The Bailout and Support for Renewable Energy

New York City--It is better than not that the bailout package passed and is now law.  However, as U.S. Sen. Barack Obama noted in his statement about its passage, this is no time for rejoicing.  Rather it is a time to get serious about addressing the issues that caused the crisis in the first place--lack of regulation, excessive debt and, above all, the failure of the underlying U.S. economy to deliver real improvement in living standards for Americans--and what we must do to put it behind us.

It was stagnant wages and falling living standards for the middle class over the last eight years, as much as anything else, that drove Americans to try to compensate with their own version of structured finance in the form of questionable mortgages and home equity loans on their homes.  And more generally, it was a preoccupation with financial engineering over real engineering that drove our society, especially our financial sector, to mortgage itself to the hilt. 

Going forward, America must first stimulate the economy by investing in clean infrastructure.  Measures that will put money on the street and also address our long-term energy challenges include a national clean infrastructure bank, a full court press to modernize our electricity grid, aid to states and localities for clean mass transportation and measures to retire our old energy efficient plant and replace it with energy efficient buildings. 

We must also provide meaningful relief for homeowners to keep people in their homes by replacing unsustainable, non-performing loans with sustainable ones as suggested by Alan Blinder, Hillary Clinton and others. Wall Street has gotten its bailout.  How about the American people?

Finally, America must move forward to accelerate the development of a full-fledged 21st century economy.  We must invest in our people, our ingenuity and our future through investments in education, clean infrastructure and the new clean energy technologies likely to power prosperity in the coming century.

There was one unambiguous bright spot in the legislation passed today.  Congress extended the Investment Tax Credit for solar energy which NDN has been arguing is vital to building a clean energy future, for eight years.  With a credit in place that will now span the period that solar needs, on its current cost path, to fall below the cost of fossil fuels, solar energy is likely to become an increasingly part of our energy future.  The production tax credit for wind, equally important, was extended by the bill for one year.