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The Path Not Taken

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Historian Kevin Mattson just wrote a book about the famous speech by President Jimmy Carter given on July 15, 1979, "the speech that should have changed the country." It was a time of yet another gasoline crisis, a time of high interest rates and of raging inflation, in an atmosphere of uncertainty about where the country was going, or needed to be going. Many of things Carter said at the time ring true today, and other things remind us of opportunities missed, and yet to be taken up.

Excerpts: "Why have we not been able to get together as a nation to solve our energy problem?" "The erosion of our confidence in the future is threatening to destroy the social and political fabric of America."

"Our people are losing faith, not only in government itself but in the ability as citizens to serve as the ultimate rulers and shapers of our democracy." "There is a growing disrespect for government and for churches and for schools, the news media, and other institutions." "The gap between our citizens and our government has never been so wide."

"What you see is a system of government that seems incapable of action. You see a Congress twisted and pulled in every direction by hundreds of well-financed and powerful special interests. You see every extreme position defended to the very last vote, almost to the last breath by one unyielding group or another. You often see a balanced and fair approach that demands sacrifice, a little sacrifice from everyone, abandoned like an orphan. Often you see paralysis and stagnation and drift."

On the specific matter of energy, President Carter committed to a policy that "this nation will never use more foreign oil than we did in 1977 [and will set] the goal of reducing our dependence on foreign oil by 50% by the end of the next decade." In support of that initiative, Carter called for a "bold conservation program to involve every state, county, and city and every American in our energy battle."

At the time, I was involved in two contracts to develop photovoltaic power development, one with the Jet Propulsion Laboratory, and another with the Solar Energy Research Institute in Colorado. After the election of President Reagan, the research and development budget of the Energy Department for renewable sources was slashed by some 80%, and these contracts ended. The solar cells being placed on roofs right now are using technology that was already available in Reagan's day. The solar thermal technologies being constructed now are not much different from the Solar One demonstration project from decades ago. Wind turbines have advanced, but these advances did not involve breakthroughs that would have been impossible thirty years ago. When it comes to energy conservation, the strategies now are much the same as they were then. Most are technologically primitive. There has not been a technological bottleneck. (E.g., Ford is now putting sod on its flat roofs.)

Some fifteen years after Carter's speech, Sir James Goldsmith reflected on societal strains in his book titled "The Trap." On the matter of energy, he points out that between 1979 and 1990 the member nations of the International Energy Agency spent 60% of its R&D funds on nuclear power, less than ten percent on renewable sources, and a mere six percent on conservation. At the time, even the Electric Power Research Institute (which is a creature of the electric power industry) projected that conservation measures alone could cut electricity use by more than 50%. When it came to energy policy, matters could hardly have gone more wrong.

With regard to nuclear power, Goldsmith was unequivocal: "Nuclear energy has no future except where energy production is centrally planned, where economically competitive options are suppressed, and where no open and informed democratic debate is possible." On top of wasting money on the wrong solution, the right ones were preempted. They were not simply passively displaced, but rather actively suppressed as a threat to a nuclear future. They were similarly a threat to the continuation of an oil-based present.

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The energy crisis can be seen as illustrative of the larger issues that Carter was struggling with, but that have become clarified since. Government has been rendered subservient to large-scale commercial enterprises in various ways, to the detriment of democracy here and elsewhere. Not only do commercial interests effectively control the legislative process as well as the regulatory agencies. Their interests are also secured at a supra-national level through such entities as the World Trade Organization.

Goldsmith was utterly clear-eyed with regard to the effect of unfettered globalization on the developed countries: "It is the poor in the rich countries who will subsidize the rich in the poor countries." We now know, some fifteen years later, that this is precisely what has happened. The economic seers are not projecting a robust return to growth in the US because the basis for that no longer exists. We have outsourced our manufacturing. The consequences of that were perfectly clear to Goldsmith. They were probably clear at Goldman Sachs as well, but here the truth was no doubt regarded as inconvenient.

Goldsmith: "Global free trade will shatter the way in which value-added is shared between capital and labor." Indeed so. Before Wall Street had to be rescued, its earnings made up 40% of all corporate earnings for the Fortune 1000. The big enchilada in Wall Street is FIRE--- Finance, Insurance, and Real Estate. Beyond that we have retail and the extractive industries. Not a manufacturer in sight.

Goldsmith: "The social divisions this will cause will be deeper than anything ever envisaged by Marx." We have yet to see this unfold because the problems have not been articulated, but that may be only a matter of time. We may be seeing the first signs in the campaign against illegal immigrants, and in the tea party movement. Perhaps, as with the financial crisis, the matter will not be taken up until after the match has been applied to the tinder.

Goldsmith: "It must surely be a mistake to adopt an economic policy which makes you rich if you eliminate your national workforce and transfer production abroad, and which bankrupts you if you continue to employ your own people." And yet we did. To the real decision-makers in our country, it is no longer of much consequence whether the American citizen is healthy, educated, and employable. We now have a world market in labor. Capital has finally had its way in its utter contempt for the needs of labor in the US.

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Goldsmith: "A nation's economy is split into two broad segments, one which produces wealth and one which dispenses it [e.g., health and education]". One cannot reduce the part of our economy which produces wealth and expect to maintain the other part that dispenses it."

We have just had an example in Congress of a bill to deny Americans the right to purchase drugs more cheaply in other countries. The vote split both parties in strange ways.*) The issue here is much the same as with labor. US drug companies can't have level pricing throughout the world, and it can't have us buying our drugs at Bangladeshi prices. But the same applies to labor. We cannot expect to maintain a manufacturing labor force that competes against cheap Asian labor. The American worker has to pay for American services, supplied at American prices. This cannot be done on Asian salaries. End of argument.

Part of our American workforce is now tightly coupled with the world economy, while much remains free of such constraints. The tightly-coupled part has had to bear the brunt of readjustments, and the effects have been brutal on the manufacturing side. On the services side, we have had a porous border that has brought millions of immigrants into wage competition with US labor. The effect has once again been relentless, persistent, and devastating.

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Siegfried Othmer is a physicist who over the last 28 years has been engaged with neurofeedback as a technique for the rehabilitation and enhancement of brain function. He is Chief Scientist at the EEG Institute in Los Angeles.

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Though my personal feelings on Carter are still ve... by mikel paul on Friday, Jan 1, 2010 at 1:10:23 PM