Jobs, Investment and Energy:  
Meeting President Obama’s Challenge

Ronald Reagan International Trade Center
Washington, DC
March 23, 2010

Jamie Galbraith:
            I’m James Galbraith, the chair of Economists for Peace and Security, and I’d like to welcome you to this first meeting in the new era of life in Washington that is not specifically or mainly devoted to health care.
            President Obama in his State of the Union said that his number one priority for the year ahead, the years ahead, was to create jobs and to restore the nation’s economy. Our thought as economists concerned with conflict resolution, but also with the broader questions of security that we all face, was to organize a meeting that would provide in some respects concrete guidance on how to meet that objective.
            Given the losses that have occurred in this deepest of all recessions, slumps, since the 1930s, the task is very challenging. It would require 200,000 new jobs every month for years and years, perhaps for five years, simply to replace the losses that have already occurred, and perhaps 250,000 to 300,000 jobs per month to do that and to absorb the natural growth of the labor force and the new entrants seeking work. It’s an extraordinary challenge, given the depth of the crisis that already existed when this administration took office.
            And there are two problems: One is how to go about it from the standpoint of the contribution of public policy, the stance of fiscal policy, the structure of institutions, the problems of financing. And the second problem is what to do. What should be the, in some sense, sectoral and substantive direction that economic development should take in a new economic recovery?
            We, I think, this morning should address both of those issues with some suggestion, particularly on the part of those who are participating in the later panels, that it would be useful to set the objective while we’re at it, while we’re creating jobs and rebuilding the economy, to rebuild the country, to rebuild our national infrastructure, to work towards solving our very substantial energy problems, and to begin to come to grips with the planetary question of climate change.
            So in the course of a very short morning, what we hope to do today is to present a kind of structured argument with three panels running in this tradition of our partners, the New America Foundation, without interruption and with a very brisk chairing so as to provide both specific presentations and a chance for some discussion with the audience on these issues as we move through them all.
            I want to say, first of all, a word of thanks to our partners. The New America Foundation has been a full collaborator in the planning and hosting of these events. We’re very grateful to be working with them. We’re very grateful to have the partnership of the Ronald Reagan International Trade Center and this wonderful facility here in Washington, D.C. And above all, I am grateful to have the help and the leadership of a truly extraordinary public citizen, Bernard Schwartz. This is the “Bernard Schwartz Symposium on Jobs, Investment, and Energy” that we are conducting here, and I am honored and delighted to be able to introduce Bernard to say a few words at the start of our proceedings. Would you please welcome Bernard Schwartz.

Bernard Schwartz:
            First of all, thank you all for coming here, and those of you who are on the Web and who are not here, and participating in what I think is an important event. And the reason why it is an important event is because we are helping to shape the dialogue, the debate, about America and where we are, where we’re going, what we should be doing, and there are so many people talking about that.
            I first want to say a couple of words about Jamie Galbraith and why this is so important, and his leadership has been so important. New America Foundation is important, and I’m very pleased about that partnership. I also want to say something nice about Thea Harvey who spent so much time and effort putting this together. I want to, of course, thank Steve Clemens, who’s not here today, but was a participant; Sherle Schwenninger, who’s going to be speaking later on today; and of course Michael Lind, who comes out of the New America Foundation. So we have a lot of good people here today, and I think that’s very very important.
            We do live in interesting times. Everybody says that. It’s a cliché almost. But the fact is, America is transgressing from a point where we were the world hegemon. But if you look around the world today, we are the world’s hegemon. We have the largest military force in the world. In fact, combine all the other appropriations and budgets, etc., in terms of military, we are the world’s hegemon. In social activities, the world imports what we have to sell. They like our movies, the like our literature, they like our clothing.
            We are the world’s economic hegemon. We don’t like to say that too often, but the fact is, it is true. We represent what, 25 percent of world’s output in the United States. It’s declined a little bit. We’re still the greatest. The competition against competitors such as China, India, other people who are coming up—they have a long way to go to get to the point where we are. China is really a poor nation. Their challenges are extraordinary, and much of what they’re doing is right; much of what they’re doing self-oriented, and therefore we’re competitors with them. We should not look upon the elevation of 700 million people in the world who are ill-fed, ill-clothed, ill-housed, elevating to a middle class—that is a good thing for America. That is not a bad thing for America. And nevertheless, when you look around, there are more democracies that we’ve ever had before. There are more people who are playing America’s game around the world than we’re playing their game. China had to become a capitalist country in order to become a world player. And that is our game, that is our ballgame, and we should stop looking at things about America that are bad—and there’s plenty to talk about that—and start looking about some of the things that are good. And we have to put some of these things together.
            I am particularly concerned about leadership. I’m concerned about the fact that we do not have today anywhere on any side of the aisle the kind of leadership that people have confidence in. And the fact that we got, after 16 months, a health bill through Congress is going to be celebrated in this town a lot. The fact is in Main Street, outside, people who are looking for their jobs, they are not concerned about health care as much as finding jobs, or keeping their jobs.
            There is no program today in America that put back eight or nine or ten million people to work, and we have to do that. Jamie mentioned a little bit; we’re going to be talking about that a little bit further today.
            The point I’m trying to make is that in an environment in which there is a lack of leadership, in which there is no consistent leader who’s able to say, follow me, right or wrong, this is where I’m going, this is who I am—I don’t think we have that so much in the United States, and we have to develop that.
            We’re very privileged today to have a very distinguished group of people, but the most distinguished person among us is Governor Rendell. I’ve worked with Governor Rendell for a long, long time. I knew him when he was mayor of Philadelphia. He was a good mayor of Philadelphia, and he did things that [brought] Philadelphia into a modern city structure. I knew him and worked with him when he became governor of Pennsylvania, and guess what, he is a good governor in Pennsylvania, and brought programs that we’re going to talk about today--whether it’s green, or whether it’s infrastructure, etc.--to actuality, to a beginning and a fulfillment in Pennsylvania. He is the kind of leadership that when he worked with the Democratic Governors Association, brought it to a new energy and a new level of accomplishment.
            The reason why Governor Rendell is here today is because we know who he is. He’s been consistent, he has been relevant, he has been part of the scene for a long time, and he doesn’t change according to the variations. We know what his values are. That’s very important in leadership today, and it’s very, very good for us to be able to say that Governor Rendell has a few words for us today, and I welcome him. Thank you very much.

Governor Rendell:
            Good morning, everyone, I’m going to begin by asking you a question: How many of you live in the Washington area? How can you do it? We got up this morning and left Harrisburg at 6:20, leaving us three hours to get here. Normally we can make it in about two hours. Harrisburg’s fairly close to Washington because you cut through Maryland as you come down. And we were doing great until we got on the George Washington Parkway literally five-and-a-half miles away from here. It took us an hour to get the last five-and-a-half miles, and every bridge in Washington was unbelievably clogged--at 9:15. Doesn’t anybody get to work on time in Washington?
            Having said that, it was great to hear Bernard talk, because we need a little optimism in this country, and Bernard has always been, for as long as I know him he’s been an optimist and someone who looks towards the future, and who doesn’t look at the failings of what we’re doing—and we certainly do have a lot of problems—but looks at what we can do, how we can break out, and how we can continue to be the leader and be competitive.
            And I will tell you that my view of America is slightly less rosy than Bernard’s. I think our competitiveness is deeply challenged, and I think we’re in real danger if we don’t act, and act fairly soon, and act fairly decisively. We’re in real danger of becoming a second-class economic power. Everything Bernard said is accurate. Those nations have a way to go to get to us. But we have a paralysis of leadership in this country. We’ve devolved into a level of partisanship and rigid ideology that is making it virtually impossible for us to get anything done, virtually impossible; and unless we break out of it, unless we look towards the future, unless we start coming together again as people and putting aside all of these differences, I think we’re in tough shape.
            So it’s great to have a conference like this. I’m going to talk a little bit about the issues, although this conference, Bernard, the issues are so broad, it was hard to talk about it. Bernard knows infrastructure is one of the things I care very much about, and infrastructure is one of the things that we better get to, because our infrastructure’s crumbling. It’s not competitive anymore. It’s structured in a way that’s bad for the environment and sustainability, and all of those things have to change.
            But I think that one of the things I want to talk to you about today is the link between our eventual security as a nation and the necessary job production that, as Bernard so aptly said, is first and foremost on the American people’s mind in the short run, as well as the long run.
            So, in 2004, I was asked to speak at the Democratic Convention, and I spoke about the need for energy, and I said--and I want to read you a quote—I said, “Without a sound energy policy, we’re forced to deal with dictators and trade with terrorists to keep the lights on in our homes and to fuel our cars. A toxic mix of oil and terrorism threatens our very security. Every American is a victim of energy blackmail that robs us of our independence, corrupts our foreign policy, ruins our economy, and holds American industry hostage.”
            And then the next night, in a speech that got a little bit more attention, John Kerry said, “No young American soldier should fight and die because of our dependence on foreign oil”—the single best thing that John Kerry said during the campaign. And he was right then, and he continues to be right today. And yet, what’s happened? Six years later, Americans are still dying in a fight that is largely about our dependence on oil.
            Now all of you, I think know Bernard, and know that he’s a very serious businessman. His efforts to get our nation back on track and to remain competitive have been nothing short of spectacular, and they’re based on his experience and his knowledge of the marketplace. He does see the writing on the wall, notwithstanding that somewhat optimistic opening, and so do I.
            Our competitor nations are making enormous investments in infrastructure, in energy, in renewables, and alternatives. They’re getting ahead of us on the curve. You know, it used to be that every new invention, every new innovation, came from the United States of America. The reason we were the economic power is not because the Lord blessed us with so much natural resources, which He did—or She did—but because we were the innovators. We had the scientists, we had the engineers, we were the people who created things and made things happen. It’s not happening anymore. Two years ago, the United States Patent Office reported for the first time in its history that more than 50 percent of the patents that it issued went to foreign companies or foreign nationals.
            So we need our Congress, our federal government, to act, and it must act quickly, and it must act at scale. It must do things that are necessary to protect our environment, to drive down our use of oil and the emissions of carbons, and to create jobs.
            Unfortunately, up until now, there’s been very little action from Washington—the paralysis I talked about. Whatever action has happened to move us along on these goals has happened at state capitals, and I’m proud to say that Pennsylvania is among them.
            In 2004, we passed what at the time was one of the most aggressive alternative energy portfolio standards in the nation. We said that by the year 2020, at least 18.5 percent of all the electricity produced at retail in Pennsylvania would have to come from identified alternative and renewable sources, sources like wind, and solar, and low-impact hydro-power, and bio-mass.
            More than half of the states have followed us now and have portfolio standards. And even though it’s slightly more than half of the states, those states represent a huge majority of the American population, so there’s strong evidence that the American people understand this and are committed to this approach. Alternative energy portfolio standards create the mandate, create the market for alternatives and renewables.
            In Pennsylvania, we’ve gone even further. We’ve done this for fuels as well. We’ve passed legislation that the administration pushed called the Penn Security Fuel Initiative. And what it says is -- it’s sort of like AEPS for fuel -- what it says is that we have a mandate that, by the time production levels increase of bio-fuels and ethanols and bio-diesel, by the time productions increase, every gallon of gasoline and diesel fuel sold in Pennsylvania must contain a certain percentage of bio-fuels, ramping up to 20 percent bio-diesel and 10 percent ethanol. And we think we can reach this production level by no later than 2014. And it will mean of the 11 billion gallons of fuel that are sold in Pennsylvania now, one billion of those gallons will come from non-fossil fuel. To give you a frame of reference, that’s more than we’ll be importing from the Persian Gulf in 2020, had we not done this. So it is an important step, and a step that I’d like to see replicated all across the nation.
            It’s also important to realize that our ethanol production, our reliance on ethanol, shifts in the statute to cellulosic ethanol, which is very, very important, because corn-based ethanol, I think, will phase out in America fairly soon.
            The third thing we did was put our money where our mouth is. And before 2007, Pennsylvania had invested $900 million in laying the groundwork, the infrastructure, and incentivizing the development of alternative and renewable companies in the state. In 2007, we passed something called the Alternative Energy Investment Fund, which created an additional $650 million for the same purpose. That has leveraged over $4 billion of private investment and created at least—it’s probably low now—10,000 jobs. The Pew Center for the States estimates that Pennsylvania has created the third highest number of green energy jobs behind only California and Texas.
            We’ve also adopted an ambitious plan to reduce our greenhouse gas emissions. This is very important, because Pennsylvania, the Commonwealth of Pennsylvania, produces one percent of all of the greenhouse gas emissions in the world—one percent of the world’s emissions. We are a very, very big coal state. The steps that we’ve taken—and we’ve passed mercury standards for coal and others—the steps we’ve taken plus the action we’ve developed means that we will be in a position to reduce our annual emissions by as much as 42 percent from 2000 levels, or the equivalent of more than 120 million tons of greenhouse gas emissions.
            Now, all these things are good for the environment, they’re good for sustainability, and they’re also great job creators. We also passed in that same bill, we passed a very strict conservation statute. And conservation produces jobs, and we’ve seen this with the investments that the president made in the stimulus money, investments to create conservation jobs, to create green jobs, etc.
            But we think that this is not only a jobs imperative; it’s also a national security imperative. There were two stunning reports that were championed by respected retired members of our military brass recently. The first was called the “National Security and Threat of Climate Change,” and the second was called, “Powering America’s Defense: Energy and the Risks to National Security.” In the first report, the opening quote read—and this an interesting quote—“Our dependence on foreign oil reduces our international leverage, places our troops in dangerous global regions, funds nations and individuals who wish to harm us, and weakens our economy. Our dependence and inefficient use of oil also puts our troops at risk. Our domestic electrical system is also a current and significant risk to our national security. Many of our large military installations rely on power from a fragile electrical grid that is vulnerable to malicious attacks or interruptions caused by natural disasters.
            And when it came to climate change, our military brass said, and I quote, “Climate change can act as a threat multiplier for instability in some of the most volatile regions in the world, and it presents significant national security challenges for the United States.” Now these are not peace activists or environmentalists. These are people who were the backbone of the American military for a long time.
            Now with this report what was the political reaction? Well of course many in the Senate said that these folks were just grandstanding and seeking the limelight.
            Fortunately there are respected politicians—not just our president—respected politicians who see the light, and I think one of the most important ones of them was former Republican chair of the Senate Armed Services Committee, John Warner, who has said recently, and I quote Senator Warner, “Leading military intelligence and security experts have publicly spoken out that if left unchecked, global warming could increase instability and lead to conflict in already fragile regions of the world. If we ignore these facts, we do so at the peril of our national security and increase the risk to those in uniform who serve our nation. It is for this reason that I firmly believe that the U.S. must take a leadership role in reducing greenhouse gas emissions.”
            And Senator Warner couldn’t be more right. I was at a conference where Jeff Immelt, the CEO of General Electric, spoke and I spoke; and Jeff Immelt said, and I think this is absolutely true, that one of the great challenges that [is] coming from global warming is the loss of water on the Earth, and that he envisions that unless we do something about it, unless technology can find an answer, that the loss of water, or the paucity of water—and China is a great example of a country that’s struggling for water; 70 percent of China does not have sufficient water—that water may be the next oil 25 years down the road, that we may be fighting wars for water supply unless we do something to stop the effects of global warming.
            So what can we do? Is it a hopeless case? Not at all. If the federal government moves in and acts quickly to replicate some of the things the states have done, there are answers. And I think the federal agenda—and I’ll close with this—ought to be the following: 1)the federal government needs to increase our investment in renewable energy sources and cutting-edge technologies like carbon capture and sequestrations. Now, President Obama obviously also sees the light, because the American Recovery and Reinvestment Act did have substantial dollars invested into energy and renewable energy, finding ways to produce the new cutting-edge batteries, hybrid vehicles, etc.—all of those things that are so important to break our dependence on foreign fuel; 2) addressing the real issues surrounding climate change by implementing cost-effective strategies to reduce or offset greenhouse gas emissions. Something has to be done, and while it’s true that on a political basis it’s unlikely that we’ll see any major cap and trade legislation--it’s just there’s no energy left in the Congress to undertake something as fractious as that would be—there can be significant progress made towards this goal. And part of that progress is number 3) enacting federal tax policies that offer predictable and long-term advantages to companies that invest in domestic solutions to energy and climate change. We need to make the tax credits permanent for alternative and renewable energy. They cannot go seeking renewal every year or two. You can’t get sufficient Wall Street investment in companies when the tax credits are not there or when there are not sufficient loan guarantees. And again, in ARRA, there were excellent loan guarantees for some of these new alternative and renewable energy companies; but we’ve got to make them a permanent fixture in our law, just like we did for oil and gas. It’s time to do that. 4) Next we have to encourage energy conservation and efficiency. The federal government should do what many, many states have done in mandating them. And we need to enact a nation-wide renewable energy portfolio standard. Twenty-six states have done so. There’s no reason for the federal government not to do it. Create the mandate. Look, it’s all about dollars, if there’s a mandate, the thing that’s so good about mandating with renewable energy portfolio standards, what’s good about mandating is it gives certainty to investors. It’s like the Galbraith, Schwartz, and Rendell partnership has a shopping center, and we want financing, and we go to the bank and we show them signed leases for 20 years for every square foot of our shopping center. We’re going to get the money! And that’s what the mandates are like. They’re like signed leases. They’re absolutely good-as-gold guarantees. 5) And lastly, the federal government should use its power as an offtaker.
            How many of you think that Boone Picken’ is nuts? None of you. And I don’t either. I don’t either. Can you imagine—just contemplate for one second—if every fleet in the nation, starting with government, starting with the incredible fleet of cars—how many cars does the federal government have? 650,000, I think—the incredible fleet of government cars and trucks, U.S. government, Pennsylvania, New York, California, Texas, every state in the union—and then let’s go to the utilities, all the utilities’ fleets, all the cable companies’ fleets, every fleet out there, post office fleets, every fleet out there converted to natural gas. We would deal a body blow to the imported oil industry, a body blow to the imported oil industry, and natural gas is cheaper, better for the environment, and we make it, and Americans can get jobs making it. The thing that’s so enticing about this entire area, and what Bernard has brought to the table in this conference, is, and I say to my constituents every once in a while, if I can tell you that we can do something that will 1) make us less dependent on foreign sources, and therefore give us political independence; 2) improve our environment; 3) create jobs; and 4) strengthen our national security, would you think that was a good idea? And of course everyone says, sure. Well, we’ve got the idea. Let’s make it a dedicated federal policy to invest in creating this new economy which will give us security, which will produce capital investment, which will turn literally millions of jobs—the statistics, everyone who has taken a hard look at this says it will produce anywhere between one and two million jobs in a relatively short period time and a tremendous amount of capital investment. And you know, if we don’t do it, if we don’t dedicate ourselves to this, if we don’t become a leader in alternative renewable energy and the job creation that comes from it, guess who will. It will be someone else. It won’t be the United States of America. This is a vacuum that will be filled, and the only issue is, are we going to fill it? Are we going to be there first? Are we going to be there with the smartest technologies? Are we going to be the ones that produce all of these technologies? Wouldn’t it be great if we started exporting to China and the rest of the world new batteries, new cutting-edge batteries that nobody else has produced? Wouldn’t it be great if we had some form of new solar components that nobody else in the world produced. Of course it would. Wouldn’t it be great if we were the ones to come up with the most viable and cost-effective hybrid cars? Of course it would. We can do it. We’ve always risen to the challenge before. This country, I think, properly focused, when we all act as Americans and get together, and put all this B.S. behind us, I don’t think there’s anything we can’t accomplish. But ladies and gentlemen, the reason this conference is so important is because the clock is ticking. And it’s not an ordinary clock; it’s one of those timers used to tell you when something’s done in the kitchen. And at the end of the timer, a bell rings. The question is, will we be ready when that bell rings.
            Bernard and Mr. Galbraith said that if any of you have a quick question or two to ask me, I’d be happy to answer it. Whenever I come to Washington I try to pack my calendar, and these days Bernard has been having so many conferences, I check with him first.

Q: Charles Hall
            Just three weeks ago I went to a conference at Penn State where I was the main speaker, and this conference was put together by Trout Unlimited, but it had all kinds of folks from—hydrologists and geologists and so forth and so on. And the issue was about your state, and it was about all of this gas drilling in your state, with the horizontal drilling and hydrofracking, and so forth. To no surprise, perhaps, the people from Trout Unlimited are very leery of this sort of thing.
            The substantial portion of the easy gas from Oklahoma and Louisiana is gone. If we’re going to get gas now, and if we’re going to do what T. Boone Pickens wants to do, and apparently you want to do, then we have to go after this much more difficult gas, with lots of issues pertaining, including what I’m interested in is the energy cost of getting the next unit of energy.     
            And so you brought up water, and water, I found it so incredible that the two most important resources we have really are energy and water, are right there, staring you in the face, and people were really yelling at each other at this meeting from different points of view.
            So if you want to go ahead with your plan, are you willing to put in horizontal drilling and hydrofracking in Pennsylvania, and I’m in the next state to the north, and we’re pretty concerned about what you guys do, because we’re going to follow. Is that going to be part of your plan to go to supposedly environmentally friendly, less impactful, which perhaps natural gas is, fossil fuels? Because there isn’t anymore? There isn’t any other place to get it.

GR:
            It’s an excellent question, and I’m sorry if this is going to be a relatively long answer, but it’s such a good question. Look, none of this is easy, and you’re absolutely right, it gets more complicated as the supply of the energy in the world gets less and less, it gets more difficult to get it, and it gets more complicated. But this goes back to what I said about us at each other’s throats. We have to come together, and we’ve got to reject the false choices. The false choices are, it’s either good for the environment, or it’s good for the economy; it can’t be both. And those are false choices.
            Now, some are easier than others. Wind energy. Now, would all of you think—Quick question: How much pollution does the production of wind energy put into the air? Anybody ... Zero! But there are environmentalists who are against wind energy. You know why? Because it kills birds. The blades kill birds.
            Now, there’s an answer to that. There’s got to be a technology, use sound technology, to keep the birds away. But I had a question: I used to be mayor of Philadelphia, as Bernard said. One of my previous mayors was gifted by the Canadian government with these wonderful Canadian geese. And they go to one stretch of what we call the East River Drive, one stretch of the East River Drive—you can usually see about a thousand of them, and maybe a hundred yards long. Then they go away for the winter. And they come back every spring to the same stretch. And I want to know if these birds can go down to Florida, or wherever they go, and come back and find the same thousand yards, how come other birds can’t avoid these giant, giant turbine blades?
            My point is that there’s always a balance, and your question goes to a much more difficult problem because deep drilling is not more, as you said. We’re pretty much out of the supply. This is called the Marcellus Shale. Gas is trapped in this very, very hard rock, and you can’t go down directly and drill. You’ve got to go down and go through horizontally. And as you drill horizontally, it causes a lot of minerals to go into the groundwater, and it has potential problems. The process is called fracking the water that gets the mineral residues is called frack water, and it causes potential problems. The frack water needs to be treated. It cannot stay there. It needs to be taken out and treated. Right now the technology is in its infancy for treating it, and the frack water is literally sucked out of the ground, put in either trucks or on trains, taken to treatment facilities off-site, treated, and then once it’s treated, it can go back in, and it has a number of decent re-uses. But it has to be treated. It’s a very expensive, slow, and cumbersome process. That’s the bad news.
            The good news is Pennsylvania’s been doing this horizontal drilling for about 18 months now, and we’ve had only one minor incident where we had any groundwater pollution at all. But the better news is technology, I believe, is on the road towards solving this problem, because at the same conference that Jeff Immelt spoke at they demonstrated a new product that GE is working very hard to get into the marketplace which will allow for contemporaneous on-site cleansing of the frack water. And it is reportedly very effective.
            So my point is, of course we’re going to monitor this because we don’t want to do anything to harm our groundwater. But on the other hand, shale is a tremendous economic opportunity for Pennsylvania. We’ve already produced about 10,000 new jobs in shale. The last three months, despite the fact that it’s been a jobless recovery, Pennsylvania has gained jobs in every months. It’s probably directly related to the shale drilling.
            The capital investment in Pennsylvania is enormous. Farmers who had long since given up hope of being anything but this close to bankruptcy are getting dollars for acreage of their land that they never contemplated they’d ever get in their lifetime.
            So it is an economic driver. Aside from the fact that it can produce the natural gas we need to be energy independent, it’s a short-term economic—long-term economic driver as well. So you don’t give up on it because there’s the potential that it damages the frack water. You’re very careful. We’ve added almost 100 new inspectors just to look at the shale sites. We monitor it very closely. And we hope that the technology catches up to the point where we’ll be able to say with full confidence that we can do this without damaging our water supply.
            But it’s a balance. As you said, wind—I mean, you name it. Everything has tremendous assets, and it has some liabilities. But I believe the answer to most of our challenges lies in technology. We can find an answer to all those things. But it is a difficult problem. But it has people at each other’s throats up there, no ifs, ands, and buts about it.
            I think I can take one more, if anybody has one more ... I think this gentleman over here.

Q:
            Governor, with all your good ideas, who is against it in this divisive political environment?

GR:
            Well it’s interesting. Interesting, interesting, interesting question. This is an area—The things that I just delineated, the federal action plan—I actually think that this could be done. Look, the administration is still committed to a full-blown cap and trade program, and, you know, after two nights ago, who doubts their ability to get stuff done if they stick to it. But right now I’m not sure there’s the political will to take on another big challenge or to do anything that will inhibit the economy and there’s some theories that cap and trade would hurt business, it’s a tax, it’s the wrong time, etc.
            But if you look at all the action steps that I laid out, none of them hurt the economy. All of them are guaranteed pluses for the economy. And I think there’s grounds for bipartisanship in that type of plan. In fact, if those of you who followed the John McCain presidential campaign, he was a latecomer to the field of renewable and alternative energy, and in fact in the Senate had voted against, for example, making the tax credits permanent a number of times; but he talked very much about the need to develop this sector of the economy. And I think if the president sat down with some of the leadership, both Republican and Democrat, you could craft something which wouldn’t necessarily be as good as a full-blown cap and trade, but would be a step in the right direction, particularly on the jobs front, particularly on the jobs front.
            The downside is that anything we do—I mean, again, if you look at all the action items, very few of them  involve money; but incentivizing this area, like was done in ARRA, runs up against the deficit.
            And I want to talk about that for a second, and that will be the last thing I say, and then I’ll let you get on with the program. I do think there’s a struggle going on in the country. The struggle was produced by the financial meltdown, not by the president. The reason we have this exploding deficit is the financial meltdown and all the steps that were necessary to deal with the financial meltdown. But it exists, and we have to make up our mind what we’re going to do.
            I was on, I forget which show, one of the Sunday morning shows, and the moderator played for me a speech, or a portion of a speech, that Mike Pence, who’s a ranking member, I think, on the House Budget Committee, Republican, he made to the Conservative Convention, that’s CAC Convention, in Washington. And he said, “Yes, we’re the party of no. We’re going to say no to taxes, no to spending, no to debt, no to borrowing.” And they showed that clip, and the moderator said to me, What do you think of that?
            And I said, in all due respect to Congressman Pence, who I’ve heard talk and seems like a reasonable guy, that’s a prescription for disaster for the country. It’s a prescription for disaster for the country. If we say we’re not going to spend money, we’re not going to invest, we’re not going to borrow, we’re not going to invest, we’re not going to invest in our intellectual infrastructure, we’re not going to invest in our physical infrastructure, we’re not going to invest in job creation, we’re not going to invest in the short-term in the environment which produces long-term benefits, if we do that, we’re finished. We’re finished. We might as well circle the wagons and wait for the end. There isn’t a business in America that grew successful without investing in its own future, in its own growth, in its own development, sometimes from capital reserves, but mostly by judicious borrowing. And there’s good government spending and bad government spending. And it’s important that we understand the distinction.
            And I said, I’d love to ask Congressman Pence how he thinks America’s going to grow.
            So Fox News, always ready, invites Congressman Pence and I to go on a show together. And I said yes, and, to his credit, he said yes. And he reiterates his statement. And I said, Congressman, explain, given that statement, explain to the American people how we’re going to continue to maintain our roads, our highways, our bridges, our ports, our airports, our rail freight. Forget building anything new. How are we going to maintain what we’ve got in anywhere decent condition if you’re not going to allow us to borrow, or spend, or invest, or raise revenue?
            And of course he didn’t answer the question. He said, “And there you go. All you Democrats talk about investment, and not spending”. Yah, we talk about investment, because that’s exactly what it is.
            So that’s the biggest hurdle. I think there’s room for bipartisanship here. Just like on infrastructure I think there’s room for bipartisanship, because in many ways they’re cross-cut issues. But let me tell you— how many of you watched the last half-hour of the vote on health care? How many of you watched it? Were you stunned by the tenor of that debate? I was, again, on one of those cable shows, but I got to listen to it. I was stunned by the venom in minority leader Bainer’s speech. I was stunned by the reaction from the Republicans in the House. I was stunned by the dialogue with Stupack—calling Stupack a baby killer? I mean, if that’s going to be the tenor of American debate and American government, then we’ll never get these things done.
            It is time for the patriots out there—and we’ve got to find them, both sides of the aisle—to step forward and say, “Enough of this stuff. We’ve got to get something done.” We’ve got to get something done. And this field lends itself to that, and you all—Look, Bernard showed me a little bit about the attendance here. You all are prominent people who are opinion influencers. You’ve got to get out there and—our side has to say—I love the fact that Nancy Pelosi said in the press conference afterwards, Even though we didn’t get one Republican vote, there were 200 Republican suggestions that were turned into amendments in the health care bill, two hundred specific Republican suggestions. We gotta keep working, and we’ve got to hope that someone on the other side sees the light.
            I’m about to go see Senator Inhofe. Now you might say why would Ed Rendell see Senator Inhofe? Because Senator Inhofe believes, and has said publicly, the second most important thing the U.S. government can spend money on, behind the military, is infrastructure. And he’s probably right. So he can be an ally to us in the need to—has anybody thought how we’re going to deal with our infrastructure problem with the trust fund in the situation it is now, with the no-tax attitude that prevails in Washington? So I’m going to go and hopefully talk some sense into Senator Inhofe.
            But we can do this. And we can do it if some patriots step forward. But you all have to continue to beat the drum. The American people, the sane American people—and I believe the sane American people are about 98 percent of us—but the sane American people have to demand that our leaders act in the interests of the country, not in the interests of the next election. Thank you.

JG:
            Thank you, governor, for that splendid start to this conference. And we wish you the best of luck in the challenging part of your morning that obviously lies ahead.