The first is an article written by Eliot Spitzer (yes, that Eliot Spitzer) for Slate. In it he argues that the proposed Obama stimulus package is flawed by focusing on transportation infrastructure, like roads and bridges. Rather, he argues that the money should be spent on "transformative" projects, and that roads and bridges are "not transformative. These projects by and large are building or patching the same economy with the same flaws that got us where we are. Our concern should be that as we look for the next great infrastructure project to transform our economy, we might rebuild the Erie Canal and find ourselves a century behind technologically."
Spitzer believes that government spending would be better "spent on new investments that may not be quite as ready to go but are surely more important to our long-term economic viability." He then argues for government to spend money on installing smart electricity meters, coupled with additional smart grid investments (I'll get to this later), building new service stations that will be able to sell alternative fuels for automobiles, upgrade medical record-keeping, upgrade the internet "backbone", and fund "robotic teams" for schools. He concludes noting that "investing in the necessary public goods to support a post-hydrocarbon, information-based economy is a much better choice than using the stimulus to patch up the old economy."
There are two points I want to make about this article. One, he uses an analogy to the New Deal and says something surprising- "The New Deal probably didn't pull us out of the Depression; World War II did that. What the New Deal did was redefine the social contract—perhaps just as important an outcome." This is surprising because a) there is an admission that the New Deal may not have done what people still think it did and b) recognizes that the importance of the New Deal was not about the economy, but a government-run social engineering program. It is this social engineering aspect of the New Deal that Spitzer hopes Obama will emulate, and Spitzer argues that building new roads and bridges won't accomplish that. Needless to say, I think that government-sponsored social engineering is wrong and should be opposed at every turn. People should be given every chance to suceed and make the best of their lives, undoubtedly there are going to be people who choose not to use that chance and there are going to be people who find ways to better their odds; government should try to make a level playing field, but it is ultimately up to the individual to make their own choices, the government should not be stepping in and dragging the person along.
Second, in the section about smart meters he makes an unsurprising statement (but surprising for its breadth): "The problem with installation of smart meters has been both the cost and, often, state-by-state regulatory hurdles. Now is the moment to sweep both aside and transform our entire electricity market into a smart market." I agree that the problem of getting new meters installed are costs and state regulatory problems; but, we have a federalist system that gives a lot of power to the state. The second sentence is the breathtaking one- that the federal government should both pay for the meters and run roughshod over state sovereignty to accomplish this would be an extreme mis-use of federal authority. As someone who works on that issue, having the federal government step in and take control over this would be a huge mistake. I want smart meters in peoples' homes, but I want that decision and control to be left to the states. The federal government can incentivize this all they want, and they have been, but the ultimate decision should remain with the states.
I have been skeptical of each "stimulus" package that has been proposed, including the bailout packages approved last year. I remain wary of the long-term damage being done to the economy in order to focus on a short-term fix. Just today, the Congressional Budget Office released an estimate that the deficit for 2009 will be $1.2 trillion, with a T, and that does not include the spending in the proposed Obama stimulus package, which will reach nearly $800 billion. According to the article, "Democratic leaders in Congress described today's deficit announcement as stunning and warned of exploding debt in the future. But they said Congress must nevertheless pass a stimulus package quickly." In other words, yes, all this spending will likely cause untold damage in the future, but, in typical congressional fashion (that applies to both Republicans and Democrats), we'll deal with that later. The article estimates that if the Obama stimulus package is passed, the deficit will likely soar to $1.6 trillion, if not more. Astounding. I have little faith that the federal government will spending whatever batch of money that gets approved in the next stimulus package wisely or efficiently, despite having a "watch dog." That simply isn't what governments do.
The second article that warranted my attention was an amusing list of "Bad design trends we hope die in 2009" that was posted on the L.A. Times' web page. Number six is this statement:
CFLs: "To be green, you do not need to suffer with compact fluorescent bulbs, a light source that does not render color or texture and only turns on and off. Instead, do the planet a favor by using a combination of a halogen bulb, which does not use mercury or rare earth phosphors, and a dimmer. If you dim a halogen bulb to 50%, you will save over 40% energy and your light bulb can last more than 10 years."
The quote is attributed to a guy named Sean O'Connor from O'Connor Lighting. I find this fascinating that a) this somehow made it in the L.A. Times and b) why hasn't anyone made this argument before? All we get bombarded with is "Buy CFLs, Buy CFLs, Buy CFLs" and "Save money, Buy CFLs." When we moved into our new apartment in 2006, we filled the house with expensive CFLs that were supposed to pay itself back and last many years. Almost 3 years later, we've now had 4 CFL's burn out on us, and they can't simply be thrown into the trash because of their mercury content. And I really don't think that they have saved us as much money as promised. Of course, CFLs don't work with dimmers either. I can only wonder at what other energy efficiency tales the public has been sold on where other options are just as viable, but aren't as interesting. How much money has been wasted by consumers on products that ostensibly save money and reduce energy but are no better than what we already have. How much money and time has the government spent on devising rules when the market is already moving in that direction?
On that topic, I note the recent movement by the California Energy Commission to set up energy efficiency standards for televisions. In the article, the CEC already admits that 87% of television models (current and proposed) will meet the standards by 2011- so what's the point in making the standards to begin with? If the industry is already making them, and if consumers actively seek them out, then the remaining 13% will either not be sold, will be remade to meet market demands or will be bought by people who are willing to pay more on their energy bill. All three of them are valid market responses.
It is this type of government heavy-handedness that I fear will become more commonplace as we move into the next administration. The ability of the consumer to decide what they want will be pushed aside in favor of what the government says you should buy, all in the name of energy efficiency and the environment, regardless of the ultimate economics of it all.
Update- not 10 minutes after I posted this, I received an email from my friend Vansmack with a link to this article: "VIZIO Offers Complete Line of Energy Efficient LCD HDTVs." The important part of the article: "Currently, all VIZIO LCD HDTVs meet Energy Star 3.0 requirements for lower energy consumption. These seven new EcoHD(TM) models, however, exceed those standards by as much as 25%, which is good news for both the environment and value-conscious consumers."
Again, this simply points out that industry, tv makers and the market are already moving in the direction of making more energy efficient televisions.
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