THE VINE OCTOBER 23, 2008
You don't see this everyday. Obama chats with Time's Joe Klein and serves up some critical thinking on food policy, laying out the web of incentives and subsidies that distort our agricultural system:
I was just reading an article in The New York Times by Michael Pollen about food and the fact that our entire agricultural system is built on cheap oil. As a consequence, our agriculture sector actually is contributing more greenhouse gases than our transportation sector. And in the mean time, it's creating monocultures that are vulnerable to national security threats, are now vulnerable to sky-high food prices or crashes in food prices, huge swings in commodity prices, and are partly responsible for the explosion in our healthcare costs because they're contributing to type 2 diabetes, stroke and heart disease, obesity, all the things that are driving our huge explosion in healthcare costs.
Major kudos for explaining how all of these issues—food, energy, health care—are interlinked. Politicians don't do that nearly enough. Now, as an analysis, this isn't bad: cheap oil is part of what's turned industrial farming into the destructive mutant we all know and love. But note what's missing: Our agricultural system's also built on artificial subsidies for overproduction that, at this point, do far more harm than good. The very subsidies that Obama... still supports. So, uh, maybe it's time to stop snuggling up to King Corn. Anyway, moving on, here's another smart exchange on climate policy—nothing groundbreaking here, it's mainly just nice to see a candidate grappling with the complexities involved in modernizing our energy system:
[BO] … For us to say we are just going to completely revamp how we use energy in a way that deals with climate change, deals with national security and drives our economy, that's going to be my number one priority when I get into office, assuming, obviously, that we have done enough to just stabilize the immediate economic situation. …
[Q] Last question is, the logic seems to me, on the environmental side, that you're going to have to slow walk cap-and-trade, you're going to have to slow walk because that would naturally raise prices. Electricity prices, as you said in the past -- the series of priorities --
[BO] The only way to do it effectively is if you are building effective consumer rebates into the plan. The bulk, the lion's share of any revenue generated from cap-and-trade has to go right back to the consumer.
[Q] So the payroll tax swap?
[BO] The payroll tax swap is one way of doing it. Just sending a pure energy rebate to folks is another way of doing it. We've got to figure out a simple way to do it but the point is, is that we've got to cushion consumers from those price hikes and then allow technology to catch up in such a way that whatever retrofitting has to be done pays for itself. I mean, essentially what we should be doing is setting the rules, setting the incentives, pricing pollution accurately, and then letting technology catch up the same way it did with acid rain. And the one thing that we probably will have to do, and this is where the federal government expenditure side comes in, we've got to pump a lot of separate players to make the initial investment.
We went to this company in Seattle, McKinstry, great little company. Not so little anymore. It started off as a mom-and-pop plumbing and HVAC operation. Somebody at some point in the family figured out you know what, we could really just specialize in making businesses more energy-efficient. They ended up working this niche. They now have several thousand employees. They've got welders on-site who are making $80-90,000 union wages with full benefits. They've got engineers, all computerized designing completely remaking school buildings, hospitals, etc. This has been voted like one of the best companies to work for in Seattle. They've got a full-court basketball and weight room where everybody goes out during lunch and plays. Great cafeteria.
I mean, it's an ideal model, but here's the point. I asked them, I said what are your average customers saving. And their customers are saving 20-30% on their energy bills so they're recouping their cost potentially in 5 years time but in the current economic environment, a lot of great potential customers of McKinstry aren't going to do it unless they get some strong incentives from the federal government. That's where the federal government comes in. We've got to do [inaudible] but we've also got to help folks who knows this is the right thing to do, do it. It's the same thing with -- there are tons of people right now who want to buy hybrids. There's a huge market for it. But good luck getting a car loan to trade in your SUV for a hybrid. We've got to give some folks some incentive so they can start making the right decisions.