax should be progressive, not regressive.
One guy says:
The only way to do it effectively is if you are building effective consumer rebates into the plan. The bulk, the lion's share of any revenue generated from cap-and-trade has to go right back to the consumer... The payroll tax swap is one way of doing it. Just sending a pure energy rebate to folks is another way of doing it. We've got to figure out a simple way to do it but the point is, is that we've got to cushion consumers from those price hikes and then allow technology to catch up in such a way that whatever retrofitting has to be done pays for itself. I mean, essentially what we should be doing is setting the rules, setting the incentives, pricing pollution accurately, and then letting technology catch up the same way it did with acid rain.
and the the other guy says:
A tax on coal, oil and gas is simple. It can be collected at the first point of sale within the country or at the last (e.g., at the gas pump), but it can be collected easily and reliably. You cannot hide coal in your purse; it travels in railroad cars that are easy to spot. "Cap", in addition, is a euphemism that may do as much harm as good. The public is not stupid.
The entire carbon tax should be returned to the public, with a monthly deposit to their bank accounts, an equal share to each person (if no bank account provided, an annual check – social security number must be provided). No bureaucracy is needed to figure this out. If the initial carbon tax averages $1200 per person per year, $100 is deposited in each account each month...
A carbon tax will raise energy prices, but lower and middle income people, especially, will find ways to reduce carbon emissions so as to come out ahead.
So, what's your point?
I don't mean to imply that Obama was directly influenced by Jerome or Hansen (or vice versa). It is possible that Obama has been in contact with Hansen-- Obama is well known for depending on experts, and Hansen is as expert as they come. But a simpler explanation is that Obama tends to look at problems the same way we do-- rationally, and with a strong belief in the power of government to enact policies that will be genuinely helpful.
I've missed that. I think I'm going to enjoy these next few years.
Now let's keep working to make this happen...