by Marion Maneker

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As the election closes out amid the wet squelch of the economy, it’s worth looking forward toward the Obama transition. In the past, I’ve wondered about who would be holding down the fort at Treasury. Jon Heilemann answered that in this week’s New York magazine: “. . . the inside betting is on a Larry Summers encore. ‘They’re gonna want somebody who knows the building, knows the economy, has been confirmed before and been advising them on economics,’ says the former Clinton aide. ‘I’d be flabbergasted if they chose somebody else.’”

But events have moved so quickly, the real question isn’t personnel but policy. With the financial system sort-of stable, there’s going to be a crying need for an economic “iron lung.” Not just the auto industry bailout, which is just as much about pensions as it is about jobs, but a massive effort to rebuild the American economy from the ground up. Here’s where Time’s Joe Klein gives us a few clues: “As Obama told me in our interview, a government-propelled transition to an alternative-energy economy will be his most important initiative. Translated into Washington terms, this means a massive infrastructure and stimulus package — in the neighborhood of $300 billion, according to the current speculation. [ . . . ] The Beltway consensus is that the economic crisis makes it necessary now. But public cynicism about government requires that the next President builds accountability into his spending programs. That’s why the Infrastructure Bank that Obama proposed during the campaign may be crucial: it would create a bipartisan board of five governors who would judge and approve all major projects. In normal times, getting an Infrastructure Bank through Congress would be impossible. “It is a direct threat to their way of life,” says Norman Ornstein of the American Enterprise Institute. “It changes the dynamic of how you deal with earmarks,” by taking the decision-making, and to some extent the credit, away from politicians.’

If that $300 billion number seems out of whack to you, go ask Martin Feldstein. He’s no liberal but he thinks $300b is the number we need to offset the loss in spending from housing. But we can’t spend that money on vacations. So we need a big infrastructure push. In terms of energy freedom, that could come in part from nuclear power. Obama soft pedals nuclear power. But one of McCain’s few talking points that does make sense is his insistence that we build 45 nuclear power plants to create 700,000 jobs. Think of it as a 21st Century Tennessee Valley Authority. (Someone in the campaign has surely found a copy of David Lilienthal’s journals on Alibris.) So maybe it won’t be 45 plants. They cost something like 11 figures each. But just a few plants would be the kind of infrastructure project that fits with all of Obama’s goals: jobs, energy independence, infrastructure. The boon to the construction trades won’t hurt either.

The big question now is how this all comes together. How does Obama’s economic team of Summers and Warren Buffett and Paul Volcker solve the problem of an economy that’s been hollowed out by the banking system and Wall Street? And can the country–and the world–wait until January for them to unveil a confidence building economic plan that is more effective than Bernanke and Paulson’s confusing and confused financial plan.

The good news is that no one’s going to be sad to see Paulson go. The bad news is that Congress will still be there. Joe Klein pointed out, Obama is going to have to step on a lot of toes to put his ideas into effect. (There’s an obvious joke to be made here about what happened when Summers stepping on toes at Harvard–but I digress.) The silver lining in the Obama campaign is his independence from the Congressional Democrats as Klein points out, even if some people find this worrisome. Moderates and independents are concerned that an Obama landslide will leave the special interests unfettered. Here Heilemann offers something hopeful:

“Sure, he vowed to transform Washington, but he did not run against it. He is surrounded by people—Emanuel, Podesta, former Tom Daschle aide Pete Rouse, and Daschle himself, who stands a reasonable chance of being Obama’s White House chief of staff—steeped in the legislative culture and masters of the legislative arena. [ . . . ] Not that dealing with a pair of institutions led by Nancy Pelosi and Harry Reid will be any kind of picnic. “They’re incredibly weak leaders running a Congress with 12 percent approval ratings,” one Democratic think-tank maven says. “They’re not people with much of a record of, you know, actually getting things done.” [ . . . ] Yet the very feebleness of Reid and Pelosi may work to Obama’s advantage; they are much more likely to see their fates as bound up with his [ . . . ] [T]he unconventional way he ran for office, the whole bottom-up movement thing, may grant him a degree of independence unique in modern history. “Personally, I think the depth of the Obama realignment is being underestimated,” says the Republican media savant Stuart Stevens, who helped elect Bush twice. ‘They have basically invented their own party that is compatible with the Democratic Party but is bigger than the Democratic Party.’”

The tepid campaign and the enormity of the financial crisis have distracted us from the potential size of the party of change that is moving toward Washington. We know very little about the man who leads that party. But it does look like we’re going to find out.

Category: BP Cafe, Politics

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Department of Follow-Up Dept.”

  1. Greg0658 says:

    1st followup – ok

    From a guy with 8rem in him, the 11 figure figure for each nuke – there is talk of not building them the ’70s way.
    Think of a wagonwheel hub and spoke. The generator in the hub with smaller nukes (aircraft carrier style) around the perimeter. That may bring down the price, a fyi for you.

    on:
    Heilemann (think-tank maven says) “They’re not people with much of a record of, you know, actually getting things done.”

    hum – had to pull the Democratic flag off that quote. My brain says this person is one of them that thinks all functions in the world should be capitalistic, and will push that thought daily.
    I’d like to see an internet database of financial backings. Halliburton Blackwater KBR to name a few of those Pentagon connected corporations. Without that database I guess I’ll just have to rely on “to big to fail is to big to fight” and that is a problem. Can you imagine a nation with zero socialist soldiers. All soldiers directed by corporations?

    I really don’t want to scare voters into 1 camp or the other, but the change of the gaurd coming has some clans very skittish. And that is a good thing in the long run game. God lovers watch for signs of terror in our streets from both foreign and domestic.

  2. johnnyA says:

    I can’t wait for Obama to name FannieMae’s Jim Johnson to head Social Security, or Franklin Raines to lead the US’s new Universal HealthCare Dept.

  3. redcharlie says:

    Obama soft-pedals nuke power for a good reason. Nukes have failed in the marketplace for 30+ years now, despite enormous govt subsidies, research, loan-guarantees, etc. Wind and solar are taking off, and have received govt support equivalent to only a tiny fraction to what nukes have received. Why do you want to throw more good money after bad?

    Nukes have various issues, but the 800 lb gorilla, so to speak, isn’t a Three-Mile island scenario it’s the question of what to do with the waste. Nuke waste is forever. The hot stuff –spent fuel rods– will take about 1000 years to “cool” down to “natural” levels, i.e. equivalent to unprocessed yellowcake. (And just because yellowcake is “natural” doesn’t mean it’s safe to have in your food or drink).

    Right now all the spent fuel rods are sitting in steel drums in temporary holding facilities (think swimming pools that you don’t want to swim in) at each plant. Obama is on the record opposing Yucca Mtn, but even if we did use Yucca, it has only enough room for existing fuel-rod waste. And Yucca isn’t foolproof. Yucca was chosen due in part to it’s uniquely low water table. Lower than surrounding areas. 20 years ago I had a conversation with Dr. Brian Wernicke (basin and range geologist now at CalTech) who thought the science behind choosing Yucca Mtn was “not good science”. There is evidence that the water table was higher at Yucca mtn in the last ~100K years? (sorry don’t remember exactly) and we really don’t know what keeps it so low there now. And an intrusion of the water table into fuel-rod waste could be a really bad thing, like explosively bad. The stuff gets hot, really hot. Especially when it’s buried underground with no way to cool it. And you know, since we are looking forward to the climate changing quite a bit over the next 100 years, trying to forecast the weather (which affects the water table) for 1000 years is a bit dicey.

    All this is to say we don’t have a good way of dealing with the waste from existing nuke plant technology. To commit to building lots of new nukes based on existing tech is kind of like adding bedrooms to a house that has no bathroom. Everybody is just keeping their own chamberpot for now, but pretty soon it’s going to stink, if it doesn’t already.

    Current nuke technology dates from the ’60s. It’s great for powering subs and aircraft carriers, but sucks as a commercial powerplant. This isn’t to say that nuclear power doesn’t have potential, but we need research, not more investment in outdated, dirty, expensive, accident-prone nuclear dinosaurs. We need new ways of disposing of the waste (vitrification, pelagic disposal, etc), and new ways of generating the power (for example, breeder reactors that only produce 1/10th the waste of current tech, or solid-state batteries –think photovoltaic cells sandwiched with nuclear material to produce 100 times the power of current nuclear “batteries” like those that power spacecraft, in a package that has no moving parts and will produce useable power for 100 years).

    Meanwhile solar-thermal and wind-power are booming. Windmills are competitive now, and are starting to put royalty checks into the hands of midwestern farmers. Let’s throw some more money that way, huh? Maybe just 10% of what we’ve given to nuke producers? for a start?

    T.Boone Pickens’s plan, for example, is two parts brilliant to one part stoopid. The stoopid part is that we’re all going to switch from one fossil fuel to another (petroleum to natural gas) in our cars. It’s stupid because lp gas cars have been around for 40 years and if they haven’t succeeded yet they aren’t going to do any better now, especially since the price of natural gas is soaring too. The brilliant parts are building windmills, and (the super brilliant part) is building out the electric grid.

    It’s like the joke: you are in a cabin in the woods. There is a kerosene lamp, a fireplace, a candle, and a gas cookstove. You have one match. What do you light first?

    Answer: The match, of course.

    So, you want energy investment. Build out the grid. No matter the source of our power, be it nuke, wind, solar, hydro, natural gas, coal, burning trash, or cow farts, we will need a better electric grid to move it to market. It’s an investment in a basic infrastructure that we will need no matter what. (And we might even kill two birds with one stone by electrifying the railroads and use THAT for the grid!)

  4. cuvo says:

    Department of Redundancy Dept.
    (and the Natural Guard).

    –[Paid for by the Tirebiter for Political Solutions Committee, Sector R]–

  5. Marion Maneker says:

    “So, you want energy investment. Build out the grid. No matter the source of our power, be it nuke, wind, solar, hydro, natural gas, coal, burning trash, or cow farts, we will need a better electric grid to move it to market. It’s an investment in a basic infrastructure that we will need no matter what. (And we might even kill two birds with one stone by electrifying the railroads and use THAT for the grid!)”

    You’re absolutely right about this and part of the reason there should be a bounce after the election. The question is whether they can create the structures within Washington to manage the build out. Feldstein suggests using the military for the stimulus–a time-honored Republican way of running a domestic stimulus program. Not sure there’s a sufficient civilian equivalent at the moment.

  6. patrick says:

    I give Obama less than a year to get anything rolling.

  7. Greg0658 says:

    FYI for comparison (I went to the turbine siting hearing) the 166 wind turbines supply about 1/8th the power of the 2 operating nukes. The two facilities are very near the same distribution corridor.

    Doing the math here (after a Google search for stats) the answer at the hearing should have come across as 1/11th. Maybe they were adding in downtime on the nukes and projecting windy days.

    “LaSalle County Nuclear Station Units 1 and 2 began commercial operation ’82 and ’84 respectively. Both units are boiling water reactors designed by General Electric.
    The station is built on a 3,055 acre site with a 2,058-acre man-made cooling lake, which is also a popular fishery managed by the Illinois Department of Natural Resources.
    LaSalle’s nuclear generating facility is capable of generating 1,140 net megawatts per unit. Together the units can produce enough power to support the electricity needs of over two million average American homes.”

    and / or / versus

    “Invenergy wind farm in La Salle County IL, will employ 166 GE 1.5 megawatts wind turbines. Both phases are expected to come online in the third quarter of 2008.”

    And I’ll remind you Barack is a Senator from a state with (from memory) 7 nuke sites (1 shut down) with wind sites sprouting up all over. Some ethanol, coal and hydro too. One collider that funding went to the ants and then Europe.

  8. redcharlie says:

    The question is whether or not we can create the management infrastructure, not whether we can do it in Washington or on Wall Street. And the answer is yeah, sure, of course we can. It’s not much different than managing the internet, or managing airports or seaports, or a highway system, or whatever. All these jobs are big network managment jobs, and can be done, and are done, by a mixture of public and private actors.

    To wonder whether the management of a national electric grid should be public or whether it should be private is like wondering whether the left half or the right half of the race horse will cross the finish line first. (And even if you prefer to think of the public sector as the “rear” half of the horse, remember neither half goes anywhere without the other. And it’s just as true to say the rear pushes the front as it is to say the front pulls the rear.)

    The countries eating our lunch competitively, especially the Asian ones, are marked by a high degree of cooperation between the public and private sectors. ( Despite Mao, Asian societies don’t have the same sort of “capitalist entrepreneur vs communist bureaucrat” theoretical baggage that tends to define the well-worn ruts of Western economic thinking.) But even this is something of a misconception, as there are really no such entities as public and private sectors that are distinct from one another. They are both the same people, just wearing different hats. So, of course they cooperate. Of course they all share the same goal (i.e. economic development, of building the wealth of their country).

    Public vs Private is a false dichotomy.

    As Galbraith wrote in “The New Industrial State,” a modern economy depends on the development of its “technostructure” which is the term Galbraith coined for the body of people who have the necessary technical and managerial skills to run a modern economy. If you want to sell cars globally, you have to build up a technostructure within your society that can do that. If you want to put men on the moon, ditto. The internet is a wonderful example of this, where the tireless efforts of bureaucratic visionaries like J.C.R. Licklider were able to shepherd the development of technologies toward an end goal by working with private companies, govt agencies, universities, and the military, all the while moving in and out of jobs in all of these sectors (well, I don’t think Licklider had formal military rank).

    With apologies to Obama, this is all to say that yes, we can. Due to our economic circumstances, the immediate push may have to come from the public sector. But that’s just circumstance. As things improve, the management of a national electric grid may well go private, or semi-private (as in a consortia of private utilities operating as quasi-monopoly with govt sanction) in the future, but the important thing is that it just get done.

  9. redcharlie says:

    To Greg0658

    I’m not quite sure what you are comparing. Uh, yes, it takes a LOT of windmills to equal a conventional nuke plant. As to which is the best deal, I leave that to the market, which shows no investment in new nukes despite decades of subsidies and loan guarantees, and lots of investment in windmills, although admittedly investment by soft-in-the-head crunchy granola tree-hugging liberal types like T.Boone Pickens.

    No, wind power is not a panacea. Nor is solar, thermal or photovoltaic. I would hasten to add that neither is nuclear nor is integrated-combined-cycle-coal nor is cellulosic ethanol nor is offshore drilling. I offer no silver bullets and I offer no either-or choices.

    We gotta use every arrow in the quiver, and we have to use them intelligently. Like using windpower (and solar) not to replace natural gas powerplants (a la the Pickens Plan), but rather using them in conjuction, as natural gas turbines and hydro turbines can rapidly increase or decrease output in response to un-cooperative and fickle weather. (Nukes and conventional coal use steam turbines, and don’t ramp up and down nearly so quickly, and anyway trying to ramp up a nuke too quickly is not a pretty thought).

  10. tenaciousd says:

    The only men who have record of getting less done that Pelosi and Reid would be Daschle and Gephardt. All the GOP had to do to get minority leader Daschle to vote against his own party was to stick and ethanol subsidy onto any bill. So, we need to be careful about assuming too much legislative savvy here.

    Also, Obama fanatics think of themselves as Democrats. They like Reid and Pelosi, too. If Obama goes to war with the Congressional leadership or begins to betray all the values that his groundtroops have projected onto him, he will lose significant support. (“Yes We Can [insert whatever major policy change you seek here]!” has never been much of a rallying cry.) I’m an active Democrat who is perfectly open to looking at nuclear power, but I will guarantee you I am a small minority within the activist base of the party at both the Presidential and Congressional levels. It is an electric rail among the Boomer environmentalist elements of the party.

    Finally, everyone gets enamored of the President, but the long-term power is in Congress. Like the tide lapping against a beach, they can slowly shape policy to their liking. Obama’s power is based on one big groundswell of energy fed by his personality and popular dislike of Bush and his brand of conservatism. The GOP Congress was foolish to attach its fate to Bush. The next one will not be so stupid (maybe, but you never can tell with conservatives). The Democratic Congressional majority will test it’s district-by-district support against Obama’s mile-wide and inch-deep national base in showdown. There is a lot of pent up demand in Congress to move some policy items that have been stymied for decades. Some late-Boomer, Johnny Come Lately like Obama will not be able to suppress that for long.