Hopefully, when Congress gets done allocating several trillion dollars simply to keep the economy afloat, we will be able to have another discussion: What should we invest in so we don’t just burden young Americans with a mountain of new debt, but also arm them with the tools to grow out of it and still prosper in the 21st century?
These could be the most important and precious dollars we spend, so we need to invest them wisely, as President Franklin D. Roosevelt did in the 1930s by creating the Works Progress Administration and the Rural Electrification Act — giant infrastructure programs that not only helped lift us out of the Depression but also made us more productive to this day.
There are many things that I can think of — surely improved public health facilities will be on the list — but here are three less obvious investments that I’m certain would make America more resilient, more prosperous, healthier and more equal in the A.C. — After Corona — era:
• More cheap, domestically produced, low- and zero-carbon energy so we become less vulnerable to the oil price manipulations of Saudi Arabia and Russia and less likely to court Mother Nature’s next curve ball: climate change.
• Expanded high-speed internet connectivity everywhere, but particularly in rural America, so more people can participate in the innovation economy.
• Deployment across America of more affordable tools of invention, design and manufacturing — so more people can build more hardware at the points of need and help innovate our way out of this crisis — not just wait to be bailed out or for the next shipment from China.
Let me offer examples of each, starting with energy.
A lot has been going on behind the scenes on the global energy front that actually holds the promise of not only making America more energy independent, but doing it based more on clean energy than fossil fuels — if we play our cards right. But Donald Trump has not been playing our cards right. Trump has been dancing with Russia and Saudi Arabia — the opposite of investing in a clean energy economy.
For decades now Saudi Arabia has been the world’s “swing producer,” adjusting its oil production to steer the price to the level of its liking — usually higher. The Saudis grew comfortable doing this because they viewed their 260 billion barrels of oil in the ground as savings in the bank, so they did not care if they pumped a little more or less in any year, as long as they satisfied the needs of their growing economy.
Not any longer. Thanks to much more fuel-efficient cars, many more electric vehicles, the backlash against petroleum-based plastics, the widening global consensus on climate change and massive new U.S. oil production, Saudi Arabia is beginning to realize that its oil in the ground is not money in the bank. It’s a diminishing asset, possibly a “stranded asset” that someday it may not be able to sell at any price.
As a result, the Saudis have become much more aggressive in securing market share everywhere possible instead of worrying about the price. That helped set off the recent Saudi-Russian price war. And while the two countries have apparently reached a truce — to put a floor under collapsing oil prices — I wouldn’t bet on it holding.
How would a wise president play this? Not how Trump did, which was to beg the Saudis and Russians to cut production and raise oil prices so everyone in the world could pay these two petro-dictatorships more money for less oil. How foolish was that?
A farsighted leader, argued Andy Karsner, a former U.S. assistant energy secretary, “could have imposed a variable U.S. tariff or fee on imported oil, which would be easily absorbed while prices are now slumping.” Such an import fee “could dynamically and automatically kick in incrementally if prices fell below an agreed floor, say $40 to $50 a barrel — the price that U.S. producers need to stay in business and supply America. The fee would disappear if prices jump above the agreed level. Brent crude is now around $31.”
If we guaranteed U.S. oil producers a predictable price floor to enable the least indebted and most productive of them to survive, Karsner told me, it would pay multiple benefits: “It would raise money for us to invest in infrastructure; prevent job losses for skilled engineers and multibillion-dollar bailouts for U.S. oil companies; keep manageably low gasoline prices for U.S. consumers; and strengthen our energy security from predatory efforts by Russia and Saudi Arabia to wipe out our domestic oil industry.”
But, most important, it would accelerate our clean energy transition, by shielding our electric car industry from foreign-manipulated gasoline prices and our wind and solar industries from temporarily suppressed natural gas prices.
We’ve got some momentum — let’s pile on. As The New York Times just reported, “Renewable energy sources are set to account for nearly 21% of the electricity the United States uses for the first time this year, up from about 18% last year and 10% in 2010.”
Many of our oil companies actually have been surviving on cheap credit, not smart fracking. The average return an oil company can make from fracking these days is actually the same as solar and wind in many cases, with a lot less risk.
Already, “three-fourths of the coal-fired plants in America now cost more just to operate than do brand-new solar and wind farms,” said Hal Harvey, chief executive of Energy Innovation.
The best part of using a variable oil import fee to stimulate investment in a U.S. clean energy economy is that it doesn’t require an outlay from the Treasury. It actually raises money for the Treasury while, as Karsner put it, “creating the incentives for America’s oil companies to do what they must to thrive. And that is evolve into diversified clean energy companies.”
With some policy creativity, one day we could become immune not only to COVID-19 but also to petro-dictators. Now that’s healthy!
But let’s not stop there. Let’s also create tax, regulatory and funding incentives for every community — but particularly the many underserved rural communities — to install high-speed broadband and fiber to the home.
“Building fiber infrastructure all across heartland America ensures that high-paying jobs can take place anywhere,” explained Matt Dunne, executive director of the Center on Rural Innovation, and it makes the whole country “more resilient to future pandemics and climate change-related weather events that require children and workers to stay home.”
High-speed internet basically enables anyone anywhere to get training for a better job, often at low to no cost, from online universities or YouTube instructional videos.
And if you connect them, they will invent. I traveled with Dunne in September to Red Wing, Minnesota, south of Minneapolis, to see the creative ways in which small towns were investing in rural broadband to build gigabit networks that support high-tech startups and local manufacturers.
My favorites were two Minnesota inventors who came up with a robotic chicken/turkey coop cleaner. It patrols the poultry house for dead birds and tills the bedding, but with an unexpected byproduct: The birds exercise more and are healthier, because they are constantly running away from or pecking at the robot. It also decreases the pecking order, so fewer birds are picked on and shunned. Mortality decreases and money is saved on feed and medicine. It’s called the “Poultry Patrol.”
And its inventors were “doing their prototyping in the region because farmers there have fiber to the home,” said Dunne. “While the robots work autonomously most of the time, there are significant periods when they need to be remotely operated and receive coding updates from afar, which is only possible with very fast broadband.”
What Dunne proposes is that the federal government create a new loan program, reminiscent of the Rural Electrification Act, which would offer 50-year, no-interest loans to communities and co-ops creating rural fiber broadband networks and an easing of regulations to enable public-private coalitions to build rural broadband and attach high-speed fiber to existing telephone poles.
This connectivity would also promote another enabling platform we need: manufacturing from anywhere through a network of open-source maker spaces. This, too, requires less government funding and more inspiration and imagination to show people what is possible.
Consider Tikkun Olam Makers, or TOM, founded by the Israeli innovation shop Reut and its president, Gidi Grinstein, which now operates in 22 countries, including the United States. TOM seeks to take advantage of all the excess 3D printing capabilities in any town or university or maker space to crowdsource the design and manufacture solutions for neglected problems for anyone anywhere.
One small example and one big one. A team of TOM volunteers in Tel Aviv recently created a customizable multipurpose open-source prosthesis, which was developed with the TOM community in Singapore. It was then adjusted for a single Israeli girl who wanted to play the violin, and it is available on the TOM website via free download. That prosthetic device cost $60 — as opposed to the standard price of several thousand dollars — and can be manufactured by maker spaces around the world for thousands of people with similar needs.
Today, though, said Grinstein, TOM is “creating an online library of open-source solutions for COVID-19, and we are working to build a bottom-up army of makers to distribute them all over the world. Our mission focuses us on the needs of smaller rural communities with weak health infrastructure and on the acute needs of senior homes, prisons and mental health facilities.
“For example, we have face shields and masks that were designed in international collaboration and are now distributed by the thousands in Tel Aviv, New York, Mexico City, Melbourne, Miami Beach, Belgrade, Atlanta and Santiago. The list grows every day.”
In the 20th century, added Grinstein, resources were redistributed in our societies through taxation and philanthropy. So, if you were a talented person, you could write a check or volunteer at a food bank.
“But now,” he said, “with these new crowdsourcing platforms, we can enable every person to contribute talents to solving our collective problems, locally and globally, on a scale that is unprecedented.”
Thomas L. Friedman
Thomas L. Friedman, a three-time Pulitzer Prize winner, is an Op-Ed columnist for The New York Times.