The United States is the Saudi Arabia of wind and solar energy

U.S. Representative Hilda Solis (D-Calif.) said the new administration must invest in environmental and energy changes and should "get started in the next six months."

In order to attain the necessary energy and environmental changes, Solis said it will take "political will," and "leadership," but emphasized it will not take a lot of money. She said that it will not be easy to convince Congress of the need for these big changes in environmental and energy policy, saying there are "not a lot of members in the House of Representatives, in my opinion, that grasp this concept."

Solis advocated "greening our buildings, greening our infrastructure." She felt this would increase jobs that would "stay here" and would allow for areas to "sustain communities."

Senior Fellow at the Center for American Progress Van Jones said the economy is collapsing because the U.S. economic structure over the last 30 years was "not sustainable." He felt that there are three inherent flaws in the U.S. economy: it has been "based on consumption, not production," the U.S. can't "run the economy forever based on debt," and one cannot run an economy based on "environmental destruction, not environmental restoration."

Jones claimed that energy change would not be as difficult as it seems because, "We have a Saudi Arabia of wind energy in this country, we have a Saudi Arabia of solar energy in this country." He also said that energy investment "pays for itself" because it will lower overall energy cost, and will immensely increase available jobs. He claimed that if the government invested $100 billion, "we can have two million new jobs in two years."

Senator Dodd: “Foreclosure crisis is the root cause of the larger financial crisis”

The Senate Committee on Banking, Housing and Urban Affairs held a hearing today on "Oversight of the Emergency Economic Stabilization Act: Examining Financial Institution Use of Funding Under the Capital Purchase Program."

Committee Chairman Christopher Dodd (D-Conn.) voiced his concerns over how the money for the $700 billion Emergency Economic Stabilization Act (EESA) was being used.

"The acceptance of public funding carries with it a public obligation," said Dodd. "One cannot benefit from taxpayer support in all its many forms and assume that one has no duty to serve that same taxpayer."

Dodd expected lenders who received some of the $700 billion to preserve homeownership. “The foreclosure crisis is the root cause of the larger financial crisis...Until we solve the foreclosure problem, we will not have any hope of solving larger economic problems.”

The Senator was critical of lenders who had received public funds and used the money to buy other financial firms or give their executives benefits rather than give out loans. “Credit is the lifeblood of the economy...Lenders have a duty to use these funds to make affordable loans to credit-worthy borrowers on reasonable terms,” said Dodd. “If they do not, then in my view they are acting outside the clear intent of the statute and should reform their actions immediately,” he concluded.

Fiscal stimulus package up for judgment

In the wake of highest GDP contraction in seven years, several economic experts offered their take on the recent crisis and weighed in on the costs and benefits of a fiscal stimulus package during a Joint Economic Committee hearing in the Dirksen Senate Office Building.

“This is likely to be the most severe recession the United States has experienced in a number of decades,” said Nouriel Roubini, professor of economics at New York University’s Stern School of Business.

“This is going to be much longer, more severe, more protracted than the average U.S. recession.”

Roubini recommended an aggressive fiscal stimulus package priced anywhere between $300 billion and $400 billion, and warned that it should be passed soon.

“We cannot wait until the next congress in February because three months from now, the collapse of spending, consumption, and investments is going to be so sharp that the economic contractions could become even more severe.”

Roubini said that the next package should focus on direct government spending for goods and services since the private sector has decreased its overall consumption.

Richard Vedder, Professor of Economics at Ohio University and visiting scholar at the American Enterprise Institute, said he was “dubious” of a fiscal stimulus package. Vedder said that fiscal stimulus does little to aid the economy, and pointed out the last stimulus package was followed by a decrease in GDP and a rise in unemployment rates. However, if fiscal stimulus is unavoidable, Vedder stated that it should take a different form. “If you’re going to have a stimulus package, certainly a tax cut is preferable to a spending increase...a tax cut would have some more positive long run incentive effects.”

When asked if the Troubled Asset Relief Program, or the bailout bill, was a good idea, Roubini answered it was the right step as long as it was used to inject banks with public capitol. This was a notion agreed upon by Simon Johnson, Ronald Kurtz Professor
of Entrepreneurship at MIT.

“The original design of TARP to buy distressed assets was a bad idea and remains a bad idea. Using those funds to recapitalize the bank system and the insurance industry, and other financial institutions that may need recapitalization as we head into serious recession is a very good, if not essential idea,” said Johnson.

Vedder said that he reluctantly supported the original proposal, but was neutral regarding the revisions.

Timothy Firestine: We need a reliable and confident government that will help the crisis

“We need to make sure these hearings aren’t merely a fact-finding expedition or whether it is laying the groundwork for action in Congress next month on a stimulus package,”Ranking member, Jim McCrery, said at the Ways and Means Committee hearing on Economic Recovery, Job Creation and Investment in America.

The Governor of New York, David Paterson, stated that as part of the second economic stimulus package, states need direct and immediate fiscal relief to help close their massive budget deficits. “Much of the good that would be done through proposals like expanding unemployment or food stamp benefits would be undone if states do not receive necessary federal budget relief,” Paterson said.

The Governor of South Carolina, Mark Sanford, said that he doesn’t believe that throwing more money to the institutions that put our economy in this situation is the way to go. Sanford said that no matter what amount of money is thrown at the consumer, individuals and businesses will likely choose to wait to make their purchases or investments. “Essentially, you’d be transferring taxpayer dollars out of the frying pan- the federal government- and into the fire- the states themselves,” Sanford said. Sanford believes that giving states more freedom, flexibility, and more options instead of more

Chief Administrative Officer for Montgomery County, Maryland, Timothy Firestine, said that it is important to note that while the state and local governments are suffering the effects of the current credit crisis, the general problems in the municipal market are not due to any fundamental problem with the underlying credits themselves. “In a quest to stimulate the economy, create jobs and help state and local governments, Congress could act to infuse capital in the municipal securities market in order for governments to begin vital infrastructure projects,” Firestine said.

Firestine and Sanford both agree that any taxation would exacerbate the economic crisis and they both stated that if anything needs to be done with taxes it would be to lower them.

Let's not jump to conclusions about the CEOs

In a discussion concerning the over criminalization of corporate crimes at the Heritage Foundation, Former Attorney General Dick Thornburgh said the justice system should be "reserving criminal sanctions" for the worst violators of corporate crimes. He added that only prosecuting severe offenses is advantageous to an influx of "flimsy prosecutions" due to a "shortage of resources" to carry out an excess amount of criminal investigations.

Thornburgh stated that in the current economic climate, there is a "temptation to do something" among citizens, lawyers, and lawmakers alike. He advocated a "cooling off period" before action is taken.

William McLucas, Former Director of Enforcement at the Securities and Exchange Commission said it is difficult to be unbiased "against the backdrop" of "executive compensation." He thought the American
economy had suffered "systemic failure" and that the U.S. should "not get distracted" from the problems in our economy by assessing biased blame.

Director of the Center for Data Analysis at the Heritage Foundation William Beach blamed our housing crisis on the desire to "increase home ownership" for people who were "not ready for those mortgages."

He said that until the risk of home sales is reduced "we are by no means out of the crisis."

Barry Pollack, Director of the National Association of Criminal Defense Lawyers, felt the economic crisis created a "presumption of guilt" among corporate crimes. He added that criminal prosecutions are "viewed with 20/20 hindsight" which isn't fair to those charged since this corporate conduct has been allowed for years. He said a reduced amount of corporate prosecutions "does not mean you're giving up the notion of accountability."