This is the seventh and final article in my energy series. The first six articles (1, 2, 3, 4, 5, and 6) established why I think the top priority should be speeding the arrival of oil independence day for national security reasons, why the likely path will be new technologies that allow us to “fill up” our cars by plugging into the electric grid, and how a by-product of success ironically could be speedier achievement of large-scale reductions in CO2 emissions (worldwide, not just in the USA).
It’s a good thing I have no plans to run for political office—ever—because there’s something in this article to make EVERYONE mad at me, regardless of their political persuasion. Here are a few examples:
• Many right-wingers won’t like the government spending or the immigration ideas.
• Many left-wingers won’t like the immigration ideas, either—let alone the Carrot Economics that, if successful, will turn private-sector problem solvers into (yet more of those despised) rich people, possibly including the world’s first trillionaires.
• Some libertarians won’t like the government intervention intended to steer and speed up the free market.
• Debt phobes won’t like the answer to the question “How the heck would we pay for all that?”
• Entrenched fat cats in the oil industry won’t like a government-sponsored program that would render their hundred-year-old business obsolete within just a few years, unless they shift gears quickly and get with the program.
• Smug elitists of the Clooneythink variety won’t like mean, evil old America causing Arab-world unemployment to skyrocket high above even today's levels by transforming their oil from "black gold" into obsolete, slimy, useless gunk. [Clooneythink, by the way, is the basis for the plot of Syriana, one of the most infuriating propaganda pieces I’ve ever forced myself to sit through. Obviously, the root cause of Arabs' problems is the United States of America, its evil leaders, its evil military, and its evil corporations; just watch the movie if you don't believe it.] Higher unemployment for Arab youth is obviously no way to achieve the important Clooneythink goal of making them all start loving us and stop hating us.
[By the way, if you need a helpful antidote to Clooneythink overload, read this for a slightly different perspective as to the causes of Arab unemployment and misery.]
Yes, there’s something in this to make everyone mad at me. My one consolation is this: That doesn’t phase me in the slightest. On the contrary, for me this is a lot of fun; it’s what I do. So let’s get started...
Two GI Bills a half-century apart
We did it once; why not do it again? Let’s compare the post-WW2 GI Bill to a new, post-911 GI Bill...
Twentieth Century GI Bill: after WW2, and before the economic boom of the mid-20th-century.
• Was very successful, and is now universally praised, even though pulling it off required increased government spending.
• It required faith in the future, and that faith was rewarded handsomely, starting in the 1950s.
• It was one of our nation's best-ever investments.
Twenty-first Century GI (“Growth Incentives”) Bill: after the 9/11 attacks, and before oil independence day in early 21st century.
• If successful, will be universally praised by our children and grandchildren, even though pulling it off quickly will require increased government spending.
• It requires faith in the future, and that faith will be rewarded handsomely, starting in the 2010s.
• It will be one of our nation's best-ever investments.
I wish I could take credit for the “Growth Incentives” idea, but I can’t. It hit me when I read a paper by Stanford economist (and former libertarian) Paul Romer, titled Should the Government Subsidize Supply or Demand in the Market for Scientists and Engineers? (read a summary here; get the full paper here). All I did was apply his concept a little more broadly, as you’ll see below.
The key idea: Maybe the government does in fact have a role to play; specifically, nudging the market in a strategically important direction with a broad portfolio of incentives that fall under the heading “pay for performance.”
Government initiation of incentives to move the private sector in strategically favorable directions is not a new idea. Great Britain offered a large monetary award for the first person to solve the Longitude problem. (Unfortunately, when the problem was solved, it took years for the government to pay up). The California legislature commissioned Agoston Haraszthy to travel Europe collecting grapevine clippings to get the wine industry started (...but the legislature unfortunately came down with amnesia when he returned to collect his commission). In any case, government-funded carrots already have a track record of yielding results. That’s what Paul Romer’s paper discussed for college science and engineering programs, and that’s what the new GI Bill idea is all about. Oh yes, and a minor detail I almost forgot: paying the recipients promptly should be a key element of the program.
The basic idea of the new GI Bill is to give the private sector incentives to get moving quickly on a broad portfolio of experiments. It’s Carrot Economics; it’s the 21st century version of the Longitude Prize.
In previous articles in this series, I’ve already talked about the hurdles standing in the way of a no-liquid-fuel automobile that consumers will actually want to buy. They included range, safety, affordability, passenger and cargo capacity, etc., and those performance specs would have to be refined. The GI Bill idea is to offer monetary prizes for solving important problems and sub-problems; i.e., to conquer those hurdles quickly. Here are a few prizes I could think of in a few weeks; additional ideas are welcome, so email them to me if you have any. [I ballparked most of the numbers, so don't be surprised if your more-detailed calculations produce a different answer or two. I also might have underestimated what some of the awards should be, so let me know if you think I should bump any of them up by a factor of ten or so.]
Prizes and programs within the Growth Incentive (GI) Bill
[By the way, anyone thinking about labeling this as a “Porkfest” should read this article first, before wasting any keystrokes on nasty emails.]
Programs and prizes, available to US citizens and organizations only:
• Science and engineering program subsidies to colleges and universities, as described in Paul Romer’s paper above.
• $15,000 bonus to each student (who is a US citizen) for earning a science or engineering BS degree, from an accredited US college or university.
• $30,000 bonus for a similarly-qualified MS degree in science or engineering.
• $50,000 bonus for a similarly-qualified PhD in science or engineering.
• Federal government recruiting of new immigrants, possibly including “signing” bonuses, for promising foreign individuals (such as this Korean), who are willing to move to the USA and become english-speaking US citizens.
[I expect backlash on this one from right-winger Tom Tancredo, who apparently can’t stand any immigrants whatsoever, and from left-winger Dianne Feinstein, who apparently can't stand immigrants who are not sure-bet Democrat votes. It wouldn’t surprise me a bit if Tancredo and Feinstein formed a strange-bedfellow coalition to fight this proposal; a good name for such a coalition would be the T.V.A. – “Tunnel Vision Alliance.”]• $10 million for 1st mobile 400-kWh rechargeable battery <200lb
• $10 million for 1st mobile 400-kWh rechargeable capacitor <200lb
• $10 million for 1st mobile 13%wt H2 storage tank <200lb
• $100 million for 1st mobile 400-kWh regenerative hydrogen fuel cell
• $100 million for 1st 100 mobile 400-kWh rechargeable batteries
• $100 million for 1st 100 mobile 400-kWh rechargeable capacitors
• $100 million for 1st 100 mobile 13%wt H2 storage tanks
• $1 billion for 1st 100 mobile 400-kWh regenerative hydrogen fuel cells
• $1 million for 1st 300mi rechargeable no-liq-fuel 4-psngr highway capable auto
• $10 million for 1st 50 300mi rechargeable no-liq-fuel 4-psngr autos
• $100 million for 1st 2500 300mi rechargeable no-liq-fuel 4-psngr autos
• $1 billion for 1st 20000 300mi rechargeable no-liq-fuel 4-psngr autos
...and last but not least:
• 10-yr nontransferable income tax exemption for each member of a prize-winning organization above.
Tell the truth: Doesn’t that list of prizes-for-solutions look a lot better than some long, Big-Brother list of Stick Economics penalties for any existing organization that doesn’t start toeing the line on fuel economy, CO2 emissions, excess profits, etc.? Won’t it be fun to watch the Stick Economics crowd’s reaction when one or more of the successes above produces the world’s first trillionaire? I can hardly wait for that.
Anyway, the total cost of the list above, which I am sure is incomplete, is approximately $3 billion (... the solution would turn out to have been worth ten or a hundred times that; maybe a thousand times). It might be advisable to fund (up front) every organization with an acceptable-looking proposal with 10% of the ultimate prize in any category; that will help insure that the young, small-fry organizations with big, promising ideas get a chance to get into the game—in which case the funding requirements might double or triple. Who cares? Not me, and if you’ve read more than five articles in this blog, I hope not you either. With so many experiments going on, one or two of them are bound to succeed. No way to know beforehand which ones will succeed, and that’s why it’s important to have a lot of experiments going on all at once. (In some circles, that process is called “evolution.”)
How will we ever pay for that, plus the extra ideas that are sure to surface? (I bet you thought I’d never get to that question.) Here’s my idea: Let’s leave tax rates alone, and borrow it from willing lenders. Back in WW2, FDR did that and called them “War Bonds”; maybe we could call these “Growth Bonds” -- or something more catchy. In any case, they’d work just like our current Treasury securities, except maybe we could put a special logo on them or something.
Remember, borrowing money for good investments is sound financial practice. Ask any banker. Let’s get moving with our new Carrot Economics program: the 21st Century GI Bill. Who knows, our grandkids just might end up labelling us "The Second Greatest Generation." I'd settle for that, wouldn't you? Besides, the alternative is already taken by the WW2 generation.
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Here are links to all seven articles in the energy series:
• Article 1: Energy facts, certainties, and possibilities
• Article 2: Government spending and its consequences
• Article 3: Yes, growth DOES require more energy
• Article 4: Dissenting from Mr. Gore
• Article 5: The obstacle to oil independence
• Article 6: A tankful of electrons
• Article 7: A 21st Century “GI Bill”
