True, we must reduce low-priority discretionary spending, both defense and domestic; slow the projected growth of Medicare and Medicaid; and restore Social Security to fiscal soundness. But we also need to care for an aging population and invest in the skills, research and modern infrastructure that power economic growth.
Alice Rivlin, founding director of the Congressional Budget Office, former director of the White House Office of Management and Budget, former Federal Reserve Vice Chair, and member of the Presidential Debt Commission.
See also: "Losing the Future?" a Breakthrough Institute staff editorial, April 14, 2011
"The cost of early research is extraordinarily high, often prohibitively so. The most significant strides we've taken in innovation in this country have, as a result, been largely the product of substantial federal investment in R&D. The early discoveries, the early inventions have rarely arisen exclusively in a private-sector environment. But with a concerted national effort, these innovative ideas can find the funding--and the resources--to become viable. Government R&D investments have resulted in the early phases of countless critical innovations. Companies like Dow have then worked with the government to take on some of the risk, to further develop the products, and to ultimately commercialize them.
Other countries are now following that model. They are spending substantial sums of money in focused R&D, providing the space for innovation that has no equivalent in the private sector. Those investments attract businesses like Dow. We want to be at the center of innovation--and the center of innovation is increasingly moving offshore.
The United States should substantially increase it's R&D budget, and should focus specifically on industries--like clean energy--where success in innovation has the greatest potential to result in valuable products, high-paying jobs, and sustainable economic growth."
"What determines success in industrial policy is not the ability to pick winners but the capacity to let the losers go." - Dani Rodrik, as quoted in a Businessweek article evaluating the future of industrial policy and clean energy...
"What determines success in industrial policy is not the ability to pick winners but the capacity to let the losers go."
- Dani Rodrik, as quoted in a Businessweek article evaluating the future of industrial policy and clean energy technology in the United States. Really, a useful lesson to keep in mind when it comes to policy design.
The Center for American Progress came out with a new report last week entitled "Out of the Running? How Germany, Spain, and China Are Seizing the Energy Opportunity and Why the United States Risks Getting Left Behind." Sound familiar? Renewable Energy World thought so and they had this to say about the report:
This is not exactly news. Rising Tigers Sleeping Giant, a Breakthrough Institute 2009 report, showed that U.S. New Energy R&D spending is embarrassing in comparison to that of important Asian economies. (See ASIA, THE U.S. AND THE NEW ENERGY RACE) Investing in Climate Change 2010, a Deutsche Bank 2010 study, showed that investments in the New Energy economy pay better than the economy as a whole but require favorable policies and incentives to put them on a level playing field against the entrenched Old Energies.
"The longer we in the United States wait, the farther ahead China will be, and it will be harder for us to catch up. If we don't get our act together, we're going to be watching the capital, the businesses and the good-paying jobs end up someplace else. And 10 to 15 years from now, we're going to be saying, 'How did Shanghai become the Silicon Valley of clean energy?'"
-Commerce Secretary Gary Locke warns about the perils of losing the global clean energy race, quoted on NPR
John Cowgill, an AP Environmental Science student in Lexington, Kentucky writes that the solution to global warming ultimately lies in creating a viable solution to fossil fuels.
"I am somewhat of a cornucopianist. Although I don't think ALL of the world's ecological problems can be solved with technology, I do believe that the solution to global warming ultimately lies in creating a viable solution to fossil fuels and not waiting on people to stop driving cars. As the [TIME] article itself explicitly states "...while global politics may shape how quickly and appropriately we structure our response to climate change, the actual work of reducing carbon emissions will ultimately be a technological problem." Thus, I am amazed that countries are not doing more to invest in green technology research. No nation is anywhere close to putting adequate funds into green technology research, and I believe the first nation to start research will put itself in a fantastic position economically, socially, and, of course, technologically."
-John Cowgill, AP Environmental Science student at Henry Clay High School, Lexington, KY.
"Attaining the 2 degree goal in the United States with existing technology will likely be very expensive. Doing so in the developing world with existing expensive technology is likely to be impossible. ...
While an emissions price is an absolute requirement for an efficient regulatory framework, it is likely not the sole requirement. Due to some imperfections in any market economy, price signals may be dampened or be short circuited. This is particularly true in the market for research and development, where it is well known that firms have incentives to under-invest in research and development (R&D) due to the fact they cannot capture all the returns to R&D--some of those returns spill over to others in the market that did not invest as much. In this case, the emissions price cannot fully motivate the R&D market and therefore a well-designed regulatory program will contain a role for government funding of R&D. ...
In addition to the economic rational for government support of R&D, there is a political case to be made. Spurring R&D and demonstration and deployment of financially risky technology investments may require an emissions price that is not politically viable (that is, it is too high to be politically acceptable). In this case, absent the market imperfections above, the price is simply too low to generate the needed investments and government must step in to support the required levels of from R&D and demonstration and deployment."
-Ray Kopp, Senior Fellow at Resources for the Future, in testimony before the Senate Energy and Natural Resources Committee, Dec. 2, 2009.
"If you had to explain America's economic success with one word, that word would be "education" ... Education made America great; neglect of education can reverse the process."
On whether or not the Obama administration has the political will to bring about financial reform:
"The rhetoric is starting to come around, but the proposals are still designed to create the status quo before the crisis. It's analytically bankrupt. Nothing they're trying for would have prevented the current crisis had it been in place, and it's very unlikely that it will prevent crisis in the future...
In particular, the administration want to create the secondary market that caused trillions of dollars of losses. They still want a massively, too-large financial structure -- so large that it clearly harms the economy."
- William Black, a former federal regulator during the Savings & Loan crisis and currently, a professor of economics and law at the University of Missouri-Kansas City as quoted in Newsweek, "Financial Follies 2.0," October 6th, 2009
"We need a public investment program to drive this shift into cleaner energy resources. The major obstacle is to convince political leaders and their constituencies to go in that direction."
--Rob Vos, Director of Development Policy, United Nations Department of Economic & Social Affairs, speaking to the New York Times about the UN's report calling for $500 to $600 billion per year for renewable energy in the developing world
"Achieving deep reductions in greenhouse gas (GHG) emissions at acceptable social cost will involve far-reaching technological change in the energy and in other sectors. Indeed, at present this seems one of the few things on which there is international agreement in relation to climate change ... [P]roperly understood, the economics of technology innovation offers a way forward between what seem very divergent international positions on climate change policy."
"Carbon prices alone, however, will not be high enough -- at least for the next few decades -- to prompt a large-scale roll-out of renewable energy, nor will they be sufficient to promote carbon capture and sequestration. Prices will be set for many years to come by cheaper sources of credit -- energy efficiency and project-based mechanisms in the developing world. So a carbon price is an essential driver towards a lower carbon economy, but additional policy interventions will still be required."
"There is no way India is going to accept any emission reduction target, period, between now and the Copenhagen meeting and thereafter... India will not accept any emission-reduction target -- period. This is a non-negotiable stand."
--Indian Environment Minister Jairam Ramesh, June 30, 2009 (Bloomberg News)
"The whole point of cap and trade is to create the market conditions necessary for viable clean energy at a massive scale. So why don't we cut to the chase and simply provide those market conditions directly?
We can't just make the pollution business harder, we need to create a better business for polluters to be in. By direct investment in efficiency, solar, wind, grid R&D, new batteries, etc., we could potentially find solutions faster than the indirect process of forcing the private market to transition by making polluters feel the pain of a carbon cap. ...
It's time to realize that government can do more than prop up banks and auto industries to avoid economic collapse - it can invest directly in REAL climate solutions to avoid global environmental collapse and the political chaos that will follow. ...
At the end of the day, it will be hard to call the Waxman-Markey bill a success if it represents merely a political achievement, while "offsetting" actual results. Keeping our attention, policies, and budgets focused on developing and implementing solutions is critical if we are to relegate carbon pollution and carbon taxes to the scrap heap of the past."
"I believe that energy, not the dollar, is the currency of the world. It is the joule that drives every economy and gives people a way out of poverty."
"If China is going to put in $440-660 billion [in clean energy development investments this year], how will $190 billion (actually under $130 billion) over 20 years put us in the leadership position?"
[M]ore importantly, if the best that the US can bring to the negotiating table ahead of the talks on a new post-Kyoto emissions treaty, is a 3% cut in emissions versus 1990 baseline, then this may not be enough to tickle out an agreement from China and India [at the international climate negotiations in Copenhagen, December 2009.]
-Global investment firm HSBC on the Waxman-Markey American Clean Energy and Security Act (via WSJ.com's Environmental Capital blog). We note that HSBC's conclusions about the Waxman-Markey climate bill strongly echo Breakthrough's own (see links in quote above).
"The United States already has a working cap-and-trade system, used since 1995 to cut back the gases blamed for acid rain. The Environmental Protection Agency says the trading system has reduced the overall cost of cutting acid-rain-causing pollutants to one-third of what was projected.
But comparing the two problems is like comparing a horn section and an orchestra.
Acid-rain pollutants can be sucked out of a smokestack by adding "scrubbers." But nothing like that is commercially available for carbon dioxide -- polluters might have to replace the coal they burn with a different fuel, or replace the coal-burning plants with solar "farms" and windmills.
Also, greenhouse gases come from far more sources: power plants, factories, car tailpipes, and both ends of a well-fed dairy cow (though the bill doesn't tackle that one: cows could still burp free of charge)."
"And the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."
Results of a Rasmussen poll asking voters to identify (between the three options above) what cap and trade policy has to do with (correct answer: a regulation on greenhouse gas emissions causing global warming, aka "The environment"). Graphic via Andrew Sullivan.
House GOP Looking For Friendly Dems To Stop Pollution Legislation
CQ reports that House Republicans are trying to forge alliances with Democrats from industrial states to fight the objectives of the Democratic leadership on pollution. Rep. Marsha Blackburn (R-TN) is looking for Dems to support legislation barring the EPA from regulation carbon dioxide, and Rep. Mike Pence (R-IN) has said that a carbon tax or cap-and-trade "amount to a declaration of economic war on the Midwest by Democrats on Capitol Hill."
Secretary of Energy Steven Chu says "another myth is that we have all the technology we need to solve the energy problem, it's only a matter of political will."
"So, another myth is that we have all the technology we need to solve the energy problem, it's only a matter of political will. I think political will is absolutely necessary ... but we need new technologies to transform the [energy] landscape."
-Secretary of Energy Steven Chu, speaking (before his nomination) in summer 2008 at the National Clean Energy Summit convened by the University of Nevada Las Vegas, Sen. Harry Reid (D-NV), and the Center for American Progress Action Fund (see video below).
Quote starts at 6 minute and 22 seconds into the video. Chu then goes on the speak about the potential for dramatic and transformational technological developments - aka "breakthroughs" - in energy technologies, including solar photovoltaics and biofuels.
"Technology policy lies at the core of the climate change challenge. Even with a cutback in wasteful energy spending, our current technologies cannot support both a decline in carbon dioxide emissions and an expanding global economy. If we try to restrain emissions without a fundamentally new set of technologies, we will end up stifling economic growth, including the development prospects for billions of people.
Economists often talk as though putting a price on carbon emissions--through tradable permits or a carbon tax--will be enough to deliver the needed reductions in those emissions. This is not true. Europe's carbon-trading system has not shown much capacity to generate large-scale research nor to develop, demonstrate and deploy breakthrough technologies. A trading system might marginally influence the choices between coal and gas plants or provoke a bit more adoption of solar and wind power, but it will not lead to the necessary fundamental overhaul of energy systems.
For that, we will need much more than a price on carbon. ...
Economists like to set corrective prices and then be done with it, leaving the rest of household and business decisions to the magic of the market. This hands-off approach will not work in the case of a major overhaul of energy technology. We will need large-scale public funding of research, development and demonstration projects; intellectual property policies to promote rapid dissemination to poor countries; and the promotion of public debate and acceptance of new options. We will need to back winners, at least provisionally, to get new systems moving. "
An oldie but a goody from well-known economist and direct of the Earth Institute at Columbia University, Jeffrey Sachs, April 2008 in Scientific American, "Keys to Climate Protection."
"We have to invest in our intellectual capability, because it is the intellectual horsepower of the country that will create new wealth." -- Secretary of Energy, Steven Chu speaking this afternoon at an energy forum sponsored by the The Washington...
"Rather than seeing public opinion as a something to move as a prerequisite to action on certain climate policies, perhaps it is time for the experts to instead shape climate policies to fit the realities of public opinion. To paraphrase Walter Lippmann, the goal of politics is not to get everyone to think alike, but rather, to get people who think differently to act alike."
-- Roger Pielke, on Prometheus, responding to a Gallup poll that the American public increasingly views media representations of climate science to be exaggerated.
"We live in a world of growing demand for energy as billions of people are rising out of poverty. As that demand for energy grows, it will require new energy production capacity. Today, that new capacity generally consists of coal-fired power plants with the same high carbon dioxide emissions as our current energy infrastructure. Just a couple of weeks ago, India announced that it is building a new 4 GW coal-burning power plant complex. These plants will emit more than 23 million tons of CO2 a year. The justification? That the need to bring electricity to one of the world's poorest regions is more pressing than the need to limit carbon dioxide from burning fuel, and this is the least expensive way to do it. It is difficult to argue against such a statement, when most of us here have never known a life without electricity.
As we struggle to develop alternatives to our current energy infrastructure, we must recognize that in order to achieve sustainable use of those alternatives worldwide they must become cost-competitive, so that they are the option of first resort.
To accomplish all of this, we will need both a revolution in technology and major changes in our economy. Our past technological choices are inadequate for our future. The solutions we need can only come from new technologies. And if the challenge of developing those new energy technologies, and implementing them worldwide, is immense, so too are the opportunities afforded by tackling this problem the right way. If we see our most pressing environmental problems as an opportunity to reassert U.S. leadership in science, technology, and innovation, we have the potential not only to resolve those problems, but also to revitalize our R&D enterprise and to rebuild our manufacturing base in the United States."
-- Senator Jeff Bingaman, chairman of the Senate Energy and Natural Resource Committee, speaking at MIT in April 2008.
"I strongly believe that the key to our prosperity in the 21st century will lie in our ability to nurture our intellectual capital in science and technology. Our previous investments in science that lead to the birth of the semiconductor, computer and biotechnology industry added greatly to economic prosperity. And now we need similar breakthroughs in energy today. We already taking steps forward, but we need to do more."
-- Secretary of Energy Steven Chu, testifying before the Senate Energy and Natural Resources Committee on March 5th.
Chief US climate negotiator, Todd Stern, said last week that the United States would be involved in the negotiation of a new treaty -- to be signed in Copenhagen in December -- "in a robust way."
"A cap-and-trade system is absolutely essential to spur private sector innovation, but must be combined with clean energy technology funding to meet the president's ambitious emissions goals," he said. "This funding should be a top priority when dealing with revenue generated by the program."
--Paul Bledsoe, a spokesman at the National Commission on Energy Policy, in the New York Times
"Well that day of reckoning has arrived, and the time to take charge of our future is here. Now is the time to act boldly and wisely - to not only revive this economy, but to build a new foundation for lasting prosperity. Now is the time to jump start job creation, re-start lending, and invest in areas like energy, health care, and education that will grow our economy, even as we make hard choices to bring our deficit down. That is what my economic agenda is designed to do, and that's what I'd like to talk to you about tonight."
Last night, President Obama articulated a vision for a new strategy of investment in sustained prosperity in the 21st century, which reminds us here at Breakthrough of the the new growth strategy called for by Teryn Norris following President Obama's election.
"The President's message on fiscal responsibility -- that he'll cut the current one by half by the end of his first term -- is smart politics right now, but it may be dumb politics by November of 2012, and doesn't make much economic sense regardless.
We're in a deepening recession, in case you hadn't noticed. The biggest challenge is to ramp up aggregate demand. Yes, we have to borrow lots from the Chinese and Japanese to do this, and, yes, it's costly in terms of additional interest payments to them. But there's no choice. In fact, if the slump gets worse -- and I have every reason to fear it will because that's the direction we're heading in as fast as you can imagine -- we'll probably have to have a second stimulus. And if the second isn't enough, a third."
"[G]overnment isn't fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole." --David Brooks...
"[G]overnment isn't fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole."
"Final quarter GDP in the eurozone fell by 1.5% in the final quarter, the first contraction since records started being kept in the 1990s. If our subprime market is the cause of this mess, how come they're suffering more than we are?"
"So far the Obama administration's response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It's early days yet, but we're falling behind the curve."
"I do not remember hearing a plausible, principled alternative powerfully articulated by the Congressional Republicans. Maybe that's because the great success of the GOP over the last eight years has been to destroy the reputation of free markets and limited government by deploying its rhetoric and then doing the opposite. Partisan Republicans choke on the truth that the emerging shape of the Obama era is the aftermath of the GOP's successful, if unwitting, campaign to destroy the political economy they proclaimed."
"Republicans don't want their fingerprints on the stimulus bill or the next bank bailout because they plan to make the midterm election of 2010 a national referendum on Barack Obama's handling of the economy. They know that by then the economy will still appear sufficiently weak that they can dub the entire Obama effort a failure -- even if the economy would have been far worse without it, even if the economy is beginning to turn around. They'll say 'he wanted more government spending, and we said no, but we didn't have the votes. Elect us and we'll turn the economy around by cutting taxes and getting government out of the private sector.'"
"There's a case to be made for a stimulus that's radically different than the one we have now; there's a case to be made for a stimulus that's like the one we have now, but a great deal smaller and more targeted; and there's a case to be made for a stimulus that's absolutely gargantuan. But thanks to the centrists, we're getting the cheapskate version of the gargantuan version: They've done absolutely nothing to widen the terms of debate about what should go into the bill, and they've shaved off just enough money to reduce its effectiveness if Paul Krugman is right - but not nearly enough to make it fiscally prudent if the stimulus skeptics are right."
"It's time for Mr. Obama to go on the offensive. Above all, he must not shy away from pointing out that those who stand in the way of his plan, in the name of a discredited economic philosophy, are putting the nation's future at risk. The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge."
"For centuries, people have worried that economic growth had limits -- that the only way for one group to prosper was at the expense of another. The pessimists, from Malthus and the Luddites and on, have been proved wrong again and again. Growth is not finite. But it is also not inevitable. It requires a strategy."
"In one of its first actions, the Obama administration instructed military prosecutors late Tuesday to seek a 120-day suspension of legal proceedings involving detainees at the naval base at Guantanamo Bay, Cuba -- a clear break with the approach of the outgoing Bush administration."
"For everywhere we look, there is work to be done. The state of the economy calls for action, bold and swift, and we will act -- not only to create new jobs, but to lay a new foundation for growth. We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place, and wield technology's wonders to raise health care's quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age. All this we can do. And all this we will do."
"That work begins with this plan - a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It's a plan that recognizes both the paradox and the promise of this moment - the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That's why we'll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century."
-President-elect Barack Obama, while addressing the country about his economic stimulus plan, "American Recovery and Reinvestment."
"The biggest problem facing the Obama plan, however, is likely to be the demand of many politicians for proof that the benefits of the proposed public spending justify its costs -- a burden of proof never imposed on proposals for tax cuts.
This is a problem with which Keynes was familiar: giving money away, he pointed out, tends to be met with fewer objections than plans for public investment "which, because they are not wholly wasteful, tend to be judged on strict 'business' principles." "
"Meanwhile, how much has our nation's future been damaged by the magnetic pull of quick personal wealth, which for years has drawn many of our best and brightest young people into investment banking, at the expense of science, public service and just about everything else?"
"Energy efficiency cannot be seen as Job 1 and the other stuff Job 2. You've got to do them all as Job 1 because they all have to work."
-Dr. Nathan Lewis, California Institute of Technology, in today's New York Times piece, "Hard Task for New Team on Energy and Climate. Dr. Lewis explains why any program on climate-friendly energy must move forward on three prongs simultaneously: increasing efficiency, moving existing nonpolluting energy technologies more rapidly into the market, and advancing on the frontiers of energy science in search of radical breakthroughs.
" We believe that aggressive support of energy science and technology, coupled with incentives that accelerate the current development and deployment of innovative solutions can transform the entire landscape of energy demand and supply.
What the world does in the coming decade will have enormous consequences that will last for centuries. It is imperative that we begin without further delay. "
"The framework of the European system put governments in the position of behaving like 'a grandfather with a large family deciding what to give his favorite grandchildren for Christmas,' Mr. Trittin said in an interview."
-From this New York Times article about the pitfalls and failures of cap and trade in Europe.
"I think we already have a green revolution, because I separate my plastics and I eat Kashi cereal. So...What more are we supposed to do, Thomas Friedman??"
-Steven Colbert, from his interview with Thomas Friedman on last Thursday's Report
"Government accounting is different from that in the private sector. A firm that borrows to make a good investment will see its balance sheet improved, and its leaders will be applauded. But in the public sector there is no balance sheet, and as a result, too many of us focus too narrowly on the deficit. In reality, wise government investments yield returns far higher than the interest rate the government pays on its debt; in the long run, investments help reduce deficits. To cut them is penny-wise but pound-foolish, as New Orleans' levees and Minneapolis' bridge attest."
"Back in the 1980s and 1990s, a government-financed initiative like that would have been called "industrial policy," which real capitalist democracies were supposed to avoid. When the Japanese perfected this approach -- with a mix of research help, tax incentives and government "guidance" -- American presidents would dispatch negotiators to demand a halt to the practice. The Japanese took them out to nice sushi dinners, gave them a police escort back to the airport, and ignored them."
"And when we all wake up on Nov. 5, 2008, to find that we have made Barack Obama the president of the United States, the world is already going to feel, to all of us, a little different, a little truer to its, and our, better nature. It is part of the world's nature and of our own to break, ruin and destroy; but it is also our nature and the world's to find ways to mend what has been broken. We can do that. Come on. Don't be afraid."
-Pullitzer Prize Winner Michael Chabon, in his Washington Post op-ed, "Obama vs. the Phobocracy," February 4, 2008.
"The dogmas of the quiet past, are inadequate to the stormy present. The occasion is piled high with difficulty, and we must rise -- with the occasion. As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country."
"[W]hat the economy needs now is something to take the place of retrenching consumers. That means a major fiscal stimulus. And this time the stimulus should take the form of actual government spending rather than rebate checks that consumers probably wouldn't spend."
-Paul Krugman
"In times like these, the best a sensible leader can do is to take the short-term panic and channel it into a program that is good on its own merits even if it does nothing to stimulate the economy over the next year. That's why I'm hoping the next president takes the general resolve to spend gobs of money, and channels it into a National Mobility Project, a long-term investment in the country's infrastructure."
-David Brooks
"As long as the [financial] industry won their bets, they could pretend that they were acting on their own and had no need of the government. However, when they lost big, as they did with the collapse of the housing bubble, they had no choice but to go running to the government for help. Wall Street executives, who might complain about a government support check of a few thousand dollars for an unemployed single mother, suddenly were demanding hundreds of billions of dollars from the government to keep their banks from collapsing."
"He said that [the next president] should not be trying to solve problems one by one- first, get the economy on track, next deal with health care, next with energy, etc.- instead should put together an economic package that makes progress across the board."
From the Washington Post: "Metro and 30 other transit agencies across the country may have to pay billions of dollars to large banks as years-old financing deals unravel, potentially hurting service for millions of bus and train riders, transit officials...
"Metro and 30 other transit agencies across the country may have to pay billions of dollars to large banks as years-old financing deals unravel, potentially hurting service for millions of bus and train riders, transit officials said yesterday.
The problems are an unexpected consequence of the credit crisis, triggered indirectly by the collapse of American International Group, the insurance giant that U.S. taxpayers recently rescued from bankruptcy, officials said.
AIG had guaranteed deals between transit agencies and banks under which the banks made upfront payments that the agencies agreed to repay over time. But AIG's financial problems have invalidated the company's guarantees, putting the deals in technical default and allowing the banks to ask for all their money at once."
"One might ask just what the hell was the point of giving AIG government credit worth $122 billion (and counting) if it wasn't going to prevent the deals the firm guaranteed from falling apart. Go read the Post story; it will disgust you seventeen ways fron Sunday."
"WTF is happening here? Can't we, in exchange for all the money we're giving AIG, force the company to keep guaranteeing deals that are vital to keeping our public services running? Something about the implementation of this bailout is very troubling."
"Unfortunately, that doesn't seem to be the issue. AIG is still guaranteeing the deals. The problem is that the contracts with the banks terminate automatically if AIG doesn't maintain a high credit rating. Which, needless to say, they haven't. So now the banks are demanding payment.
Which just goes to show how all this stuff trickles down not just to Main Street, but to the subways underneath Main Street too. However, a Treasury Department spokesman says, 'Treasury is aware of this situation.' That should make us all feel better, right?"
"Like other ideologues, libertarians react to the world's failing to conform to their model by asking where the world went wrong." -Jacob Weisberg, in his piece on Slate.com, "The End of Libertarianism"...
"Finally, if Congress passes another stimulus package, it can't just be another round of $600 checks to go buy flat-screen TVs made in China. It has to also include bridges to somewhere -- targeted investments in scientific research, mass transit,...
"Finally, if Congress passes another stimulus package, it can't just be another round of $600 checks to go buy flat-screen TVs made in China. It has to also include bridges to somewhere -- targeted investments in scientific research, mass transit, domestic clean-tech manufacturing and energy efficiency that will make us a more productive and innovative society, one with more skills, more competitiveness, more productivity and better infrastructure to lead the next great industrial revolution: E.T. -- energy technology."
"Pardon me for asking, but if a company is too big to fail, maybe - just maybe - it's too big, period... ...We seem to have forgotten that the original purpose of antitrust law was also to prevent companies from...
"Pardon me for asking, but if a company is too big to fail, maybe - just maybe - it's too big, period...
...We seem to have forgotten that the original purpose of antitrust law was also to prevent companies from becoming too powerful. Too powerful in that so many other companies depended on them, so many jobs turned on them, and so many consumers or investors or depositors needed them - that the economy as a whole would be endangered if they failed. Too powerful in that they could wield inordinate political influence - of a sort that might gain them extra favors from Washington."
"[D]omestic policy outcomes are unlikely to hinge crucially on the relatively subtle differences between mainstream Democratic Party politicians. Rather, the views of relatively conservative congressional Democrats are likely to be decisive." Matthew Yglesias, on the power that centrist party members...
"[D]omestic policy outcomes are unlikely to hinge crucially on the relatively subtle differences between mainstream Democratic Party politicians. Rather, the views of relatively conservative congressional Democrats are likely to be decisive."
Matthew Yglesias, on the power that centrist party members like the Technology 16 yield over the legislative process.
"It's politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold." -Paul Krugman...
"It's politically fashionable to rant against government spending and demand fiscal responsibility. But right now, increased government spending is just what the doctor ordered, and concerns about the budget deficit should be put on hold."
"I'm already sick of talking about me. Meanwhile, we still have the financial crisis of our lifetimes to deal with. And let me point something out: while the stock market has been going gangbusters, we haven't yet seen anything like...
Meanwhile, we still have the financial crisis of our lifetimes to deal with. And let me point something out: while the stock market has been going gangbusters, we haven't yet seen anything like a return to normality in credit markets."
-Recently named (and humble) Nobel Prize winner Paul Krugman, explaining that the recent stock market surge is not necessarily indicative of an upswing in the economy.
"It's also a unique opportunity to bring together the public sector, the private sector, industry, the national labs, the universities. By doing that, not only do you make breakthroughs, but you already have this community involved, so they can take...
"It's also a unique opportunity to bring together the public sector, the private sector, industry, the national labs, the universities. By doing that, not only do you make breakthroughs, but you already have this community involved, so they can take it to the next step, to the market."
-Representative Bart Gordon (D-TN) in an interview with Newsweek's Fareed Zakaria, discussing the need for an Advanced Research Projects Agency-Energy, or ARPA-E, with a mandate to invest in potentially game changing energy technologies.
"[T]he U.S. economy is never going to be really healthy until the country figures out how to provide work at decent pay for all, or nearly all, of the men and women who want to work."
"[T]he U.S. economy is never going to be really healthy until the country figures out how to provide work at decent pay for all, or nearly all, of the men and women who want to work."
"Like all transformative movements, the Reagan revolution lost its way because for many followers it became an unimpeachable ideology, not a pragmatic response to the excesses of the welfare state." -Francis Fukuyama, in a recent Newsweek article about the end...
"Like all transformative movements, the Reagan revolution lost its way because for many followers it became an unimpeachable ideology, not a pragmatic response to the excesses of the welfare state."
-Francis Fukuyama, in a recent Newsweek article about the end of Reganism
"I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that...
"I believe that banking institutions are more dangerous to our
liberties than standing armies. If the American people ever allow
private banks to control the issue of their currency, first by
inflation, then by deflation, the banks and corporations that will grow
up around the banks will deprive the people of all property until their
children wake-up homeless on the continent their fathers conquered."
"It's a larger issue of the House and Senate just don't talk to each other enough, work out trust and understanding. That's what this really is. They're in their little world, we're in our little world. It's sitting down like...
"It's a larger issue of the House and Senate just don't talk to each other enough, work out trust and understanding. That's what this really is. They're in their little world, we're in our little world. It's sitting down like adults, both sides, House and Senate, and working out solutions."
Senate Finance Committee Chairman, Max Baucus on the apparent failure of the Democratic Congress to pass an extension to the critical renewable energy tax credits before the end of the 110th Congress.
"...the priority should be advancing technological solutions, creating incentives for populations across the globe to preserve their forests, and making the most vulnerable populations more resilient to heat waves and flooding."
"The report says working toward a new global climate deal remains important. But interestingly, it also says the priority should be advancing technological solutions, creating incentives for populations across the globe to preserve their forests, and making the most vulnerable populations more resilient to heat waves and flooding."
-Andy Revkin, on a new report issued Monday by the European Environment Agency, the World Health Organization and the European Commission, about Europe's increasing rate of climate change and how these organizations suggest this warming should be mitigated.
"[L]et's commit right now that any bailout profits will be invested in infrastructure -- smart transmission grids or mass transit -- for a green revolution." -Thomas Friedman is making sense....
"[L]et's commit right now that any bailout profits will be invested in infrastructure -- smart transmission grids or mass transit -- for a green revolution."
"If money isn't loosened up, this sucker could go down." -George W. Bush, 43rd President of our Union, at a meeting of Congressional leaders to determine the structure and details of the Wall Street Bailout. TGIF, folks. TGIF....
"The global financial turmoil has pulled nearly everybody out of their normal ideological categories. The pressure of reality has compelled new thinking about the relationship between government and the economy. And lo and behold, a new center and a new...
"The global financial turmoil has pulled nearly everybody out of their normal ideological categories. The pressure of reality has compelled new thinking about the relationship between government and the economy. And lo and behold, a new center and a new establishment is emerging."
"After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well." -Senator Chris Dodd (D-Co.), chairman of the Senate Banking Committee, expressing his reservations about...
"After reading this proposal, I can only conclude that it is not only our economy that is at risk, Mr. Secretary, but our Constitution, as well."
-Senator Chris Dodd (D-Co.), chairman of the Senate Banking Committee, expressing his reservations about Treasury Secretary Henry Paulson's proposed bailout plan, which involves giving Paulson 700 billion in taxpayers' money with no oversight on how it is managed or spent.
"What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That's why Hank Paulson and Ben Bernanke were so scared last week. And, yes, I...
"What would be the dollar cost of not bailing out Wall Street? Try a number north of $30 trillion. (The awful math is detailed below.) That's why Hank Paulson and Ben Bernanke were so scared last week. And, yes, I think "scared" isn't too strong a word. You don't think they convened an emergency nighttime meeting of congressional leaders and then walked out with something close to a blank check for a trillion bucks because they thought we were headed for an outright recession, even a fairly nasty one?"
"Throughout US history, competent public investment decisions have been an essential complement to private investment, from the Louisiana Purchase and the Land Grant Colleges to the Interstate Highway System and the Internet." -Everett Ehrlich, Felix G. Rohatyn, "A New Bank...
"Throughout US history, competent public investment decisions have been an essential complement to private investment, from the Louisiana Purchase and the Land Grant Colleges to the Interstate Highway System and the Internet."
"When I taught a journalism course at Princeton a couple of years ago, I was captivated by the bright, curious minds in my class. But when I asked students what they wanted to do, the overwhelming answer was: 'Oh, I guess I'll end up in i-banking.'"
"When I taught a journalism course at Princeton a couple of years ago, I was captivated by the bright, curious minds in my class. But when I asked students what they wanted to do, the overwhelming answer was: 'Oh, I guess I'll end up in i-banking.'"
"Conservatism was once a frankly elitist movement. Conservatives stood against radical egalitarianism and the destruction of rigorous standards. They stood up for classical education, hard-earned knowledge, experience and prudence. Wisdom was acquired through immersion in the best that has been thought and said.
But, especially in America, there has always been a separate, populist, strain. For those in this school, book knowledge is suspect but practical knowledge is respected. The city is corrupting and the universities are kindergartens for overeducated fools."
"There also seems to be some kind of psychological compensation mechanism at work among corporate and Hollywood elites: that it's OK to be a runaway consumer so long as you theatrically denounce consumption." Gregg Easterbrook, in his review of Thomas...
"There also seems to be some kind of psychological compensation mechanism at work among corporate and Hollywood elites: that it's OK to be a runaway consumer so long as you theatrically denounce consumption."
