Pollin: Double the number of busses and make them affordable will drive Detroit and the green economy

Story Transcript

PAUL JAY, SENIOR EDITOR, TRNN: Welcome back to The Real News Network, coming to you again from Amherst, Massachusetts. We’re at the University of Mass. and we’re at the PERI Institute, which is the Political Economy Research Institute, whose codirector is Bob Pollin. Thanks for joining us, Bob.


JAY: So on the first segment of the interview, we were talking and you were saying that the stimulus package, even though it’s not enough, had some real funds for building some green jobs and some transferring to a kind of green economy. But you’re imagining something much bigger than that. And a lot of people have put the idea of less growth is necessary to save the planet. You’re saying, actually, more growth, but it’s a kind of growth. So put some numbers on this. What do you envision?

POLLIN: Green growth. Okay. So let’s start with the simplest basic numerical exercise, which is if we compare spending money on fossil fuels in the US economy today versus a combination of clean-energy investments today, to spend $1 million you will generate about five jobs per million dollars of spending in fossil fuels, and you’ll generate about 17 jobs per million dollars of spending in the clean-energy economy.

JAY: Why?

POLLIN: Why? Two basic factors that actually also have nothing particularly to do with whether it’s green or not. The first factor is what we economists call labor intensity, which means, when you spend money on a project, how much goes to hiring people versus buying machines, versus spending on buildings, and versus transportation, long-distance transportation. So if we compare, say, retrofitting a building, making a building more energy-efficient, versus importing oil from Saudi Arabia, we can see in our heads that the number of people that are going to show up at the building is a lot more than the people that are going to get jobs in the US from buying the oil from Saudi Arabia. So that’s the biggest driver. And the second and related one is domestic versus import spending. So if we concentrate a given million dollars of spending and a higher proportion is spent within the US economy, that also will create more jobs. So it’s those two factors. It’s relative labor intensity versus other purchases, and domestic spending versus foreign spending. And those are the factors.

JAY: Now, one would’ve thought that the crisis in the Detroit auto industry would have been a once-in-a-lifetime opportunity for government to step in and use the auto industry as this engine for a new, green economy.


JAY: And instead it went—Obama administration went completely the other way: cut and slash, and get them back to being, quote-unquote, “competitive car companies” again. So what do you judge in terms of what their real motivation or plan is here, when they seem to have blown it in Detroit?

POLLIN: Well, they threw money at the problem. They basically threw workers’ pension money at keeping the companies alive, and then there was no requirements that the companies hire workers in the US, that they could do whatever they wanted. So, again, I think what we need to think about is the central role of government, public investment, and industrial policy. I mean, one of the ideas that I’ve written up is the idea of forcing the auto companies to get into producing buses immediately. And that has a lot of important ramifications. Number one, it would force them to start converting into something else. Number two—.

JAY: Converting from just making cars. Yeah.

POLLIN: Cars to buses. Now, they don’t have to do it if they don’t want the contracts, if they’re stupid enough to not accept the contracts.

JAY: Well, but two of the three auto companies the government actually controls. But they’re not using that control as part of any kind of green plan.

POLLIN: Yeah. So an initial green plan would say, okay, let’s start increasing public transportation.

JAY: Alright. So what’s your modeling on that?

POLLIN: Yeah. So the model says that, well, going a mile in a bus produces one half the amount of greenhouse gas emissions as driving 1 mile in a car. Number two, it also costs one half. So in terms of a program to benefit low-income people—. Low-income people, actually, even like upper income people in this country, spend 95 percent of their transportation budget on cars. And then, when you ask them why they don’t get on a bus or a subway, it’s ’cause it’s so inconvenient, ’cause there’s not enough. So if we do a procurement program to, say, double the number of buses in the streets, then it would be convenient for people. And it would also create—you know, some work that I’ve done, I estimate that it could generate, somewhere, an increase of the equivalent of 10 percent of the auto purchases in the US. So it would be an important stimulus package.

JAY: So the idea is the federal government would use federal money, buy buses, and give them to cities?

POLLIN: Give them, yeah, or, you know, whatever the details are. I mean, like, in Amherst, where we’re sitting right now, we actually have a decent public transportation system even though this is a semi-rural area. And the bus system is free. Anybody just gets on the bus. And people use it. And it’s popular. So, I mean, that’s—and there are other—there are actually federal programs to divide public transportation on an individual basis to low-income people.

JAY: But generally what’s happening across North America is the cost of getting on a bus keeps going up.

POLLIN: Yeah. So we have to—that’s why there is a subsidized program that’s a decent model in the United States for getting people, low-income people, to their jobs. So you can generalize that program. But the main idea, yes, I like the idea of getting people affordable transportation that’s also relatively energy-efficient. But mainly it would also be a major engine of growth and stability for the auto industry as a short-term program. Longer-term, yeah, the auto industry should start thinking about not just making cars but buses, and also rail. Right now we are not competitive globally with other countries that produce rail transport vehicles, but that’s something that we can build toward.

JAY: But it’s a no-brainer. I mean, when the Obama administration was sitting down and looking at and discussing what do we do about Detroit as, again, one-in-a-lifetime opportunity, really, where you have these major companies come to government and say, “Okay, come buy us, come and take us over,” and none of this gets implemented. So where’s the roadblock here in this administration?

POLLIN: Well, I think, you know, we’re in a crisis, and, you know, there is a lot of inertia. And we’ve been through 30 years of neoliberalism, and the notion that the government can positively do something innovative was lost a long time ago. And to regain—.

JAY: Although certainly it was part of Obama’s election campaign was this vision of a new, green economy.

POLLIN: Absolutely.

JAY: It was—and part of his mandate.

POLLIN: Yeah, yeah, yeah. And, yeah, in fairness, again, the stimulus program, at least in terms of committing money, is not good enough, but it is a massive commitment in terms of money—$100 billion is a lot of money, given that it was next to zero before that. And, you know, working with people in the Energy Department now, they haven’t had the experience in implementing these things, as much as they are committed to doing it well. So getting the engine working where these things can really be done and government capacity matches the needs is itself a challenge. That doesn’t mean that the government is off the hook and say, well, then, we just keep doing things as usual, because—.

JAY: But this administration seems—in spite of all the right-wing critique of this administration as being socialist and all of this, they actually seem very wedded to a private model, to the point that they actually don’t seem to be able to kick off a real green program, outside of—you know, the stimulus package is still pretty modest, even if it’s more than before. It’s certainly not a vision of a whole new, green economy.

POLLIN: Yeah. Well, I think that, you know, there is so much momentum in the streets. And so we have to mobilize that and keep putting pressure, and we can’t expect Obama or anyone else in the administration to lead the development of a green economy. We have—you know, in this region there is intense interest, including here at U. Mass. The president of the university and all that, they’re all committed to really doing something and competing with other states and being the most green state. And I’ve been to Maine. They say the same thing. So making it real, mobilizing that energy, and getting people’s commitments into real, tangible things is the challenge right now. And I think the stimulus program can help, but more than that I think, you know, we have to start thinking about (A) seriously restricting fossil fuel emissions. And that’s the new bill that’s before Congress. You know, it’s the Waxman-Markey with cap and trade. Again, there’s a lot of things wrong with it.

JAY: But for this to really kick this off in a time frame that’s meaningful, doesn’t the government have to directly get involved in these programs, like, hire people directly? You can’t just keep seeding the private sector and having carrots out that the private sector should do something. If we’re talking a 10-, 15-year window of decisive action, then the government’s got to get in there with both feet. But this administration seems very susceptible to this pressure of too much government.

POLLIN: I think they are. And I think they’re capturing the residue of 30 years of neoliberalism, in which people were committed to the idea that, you know, the government is the problem. Now Obama, yes, has changed the rhetoric, in saying, well, the government can be part of the solution. Obama and all the people around him, you know, never thought that they were going to be faced with an economic crisis of this magnitude. So there is—yeah, I mean, they are groping around. They’re not—you know, they are not the left. They can listen to the left, but the left has to set the agenda and push them to do the right thing.

JAY: Alright. In the next segment of our interview, let’s talk about what this means for developing countries and the more developed of the developing. When India and China say, “You’ve had your turn to grow. Now it’s ours. You can’t start kicking us around on carbon emissions,” how do you answer that? So please join us for the next segment of our interview with Bob Pollin.

Robert Pollin

Robert Pollin is Professor of Economics at the University of Massachusetts in Amherst. He is the founding co-Director of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the US and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the US. His latest book is Back to Full Employment. Other books include: A Measure of Fairness: the Economics of Living Wages and Minimum Wages in the United States, and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.