Senator Charles Schumer (D, NY) called for a $500-700 billion stimulus package on ABC’s “This Week”:
Archive for November, 2008
THE GEEK SHORTAGE: According to the National Science Foundation, American universities graduated a record number of science and engineering PhDs in 2006–almost 30,000 of them. So we should have plenty of scientists to set to work on the energy challenge; yet, as a recent study from the Urban Institute explains, “each year there are more than three times as many S&E four-year college graduates as S&E job openings.” What gives? Turns out a lot of those graduates are in the biological sciences–which, coincidentally, saw a massive boost in federal funding a few years ago.
What we need is a new Sputnik scare: After the Soviet Union put the first-ever satellite in orbit, Congress passed the National Defense Education Act, providing about $6.5 billion worth (in today’s dollars) of funding for graduate fellowships, low-interest college loans, and new research equipment and facilities. Why no National Energy Education Act today?
Chris is a contributing editor to Science Progress, senior correspondent for The American Prospect and author of two books, including the New York Times bestselling The Republican War on Science and Storm World: Hurricanes, Politics, and the Battle Over Global Warming, selected as a 2007 best book of the year in the science category by Publisher’s Weekly. He was one of the first to support my and Jesse Jenkins’ proposal back in August, when he wrote a piece for Science Progress, “A New Mission for American Science,” where he said:
With a new bailout for Detroit on the table, there’s a lot of talk about getting some “grand bargain” with automakers out of the deal: automakers will agree to some terms, like producing more efficient vehicles, in exchange for the loans.
In fact, the direct loans approved by the 2007 Energy Bill require auto companies to use the funds to retool factories that produce vehicles that get 25% better fuel economy than the average vehicle in it’s class. That’s a start.
But the real grand bargain, in my opinion, is to bust out of this incremental improvements mentality for fuel economy. We don’t need incremental improvements, we need exponential improvements in fuel economy. Here’s how it could work…
It takes something like 3-7 years to design a new car, build the plants and get it rolling off the assembly line. So, rather than say we want a 4% annual improvement in fuel economy (as the current CAFE standards roughly call for) – incremental improvements that get us to no-where near plug-in hybrid-type fuel economy – let’s propose a deal that goes something like this.
In 2005, with GM and Ford teetering perilously close to bankruptcy, the Breakthrough Institute created the Healthcare for Hybrids proposal with Senator Barack Obama, Representative Jay Inslee, and the Center for American Progress, a plan which would have linked fuel-economy increases to relieving health care costs for U.S. automakers. Today, with the industry again on the brink of collapse, we invite you to join us is exploring a new question for the new era:
What will it take to reinvent the American auto industry?
We will publish the best responses on our home page, www.thebreakthrough.org. Please submit your op-eds to email@example.com and paste or type your content into the body of the message; please do not send attachments.
“As GM goes, so goes the nation,” went the old saying. Let’s hope not.
The U.S. auto industry is in its last throes. After decades of declining market share, sales have collapsed to 25 year lows, with total sales for October over 30 percent below last year. GM sales have plummeted by 45 percent, and its stock price is down to its lowest level since 1950. According to Deutsche Bank, GM may not be able to fund its operations past December. An op-ed in yesterday’s Detroit News put it this way:
“It’s over, folks… It would be impossible to overstate the historic implications of this — what it means for the national economy, the city of Detroit, the state of Michigan, the industrial Midwest, GM employees and retirees, suppliers, dealers, non-profits and the United Auto Workers.”
Should the industry be allowed to fail? Obama, Pelosi and Reid don’t think so, and it appears increasingly likely that an additional $25 billion federal package — on top of the $25 billion in direct loans included in the $700 billion bailout plan — will be injected to prevent bankruptcy. Obama and the Democratic leadership have indicated that such a deal would be contingent upon automakers’ willingness to transition the industry to produce more fuel-efficient and cleaner vehicles, but no further details are on the table.
The good news: an elite consensus is crystallizing around the need for massive economic stimulus funded by deficit spending. Hundreds of economists are calling for stimulus on the scale of 2-3 percent of GDP — or $300-500 billion per year, equivalent to the expected decline in U.S. consumption as a result of the housing market collapse — to confront the recession head-on.
The bad news: this growing consensus may only support short-term stimulus investments – such as aid to state and local governments, extended unemployment benefits, and rebate checks – without any long-term economic strategy. Infrastructure spending is gaining support, but mostly for proposals that have already been planned and scheduled. Given the increasingly dim prospects for long-term U.S. competitiveness, it’s critical that we think smart and act quickly to secure our economic future. As Harvard Business School guru Michael Porter put it in last week’s BusinessWeek cover story:
The stark truth is that the U.S. has no long-term economic strategy–no coherent set of policies to ensure competitiveness over the long haul. Strategy embodies clear priorities, based on understanding the strengths we need to preserve and the weaknesses that threaten our prosperity the most. Strategy addresses what to do, but also what not to do. In dealing with a crisis, experience teaches us that steps to address the immediate problem must support a long-term strategy. Yet it is far from clear that we are taking the steps most important to America’s long-term economic prosperity.
So what are some guidelines for a long-term growth strategy? A good place to start is with a basic recognition of how economic growth occurs: growth is driven primarily by increases in productivity. Why? Because greater productivity allows us to do more work with less resources. It’s that simple.
Few moments in history feel this monumental. It’s the feeling of renewed hope and immense possibility.
Barack Obama has once again tapped America’s power of invention. It’s the same power that led us to invent the first modern democracy. To invent the systems and technologies that continue to drive human progress. To constantly reinvent ourselves in the face of insurmountable hardship and division.
Invention is our greatest power — the very heart of the American spirit. It’s what can renew our promise once again and make this century the next American century.
Since its founding, the Breakthrough Institute has been a pioneering force behind the creation of a new progressive politics capable of capturing and unleashing this power to confront the world’s greatest challenges.