Tim Bond, head of Global Asset Allocation at Barclays, an investment bank, has put forth that the Swedish crisis of the late 80’s and 90’s will be a good model for the current, much wider, global financial crisis likely ensuing economic consequences.
In the Swedish example intervention was resisted, there was a tight downward spiral, there was a recovery, and while the economics caught up with the bailouts there was an extended period of negative growth as credit was tight and earnings declined. Whether the US and Global economy rebounds at the same rate or not, there are certain realities that will likely take shape – and a growing unemployment rate is most certainly one of them.
The G7 is working very hard on addressing our financial turmoil. I’ll leave much more qualified people to address the impact of the bail out packages on investment and more, and I hope to motivate someone to write about those effects here on CleanTechies. I will take a shot at suggesting implementing measures that address at least one aspect of the wide spread panic that is gripping so many these days – how this solution could have an effect on employment, education and the preparation of a grid more adequately equipped to accept electricity from intermittent and distributed renewable sources.
The United States has addressed weak economic demand for a work force in the past, sometimes effectively and at times very effectively. FDR’s New Deal package included some economic groups that focused on labor including the Civilian Conservation Corps, the Public and Civil Works Administrations and the Rural Utilities service. There are some critics of the New Deal, but the legacy of the efforts of these programs include rural electrification and skills training for workers temporarily employed by them (despite Labor Union’s objections).
In 1944 the Department of Labor and congressional leaders recognized in the tremendous impact thousands of unemployed GI’s returning from World War II would have on the economy and sought to mitigate unemployment lines by offering veterans stipends for educational programs. Many were allowed to pursue higher education, and much of the economic success of the 1950s has been attributed to the Servicemen’s Readjustment Act – also known as the GI Bill.
The success of these programs should provide a framework for our legislators should see that in addition to a financial bail out of the markets there needs to be a concerted effort placed on ensuring that the unemployed are provided options that will have lasting economic and social benefits for the country. I encourage you to debate this amongst yourselves, and I suggest we get cracking on this soon – implementing work/study programs and on the job training programs that will stimulate the economy by giving people a paycheck, educating them with skills needed to succeed, developing our transmission infrastructure to accommodate the growth of the renewable energy, facilitating the investment decisions for project developers, ensuring we have environmentally safe options for energy and moving our nation towards energy independence which will create jobs along various value chains.
