The New Republic

In an Earth Day-inspired foray into
environmental flim-flammery (on par only with NBC's woeful,
GE-sponsored November "Green Week"), the refreshingly batty Jim Cramer devoted a portion of "Mad Money" to "The Next President's Green Thumb"--and what it might mean for the savvy investors among us.

He
points to a few established solar and wind energy companies, whose
worth is poised to stabilize and grow when renewable energy
technologies find favor under either Democratic candidate. Cramer goes
on to mention nuclear energy stocks that could boom in a
McCain administration (see here for why that's troublesome), and the
latent potential in the quirky but blossoming auto recycling industry. But troublingly, according to a RealClearMarkets roundup of the show:

Cramer predicts the biggest winners under a Democratic president
will be the agriculture stocks. With the country's increased interest
in ethanol, he predicts huge
windfalls for agriculture companies. He reminded viewers that while
there is no solar lobby or green building lobby in Washington, the
agriculture lobby will remain influential no matter who's in the White
House.

There are two main problems with that assertion.
Firstly, the philosophy that 'might makes right,' which ignores how
terrible the farm lobby has been for America, also presumes a
compartmentalized, 'silo' approach to environmental lobbying in
Washington. At least for now, that methodology--as new, intriguing
partnerships within the green movement demonstrate--is falling by the
wayside. One is more likely to see an interdisciplinary effort on wind
energy from old foes like the National Wildlife Federation and the
United Steelworkers, or an infrastructure investment/jobs bill pushed
by an umbrella group like the Apollo Alliance, than to see a
single-issue lobby devoted to "green building" or "solar." 

Perhaps
Cramer doesn't know enough about green organizing to accurately predict
the dynamic of a future earth-friendly Washington. But he's right that
the government will have the ability to pick market winners and losers.
And it's more than federal investments and subsidies at issue (though
tax breaks for wind and solar are set to expire at the end
of the year; bad news if the 2004 lapse was any indication). Private
sector investments in renewables are crucial to bringing these
economies to scale. And the key to getting clean technology over the
"valley of death"--as it's termed in venture capital circles--is a
federal thumb on the scale. Bracken Hendricks over at the Center for
American Progress, tells me:

The
failure of the government to offer predictable long term policy
initiatives has absolutely hurt the renewables markets. Banks are
uncertain about the policy environment that these projects will
encounter. If the financial sector knows that the US government is
comitted to renewables and the industry, they're going to make the
investments, because they're smart investments.

Bottom line: The
free market will have to play a big role in greening our economy. If investors don't get the vote of confidence on the most efficient technologies from
Cramer, no less the brass in Washington, we can forget about our precious Envirolution.

--Dayo Olopade

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