Comparisons between President Obama and President Franklin Roosevelt are becoming common, and for good cause. Both swept to power amidst a collapsing economy, and both came to Washington with newly strengthened Democratic majorities – majorities elected on a promise of change.
One lesson I hope that Obama will learn from FDR is the idea of government through experimentation. Roosevelt's New Deal was an age when the administration enacted a wealth of new programs, some seemingly at odds with others. Roosevelt brought in a team of smart young staffers, and let them see which programs worked, and then had them take what worked and turn it into new programs.
Ideology isn't the engine of government. Reality is. Of course, to determine what works and what doesn't, one must have hopes, dreams, and expectations against which to match results. Values, then, are crucial to effective governance. But clinging to a particular ideological solution can only hamper our progress.
FDR knew this, and I believe that Barack Obama does as well. Bringing Rahm Emanuel on board as Chief of Staff is a good move, because Rahm knows this. Rahm is motivated to win, and if possible to drink the blood of his enemies.
You can see Obama's pragmatism not just in his interview with TfK two and a half years ago, but in the way he talks about energy. He's happy to consider drilling, and to fund research into clean coal. And he wants to move with deliberate speed on nuclear power. But he also insists that we have to fund research into solar, solar baseload, geothermal, wind, hydro, and wave and tidal power. I happen to think coal and nuclear are not great long-term options, but there's no reason not to give them a seat at the table. If I'm right, they'll fail on their merits, and there will be no object to redirecting resources to more successful options. And if safe nuclear power (including safe nuclear storage) or clean coal technology becomes feasible, we'll move forward on that front.
The energy crisis is unlike anything we've seen before, and our policy response has to allow for inventiveness and flexibility. The financial crisis we face is unique, too, and requires an experimental approach. I am confident that President-elect Obama has learned those lessons, and it falls to all of us to help the new administration see what works and what doesn't.
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I hope not as FDR's early policies were a disaster. The NRA in particular was an attempt to impose top-down central economic planning without regard for civil liberties. His advisors looked to Mussolini and Stalin for their policy models and the economy failed to recover to any significant degree until after WW2. Hardly a record of economic success. We are left with a selection of his successful experiments, but his constant tinkering with the basic rules of the system were a large factor in the lack of a meaningful recovery. If you think of an economy as an ecosystem, it is a stable climate that will promote the greatest abundance of life. The climate analogy is the tax system, the rule of law - particularly contract and property rights and a social environment that favors entrepeneurship and economic liberty. If Obama monkeys with these factors (which his policy proposals to date have not) then you can expect a repeat of the 30s
Not to be picky, but variability in the environment promotes diversity. I'm not an economist, so I can't speak to the economic analogy for this basic ecological theory.
Note also that I'm not endorsing any particular policy of Roosevelt's but to an approach to policy which I think is healthy and appropriate.
OK, but the link you posted talks about "disturbance is neither too rare nor too frequent" being optimal. Technology is the main disruptive force in the economic landscape and of course the results have been in favor of more diversity and growth. The problem in the 30s is that under FDR business had no clue what the rules would be next year so there was little ability to plan and the so investment was withheld.
As far as energy technology goes, the gov can and should fund basic research in all the areas you mentioned, but ultimately the development of workable solutions depends upon the private sector, which maximizes variation and experimentation to a much greater extent than government ever could. So for example we have a at least a dozen potentially viable VC-funded thin-film solar companies (like Nanosolar for example) all competing with slightly different technologies
Right, the disturbance has to be of some intermediate level, though "intermediate" is context dependent. A static environment (or your "stable climate"), though, promotes low diversity.
Opinion among serious economists seems divided over which of Roosevelt's specific policies worked, and why and how. I am simply endorsing an approach which allows policymakers and private investors to select the most successful approaches from the range of options. Competition is good, and it's as good within government as it is within an ecosystem or an economy.
Consistency matters, though. European wind turbine manufacturers have taken over that market because of confusing and inconsistent US rules and subsidies for wind power. Part of the solution is to make a long-term commitment to growing industries like wind and solar. But the government shouldn't put all its weight behind one of those solutions, let alone to one technology within one of those areas. Creating a national energy grid that can move power from wind farms in Kansas to cities in California on one day, and from solar farms in California or Texas to those same cities on another day will be crucial, and signals a commitment to a new way of doing business. It also allows the government to change directions at lower cost down the road as new technologies come on line.
Storing energy by pumping water uphill is a long-established and highly efficient technology (universally used in hydro-electric plants) that would greatly reduce the need for large power transfers. In addition - most of the current proposals for large solar power plants used heated liquids for overnight storage. Both of these forms of storage have relatively cheap capacity costs.
Furthermore - Kansas needn't be the only place where large windfarms are, nor Texas or CA for large solar farms. Both wind and solar can be built cost-effectively in many locations in nearly every state. In fact, most states have enough good locations for one or both to easily supply their current energy needs. There's no need to rely on huge energy transfers, and doing so would be extremely risky.
If only more places had large amounts of water to spare. The beauty of a national grid is that one can move energy around from wherever the wind blows or the sun shines to wherever the power is needed.
This reduces risks.