America is adrift and needs leadership to modernize and build a foundation for 21st century competitiveness. And while it’s a long hard to travel, there are at least a few signs of optimism.
Such were the key takeaway points from Friday morning’s panel on the question of “Retooling the American Economy,” which was part of the Progressive Policy Institute’s Second Annual North American Strategic Leadership Infrastructure Leadership Forum in Washington, DC.
The panelists were : Tom Friedman, New York Times Columnist, Pulitzer-Prize Winning Author; Jason Furman, Deputy Director, National Economic Council, White House; Roderick Bennett, Advisor to the General President of the Laborers’ International Union of North America; and John Woolard, CEO, Brightsource Energy. David Wessel, economics editor of the Wall Street Journal moderated.
In general, the panelists agreed that we’re in a difficult spot. We’re falling behind China on infrastructure, on energy, on basic research and development – just about every measure of investing in a 21st century economy. As Friedman put it, “We can only go so long with a philosophy of dumb as we want to be.”
Part of that dumb-as-we-want-to-be philosophy is an unwillingness on the part of many to admit that government has a key role to play in creating an environment where innovation can thrive, both by making big investments and putting the right incentives in place. The solution to this, of course, is leadership.
“We have an epic lack of faith in government with a capital G, but we have an unchanging love for government at the local level when it means bridge projects and energy projects and broadband projects,” said Furman. “And that’s something you see at the bipartisan level. Some of this means we have a messaging problem, and some of that is bottom-up, pointing out what it all tangibly means.”
“But how you get the snake through the python is a big challenge,” Furman added. “You have to pass the thing through Congress, and the debate will be framed in big government terms.”
Friedman, who was openly critical of the administration’s salesmanship efforts, argued that what was needed was big-picture leadership.
“We need to make it aspirational,” said Friedman. “That’s what the moon shot was all about. People want nation-building at home. You fly from Shanghai to JFK, and you go from the Jetsons to the Flinstones. People sense that. And the President has never made that the lodestar. He’s never leveraged all that energy.”
Woolard, who heads a large solar energy company, offered a dose of optimism. “We have a lot more projects here in the U.S. than abroad,” he said. “There are good projects, and there’s a lot moving forward.”
“But,” he added, “The thing that scares me most is the longer-term issue. Not enough students are going into engineering. We need to encourage people to go into those disciplines.”
Woolard also described the challenge at hand: In order to stabilize carbon emissions at 450 parts per million by 2050 (a commonly-agreed on target to stem global warming), “we’ve gotta build between 12,000 and 20,000 gigawatts of carbon-free power. That’s a power plant per day. We’ve built gigawatts a week before, but we don’t have the rules yet to get to this objective. We need policy.”
The consensus was that there would need to be a price on carbon. “Capital works itself out with the right rules,” Woolard said. But given the politics of energy, would the political will ever exist?
Here Friedman was an optimist: “We’re absolutely going to have a gas tax and a carbon tax,” he told the audience. “Because we’re going to run out of money, and we will need revenue and when we run into that wall, people will look around and say, what’s the best source? The sad thing is there are 535 members of Congress, and not one will propose this when it is so manifestly in the strategic and economic interest of the country.”
Bennett, whose union represents construction workers, also registered support for a gasoline tax, which he called “the elephant in the room.”
Friedman also offered a “killer app” for economic competitiveness: “An ecosystem of a national renewable standard, a price on carbon, a gasoline tax, higher building efficiency standards,” he said. “Put that ecoystem in place and you get 10,000 green garages trying 10,000 different things. Two of those will be the next green Google and Microsoft. The killer app is the enabling system.”
