WILD CARDS - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 191

2012 to predict a less-than-full-strength economy until 2018. 24 Many
analysts are even more pessimistic.
A depressed economy that persists longer that most experts expect
could alter the consequences of changes in U.S. energy. In Chapters 2
and 3 I argued that, in the long run, new jobs in oil and gas will merely
replace jobs in other sectors. But a persistently weak economy changes
what the long run is. If the U.S. economy continues to lag, new jobs in oil
and gas, as well as in the sectors that supply them and take advantage of
inexpensive fuel, are more likely to be clear-cut gains for workers. Steps
helping to facilitate development would thus carry more benei ts in this
set ing, and steps thwarting development would cause more harm.
Ei cient vehicles and alternative energy pose trickier analytical chal-
lenges. Conventional wisdom usually holds that the types of regulations
that are typically needed to spur their growth hurt economic perfor-
mance (if only slightly when pursued properly). h is suggests they
would be particularly damaging if the economy were unusually weak.
Reality, however, is slightly more complex. Measures that create
demand for new goods and services are precisely what the economy
needs when it is operating below its potential. Steps that prompt power
companies to buy more wind turbines or car companies to invest in
assembly lines for advanced cars and trucks start a chain reaction that
ends with more people being hired to deliver those products. It's good
news for a sluggish economy.
But there is a big caveat: the same policy measures that prompt
more investment in new energy technologies can risk depressing invest-
ment and consumption elsewhere in the economy. If a power company
spends money on wind turbines that it would otherwise have kept in
the bank, that's good news. If the money would have gone instead to
natural-gas-fueled power plants and fuel purchases, the shit would
probably be close to a wash. If the regulations aimed at spurring the
adoption of wind turbines instead prompted the company to invest
nothing at all, either in wind power or in natural gas, the consequences
would instead be negative.
A similar set of trade-of s could play out with advanced cars and
trucks. If regulations prompt consumers to replace purchases of foreign
oil with spending on ei cient U.S. cars, this boosts the U.S. economy, as