With the recent financial turmoil, many companies and industries are finding themselves in deteriorating financial straits. Yesterday the CEOs of the ‘Big Three’ auto makers testified before Congress on why they should be the latest recipients of taxpayer funds, specifically a $25 billion injection from the government to keep their businesses afloat. At the same time, renewable energy infrastructure buildout is facing similar problems. 66 out of 262 approved wind farms have either been outright canceled or postponed. Some tough choices will likely have to be made. It has been our historical political trajectory to put out immediate fires and neglect smoke on the horizon. But at what point, if ever, is there an ‘a-ha’ (or ‘uh-oh’) moment, when we collectively realize we don’t have the resources to continue ALL businesses. Some entire industries can, should and will fail.

Below the thread are some brief comments, and an open thread on the automobile industry bailout situation.

“Hummer?”	“or Light and Heat?”

CARS OR WIND TURBINES?

There are several levels to this question (as to most questions).

Firstly, we have to look at the feasibility of each industry on its own merits. Can the automakers propose a coherent businessplan that will not require government bailout money in the future? What are the economics of wind farms, both to the industry, and to the long term holders of the energy harnessing equipment (energy return)? Especially in a business landscape penalizing carbon, wind power can be profitable. Wind expert Paul Gipe at ASPO-Sacramento ran through some numbers suggesting that with the industrial capacity of the U.S. heavy duty truck manufacturing industry, all the wind turbines needed to replace all U.S. electric generation capacity could be built in about 10 years—(basically the Gore plan).

Secondly, there are the issues of growth, infrastructure and comparative advantage. For the longest time we (the USA via the Washington Consensus) have campaigned against import substitution policies in Latin America and other places around the world to accelerate the size of the global trade pie. As resources (or ‘money’) become more scarce, it stands to reason that we will incrementally produce a larger % of basic goods closer to home face shortfall risk.

Thirdly, the last generation has moved, via unnoticeable baby steps, a long ways from recognition that ‘we can’t do it all’, though recent events should provide a contrary example. It seems our entitlement culture is very fluent with the words ‘more’ and ‘cheaper’, and less familiar with ‘either-or’ or ‘none’. The pride or shame associated with letting an industry fail almost seems like a national scarlet letter of failure. Akin to ‘losing face’ in Japan or China.

Lastly, we get to the the heart of the issue surrounding a choice between supporting and promoting the auto industry and supporting and promoting renewable energy infrastructure. These two industries are in sharp contrast with eachother in the upcoming changing social landscape. Whether they are profitable to shareholders or not, one is primarily on the consumption side of our resource ledger (liability) and the other is on the asset side, a producer of a basic need.

The political signs of energy change have started. President-elect Obama has significant challenges ahead, as do we all. I suspect the next administrations policy choices are already well underway. If the financial crises are any roadmap, it paradoxically seems that those who fail first, are almost better off, as the ‘cost’ of failing is being bought out or bailed out (with exceptions like Lehman). Can we afford to divert resource (labor, energy, materials, etc) into all of our current industries? Do we have the courage to admit we can’t do everything? In the opinion of this writer, we should steer the % of our population who consumes and produces little more in a direction of producing, and consuming less. This may be an unpopular diet.

The title of this post is a rhetorical question, but an example of one of the types of choices we might begin to face. What say you TOD readers - Can we produce both automobiles and renewable energy infrastructure?