The economy needs more stimulus, pronto. There's no way in hell Congress will approve it. But the President doesn’t need Congress to use the EPA to clamp down on greenhouse emissions. That would get private utility companies and banks, both of which have a lot of cash on hand, to invest heavily in green energy jobs.
Details after the jump.
Economists agree the economy needs more stimulus. Three winners of the Nobel Prize in Economics--Paul Krugman, Joseph Stiglitz, and Robert Solow--in December 2010 urged Congress to defer concerns about the deficit till after the economy recovers, and to focus on stimulus spending immediately.
And the need for stimulus has only gotten worse since then. Here’s Krugman in late August 2011, observing we need stimulus so badly we could use a fake alien invasion, or a program that prints money, buries it in old coal mines, and pays the unemployed to dig it up.
But it’s beyond obvious no stimulus program will make it through Congress. The GOP controls the House and has 49 votes in the Senate, enough to sustain a filibuster. No new deficit spending, no how, no way.
So if there’s going to be significant stimulus spending, it’s gotta be Congress-free.
Well, guess what:
Supreme Court Upholds EPA's Authority to Regulate Carbon Dioxide
WASHINGTON, DC, June 20, 2011 (ENS) - The U.S. Supreme Court today reaffirmed its finding that carbon dioxide is an air pollutant subject to control under the Clean Air Act and upheld the authority of the U.S. Environmental Protection Agency to regulate the greenhouse gas.
The EPA is an executive branch agency. It doesn't need authority from Congress to act, other than the authority of the Clean Air Act, which is already in place. (And can't be repealed without overriding an Obama veto, which ain't gonna happen.)
So here's the HeyMikey Congress-Free Stimulus Plan:
1. EPA issues new regulation: to emit CO2, you have to buy a CO2 license from the EPA.
2. The EPA will auction these licenses to the highest bidder. The $ raised will go to deficit reduction. (Man, will THAT confound the Teabaggers.)
3. The licenses available in each auction will only cover about 90 days' worth of the nation's CO2 emissions, at current rates.
4. The number of licenses available at each auction will gradually decline.
Immediately the nation's utilities will start hiring people to install solar panels, wind turbines, insulation, LED lights, etc. Airlines will start looking to diversify into high-speed rail, which they'll need to hire a lot of people to build.
The steeper the cutback in the CO2 licenses offered, the faster people get hired to implement alternative energy.
No Congressional action required.
Now, let’s put to rest a few worries. First: where’s the money going to come from? And is using that money on energy projects going to divert it from some other, more economically productive, use?
And utility companies are sharing in the bounty. For instance, AES, which operates in 31 countries and is headquartered in Virginia, has cash reserves of $5.38 billion. Two other American utilities are sitting on more than $2 billion...each. Four US utilities have been blessed with over $1.3 billion in cash to play with...apiece. And six more have $450 million to $956 million in reserves, each. (Utility companies listed by cash on hand here.)
But the cash held by utility companies is just the small-change tip of the cash-on-hand iceberg. Look at banks. JPMorgan Chase has $872 billion, yes, with a B, on hand. Citigroup has $790 billion, Bank of America has $572 billion, four other banks have $264 billion to $445 billion apiece, and 14 other banks have over $100 billion each. Just the top 10 banks have over $4 trillion sitting around, doing nothing, waiting for the economy to improve so there will be something profitable to invest in. (List of banks by cash on hand here.) The Fed's Quantitative Easing created the money, but can't put it to practical use.
What better use for that money than hiring Americans to generate clean energy? After all, as Krugman explains, corporations aren’t on the verge of hiring a lot of people with that money. What’s holding them back is lack of demand:
[I]it’s widely understood that corporations are already sitting on large amounts of cash that they aren’t investing in their own businesses. In fact, that idle cash has become a major conservative talking point, with right-wingers claiming that businesses are failing to invest because of political uncertainty. That’s almost surely false: the evidence strongly says that the real reason businesses are sitting on cash is lack of consumer demand.
Well, it's a safe bet the demand for energy is going nowhere but up. And if less of that energy can generate CO2, then more of that energy has gotta be green. That's demand.
But won’t this drive energy prices up? And won’t that hit the poor hardest? Not to worry. It would be fairly easy for the EPA to require that any company purchasing a CO2 license must have progressive pricing. That is, enough power for a family’s reasonable use would be billed at a low rate, and as usage rises beyond that, the price per kilowatt-hour would go up. In fact, progressive pricing is such a good conservation incentive you wonder why it hasn’t been implemented already on its own merits. And of course, the poor are hit hardest by...the damn lack of jobs.
But won't some wingnut sue the EPA, claiming its mandate under the Clean Air Act is simply to protect the environment, not to enact economic policy? Certainly. But the wingnuts will lose. The EPA can simply point out that climate change is accelerating faster than predicted, so bold action is necessary. And the courts typically take a deferential approach to the validity of Federal regulations. In fact, in the leading case on the deference-to-agency-regulations issue, Chevron v. Natural Resources Defense Council, the Supreme Court upheld a set of controversial EPA air-pollution regulations. And worst case, the wingnuts win, but it takes two or three years to drag through the courts...and by that time the money's invested, the jobs created.
So Obama could do it without Congress.
So why not?
If you like the idea, tell President Obama about it here.