Nov 25th 2008

Woolsey: Any Detroit Bailout Must Break US Oil Dependence - An Interview by Nathan Gardels

by Nathan Gardels

Nathan Gardels has been editor of New Perspectives Quarterly since it began publishing in 1985. He has served as editor of Global Viewpoint and Nobel Laureates Plus(services of Los Angeles Times Syndicate/Tribune Media) since 1989. These services have a worldwide readership of 35 million in 15 languages. Gardels has written widely for The Wall Street Journal, Los Angeles Times, New York Times, Washington Post, Harper's, U.S. News & World Report and the New York Review of Books. He has also written for foreign publications, including Corriere della Sera, El Pais, Le Figaro, the Straits Times (Singapore), Yomiuri Shimbun, O'Estado de Sao Paulo, The Guardian, Die Welt and many others. His books include, "At Century's End: Great Minds Reflect on Our Times" and "The Changing Global Order." Since 1986, Gardels has been a Media Fellow of the World Economic Forum (Davos). He has lectured at the Islamic Educational, Scientific and Cultural Organization (ISESCO) in Rabat, Morocco and the Chinese Academy of Social Sciences in Beijing, China. Gardels was a founding member at the New Delhi meeting of Intellectuels du Monde and a visiting researcher at the USA-Canada Institute in Moscow before the end of the Cold War. He has been a member of the Council of Foreign Relations, as well as the Pacific Council, for many years. From 1983 to 1985, Gardels was executive director of the Institute for National Strategy where he conducted policy research at the USA-Canada Institute in Moscow, the People's Institute of Foreign Affairs in Beijing, the Swedish Institute in Stockholm and the Friedrich Ebert Stiftung in Bonn. Prior to this, he spent four years as key adviser to the Governor of California on economic affairs, with an emphasis on public investment, trade issues, the Pacific Basin and Mexico. Gardels holds degrees in Theory and Comparative Politics and in Architecture and Urban Planning from UCLA. He lives in Los Angeles with his wife, Lilly, and two sons, Carlos and Alexander. Gardels plays the cello on his free time.

A mounting chorus of voices -- including President-elect Obama's -- are linking any economic stimulus or any related bailout of Detroit to environmental and energy independence objectives. Here, James Woolsey, a former CIA director and the energy adviser to John McCain during the campaign, adds his two cents a mile to the debate. There may indeed be a "green lining" to resolving America's economic crisis.

Nathan Gardels: After Citigroup, the next bailout crisis in the U.S. will involve the Big Three automakers in Detroit. What kind of deal should the government make with Detroit to ensure a retooling of the industry that puts America on the path to clean energy and energy independence?

James Woolsey
:
Any bailout money for Detroit should be used to maximize the speed of a shift toward the use of electric hybrids and flexible fuel vehicles. Both are necessary in breaking oil's monopoly on transportation in the U.S. Both would utilize existing infrastructure such as electric power grids and filling stations, and the technology is already there, and in use, for the engines themselves. So it can be done relatively quickly.

When I say electric, I don't necessarily mean all-electric cars. With an electric hybrid, you only need a battery than can take you 30-40 miles on an overnight charge -- along the lines of what the Chevy Volt (scheduled for 2010) can do. Three quarters of the cars in the U.S. go less than 40 miles a day. On three days out of four, you can use all electricity. For anything beyond that, with a hybrid, you'd have liquid fuel to take you the rest of the way where you need to go.

Flexible fuel vehicles should have an "open standard," which means they can use not only ethanol but methanol, butanol or other alcohol-based fuels. This can be done quickly. Brazil went in only three years from having 5 percent of its news cars using flexible fuel to 75 percent.

Putting this shift front and center will not only help save jobs in the auto industry but create news jobs -- for example in the production of batteries for electric hybrid vehicles. It will create a whole new set of suppliers.

Gardels: America has been through this cycle several times where we pledge to free ourselves from Mideast oil -- the first OPEC oil shock in the 1970s, the first Gulf War, 9/11 and the rise of oil to $140 a barrel a few months ago. What will be different this time?

Woolsey: First of all, the apparent need for an industry-wide restructuring in Detroit is an opportunity for intervention to set fuel and vehicle standards that we've not seen before.
Second is the cheap cost of electricity. If you are driving a car fueled by electricity and stored in batteries the cost is between 2 and 4 cents a mile. The electric hybrid car I have costs me 2 cents a mile on an overnight charge because my utility company charges less for energy use at night than at peak hours during the day.

No matter how cheap a barrel of oil becomes, it will never match this price of electricity. Last summer, gas was up to 10 cents a mile; perhaps it is now in the high single digits. This was not true in the past for alternatives like synfuels or hydrogen, which were even more expensive than oil.

Ultimately, this is why I believe electricity is the resource that will wean us from oil. For the average family, electric hybrid cars can reduce their fuel bill by one-third or more. That is a pretty good deal. And this is true independent of its other benefits -- reducing carbon output that causes climate change or stemming our indirect subsidy of terrorism in the Middle East by hemorrhaging cash to the likes of Saudi Arabia for their oil.

Gardels: In World War II, the U.S. retooled the auto and other industries in a matter of months to produce tanks, planes and other weaponry. Is there any reason we can't shift that quickly today from gas-guzzlers to electric and hybrid fuel cars as part of the managed bankruptcy of the auto industry?

Woolsey: As we geared up for World War II, the U.S. became a command economy under FDR. He simply ordered industries in the name of national security to mobilize for war after the attack on Pearl Harbor.

It would be more complicated today, and I think we'd want to preserve as much of the market as possible in a crisis, but not wartime, environment. But I do think that by changing the incentives for both the industry and consumers we can rapidly create a large enough market for electric and hybrid fuel vehicles that will challenge and then override oil-fueled transportation.

We need to make it easier for people to buy flex fuels and electric hybrid cars. There is already a $7,500 tax credit available.

And we need to mandate the automakers retool for flex-fuel capacity -- a minor manufacturing shift that costs only $100 per car or so, much simpler than the mandate for seatbelts or airbags. The government might even want to let the automakers write off capital expenditures for any move toward oil independence.

Gardels: The Japanese have spent years refining hybrid vehicles, including the Toyota Prius, which is widely driven in the U.S. If we want to be free of Middle East oil, why not just import Japanese cars or buy cars made in the U.S. by Japanese companies?

Woolsey:
The health of the U.S. economy over the long run is tied up with having a viable auto industry. We can certainly be open to giving the Japanese or others incentives to locate their production in the U.S. -- perhaps with tax write-offs -- if they moved rapidly to electric drive.
This would reduce their transport costs of shipping from abroad and create jobs in the U.S. But that is in addition to, not as a substitute for, an American industry.

Gardels: The incoming Obama team has been talking a lot about a "green stimulus" for the economy. Perhaps the bailout or managed bankruptcy of the Big Three can be linked to that stimulus -- for example, the construction of electric fueling stations around the country for consumers who shift to electric cars.

Woolsey:
Any stimulus that moves us toward a green economy should be structured so it can operate even if credit markets are frozen up for a time. A direct fiscal stimulus can be aimed at weatherizing buildings so they are more energy efficient or installing solar units. That would employ people. The more we can move toward distributed generation of energy and away from central power plants the better we are. That kind of decentralization of power production will create jobs.

Denmark, for example, gets a third of its electricity from co-generation -- the recycling of waste heat in homes, offices and factories. In the U.S., co-generation is a tiny source of electricity.
Moving to Denmark's level on this front alone could employ those very people who have lost their jobs because of the downturn in the housing construction industry.

In many states and localities, simply changing the rules set by the public utility commissions, which favor the large centralized producers of energy, would allow this to go forward. No big, huge government program from Washington is required.

Gardels:
So there may be a "green lining" to America's economic crisis?

Woolsey:
Yes, possibly so.


Below a video clip in which James Woolsey speaks about America's oil dependency, on October 14, 2008:


Watch a related TV-program by the British TV Channel "Channel 4" - Click here


If you wish to comment on this article, you can do so on-line.

Should you wish to publish your own article on the Facts & Arts website, please contact us at info@factsandarts.com. Please note that Facts & Arts shares its advertising revenue with those who have contributed material and have signed an agreement with us.

Browse articles by author

More Current Affairs

Nov 4th 2019
Extract: "Trump displays repeated and persistent behaviours consistent with narcissistic personality disorder and antisocial personality disorder. These behaviours include craving for adulation, lack of empathy, aggression and vindictiveness towards opponents, addiction to lying, and blatant disregard for rules and conventions, among others." The concern is that leaders with these two disorders may be incapable of putting the interests of the country ahead of their own personal interests. Their compulsive lying may make rational action impossible and their impulsiveness may make them incapable of the forethought and planning necessary to lead the country. They lack empathy and are often motivated by rage and revenge, and could make quick decisions that could have profoundly dangerous consequences for democracy.
Oct 31st 2019
EXTRACT: "......let’s see what happens when we have less money for all the things we want to do as a country and as individuals. Promises and predictions regarding Brexit will soon be tested against reality. When they are, I wouldn’t want to be one of Johnson’s Brexiteers."
Oct 21st 2019
EXTRACT: "Were Israel to be attacked with the same precision and sophistication as the strike on Saudi Arabia, the Middle East would be plunged into war on a scale beyond anything it has experienced so far. Sadly (but happily for Russian President Vladimir Putin), that is the reality of a world in which the US has abandoned any pretense of global leadership."
Oct 20th 2019
EXTRACT: "Europe also stands to lose from Trump’s abandonment of the Kurds. If, in the ongoing chaos, the thousands of ISIS prisoners held by the Kurdish-led Syrian Democratic Forces escape – as some already have – America’s estranged European allies will suffer. Yet Trump is unconcerned. “Well, they are going to be escaping to Europe, that’s where they want to go,” he remarked casually at a press conference. “They want to go back to their homes." "
Oct 15th 2019
EXTRACT: "Assuming the House ultimately votes to impeach Trump, the fact remains that there are far fewer votes in the Senate than will be needed to convict him and remove him from office. But the willingness of Congress – including the Senate – to continue tolerating his dangerous conduct in office, including threats to US national security, is now truly in question."
Oct 7th 2019
EXTRACT: "The problem didn't start with the election of Donald Trump. Nor did it begin with the Democrats launching an impeachment inquiry against Trump. This is a developing crisis that has been growing like a cancer within our polity for at least the past 25 years. Its main symptoms are a lack of civility in our political discourse, a "take no prisoners" mindset, and a denial of the very legitimacy of "the other side." Trump didn't create this crisis; he was the result of it.   When Newt Gingrich took the helm of Congress in 1995, unlike previous Republican leaders, he embarked on a campaign not only to obstruct the efforts of then President Clinton, but to destroy him. Congress launched a series of investigations accusing Clinton of everything from corruption to obstruction of justice – with hints of even more nefarious plots to assassinate those who might pose a problem to his presidency.  "
Oct 4th 2019
EXTRACT: "As the story spreads, it grows darker. Meanwhile, Trump is trying to learn the identity of the whistleblower (who is protected by law), which could expose that person to great danger. And he is accusing some people – including Adam Schiff, the chair of the House Intelligence Committee – of treason. My sense is that Trump fears the tough, focused Schiff. Trump has ominously noted that traitors used to be shot or hanged. And he hasn’t helped himself with members of either party by declaring, in one of his hundreds of febrile tweets, that forcing him from office could lead to a “civil war.” Trump has taken the United States somewhere it’s never been before. His presidency may not survive it."
Sep 24th 2019
EXTRACT: "But regardless of whether the Ukraine scandal remains front-page news, it will haunt the US intelligence community, which has been Trump’s bête noire since the day he took office. Trump has relentlessly attacked US intelligence agencies, cozied up to Russian President Vladimir Putin, and divulged secrets to foreign officials, potentially burning high-value sources. This behavior had already raised serious concerns about whether Trump can be trusted to receive sensitive intelligence at all. Now, intelligence leaders must ask themselves how far they are willing to go in toeing the White House line."
Sep 21st 2019
EXTRACT: "As Lobaczewski pointed out, pathological leaders tend to attract other people with psychological disorders. At the same time, empathetic and fair-minded people gradually fall away. They are either ostracised or step aside voluntarily, appalled by the growing pathology around them.......As a result, over time pathocracies become more entrenched and extreme. You can see this process in the Nazi takeover of the German government in the 1930s, when Germany moved from democracy to pathocracy in less than two years.......In the US, there has clearly been a movement towards pathocracy under Trump. As Lobaczewski’s theory predicts, the old guard of more moderate White House officials – the “adults in the room” – has fallen away. The president is now surrounded by individuals who share his authoritarian tendencies and lack of empathy and morality. Fortunately, to some extent, the democratic institutions of the US have managed to provide some push back."
Sep 16th 2019
EXTRACT: "If the Supreme Court does agree with the Divisional Court that the question is political rather than legal, it will take the UK constitution into quite peculiar territory. Prime ministers will be the new kings and queens. They will be free to suspend parliament at will, and for as long as they wish, without any judicial interference. Parliament will meet not out of constitutional necessity but in the service of the government’s interests – namely, to pass its legislation and to maintain appearances, rather than to hold it to account."
Sep 12th 2019
Extract: "The Republican Party has lashed its fate to an increasingly unhinged leader. Though three other presidential hopefuls for 2020 now stand in Trump’s way, none can defeat him. But they can damage his reelection effort, which is why the Republican Party has been scrapping some primaries and caucuses. How well Trump does in November next year may well depend on how his fragile ego withstands the coming months."
Sep 2nd 2019
EXTRACTS: "Most people think of revolutions as sudden earthquakes or volcanic eruptions that come without warning and sweep away an entire political system. But historians, political scientists, and even the odd politician know that the reality is very different: revolutions happen when systems hollow themselves out, or simply rot from within. Revolutionaries can then brush aside established norms of behavior, or even of truth, as trivialities that should not impede the popular will............ Only time will tell whether we are currently witnessing the hollowing out of British democracy. But Prime Minister Boris Johnson may well have crossed some invisible Rubicon by.......... Whatever happens now, British parliamentary democracy may never be the same again. It will certainly never again be the model that so many people around the world once admired."
Aug 29th 2019
EXTRACT: "Events such as prorogations and dissolutions happen when countries face difficult times. Therefore, because of the disastrous effects of Brexit: sterling in freefall; a recession looming on the horizon and Britain’s international standing at its lowest ebb since Suez, it is no surprise that the country is in this position now. The worrying thing is that using the monarchical power of prorogation does not solve problems – it has a history of turning them into frightening and often violent crises. There is a worrying relationship between the use of such powers and a complete breakdown in government."
Aug 28th 2019
EXTRACT: "Reminiscent of Don Quixote, Trump is tilting at windmills. His administration is flailing at antiquated perceptions of the Old China that only compound the problems it claims to be addressing. Financial markets are starting to get a sense that something is awry. So, too, is the Federal Reserve. Meanwhile, the global economy is fraying at the edges. The US has never been an oasis in such treacherous periods. I doubt if this time is any different. 
Aug 24th 2019
EXTRACT: "In fact, with firms in the US, Europe, China, and other parts of Asia having reined in capital expenditures, the global tech, manufacturing, and industrial sector is already in a recession. The only reason why that hasn’t yet translated into a global slump is that private consumption has remained strong. Should the price of imported goods rise further as a result of any of these negative supply shocks, real (inflation-adjusted) disposable household income growth would take a hit, as would consumer confidence, likely tipping the global economy into a recession."
Aug 21st 2019
EXTRACT: "Climate change is real, and it is a problem. According to the IPCC, the overall impact of global warming by the 2070s will be equivalent to a 0.2-2% loss in average income. That’s not the end of the world, but the same as a single economic recession, in a world that is much better off than today.  The risk is that outsized fear will take us down the wrong path in tackling global warming. Concerned activists want the world to abandon fossil fuels as quickly as possible. But it will mean slowing the growth that has lifted billions out of poverty and transformed the planet. That has a very real cost. "
Aug 20th 2019
EXTRACTS: "It is no exaggeration to say that Johnson has lied his way to the top, first in journalism and then in politics. His ascent owes everything to the growing xenophobia and English nationalism that many Conservatives now espouse................Johnson has chosen a government of like-minded anti-European nationalists. His principal adviser, Dominic Cummings, was described by David Cameron, Britain’s prime minister from 2010 to 2016, as a “career psychopath.” Cummings is, alongside Johnson, the most powerful figure in the new government; he is an unelected wrecker who earlier this year was ruled to be in contempt of parliament. Fittingly, if depressingly, he now is masterminding our departure from the EU with or without parliamentary approval."
Aug 19th 2019
EXTRACTS: "Back in May, a jury found Patrick Syring, a former State Department official, guilty of 14 counts of making threats against my life and my staff at the Arab American Institute. This week, a federal judge sentenced Syring to five years in prison to be followed by three years of court-ordered probation.................It gives me no pleasure to see this man going to jail for a long period, but it does provide us all with a sense of enormous relief. I've been threatened before. My wife, my children, and I have received death threats for the past 50 years – owing to my advocacy for Palestinian rights and the rights of the Arab American community. My office was fire-bombed and an Arab American colleague, whom I hired, was murdered. Two individuals who, in the past, made death threats against me and my children were convicted and sentenced to prison terms. But this case was different."
Aug 15th 2019
EXTRACT: "Gaslighting typically refers to intimate relationships. It’s a way of controlling someone by creating false narratives – for example, that they are irrational or crazy. If such lies are repeated constantly, victims may get confused and start believing there really is something wrong with them. Confusion, diversion, distraction and disinformation can similarly be used to gaslight an entire society. So how can you tell if you are being gaslighted, and how do you avoid it in the first place?"
Aug 14th 2019
EXTRACT: "Trump has once again painted himself into a corner. Since the latest massacres, he’s been at pains to present himself as a reasonable fellow who can get behind gun reform (and perhaps mollify suburban women, his most dangerous foes on this issue). But he’s also noticeably (and typically) anxious to maintain the loyalty of the rural voters who form an important part of his base. Trump has also taken the gamble of using racial politics and white supremacy as instruments for winning in 2020. When faced with the dilemma of trying to assuage suburban voters or keeping the base close, time after time his instinct has been to shore up the base. (That didn’t work very well in 2018.)"