Oct. 1, 2008
COMMENTARY: How the Iraq Peace Dividend Can Revive the Economy
By Robert Girling
Special to Huntington News Network
Now that we are in the midst of a financial crisis, is a time to act boldly.
It is a moment that the Chinese would describe as weii, a "dangerous opportunity."
While much of the press has focused on the danger, there is little said about the opportunities. There is a vast opportunity if only Congress would act on it.
Now is the time for Congress to take action and authorize funding for a $200 billion annual public works military conversion program based in public transportation and energy conservation. Tax credits for alternative energy and "green" conversion of residential and commercial buildings will allow our economy to side-step a recession and put it on a path for long term growth well into the 21st Century.
The end of the Cold War ushered in a decade of economic growth.
The current recession is replete with opportunities.
Military spending and the enormous cost of the war has displaced spending on other priorities spending which generate jobs and incomes for just those industries which are eroding.
Last year the Federal Government spent over $570 billion on the military. That spending generated 4.5 million jobs, but did nothing to add to the country's productive capacity or generate sustained economic growth.
According to University of Massachusetts economics professors Robert Pollin and Heidi Garrett-Peltier, over 11 million jobs would have been created had that money been spent on building mass transit.
Not only that, our oil imports and greenhouse gas emissions would drop of 30% according to the American Public Transport Association's report Public Transportation Reduces Greenhouse Gases and Conserves Energy. In addition, with mass transportation each household stands to save over $7,000 per year.
The US Department of the Census estimates that 46% of the American population does not have access to public transportation. The cost of building a modern transportation system would be in the range of $50 to $100 billion per year. Meanwhile, high-speed rail plans are sitting on the shelf for six corridors which have been designated by U.S. Department of Transportation.
California's $40 billion project would create nearly 800,000 new jobs for the state's aerospace and construction industries while at the same time reducing green house gases by more than 8.7 million metric tons annually. The state has been seeking ways to fund the high speed rail system to link the northern and southern population centers for over a decade. Recent forecasts show the system carrying up to 117 million passengers per year by 2030, with an expected trip from San Francisco to Los Angeles taking just two and a half hours.
Meanwhile the nation's construction industry is mired in its worst slump in forty years. And its effects are wide and deep.
As William Beach, Director of Data Analysis for the Heritage Foundation, told Congress in January, the root of the current crisis is the "collapsing housing market and the financial institutions and practices related to residential construction and mortgages." These declines will continue as over two million sub-prime adjustable rate mortgages will reset to a higher interest rate putting a drag on the economy.
We can invest the Iraq Peace Dividend in making our housing energy efficient. This will recharge our construction industry and pay enormous dividends. Consider that 40% of our energy is used in buildings. Energy consultant Paul Rosen estimates that each home wastes 40-50% of its energy. Every $1 billion spent on improving the energy efficiency of our homes generates 12,500 jobs while saving millions of barrels of oil. Meanwhile $1 billion spent on war, generates only 8,500 jobs and uses millions of barrels of oil in transporting heavy aircraft and ships filled with supplies and weapons.
What is more, many large firms which have been dependent on military procurement can win as well. According to the Environmental News Network, 29 states have enacted renewable portfolio standards (RPS) generating a continual flow of new renewable projects to meet the mandates. Green power technologies can create thousands of jobs in factories to design, engineer and install solar technologies and high speed trains.
States like California are trying their best to build and attract green industries and energy saving research by financially supporting innovation, subsidizing new factories and creating incentives to build new green projects. The solar market is growing at 30% per year and according to the Solar Industry Workforce Survey over 70% of solar firms are experiencing difficulty in hiring.
Our federal government can lend its economic weight to provide the resources to power a high-tech green revolution.
Congress can take action and authorize funding for a $200 billion annual Public Works Military Conversion Program for financing public transportation and energy conservation. Stimulated by public-private partnerships and tax credits for alternative energy and "green" conversion of residential and commercial buildings our economy will be literally propelled into a sustainable long term growth well into the 21st Century.
This recession can be reversed. It is not just a matter of giving a bailout to the financial sector. The cost of inaction will be a prolonged, painful recession. All we lack is the political will.
Robert Girling is Professor of Business Strategy at Sonoma State University, Rohnert Park, CA. He holds a Ph.D. from Stanford University and is a Fulbright Senior Scholar. Distributed by PeaceVoice, a program of the Oregon Peace Institute
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COMMENTARY: How the Iraq Peace Dividend Can Revive the Economy
By Robert Girling
Special to Huntington News Network
Now that we are in the midst of a financial crisis, is a time to act boldly.
It is a moment that the Chinese would describe as weii, a "dangerous opportunity."
While much of the press has focused on the danger, there is little said about the opportunities. There is a vast opportunity if only Congress would act on it.
Now is the time for Congress to take action and authorize funding for a $200 billion annual public works military conversion program based in public transportation and energy conservation. Tax credits for alternative energy and "green" conversion of residential and commercial buildings will allow our economy to side-step a recession and put it on a path for long term growth well into the 21st Century.
The end of the Cold War ushered in a decade of economic growth.
The current recession is replete with opportunities.
Military spending and the enormous cost of the war has displaced spending on other priorities spending which generate jobs and incomes for just those industries which are eroding.
Last year the Federal Government spent over $570 billion on the military. That spending generated 4.5 million jobs, but did nothing to add to the country's productive capacity or generate sustained economic growth.
According to University of Massachusetts economics professors Robert Pollin and Heidi Garrett-Peltier, over 11 million jobs would have been created had that money been spent on building mass transit.
Not only that, our oil imports and greenhouse gas emissions would drop of 30% according to the American Public Transport Association's report Public Transportation Reduces Greenhouse Gases and Conserves Energy. In addition, with mass transportation each household stands to save over $7,000 per year.
The US Department of the Census estimates that 46% of the American population does not have access to public transportation. The cost of building a modern transportation system would be in the range of $50 to $100 billion per year. Meanwhile, high-speed rail plans are sitting on the shelf for six corridors which have been designated by U.S. Department of Transportation.
California's $40 billion project would create nearly 800,000 new jobs for the state's aerospace and construction industries while at the same time reducing green house gases by more than 8.7 million metric tons annually. The state has been seeking ways to fund the high speed rail system to link the northern and southern population centers for over a decade. Recent forecasts show the system carrying up to 117 million passengers per year by 2030, with an expected trip from San Francisco to Los Angeles taking just two and a half hours.
Meanwhile the nation's construction industry is mired in its worst slump in forty years. And its effects are wide and deep.
As William Beach, Director of Data Analysis for the Heritage Foundation, told Congress in January, the root of the current crisis is the "collapsing housing market and the financial institutions and practices related to residential construction and mortgages." These declines will continue as over two million sub-prime adjustable rate mortgages will reset to a higher interest rate putting a drag on the economy.
We can invest the Iraq Peace Dividend in making our housing energy efficient. This will recharge our construction industry and pay enormous dividends. Consider that 40% of our energy is used in buildings. Energy consultant Paul Rosen estimates that each home wastes 40-50% of its energy. Every $1 billion spent on improving the energy efficiency of our homes generates 12,500 jobs while saving millions of barrels of oil. Meanwhile $1 billion spent on war, generates only 8,500 jobs and uses millions of barrels of oil in transporting heavy aircraft and ships filled with supplies and weapons.
What is more, many large firms which have been dependent on military procurement can win as well. According to the Environmental News Network, 29 states have enacted renewable portfolio standards (RPS) generating a continual flow of new renewable projects to meet the mandates. Green power technologies can create thousands of jobs in factories to design, engineer and install solar technologies and high speed trains.
States like California are trying their best to build and attract green industries and energy saving research by financially supporting innovation, subsidizing new factories and creating incentives to build new green projects. The solar market is growing at 30% per year and according to the Solar Industry Workforce Survey over 70% of solar firms are experiencing difficulty in hiring.
Our federal government can lend its economic weight to provide the resources to power a high-tech green revolution.
Congress can take action and authorize funding for a $200 billion annual Public Works Military Conversion Program for financing public transportation and energy conservation. Stimulated by public-private partnerships and tax credits for alternative energy and "green" conversion of residential and commercial buildings our economy will be literally propelled into a sustainable long term growth well into the 21st Century.
This recession can be reversed. It is not just a matter of giving a bailout to the financial sector. The cost of inaction will be a prolonged, painful recession. All we lack is the political will.
Robert Girling is Professor of Business Strategy at Sonoma State University, Rohnert Park, CA. He holds a Ph.D. from Stanford University and is a Fulbright Senior Scholar. Distributed by PeaceVoice, a program of the Oregon Peace Institute
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