Eric Harrington – The Crash is a Huge Opportunity
The crash is a huge opportunity
The recent financial crash is a long overdue wake up call, but it is not the end of the world. In fact, it is a tremendous opportunity. Yes, sometimes it takes a near death experience to change someone’s life, and that is the case now. The US needed this crisis to wake us up out of our conservative free-market is wise, shopping fixes everything, wealth trickles down narcotic stupor… We have been postponing the inevitable and the time has come to wake up and smell the Chai, as it were.
The once great US economic machine has been resting on it’s laurels for 2 decades now, artificially simulating a real economy with rampant deficit spending (both in the government AND in the individual households) and Casino-esq market shenanigans euphemistically called “Trading” (although nothing ever actually goes anywhere except vapor land). We have lost our edge, and our market advantage, and we are poised to slide into 2nd world economic doldrums if BIG changes are not made immediately. Fortunately, the recent crash is the perfect backdrop to promote REAL change.
America does not need to rescue banks, or our auto industry. All that will do is continue us on the inevitable downward slide we face. We need to make our country competitive again on the world stage. We cannot compete with China’s labor market when it comes to making things cheap, so stop talking about American labor unions being the problem. Unions strengthen the middle class, and they are the source of virtually all innovation and invention. We cannot compete with India for cheap services (taxi drivers in India often have masters degree’s.) We can provide better quality, but not price. No, we cannot compete long-term in the traditional ways in the new world economy and preserve our standard of living. It’s over, done, Finito.. We need to change in a big way and we have a fantastic opportunity right now to set ourselves up to be an economic powerhouse for the next century.
Green is the next bubble. Global warming and the fight for control of limited oil supplies has made this painfully clear. This is our challenge and our tremendous opportunity. Economist Paul Krugman and many others are suggesting that what is needed now is stimulus package of historical proportions, and the recipients are always Roads, bridges, schools and lastly, alternative energy, but this is completely backwards. A recent LA Times articl even suggested a number as high as 7 trillion dollars. Back in the days of the $700 billion bailout, 700 billion was no where near enough to do what’s really necessary, but $7 TRILLION, now that spells opportunity! Let me explain…
The price tag to completely convert the existing US electrical infrastructure to clean reneweable energy I have estimated in previous posts to be around $3 trillion. This is actually 70% of the actual cost, with the free market covering the rest in a windfall investment opportunity. We then bump this number to 4 trillion to cover the additional load for transition to electric cars. What do we get for this huge sum? MILLIONS of new jobs, huge contracts for thousands of manufacturing industries, in other words, trillions in cash injected into the economy at the bottom where it helps most, with the end result of completely eliminating the US dependence on foriegn oil, and for the most part, oil period.
Another trillion or two should be allocated to build a transnational maglev high-speed rail network to replace a large portion of highly energy inefficient airline travel. Another few hundred billion could go to the car companies to transition to electric cars and to build a national charging infrastructure. That still leaves a few trillion for building schools and creating college scholarships and small business loans. We need economic stimulus, not bailouts. Bailouts preserve the staus quo and that is a huge mistake at this critical juncture..
Now these numbers are broad estimates for the most part, but the template is what counts. I hear politicians talking about investing in “roads and bridges” and that is EXACTLY NOT what we need to invest in right now. Those 20th century infrastructure projects simply continue our decay economically, even if they do reduce the amount of shock absorber replacements we need on our cars. What this new model will do is make America a desirable place to MANUFACTURE again. Industries that have high energy consumption and find themselves slaves to volatile oil and gas prices will find refuge in the stable renewable energy grid of the US. Those same companies, facing major problems with the upcoming carbon taxes and or caps can come to America and all but eliminate their carbon footprint. And transportation costs when their primary market is the U.S. We could also subsedize waste treament/recycling facilities for those with industrial waste issues. With the rising costs that India and China are facing both in labor and energy, such an investment would make the US instantly competitive again, and for the foreseeable future.
And the invention and innovation that will come from such massive investment will generate major improvements in renewable energy generation and electric transportation technologies and create a powerful new international industry that the US will DOMINATE. This is the future and we need to sieze it! This plan will not just save the economy, but also renew it. This is the last thing the existing internationl oil oligarchy wants. They LOVE the status quo, for with it they control the world. We can take back our country with this bold move.
This is our grand challenge and opportunity. It is a chance to convert this crisis into a blessing. Let’s not pass it up.
If you agree with this strategy, please forward this to everyone you know. We need to get the word out that we want to use this crisis to better our country, not just save it.