ENERGY EFFICIENCY HELPS ECONOMY

INEFFICIENCY IS THE PROBLEM.

I have long claimed that to force the economy to become more efficient would be helpful to the economy. Energy reform, to be implemented, needs the augmentation of economic activity. It is no coincidence that the French economy, with its long term drastic investments in an efficient economy, is doing best among the advanced economies.

Paul Krugman addresses the subject in the New York Times (April 30, 2009 http://www.nytimes.com/2009/05/01/opinion/01krugman.html).

Here is my comment:

Why not use a different model for the economy of the USA? Suppose it's an obese person. The arteries became so inefficient, that the patient suffered a heart attack. The doctor comes and prescribes to cap calories, and trade the usual foods for others, healthier ones.

What should the patient do? Go along with the prescribed changes, or claim that only hamburgers are satisfying, and a better health means the capacity to consume ever more hamburgers, and to become ever bigger?

France has been under drastic energy taxes for decades, and cap and trade for many years. Nevertheless the French economy seems to be going much better in all ways at this point, perhaps precisely because it is protesting people in the street who push for reforms, and not just a few ideologues paid by the ultra rich (Gingrich style republicans, Limbaugh, neoconservatives, etc.) In other words, it is the demos (people) and not the ultra rich who propose reforms and then dispose of them. The people is always for energy reform, because they are the one breathing the air, and they can't go to Bali to relax for 6 months.

In the Turin area (the hometown of Fiat's Chrysler savior), cranes are everywhere. Two hours away, the French village of Monetier over the border has twice more cranes than the entire city of San Francisco. Real estate is down in France, but just barely (it collapsed in nearby Spain, with its more American economic model, caused by the long reign of fascists, and then neoconservatives, and axed on construction and speculation)

But the European Union, and the French government, are introducing ever more stringent energy conservation measures. The French government just proposed a new high speed automated 24/7 metro for the greater Paris, to extend the existing system (cost: 50 billion dollars). This is all related: there is more money for investments in efficiency, because more money is saved in the direct consummation of energy, and that, in turn, comes from the fact that energy is more expensive, making its use more efficient, and to make energy expensive, the broadest imaginable taxes force everyone to save, and their revenue can be recycled for ever more efficiency.

One would think, at first sight, that the ultra rich would be for energy reform: after all it would bring more riches. But it is not, at least in the USA. In the USA the ultra rich have become vultures feasting on the decaying corpse of an ever more inefficient economy. Hedge funds, in particular, belong to the economy like leeches on a movie star. Enough leeches to hollow the patient out. Financial piracy is part of the inefficiency problem, it has even become its soul, and that's how it feeds, in the USA (and imitation poodles such as London).

In France, and increasingly the rest of Europe, and beyond, the culture of the rich and powerful has turned different, as it responded to the ecology of efficiency. In a country where energy is expensive, it is energy efficiency that bring riches, and thus the energy efficient companies that bring the clout, and their interest is to have an ever more efficient economy. So they push for energy reform.

Is it better to have a more efficient economy, that can do what is worthy, or an obese economy with a chronic heart attack, that cannot stand up for worthy causes? Is virtue and health better than sin and decrepitude? Is the people free to chose?

Patrice Ayme
http://patriceayme.wordpress.com/