By Russell Goldsmith
The U.S. is a long way from tackling the important, tough goals of growing our economy and achieving energy independence.
I think it’s time all Americans put some real heart and muscle into that effort.
Earlier this year, Congress passed and the president signed a $168 billion economic stimulus package that some thought would help us turn the economic corner.
In fact, much like a double shot of espresso, the impact of the tax rebate program was brief and limited.
With California’s unemployment rate now more than 7%, U.S. gross domestic product growth stagnant and $700 billion going overseas each year to buy oil, America needs a “fiscal stimulus II” that actually stimulates our weak economy by targeting one of the root causes of our economic malaise: energy costs.
A second comprehensive fiscal stimulus package should address the immediate energy crisis and the long-term goal of greater energy independence, while pumping dollars into the cause and creating jobs for America’s economy now.
We need a broad, bipartisan public-private partnership that requires a comprehensive commitment now not only from government, but from the private sector as well.
By reducing the billions we spend abroad each year for oil, this aggressive public-private partnership would also improve our environment, strengthen the dollar and, as a result, improve our national security.
The obvious first step is extending the federal tax credits for alternative energy, such as wind and solar power, which expire in December.
To continue subsidizing drilling when oil is more than $100 a barrel and not subsidize these fledgling progressive alternatives is a backward energy policy.
With so many of these alternative energy companies and investments in California, our state, in particular, could and should be the world leader in the development of solar and wind power and water conservation technology, and both the government and the private sector should support that.
America should also aggressively target the most immediate way to save: energy conservation.
At City National Bank, we save more than $1 million per year through energy conservation tools and techniques available now.
By working on its own practices and offering incentives to the private sector, the federal government could aid conservation with mammoth savings in energy consumption very quickly.
The federal government could lead here by contracting with General Electric Co. to make 1 billion compact fluorescent light bulbs at plants in the U.S. The cost would be roughly $3 billion to $4 billion (assuming the light bulbs are $3 or $4 each), a fraction of the cost of the economic stimulus package passed earlier this year.
Giving 10 of these lights bulbs to every American household would introduce more people to these energy-saving bulbs, reduce energy use (each bulb uses 75% less than traditional bulbs and lasts 10 times longer) and create U.S. manufacturing jobs quickly.
Here’s another opportunity: Concerns over the cost of heating this winter are already making headlines in many parts of the country.
The government could finance contracts for additional insulation produced in the U.S., and many of the housing industry’s unemployed construction workers and sidelined homebuilding companies could be hired to install insulation and caulking in millions of homes, saving energy, money and maybe even lives this winter while creating jobs now.
The government’s new fiscal energy stimulus plan could also include a boost for the nearly bankrupt U.S. airline industry, by guaranteeing the financing for airlines to buy or lease new energy-efficient engines and airplanes, like Boeing’s 787, which uses 20% less fuel than today’s conventional plane.
The cost savings from reduced fuel could be used to help repay any government costs and more U.S. jobs would be created by the production of this new equipment.
Similarly, the government should purchase many more U.S.-made buses that burn natural gas fuel and give them to U.S. cities to expand mass transit options.
All of this is just a start. Most of all, what we need is an ambitious, multifaceted public-private program with bipartisan federal leadership to galvanize this country.
Goldsmith is chairman and chief executive of City National Bank.
