Going Into Overtime

The successful Cash for Clunkers program is coming down to the wire in the Senate. They have until the end of the week to pass the bill before they head into an August recess. But if they try to change the bill from what the House passed already - which was just a straight extension - the bills would have to be reconciled, and that would require the House coming back from its recess. Otherwise, it'll get signed into law too late for the program to stay in business. What will Sen. Reid do?

The $2 billion cash infusion granted Friday by the House to the overwhelmed cash-for-clunkers program must be accepted by the Senate this week without amendments — or it won’t be signed into law until September.

The House has adjourned for its summer recess, and some Senate lawmakers want to change the bill, which will likely force Reid into a days-long cloture process.

And that's in addition to trying to move the Sonia Sotomayor confirmation, which will probably take multiple days of floor debate, even though the outcome is assured. There's simply no way the Senate can plow through all that by the deadline of Thursday night. It's not possible.

Senate Minority Whip Jon Kyl (R-Ariz.) said his party will push a go-slow approach on cash-for-clunkers so that the program’s solvency and effectiveness can be examined. Without knowing how many claims are still in the pipeline, Kyl suggested a similar mistake could be made again.

“We need to have a time-out to see how much money was spent,” Kyl said. “Before you authorize more money, wouldn’t you like to know how much you’ve spent and how it took to spend it, and what kind of things you might want to do to modify it?” [...]

The GOP staffers pointed to Democrats like Dianne Feinstein of California, Claire McCaskill of Missouri and Mark Warner of Virginia, who in recent days have all expressed skepticism about the program. However, Feinstein and GOP Sen. Susan Collins (Maine) indicated on Monday evening they will support the measure. Warner wants the program to have higher mileage requirements while McCaskill has sounded skeptical about how it will be funded.

But other Democrats strike a common refrain: The sudden demand on the cash-for-clunkers program proves it is working.

With Feinstein and Collins singing off after seeing the unexpected increases in fuel efficiency coming from this program, it's safe to say that this has a good chance of passage. But Republicans will obstruct, and slow down, and gum up the works, and try to add amendments and poison pills, all the while saying that they just have to get home for the August recess. And so a program with demonstrable success that has led to the highest light vehicle sales in a year might get scrapped because of the old stopwatch.

What a wonderful political system we have.

Wildly Successful Government Program

Americans have been conditioned by wingnut rhetoric into believing that government cannot possibly work well. I think that ought to be contradicted by the success of the Cash For Clunkers program, which leveraged $4-5 billion into the economy in seven days, got consumers spending again on big-ticket items, and improved fuel efficiency on 250,000 cars well above expectations (preliminary Congressional reports show a 69% increase in fuel efficiency - most people are trading in SUVs with 100,000 miles or more on them for solid passenger cars). The program is working so well that Congress wants to continue it.

Congress is moving quickly to save the depleted cash-for-clunkers program, as the House passed a $2 billion spending measure Friday afternoon that would keep alive a program that has encouraged American car owners to trade in their old gas guzzlers for more fuel efficient vehicles.

Despite some criticism from Republicans who called the legislation another bailout for another industry, the bill easily passed on a 316-109 bipartisan vote.

Under the fast-track bill, Democratic leaders will use funds from a renewable energy loan guarantee included in the stimulus. The bill would extend the program through Sept. 30, 2010. Democrats have portrayed the run on cash for clunkers cash as a great success for the $1 billion program, which allows car owners to turn in older, less fuel efficient cars for a $4,500 rebate to purchase higher gas mileage vehicles.

These are the same Republican stooges who complained that GM and Chrysler were shutting down too many auto dealers. Now the government designs a program that massively helps dealers, achieves fuel efficiency and with a small investment gets a lot of economic activity going, and they scream "bailout." Hypocrites. There's also the fact that this is not even new money, but money already in the stimulus package. They're also whining that the dealers haven't been paid yet, even though the program kicked off a WEEK ago. Apparently they all receive their paychecks instantly for all work they perform.

Sadly, too many people see a government program run out of money and think it failed. No, that means demand was so high that it fulfilled its purpose in a matter of days. I see Claire McCaskill rejecting the idea of "subsidizing auto purchases forever." Apparently "forever"=anything more than one week.

We still have a tough economy. The recession has leveled off into something approaching stagnation. And there is compelling evidence that the stimulus package is responsible for even getting us back to the stagnation point. Consumers still aren't spending and a lot of people still have no job. Until businesses start hiring again government needs to drive economic activity, which is why you're seeing second stimulus packages proposed in the form of extending measures from the initial stimulus.

Except lots of those extensions revolve around corporate tax breaks and not things that put money into the economy. Things like Cash for Clunkers. And Democrats ought to tell the story that this successful government program, going deliberately and directly to Main Street, represents our best hope for economic recovery.

UPDATE: Obama said this today:

Now, one of the steps we've taken to boost our economy is an initiative known as "Cash for Clunkers." Basically, this allows folks to trade in their older, less fuel-efficient cars for credits that go towards buying fewer, more -- newer, more fuel-efficient cars. This gives consumers a break, reduces dangerous carbon pollution and our dependence on foreign oil, and strengthens the American auto industry. Not more than a few weeks ago, there were skeptics who weren't sure that this "Cash for Clunkers" program would work. But I'm happy to report that it has succeeded well beyond our expectations and all expectations, and we're already seeing a dramatic increase in showroom traffic at local car dealers.

It's working so well that there are legitimate concerns that the funds in this program might soon be exhausted. So we're now working with Congress on a bipartisan solution to ensure that the program can continue for everyone out there who's still looking to make a trade. And I'm encouraged that Republicans and Democrats in the House are working to pass legislation today that would use some Recovery Act funding to keep this program going -- funding that we would work to replace down the road. Thanks to quick bipartisan responses, we're doing everything possible to continue this program and to continue helping consumers and the auto industry contribute to our recovery.

So I'm very pleased with the progress that's been made in the House today on the "Cash for Clunkers" program. I am guardedly optimistic about the direction that our economy is going. But we've got a lot more work to do. And I want to make sure that all the Americans out there who are still struggling because they're out of work or not having enough work know that this administration will not rest until the movement that we're seeing on the business side starts translating into jobs for those people and their families.

Absolutely true. Democrats don't accentuate enough positives.

UPDATE: McCaskill backtracks, says she would consider using existing fund for C4C, wants to study program's effectiveness.

UPDATE: Enviro-blogger Adam Siegel, a critic of the C4C program initially, has some thoughts, conceding that the program is working very well but suggesting some tweaks. The best critique of the program is that it props up the car culture, which I don't doubt, but people with 140,000 miles on their Hyundai SUVs probably aren't candidates for biking or the subway, and what's more, this is a successful economic program with definable environmental benefits, not vice-versa.

Cash For Clunkers Looks To Be Success

So the government inaugurated that cash for clunkers program this week. How's it going? Well...

The U.S. government will suspend the popular cash-for-clunkers program after less than four days in business, telling Congress that the plan would burn through its $950-million budget by midnight, several sources told the Free Press [...]

The decision to suspend the plan came after auto dealers warned the government today that it was in danger of losing track of how many trades had actually been made.

The plan offering owners of old cars and trucks $3,500 or $4,500 toward a new, more efficient vehicle has proven wildly popular, with 22,782 trades certified by federal officials since Monday. But the National Highway Traffic Safety Administration told dealers Wednesday that a vast majority of transactions submitted were being rejected for incomplete or illegible paperwork.

A survey of 2,000 dealers by the National Automobile Dealers Association, the results of which were obtained by the Free Press, found about 25,000 deals not yet approved by NHTSA, or about 13 trades per store. With 23,005 dealers asking to be part of the program, auto dealers may have already arranged the sale of more than the 250,000 vehicles that federal officials expected the plan to generate.

OK, so some problems with implementation. But in general, you're talking about a wildly popular program. I think that the speed of the deals shocked those carrying out the rebates, but I expect that to get ironed out soon enough. And you're basically talking about $1 billion dollars leveraging about $4-$5 billion dollars through the economy within four days and saving an unspecified amount of oil through the sale of almost a quarter of a million more fuel-efficient cars. The fuel efficiency standards could have been higher, no doubt, but taking out a quarter of a million crappy gas guzzlers is great, and $5 billion in economic activity where none would otherwise exist is an excellent mini-stimulus.

I also like DiFi's stand, after Michigan lawmakers vowed to seek additional funds for the program, that she would block anything unless the fuel economy gains were boosted. The taste has been offered to Detroit, and now they'd be hard pressed to say no.

Now, let's offer money to people to paint their roofs white.

Cash For Clunkers

Included in the supplemental war funding bill passed by the House yesterday was a measure providing $1 billion in funding to a program called "Cash for Clunkers," which essentially works like this: the government will offer vouchers of up to $4,500 for car owners to turn in their inefficient vehicles for a new model which improves on that fuel efficiency. Ultimately, the program would spend up to $4 billion to get 1 million "clunkers" off the road.

There's actually been a lot of criticism from environmental advocates over the program, but it seems to me that its primary goal is to induce $10-$15 billion dollars of economic activity. The government offers $4,500 or so to leverage $15,000 or more of spending per car, and that goes to dealers, suppliers and manufacturers. The environmental impact is a secondary characteristic of what amounts to a micro-stimulus. Now, there have been some very compelling articles about how this particular program doesn't go far enough - although I would add that getting vehicles that offer 18mpg or less off the road and putting those people into any kind of car that gets half-decent, even below-average mileage saves a LOT more gas than putting people from a Honda Civic into an electric car. That's just a mathematical fact. So while it seems like nothing switching from a car that gets 18mpg to 22mpg, as the program incentivizes, you save more gas that way than switching from 50mpg to 100mpg. You can see if your car qualifies for the program here.

But again, the primary goal of this program appears to be getting $15 billion dollars cycled through the economy. Hiding that money in holes and allowing people to dig the money up is similarly wasteful, inefficient and inequitable - but it would be precisely what John Maynard Keynes would proscribe. Auto spending is the largest purchase that non-wealthy consumers make outside of housing, and incentivizing that activity would have a stimulative effect. Plus, considering that we own a lot of GM and Chrysler, this would in effect allow the government to pay itself.

Again, the details of this particular cash for clunkers plan may not be ideal. But putting it into the stimulus tells me two things. One, the Administration knows that we need economic stimulus. The economy continues to fall apart, with double-digit unemployment just around the corner, and even a leaky stimulus measure makes a lot of sense right now. If it reduces emissions - and nobody questions that it does, just not enough - that's gravy. The White House probably sees the prospect of a big stimulus unlikely in the short term, and so sneaking this cash for clunkers measure into the war spending bill at least leverages a nice piece into the economy.

Two, I think this means Waxman-Markey, the climate and energy bill, is in a lot of trouble. Despite the fact that it would actually reduce the deficit, the concerns about cost have caught fire on the right, mainly through persistent lies. The bill had to be seriously gutted to get passage out of the Energy and Commerce Committee, leading many on the left to slam it, sometimes in misleading ways, as David Roberts notes (Waxman-Markey does NOT give away 85% of carbon allowances to polluters). But cash for clunkers initially made its way into Waxman-Markey. That the Administration took it out and sped it up does not speak well for their beliefs about its passage in the short term. Maybe they just want to kickstart the auto industry faster, but it seems to me there's a lot more talk about things like painting everybody's roof white than passing a comprehensive climate and energy bill. And that's a big worry.

...so I'm providing the concerns with this iteration of the bill, the trigger point for vouchers can be as lot as 1mpg; there is a sense that poor people who need a car wouldn't be able to get one with such a voucher and should be able to step up with used cars (in other words, buy a used vehicle with better mileage than their current vehicle, kind of a clunkers-for-super-clunkers); and Japanese automakers would have a better time of things with this bill than American ones.

The Big Shift On Cleaner Cars

I'm looking at the President's speech on raising gas mileage standards and finally putting to an end the slow-walk approach to reining in greenhouse gas emissions. My state Senator, Fran Pavley, is there, and there may be nobody more responsible then her for this day. She authored the landmark tailpipe emissions law in the California legislature that provoked this eventual solution. And as Kate Sheppard explains, this is really a big step.

The move will push the entire country to meet the aggressive standards proposed by the state of California. California and 13 other states had requested a waiver from the U.S. EPA that would allow them to set tougher auto-emissions standards than the federal government by requiring cars to reduce their emissions of carbon dioxide—and the only viable way to cut CO2 emissions is to require cars to get better gas mileage. The Bush administration denied California’s request last year, but Obama directed the EPA to reconsider the petition almost immediately after he took office.

The Obama administration will now officially grant California’s request for a waiver, and at the same time will adopt California’s standard for the whole country. This means fuel-economy and emissions standards will be combined into one straightforward set of rules [...]

The announcement will also be an opening move for the EPA in its fight against global warming. Last month, the agency indicated that it intends to begin regulating greenhouse-gas emissions under the Clean Air Act, having determined that planet-warming gases threaten human health. EPA’s first target was expected to be mobile sources—i.e., cars and trucks—which account for 20 percent of all U.S. emissions.

The move will please the Auto Alliance, the major industry group representing car makers, which has been asking for one standard that unifies emission and fuel-economy standards across the whole country.

Environmentalists do not consider this a backtrack or a compromise at all, but the "single biggest step the American government has ever taken to cut greenhouse-gas emissions," according to Daniel Becker of the Safe Climate Campaign. The cost of cars will increase, but the reduction in fuel costs will offset that.

And this shift will aid the climate and energy legislation moving through the House. Obviously the White House is signaling that they're moving forward, and the Congress can either get involved in the solution or sit back and watch. I have no doubt that Obama's EPA will be vigorous in pulling the trigger on regulating more greenhouse gas emissions, for example from power plants, in the absence of legislation.

Big Tailpipe Emissions Breakthrough, As Arnold Runs And Hides Again

The Obama Administration is poised to announce a major deal on tailpipe emissions standards, bringing the whole country under one federal standard that fairly closely appropriates what California passed in 2002 and has been trying to get a waiver from the feds about ever since.

President Obama will announce as early as Tuesday that he will combine California’s tough new auto-emissions rules with the existing corporate average fuel economy standard to create a single new national standard, the officials said. As a result, cars and light trucks sold in the United States will be roughly 30 percent cleaner and more fuel-efficient by 2016.

The White House would not divulge details, but environmental advocates and industry officials briefed on the program said that the president would grant California’s longstanding request that its tailpipe emissions standards be imposed nationally. That request was denied by the Bush administration but has been under review by top Obama administration officials since January.

But Mr. Obama is planning to go further, putting in place new mileage requirements to be administered by the Department of Transportation that would match the stringency of the California program.

Under the new standard, the national fleet mileage rule for cars would be roughly 42 miles a gallon in 2016. Light trucks would have to meet a fleet average of slightly more than 26.2 miles a gallon by 2016.

This is a major victory for California, as well as a step forward for all sides of this debate. Auto companies, who apparently signed off on the deal, can now have certainty about their future production needs. The states can get out of court and provide a better environment for their constituents. And we all can breathe cleaner air while using less oil.

But the hilarious postscript must be highlighted. Politico reports that this deal will be announced tomorrow, with California Governor Arnold Schwarzenegger in attendance. As CapAlert notes, there's just one problem: California has a statewide election tomorrow, and Arnold is not an absentee voter. Yes, the Governor, the head cheerleader and supporter of the special election, might miss out on voting in it (although, if the announcement takes place early enough, he could be reasonably expected to make it home before the polls close at 8pm).

You know Arnold can't resist the lure of the spotlight. And better for him to stand at the side of a popular President than try in vain to rescue a flawed set of ballot measures which have probably already failed, given the 2 million vote-by-mail ballots already cast. It probably appeals to him to leave town on Election Day and hide out in Washington. That's par for the course for him, failing to ever accept responsibility for the damage he's caused.

Cash For Clunkers - An Innovative Idea From Washington? The Devil You Say!

I support a 'cash for clunkers' program not because it would help the US auto industry and increase consumer spending. It would really reduce emissions at the low end and green the fleet. And I don't buy the criticism that nobody would participate in the program. Right now, because of the economic downturn, we are seeing cars that would have otherwise been junked remain on the road. Those are precisely the cars targeted. Allowing people to turn them in for cash they can use to buy more efficient vehicles would reverse that bad outcome and have an environmental impact besides. It's benefited Germany, France, Italy and other countries who have adopted the policy. And it looks like the House struck a deal moving this forward.

In a major advance for the so-called “cash for clunkers” program, House negotiators reached a tentative agreement on a plan that would award vouchers of up to $4,500 to vehicle owners who trade in their old cars for more fuel efficient models.

Under the House plan, a car trade-in that improves fuel efficiency by at least 10 miles per gallon would qualify for a $4,500 voucher, as would the trade-in of a small truck that improves efficiency by 5 miles per gallon. The new vehicle must have a minimum fuel efficiency rating of 22 miles per gallon for cars and 18 miles per gallon for small trucks.

A car trade-in that improves fuel efficiency by at least four miles per gallon would qualify for a $3,500 voucher, as would a small truck trade-in with a two mile per gallon improvement.

Those fuel efficiency ratings don't sound like a lot, but improving 10mpg to a low-mileage car saves a lot more gas than improving 10mpg to a high-mileage car, and essentially this program is designed to do just that.

Negotiators plan to stick this inside the larger energy bill, where its benefits can weigh on auto-state lawmakers who might otherwise be tempted to reject the whole thing. So while "cash for clunkers" doesn't solve the problem of reducing fuel consumption completely, it doesn't have to do the whole lift by itself. And as fuel economy standards are finally set to rise, this proposal would actually get those more fuel-efficient cars out the door and onto the road. Hopefully this will help the larger energy bill pass.

...As for increasing biofuels, some harm more than help, but hopefully this can spur innovation so that we can run cars on banana peels like in Back To The Future.

Cash For Trash

One of the developments that drove the market this week was the news that GM wouldn't need any further financing from the government in March. Which is great. But the reason wasn't that auto sales bounced back to life. It was that they have been able to extract more blood from the stone than they expected.

G.M., the nation’s largest automaker, issued a statement saying that it had told President Obama’s auto industry task force, which is reviewing the restructuring plan that the company submitted last month, that its March financing request “would not be needed at this time” because it was making more progress than expected in reducing costs.

The statement did not specify whether G.M. still expected to need the full $30 billion that it had requested.

“This development reflects the acceleration of G.M.’s companywide cost reduction efforts as well as proactive deferrals of spending previously anticipated in January and February,” the statement said. “G.M. will remain in regular contact with the presidential task force on the auto industry on the status of G.M.’s restructuring actions, its liquidity position, timing of future funding requests, and other relevant topics of mutual concern.”

What is missing in that report is the selling of cars. They can cut as deep and hard as possible, and force their union to knuckle under as well, the way Ford did this week. Ultimately, that will reduce wages across the industry, and in the non-union shops as well, as everyone races to the bottom. But again, the problem is that nobody is selling any cars.

I think we should seriously consider the German "cash for trash" model:

Amid the gruesome headlines generated by the world's auto industry these days, it almost read like a typo: new car registrations in Germany rose 21% year-on-year in February, the country's Association of the Automotive Industry (VDA) announced March 3. This, though, was no error. The 278,000 cars put on the road, crowed Matthias Wissmann, VDA's president, amounted to "the highest level of sales in the month of February for ten years."

Why the splurge? German drivers have latched onto a juicy new deal. Under a scheme started in January, car owners who trade in a vehicle more than nine years old for a new, greener model can expect $3,172 from the German government as well as a break from paying road tax for at least a year. Similar "scrapping schemes" have been launched in recent months in France, Italy and Spain. Now motor manufacturers in Britain are pleading with its government to follow suit.

You can do more to fight global warming by improving performance at the low end than by giving everyone who has a moderately efficient vehicle a Prius. A "cash for trash" scheme would do just that by dramatically increasing the fuel economy of the overall American fleet, with the added benefit of jump-starting sales for the moribund auto industry. There's legislation on this, and seeing how Germany and other nations are using this plan to boost their own homegrown industries it would be in no way protectionist to do the same for the Big Three. If you want to sell cars, subsidize the overhaul of the fleet.

Auto Industry Resigned to California's Leadership On Climate Change

President Obama has officially directed the EPA to review the decision to deny California (and 17 other states) a waiver under the Clean Air Act to regulate its own greenhouse gas emissions, and considering that Obama's EPA is about to hire the lead attorney in the Supreme Court case that found the EPA has the authority regulate carbon emissions, I expect we will see the waiver granted in short order.

"For the sake of our security, our economy and our planet, we must have the courage and commitment to change," Obama said in the East Room of the White House. "It will be the policy of my administration to reverse our dependence on foreign oil while building a new energy economy that will create millions of jobs."

Today's actions come as Obama seeks to fulfill campaign promises in the first days of his administration. The moves fulfill long-held goals of the environmental movement.

Lawmakers and environmentalists throughout California are predictably hailing the move. But notably, another group on board with the decisions are - wait for it - the automakers.

Auto-industry officials were surprisingly receptive to President Obama’s announcement about tightening emission standards, saying the steps he announced were the best they could hope for.

“It seems the president has set out a reasonable process,” said a top industry official who refused to be named. “He can say with credibility that there’s a new sheriff in town. Now, maybe there’s room to discuss this with stakeholders.”

The uncertainty of the process, given the Bush Administration's failure to set standards passed by Congress in the 2007 energy bill and this looming fight over the California waiver which could have ended up in Congress or the courts, may be a factor in the auto companies' tepid support. So too is the fact that Obama and the federal government still partially controls the fate of the Big Three in the auto industry bailout.

Eventually, we will much to what amounts to a national standard, with 40% of the country's population poised to back California's emissions targets and the auto industry forced to calibrate to the higher standard. This will SPUR innovation, not dampen it, and will eventually be a boon to an industry which has failed to adapt to changing needs for far too long.

They Work Hard For The Money

So after driving to Capitol Hill this time, the heads of the Big 3 auto companies are due for their ritual stoning in front of Congress today, as they continue to prostate themselves and beg for funding to keep them alive. This time, they came prepared with plans for viability, and the promises are wide and deep. The three top executives will lower their salary to $1. They'll cut product lines and consolidate operations. They'll work on comprehensive health care reform, fair trade and even producing more fuel efficient cars, though many like Robert Reich are skeptical about that last offer, especially considering that gas has fallen back to under $2 a gallon and demand for bigger vehicles and SUVs may be creeping back up. I've read that getting the real junkers off the road and replacing them with even moderately efficient cars saves a lot more gas than getting everyone in an economical car into a Prius, so incentives for trading in those cars on the low end would actually be the best policy, and Ford has suggested that as well.

Even the UAW is offering concessions in return for the loans, which flies in the face of conservative propaganda about fat-cat unions destroying the industry (which makes sense, because, you know, without the industry, there is no union):

The United Auto Workers said Wednesday it is willing to change its contracts with U.S. automakers and accept delayed payments of billions of dollars to a union-run health care trust to do its part to help the struggling companies secure $34 billion in government loans.

United Auto Workers President Ron Gettelfinger said the union will suspend the jobs bank, in which laid-off workers are paid up to 95 percent of their salaries while not working, but he did not give specifics or a timetable of when the program will end.

"We're going to sit down and work out the mechanics," Gettelfinger said at a news conference after meeting with local union officials. "We're a little unclear on some of the issues."

In truth, the union contracts are not a problem, it's the fact that a country without high wages and benefits and free healthcare is competing with a bunch of countries that have all that, and hopefully we'll see people finally understand that fact. And by the way, this is on top of UAW restructuring from 2007 that lowered the wage structure under even nonunion auto plants in the South and transfered responsibility for the pension plan to the union as well. So this is not the first time the UAW has lent a hand.

GM and Chrysler are even considering a pre-arranged bankruptcy in exchange for bailout money, to reorganize the entire sector.

My point is that the auto companies are bending over backwards for an accommodation with Congress, all for a mere fraction of what Emperor Paulson has spent on the TARP program, without hardly any oversight at all. And yet the votes still aren't there, at the moment.

One day after the auto companies sent survival plans to Capitol Hill in an urgent plea for bailout billions from the fund, Sen. Harry Reid told The Associated Press in an interview, "I just don't think we have the votes to do that now."

I don't think the automakers are saints or anything. They're still spending a fortune on lobbying and campaign contributions. And Ford wants Congress to block California's plan to regulate tailpipe emissions, saying that there ought to be one national standard (and it should be California's - 16 states have signaled they would adopt it, and it is completely in government's interest and mandate to reduce greenhouse gas emissions). But this really shows how completely in bed Congress is with the financial industry. The CEO of Citigroup didn't have to agree to take $1 in salary. The head of Goldman Sachs didn't have to drive to Washington. Nobody on Wall Street had to agree to major reregulation as a precondition for a bailout.

An auto industry bailout is unpopular but so was the financial bailout. But that didn't stop lawmakers from taking seriously the threats of depression if the banks didn't get practically no-strings-attached money. Automakers are also playing up fears of serious economic collapse but lawmakers seem less concerned.

I think one difference here is that Congress actually understands how auto companies make money, while they can't fathom the financial industry's complex arrangements, and tend to just trust the "very serious people" that the banks need hundreds of billions to survive. Also, if Detroit contributes to campaigns, Wall Street bankrolls them. And there's the skillful PR campaign from the right that the carmakers' struggles are all the fault of the unions, when that doesn't come into play with the financial industry.

It's still pretty shameful that an industry that pushes paper back and forth and pretends to create wealth can ask for and receive hundreds of billions of dollars by snapping their fingers, while companies representing working people that make things for a living have to grovel and beg. A deindustrialized America is an America that will not function as a first-rate power in the future.

CAP has a good report on the way forward for the auto industry - they call it a "bridge loan to the 21st century."

Building The Cars Of The Future

For the moment, it appears that the auto industry bailout is dead.

WASHINGTON – The Senate's top Democrat has called off a planned vote this week on a $25 billion auto industry bailout. Senate Majority Leader Harry Reid said that he wanted to figure out some way to help Detroit's struggling Big Three but that efforts to do so had stalled.

The White House and congressional Republicans rejected Democrats' plan to dip into the $700 billion Wall Street rescue fund to finance loans to U.S. automakers.

Obviously this wasn't a favorable environment, with 49 Republicans and a skeptical GOP President in the lame-duck session and an unpopular bailout of the financial industry in the rear-view mirror. Treasury was against it from the beginning, and the public was uneasy about it as well. The White House's quick fix, to allow carmakers to access federal loans by dropping their requirements on fuel-efficient vehicles, was a non-starter and the opposite of what we should be doing.

The financial bailout and the proposed auto industry overhaul are very different beasts. With the auto industry you have millions of factory jobs on the line, as well as the support industries that feed them. Believe it or not, autos are made here with a far cleaner process than those made abroad, too, so allowing, say, the Chinese to buy GM, would have dramatic consequences for climate change, not to mention the fact that losing GM would mean losing the Chevy Volt, which is the most promising electric car in production, using a lithium-ion battery instead of nickel, which is the key to a sustainable transportation future. And from an economic standpoint, you're looking at a near-total decimation.

Still, this problem is really sad and really difficult. While Wall Street got a $700B bailout, the auto industry is looking for a bridge loan because auto sales just crashed in October from a run rate of around 16 million vehicles to 10 million vehicles. That's not something that can really be managed away in a short period of time, it's the equivalent of demobilizing a small war. That's overhang of factories, management, people, capital, and expertise of six million vehicles a year. The auto industry reaches into every community in America, with car dealerships, supply chains, and parts makers sustaining millions of jobs a year. Beyond that, as Wes Clark notes, there's the national security element of electrifying our armed forces, a project the auto industry is moving forward.

Yes, the auto industry has been badly managed, and labor has fought against reasonable environmental regulations. And the management doesn't really 'deserve' a bailout. But what's going on here is not a normal market failure; auto companies have done done surveys which show that consumers will not buy from companies in bankruptcy, and GM is going to be in chapter 7 not chapter 11, which means full liquidation. People won't buy from a company that looks like it'll go bankrupt, but a company without customers will go bankrupt. That's a feedback loop we don't want to see, because liquidation of the auto industry will probably cause a depression. Millions of retirees with pensions and health care will lose it, consumers with domestic cars will lose benefits associated with those cars, the secondary car market will be destroyed, and consumers will lose confidence about all major consumer purchase.

In other words, the auto industry, and really the entire economy, is in the midst of the same dynamics that take hold in a bank run. I just read Paul Krugman's The Return of Depression Economics, and this is the scenario that he draws out in economies system-wide. The temptation here from policy-makers is to cut the baby in half, which is the wrong strategy. Either the government should decide to defend the auto industry at all costs, and tell consumers their car purchases are safe, or the government should let the auto industry die. A bridge loan must be accompanied by a government guarantee,because without it the industry is just in limbo and the underlying confidence problem remains.

If it sounds unfair, well, tough. Liquidating the industry is a terrifying scenario, even if it was only GM, which is the closest to collapse right now. And let's be clear about what the right really means when they claim to want to allow the carmakers to fail - it's not about "letting the market rule" or "not rewarding failure", they're talking about union-busting.

All this screaming about bankrupting GM has everything to do with a conservative philosophical imperative that the free market will set all these things right, that unions are bad and they are an affront to free enterprise. It's a moral position not a rational one, and it persists despite all evidence to the contrary. It should have been thoroughly discredited by this point, but alas, some continue to cling to it. The problems being suffered by the auto companies right now are nothing more than a shock doctrine opportunity to destroy the UAW to them. They either have not come to terms with the fact that one in every twelve jobs in this country have income that is tied to the Big 3, or they simply don't care.

Or, like Alabama Senator Richard Shelby, they come from right-to-work states that would benefit from Detroit's demise. Shelby may carp about "the uncompetitive structure of [the Big Three's] manufacturing and labor force," but as Marcy Wheeler notes, his state is home to the non-union plants that make M-Class SUV, GL-Class SUV, Pilot SUV, Santa Fe SUV, plus engines for Tacoma and Tundra pick-ups and Sequoia SUVs.

Not exactly a vision in green.

This is the time to use this crisis to boldly push forward green technologies that change how we get people from point A to point B. But the US auto industry can be a part of that solution rather than an impediment to it. And in order to accomplish that we need more than oversight, but a clear vision, buttressed by a say in management decisions, of how Detroit can go forward. As Jeffrey Sachs says here, we can support the auto industry and support our own future at the same time.

This is an opportunity to embark on a major industry restructuring to position the United States to lead the world in producing cars that get 100 miles or more per gallon. This achievement is closer than many suppose, with the pathbreaking plug-in hybrid Chevy Volt set to arrive in 2010 and several new hybrid models on the way. American-made fuel-cell cars may be a large-scale reality within a decade. Success would dramatically improve energy and national security, climate security, and U.S. global competitiveness, and a public-private partnership is needed to bring about this transformation [...]

And a transformation of the type that's required for long-term sustainability of the automakers will require both the market and government. Public policies and funding are needed to support the research and development of high-performance batteries and fuel cells and, especially, to modernize the national power grid and other infrastructure. These are steps that individual auto companies (and even the industry as a whole) could not accomplish on their own.

Some want to see the industry punished for its neglect of energy and environmental realities, but we should acknowledge that the SUV era reflected poor judgment across society. Yes, the industry ignored warnings about energy insecurity and climate, but so did the public and politicians. Rather than kill the auto industry, and destroy the U.S. economy in the process, we should fix the industry with a sense of national responsibility and purpose. (We should also fix our ramshackle health-care system, which has burdened the industry and the economy with punitively high costs.) [...]

We face an unprecedented financial calamity, energy crisis and environmental threat. A vibrant, growing U.S. automobile industry should play an essential role in solving all three. The technologies that will win the day are in sight; industry has already made important advances. A partnership with government is vital and should begin this week.

Sadly, conservatives have won this round. I hope the carmakers are still alive when we have the numbers to set this right.

John Amato has more.

Fossils Addicted To Fossil Fuels

The short-sighted American auto industry is still claiming that increased fuel efficiency will cost them jobs, as opposed to, you know, being the only thing to save the entire industry from complete and utter destruction. Nobody wants to buy their gas guzzlers anymore. How long is it going to take for them to figure that out?

Schmucks. Never mind the fact that radical climate change is a fact of life and 100 years of chomping on fossil fuels has put us in a predicament where saving "part" of our ecosystem is the only future option. But on strictly an economic basis, cars that don't stretch the fuel dollar won't be sold. Period. People already have cars that get shitty gas mileage and they're not going to upgrade to something worse. There's enough competition in the market, and more coming on line, that automakers with a 1956 way of thinking about auto efficiency will be crushed like a bug.

The killer app that could wipe out these jokers completely is better transit. Ben Cardin is a national leader on this front, and I encourage you to read this interview. An excerpt:

Grist: You authored the transit portion of the Climate Security Act. Clearly this is a priority issue for you. What role do you think transit policy should play in climate legislation?

Sen. Cardin: A huge part. [The transit portion called for] $171 billion over the life of the bill. That's big money. That can make a major impact. It can make a huge difference in the capacity for transit programs. We are in desperate need of significant transit improvements. We've got to have the facilities and we don't today, and then we need the fare-box and economic policies that reward people for taking public transportation. Some try to say that it should be "self-sufficient" or have a certain percentage return through the fare-box. We don't do that on our roads, and public transportation is much better for so many reasons -- not just the environment or the quality of life. We should be providing much stronger incentives for people to use public transportation, but first you need to have the facilities.

I'm a big, big supporter of dramatic change in public transportation. It includes more than just the bus and rail systems in our urban areas. It includes a commuter rail and inter-city rail -- the whole gamut of services that get people out of their personal vehicles. I don't want people driving their personal vehicles the way they are today.

He's absolutely right about this. Reality is coming to the transportation sector and they can climb aboard or get out of the way. The time for backward thinking is over.

UPDATE: Harry Reid is completely right, by the way. Coal does make us sick, and furthermore the real cost of using fossil fuels is almost never addressed. We built the public infrastructure through taxpayer money. We spend hundreds of billions on defense to ensure safe passage for oil. The real cost of gas is at least double what you pay, and more if you factor in the lung disease and sickness associated with refining and rendering and smog and pollution. Coal makes us sick. Oil makes us sick. It's time to get off them.

OR-Sen, AK-Sen: Glimmers of Hope

I mentioned Oregon Senate candidate Jeff Merkley in the last post, and I have a very good feeling about him. Not just from the standpoint of him being possibly one of the few reliable progressives we can elect to the Senate (Tom Allen and Tom Udall and maybe Mark Begich being the others, IMO) - but Gordon Smith, the fake moderate Republican who every election year tries to wipe away the memory of his past far-right votes, is clearly frightened enough about his chances that he's running ads tying himself to Barack Obama.



It's pretty clear how popular Obama is in Oregon once you see that ad - no wonder they're not really competing up there for now. Obama, for his part, responded in this fashion.

"Barack Obama has a long record of bipartisan accomplishment and we appreciate that it is respected by his Democratic and Republican colleagues in the Senate. But in this race, Oregonians should know that Barack Obama supports Jeff Merkley for Senate. Merkley will help Obama bring about the fundamental change we need in Washington," said Obama campaign spokesman Bill Burton.

I am not particularly happy with Obama for his FISA el foldo, but he is paying attention to electing Democrats across the country, which gives us an opportunity to try and change the balance between reactionaries, conservatives and actual progressives in the Congress.

As for the aforementioned Mark Begich, I thought this was a strong statement in the wake of the Supreme Court stepping in (activist judges!) to limit the damage awards to Exxon in the Valdez spill:

“The thousands of Alaskans whose lives were devastated by this disaster are hurt, once again, by this ruling," Begich said. "What we’re seeing today is another example of how Washington is out of touch with real people. The justices have sided with corporate America rather than with Alaska families who have suffered for nearly 20 years.”

Begich added that while the livelihoods of thousands of Alaska fishermen and others were destroyed by the spill, Sen. Ted Stevens has continued to work to serve the interests of big business, rather than put pressure on Exxon to settle the lawsuit or drop its appeals.

“Sen. Stevens continues to show he works hard for special interests, but where has he been when it comes to doing what’s right for Alaskans?” Begich said.

This is yet another shitty day for the country, but there are a few candidates with integrity and a commitment to serve the people. You just have to search for them.

EPA Avoidance Update

Just to update on the EPA's denial of a waiver to California to regulate its own greenhouse gas emissions - the White House is now refusing thousands of documents on the matter to Henry Waxman's Oversight and Government Reform Committee, citing executive privilege.

"I don’t think we’ve had a situation like this since Richard Nixon was president," said Rep. Henry Waxman, D-Calif., the chairman of the House Committee on Oversight and Government Reform, which is conducting the investigation.

An EPA official, Jason Burnett, has told committee investigators that EPA Administrator Stephen Johnson had favored granting the waiver but denied it after meeting with White House officials. In testimony last month, Johnson refused to say whether he’d discussed the waiver request with Bush.

The White House waited until the very day that the Oversight Committee was going to rule on contempt citations for failing to respond on this issue. And the OMB and the EPA basically answered by saying "we've given you enough documents, no more documents for you."

It's clear that the EPA and the Bush Administration will stonewall until the day they leave office on this front, and so it's up to the next President to make a determination on the waiver. And all you need to know about California's chances of being able to regulate emissions is that Obama supports the waiver, and McCain has been vague and evasive about it (not to mention he's taken more money from oil companies than any other Presidential candidate).

Meanwhile, California is offering another regulatory solution: they're adding a Global Warming score to the sticker of every car for sale in the state.

The California Air Resources Board said Thursday the window sticker will give consumers the information they need to choose a cleaner-burning car or light truck.

"This label will arm consumers with the information they need to choose a vehicle that saves gas, reduces greenhouse gas emissions and helps fight smog all at once," board chairman Mary Nichols said in a statement. "Consumer choice is an especially powerful tool in our fight against climate change. We look forward to seeing these stickers on 2009 model cars as they start hitting the showrooms in the coming months."

We'll see if this affects consumer choice in the coming months, although the fuel economy portion of the sticker is already driving demand. To say nothing of those 5 hydrogen fuel cell cars turning up on Southern California roads.

Whining and Crying Instead of Innovating

Oil prices shot up today on fears of shortages, leading the US Congress to pass the latest in a series of stupid laws regarding our energy future:

The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure.

The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.

The measure passed in a 324-84 vote, a big enough margin to override a presidential veto.

It's a nice election-year "are you with us or are you with the oil companies" vote, but it's the complete opposite track of how we should look at the situation.

A substantial amount of the oil in the world has already been pumped out of the ground. What's left is going to be harder and costlier to reach. It's called peak oil, and nobody wants to talk about it, but in all likelihood we're already there. OPEC would be pretty happy getting $130 a barrel for oil if they had excess capacity to pump. I'm not at all sure they do.

But whether they do or not, trying to lower the price of gas on the margins is insufficient to the problem. Iran says a lot of stuff that's not entirely true, but this is an example of what the next steps could be if we invested in innovation.

Researchers at Isfahan University of Technology have invented a car which consumes only a liter of gas to drive up to 500 kilometers.

“The single-person car is capable of driving at a maximum speed of 75 kilometers per hour,” Alireza Fadaei, supervisor of the manufacturer group announced.

“The car has a 3.5 horsepower carburetor and is equipped with an injection engine,” he added.

“Composite materials with fiber-carbon, which form the body of the car, give it low weight and high strength,” the supervisor of the group claims.

The Iranian car, which is scheduled to be exhibited in France's Low Consuming Exhibit in Nogaro, aims to replace motorcycles.

It could replace cars, too. And we could encourage smarter growth and more mass transit and higher efficiency instead of spending time and effort finding out if OPEC is undercutting you on the price. Guess what - they are. They probably always have been. But that tiny amount of extra cash isn't going to do anything to solve long-term energy needs or fight global warming. The Congress is fighting the last war and trying to save their political skins from angry drivers. But this is useless policy.

Obama And The Energy Future

Friends of the Earth, the newest and most forward-thinking environmental group, endorsed Barack Obama today, mainly because of his stance on the gas tax suspension.

“We endorse Senator Obama because we believe he is the best candidate for the environment,” said Friends of the Earth Action President Brent Blackwelder. “The ‘gas tax holiday’ debate is a defining moment in the presidential race. The two other candidates responded with sham solutions that won’t ease pain at the pump, but Senator Obama refused to play that typical Washington game. Instead, Obama called for real solutions that would make transportation more affordable and curb global warming. He showed the courage and candor we expect from a president.”

Experts agree that gas prices are likely to decline only slightly under a Clinton-McCain “gas tax holiday”—if they decline all. Instead of signing onto this gimmick, Obama has called for long-term solutions that would limit oil consumption by requiring cars to be more fuel efficient and expanding transportation options including passenger rail.

So Hillary Clinton is not only content to call for pointless proposals that would potentially eliminate hundreds of thousands of highway construction jobs and do next to nothing for working people, she's happy to lose all of her allies in the environmental movement over it. Obama is right - this is a function of status quo political thinking:

He used the tax holiday — an idea that Sen. John McCain, the presumptive Republican nominee, also supports — to illustrate the Democratic Party's need to set itself apart. "When we're offering the same things that John McCain is offering on the cheap, that means we are not presenting a truthful response to the challenges we face in America," Obama said. "We can do better than that this time."

Now, Clinton's team is countering with the fact that Obama voted to suspend the gas tax in Illinois a few years ago. Right, and he LEARNED from it that the oil companies do not pass that relief on to the customer. He also knows that George Bush isn't going to impose any tax burden on oil companies.

"At best, this is a plan that would save you pennies a day for the summer months - that is, unless gas prices are raised to fill in the gap, which is just what happened in Illinois when we tried this a few years ago," Obama said.

"Meanwhile, unless you can magically impose a windfall-profits tax on oil companies overnight to pay for the holiday, it could imperil federal highway funding and cost Indiana more than 6,000 jobs," Obama said.

In the short-term gas prices are going to be high; it's a fact of life in a country where the fuel efficiency is too low and the driving distance is too long. There are plenty of things you can do in the long-term to reduce people's expenses, help save the planet from the ravages of global warming, kickstart the economy and enhance quality of life. It's steps like investing in high-speed rail and mass transit, improving the fuel economy of the national fleet of cars (which was in last year's energy bill, much to the dismay of lawmakers who like their SUVs), eliminating coal-burning power plants (good for Kathleen Sebelius) and investing in wind, solar and biomass, and eventually spurring those investments with money from a tax on carbon that will actually be an economic engine:

If there's a paradise for environmentalists, this Nordic nation of 9.2 million people must be it. In 2007 Sweden topped the list of countries that did the most to save the planet - for the second year running - according to German environmental group, Germanwatch. Between 1990 and 2006 Sweden cut its carbon emissions by 9%, largely exceeding the target set by the Kyoto Protocol, while enjoying economic growth of 44% in fixed prices [...]

The main reason for this success, say experts, is the introduction of a carbon tax in 1991. Swedes today pay an extra 2.34 kronor (20p) per litre when they fill the tank (although many key industries receive tax relief or are exempted). "Our carbon emissions would have been 20% higher without the carbon tax," says the Swedish environment minister, Andreas Carlgren.

"It was the one major reason that steered society towards climate-friendly solutions," reckons Lindberg. "It made polluting more expensive and focused people on finding energy-efficient solutions."

"It increased the use of bioenergy," concurs Professor Thomas B Johansson from the University of Lund, a former director of energy and climate at the UN Development Programme. "It had a major impact in particular on heating. Every city in Sweden uses district heating [where steam and hot water are piped to a building in a particular area]. Before, coal or oil were used for district heating. Now biomass is used, usually waste from forests and forest industries." [...]

Today, environmental measures are common throughout the country. Take Linköping, Sweden's fifth biggest city, which is running its fleet of buses and rubbish lorries, a train line and some private taxis on biogas, from methane produced from the entrails of slaughtered cows.

Similarly, Stockholm's central station is planning to harness the body warmth of 250,000 daily commuters to produce heating for a nearby office block. The body heat would warm up water that would in turn be pumped through pipes over to a new office block. And King Carl Gustaf XVI last month had all the lights at royal castles turned off for an hour to back an energy efficiency campaign.

While our gas tax pays for highway construction, it's structured essentially the same way as the carbon tax. This is what Hillary Clinton wants to eliminate for the sake of a few votes in Indiana.

I believe that Obama's base of support among young people will spur him to fiercely confront climate change in his first term, for environmental, economic and national security reasons. We aren't going to get off fossil fuels overnight but we can make a difference. But not if conventional Washington thinking rules the day.

May Day Happenings

Tomorrow is May Day, and the combination of anniversaries - the traditional holiday for workers (that started in the United States, it is most certainly NOT a Communist holiday), a day of action in the Latino community, and the 5th anniversary of "Mission Accomplished" - means that there are goings-on all over the state tomorrow.

• Latino groups will stage a May Day rally for immigrant rights tomorrow in downtown Los Angeles. You may remember that last year's event in Macarthur Park ended in chaos with tear gas and brutality marring a peaceful protest. The cops have actually been practicing and preparing so that there are no such incidents this year. Organizers expect anywhere between 25,000-100,000.

• There's at least one budget cut/fee increase protest being planned at Cal-State Northridge, organized by students. It should start around 12:00 on the bookstore lawn. I believe this is part of a continuing action by students to raise awareness about the crime Arnold Schwarzenegger wants to commit on public education this fiscal year. There's more at The Alliance for the CSU.

• On the anniversary of "Mission Accomplished," True Majority and CREDO Mobile are teaming up to deliver the Responsible Plan to End The War in Iraq to incumbent House members, and urge them to sign on to the bills in the plan that have already been proposed. The House leadership is planning on cravenly offering more money in the war supplemental than even George Bush asked for, funding it through 2009 without any checks or conditions. This is dead wrong, and there are steps Congress can take right now to rein in military contractors, aid in the humanitarian crisis, and increase regional diplomatic efforts, instead of allowing Bush to muddle through and pass off the disaster to his successor. You can find one of the 210 events in your area by clicking this link.

• The west coast chapters of the International Longshoreman Worker's Union (ILWU) is planning on shutting down all west coast ports on May Day to protest the ongoing occupation of Iraq. Information on Bay Area events is here. There's also information at this blog. This is the biggest general strike I can remember, and coming from longshoremen it can hardly be considered the work of dirty hippies. This is a very important event.

• And in what may in the final analysis be the most revolutionary event, word has it that Tesla Motors will open their very first store tomorrow in West LA, on Santa Monica Boulevard just east of the 405 Freeway, which paradoxically is one of the most congested spots in the city. Tesla has created an electric vehicle that runs like a sports car, and in future years their sedan model will be relatively affordable while getting the equivalent of 135 miles per gallon. As this event is the closest to me, I might actually get to this one. :)

Romney: "We Must Not Have National Parks, Like The One I Built With My Own Hands That Is Vital To America's Future"

You almost can't keep up with the Romney flip-flops, it's like competing in a footrace against The Flash. After practically challenging Mike Huckabee to a fight for besmirching the honor of President Bush, he decided yesterday to claim Bush mismanaged the Iraq war. And then there's this:

I'll have pictures and a few anecdotes from Obama and Clinton later, but I wanted to bring attention to a rather strange comment that Romney made during his stump speech. He began a thread about all the great things that George Bush has accomplished, including lowering taxes (no surprise there) and then added that Bush has "strengthened our economy by getting us off of foreign oil." Huh? [...]

Romney went on to talk about the fact that oil just hit $100 a barrel today and then something about how we buy a bunch of oil from overseas and that we need to become energy independent. It was all said in a very earnest and serious tone, so it all felt very true, but it can't be, can it? I mean, Mitt just told us that George Bush freed us from our dependence on foreign oil, so who cares if it hits $100 a barrel, right?

This is very distilled flip-flopping, and I think if Mitt ends up getting the nomination he could finely hone this even further and take contradictory positions in the space of a single word, as in "The economy is rolling along at a great clip, but we must admit that it is in some areas weakbutstrong."

When Politics Is Not Enough

Tomorrow the President will sign an energy bill that will increase the nation's fuel efficiency by 40%. That's significant, but it's also correct to sniff that such a move would bring US cars "into the 1980s." The special interests, the oil and gas companies, have worked their magic for so long that even a major step forward like this looks woefully insufficient.

Plus, the massive subsidy to corn-based ethanol inside the bill could have a devastating impact on our oceans.

The nation's corn crop is fertilized with millions of pounds of nitrogen-based fertilizer. And when that nitrogen runs off fields in Corn Belt states, it makes its way to the Mississippi River and eventually pours into the Gulf, where it contributes to a growing "dead zone" — a 7,900-square-mile patch so depleted of oxygen that fish, crabs and shrimp suffocate.

The dead zone was discovered in 1985 and has grown fairly steadily since then, forcing fishermen to venture farther and farther out to sea to find their catch. For decades, fertilizer has been considered the prime cause of the lifeless spot.

With demand for corn booming, some researchers fear the dead zone will expand rapidly, with devastating consequences.

"We might be coming close to a tipping point," said Matt Rota, director of the water resources program for the New Orleans-based Gulf Restoration Network, an environmental group. "The ecosystem might change or collapse as opposed to being just impacted."

The energy necessary to grow and process corn, too, blunts its effectiveness as an alternative source of fuel.

Ultimately, the peculiarities of the modern political scene, with its diametric opposition on so many issues and its belief in the art of the compromise, means that we may never fully deal with the problem of our impact on the environment. Real change is probably far more likely to come from the technological arena. Indeed, 21 billion of the 36 billion gallons of alternative fuel mandated by the energy bill must come from cellulosic ethanol like switchgrass and wood chips. And eventually, Moore's Law will kick in on other renewable sources as well.

Nanosolar, a heavily financed Silicon Valley start-up whose backers include Google’s co-founders, plans to announce Tuesday that it has begun selling its innovative solar panels, which are made using a technique that is being held out as the future of solar power manufacturing.

The company, which has raised $150 million and built a 200,000-square-foot factory here, is developing a new manufacturing process that “prints” photovoltaic material on aluminum backing, a process the company says will reduce the manufacturing cost of the basic photovoltaic module by more than 80 percent.

Nanosolar, which recently hired a top manufacturing executive from I.B.M., said that it had orders for its first 18 months of manufacturing capacity. The photovoltaic panels will be made in Silicon Valley and in a second plant in Germany.

We've had the technology to harness the sun since the 1970s. If it can be made so affordable that the market would be fools to pass it up, then you have a tipping point. That doesn't mean we shouldn't push for a renewable energy standard next year, or removing subsidies for oil extraction. It means you fight on as many fronts as possible to reach a solution.

The Energy Bill

Yes, the Federal Energy bill is a disappointment. But think about how much more of a disappointment it would have been if the House didn't stake out such a bold position. They could have not included the renewable energy standard or the tax plan to eliminate subsidies for Big Oil. Now we know that we have 53 and 59 votes, respectively, in the Senate for these initiatives, and with a new President, those could get through. What eventually will pass includes a 40% increase in fuel efficiency and programs for efficient lighting and buildings. I'm somewhat unhappy about the reliance on ethanol, which is a sop to regional interests, and which costs as much, if not more, in energy to produce as the gas itself. However, a healthy percentage of that ethanol production would be from prairie grass and wood chips and cellulosic sources, so technology could be the killer app here.

Overall, this bill, which is likely to be signed, will not cause too much harm, will take a step in the right direction, and we'll be able to get the other noble elements later.

(This is my "pragmatic" persona. If I didn't have it, I'd be tearing my hair out by now.)

UPDATE: I agree that Mary Landrieu's behavior is disgusting. She was the only Democratic vote to uphold the filibuster of the first stripped-down energy bill, which still had the tax package. There was absolutely no reason for her to vote against the filibuster, she could have pulled a reverse Lieberman, voting to end debate and then voting against the bill. Landrieu is up for re-election in Louisiana, in a tough race and I won't be too sorry to see her go. And the Senate Democrats should have applied more pressure.

But then the bill would have drawn a veto, we can't get to 67, and there's no energy bill.

I sound like an idiot, I know, but while I would agree that you can draw a line in the sand over the truly bad global warming bill, I don't see the need to do that here. The Senate has almost no victories right now. Raising CAFE standards is not a little thing.

UPDATE II: Again, I fully understand that the two parts taken out of the bill were the two best parts. And there are all sorts of things you can do to force those wielding the filibuster out into the open. I would bring those pieces of the bill up again soon, in an election year, to put more pressure on everybody.