Economy

Will the Financial Crisis Put an End to Reckless, Planet-Destroying Consumption?

The spiraling economy has forced the American consumer to halt and take stock. And that's a good thing.

The nation has faced the spectacle, in recent days, of auto industry leaders appearing before Congress to plead for their companies' lives, asking for bailout funds. This extraordinary turn of events comes in the wake a 32 percent drop last month in auto sales, one of the steepest declines in history and a decline that occurred across all product categories and companies within the industry. The woes of this single industry highlight deeper worries for American manufacturing and retailing in general, as companies like Linens 'n Things and Circuit City file for bankruptcy and many others brace for a bleak holiday season as consumer spending evaporates.

And yet we would like to pose a heretical question: is the drop in auto sales -- and general decline in consumption -- really a bad thing for America?

The over-consumption of material goods, such as cars, is in large measure the cause of our environmental problems. The transportation sector continues to be the largest source of CO2 emissions in the U.S., with cars alone contributing about 20 percent of all greenhouse gas emissions.

Amid the deepening economic crisis, the window of opportunity for bold initiatives has been flung open and Obama’s new chief of staff has said, "you don’t ever want a crisis to go to waste." Consensus is building that the Obama administration will have to offer a comprehensive economic stimulus plan as soon as he steps into office, if not before. But what kind of consumption should be stimulated?

In a recent New York Times opinion piece, Nobel Prize winner Al Gore put it this way:

"Here is the good news: the bold steps that are needed to solve the climate crisis are exactly the same steps that ought to be taken in order to solve the economic crisis and the energy security crisis."

Some think-tanks, such a Redefining Progress in San Francisco and the New Economics Foundation in London, have similarly called for a Green New Deal -- creating green jobs and retooling for sustainability as way to stimulate the economy. Obama has said he’d like to help car companies, "weather the financial crisis and succeed in producing fuel-efficient cars here in the United States."

For the car industry, a re-tooling to produce high quality small cars and trucks that can rely in part on renewable energy is long overdue. We hope this view takes hold and an Obama administration is able to follow through. The end of the "SUV-era" and unbridled consumerism as the engine of economic growth should be something to celebrate, not to fix.

Since the end of World War II, cars have played a special role in the mythology of the American Dream, symbolizing independence and freedom. Yet, reality is often quite different. For example, despite the billions spent on the Big Dig to relieve bottlenecks in the city of Boston, congestion has been worsening in the Boston metro area, with the public transit authority suffering from $8 billion in debt, and with lawmakers and transportation officials admitting they have no comprehensive plan for meeting the transportation needs of the future. Under decades of conservative rule, we have been taught to think of ourselves as consumers first, and citizens second. The result has been a dangerous decline in public investments, especially for public transportation.

Our country stands at a crossroads. We can try to bailout floundering behemoths like General Motors that are "too big to fail," in a desperate attempt to return to the way things used to be. Or we might let GM fade into history even as profitable and environmentally responsible arms of its business --  such as research into new battery technology -- are spun-off. We can boldly move forward and use this moment to transform from heedless consumers to responsible citizens.

The American consumer has been forced to halt and take stock. We face multiple challenges: global warming, the energy crisis, ongoing wars, the looming threat of peak oil, and accelerating population growth. We will need to reduce the consumption of physical goods if we are to meet the energy demands of tomorrow without destroying our children’s future. Obama has put out the call for our generation to rise to the occasion.

As responsible citizens we should call for an increase in investment in rebuilding certain kinds of infrastructure and strengthening the social safety net -- providing bridges that do not collapse, safe and affordable public transportation, improved health care, and education.

Further, as we work to green our economy, we will create millions of new jobs worth having. There are numerous examples of how we can improve our lives, create more time to spend with family, friends and creative pursuits, and continue to produce new goods and services that provide us with what we truly need.

To do this, we will have to accept that undifferentiated GDP growth, by itself, is no longer our prime indicator of success. Next time an economist says, "We have to restore growth to our economy?" we need to ask, "What kind of growth?"

Orion Kriegman is an Associate at Tellus Institute, where he serves as the Great Transition Initiative (GTI) Organizer. Dr. Rosen is Executive Vice-President and a founding member of Tellus Institute.
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