Friday, April 03, 2009

Very few papers are making this point

Johann Hari: The protesters are the ones we should listen to at this summit

The way out of the credit and the climate crunch is the same - a Green New Deal

Friday, 3 April 2009

"the government needs to spend large sums of money, financed by borrowing, to get all the workers waiting idle back into action. This form of government spending brings consumer demand back – and reverses the downward trend. Then, once you've recovered, you pay off the debt. Keynes stressed you can spend this money on anything: at one point he proposed burying wads of cash and paying people to dig them up. But today, we face an incredible coincidence. At the same moment, we need to spend lots of money on something, anything – and we need an immediate transition to a low-carbon economy. And it gets better: it turns out a green stimulus is best for the economy. A major study by the University of Massachusetts compared the effects of an old-style stimulus that simply gives people more cash to a green stimulus.
They found that a green stimulus creates four times more jobs, and three times more "good jobs", defined as those that pay more than $16 per hour. Why? Because a green stimulus is labour-intensive: you spend more money on people and less on machines. And the money you spend stays at home, making it easier to sell: you can only insulate a loft in Hull in Hull; you can only build a wind farm in the Mid-West in the Mid-West.
But it's not happening. A study by HSBC has found that only 6 per cent of Britain's stimulus so far has gone to green projects. In the US, it is just 16 per cent. It is nonsense to claim there aren't enough green projects "shovel-ready": during World War Two, the industrial capacities of our countries was transformed from making consumer goods to making tanks and weaponry in less than sixty days. We could do the same.
But this alacrity shouldn't surprise us. The weight of conventional wisdoms and the sway of powerful corporations with vested interests in the old sickening world holds back even the better leaders."

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