One day after endorsing Barack Obama’s presidential candidacy, Google CEO Eric Schmidt hit the campaign trail with the Democratic hopeful to appear in a roundtable discussion on the economy in Florida.
The far-ranging panel carried the theme of job creation, but also touched on tax policy, healthcare and education as the government mulls a second economic stimulus package to restore the battered economy.
“I remain optimistic,” Schmidt said. “I think we’re seeing a century’s transformation in five years,” he added, referring to the rapid-fire changes that are reshaping industries such as technology and energy.”
Joining Schmidt and Obama were former Federal Reserve Chairman Paul Volcker, several governors and a small-business owner from Florida.
For Schmidt, overhauling the nation’s power grid and developing new energy sources hold the “double benefit” of stimulating an economy beset by a severe exodus of manufacturing jobs, while also going a long way toward meeting the challenge of climate change.
“It seems to me if you want to build jobs, you need to build whole industries,” he said.
“Unless we do something, it’s going to be a long time before businesses feel comfortable investing. In the short term, the federal government can do a lot of things, and they’re all targeted at middle class jobs.”
Spurred by prudent tax incentives, a major clean-energy initiative could create a new class of manufacturing and technical jobs, helping to revive ailing sectors of the economy such as the automotive industry, Schmidt said, advancing a cause that has become a major area of research and development for Google (NASDAQ: GOOG).
“All of that technology has to be built somewhere, so let’s build it in the U.S.,” said Michigan Gov. Jennifer Granholm, who recently signed into law a bill mandating that 10 percent of the state’s energy come from renewable sources, such as solar and wind, by 2015.
Granholm pointed out that her state has the highest unemployment rate in the country, having lost 400,000 manufacturing jobs in the past eight years, due in large part to the dramatic tailspin of the three largest U.S. automakers.
McCain pledges tax credits
John McCain, who was also campaigning on the economy this morning, has outlined his own list of policies to reduce carbon emissions and promote alternative energy. Like Obama, McCain pledges a tax credit for research and development and support for companies promoting clean energy technologies like wind and solar.
McCain also promises a $5,000 one-time tax credit for consumers when they buy a zero-carbon-emission car, a policy Obama criticized as short-sighted. McCain contends that the credit will spur consumer demand for clean cars, which in turn will create a competitive advantage for the automaker that is first to bring them to market.
The panelists also talked up the need to upgrade the nation’s system of supplying electricity to the so-called “smart grid,” a responsive, automated system that would allocate energy more efficiently.
“We’ve got a really old, broken down electricity grid,” Obama said. “The problem is that a huge amount of energy is wasted during the transmission,” he added, comparing the current method of conveying electricity to water passing through leaky pipes.
A key feature of the smart grid would be the ability to give customers a credit on their power bill for unused electricity or electricity generated by machines such as hybrid plug-in automobiles.
“Because it’s not technologically smart, you can’t sell back unused energy into the grid and take it when you need it,” Obama said.
Obama also made mention of another policy initiative very dear to his latest endorser’s heart, promising that new sectors of job growth would be “not just roads and infrastructure, but laying broadband lines, so people can Google anywhere.”
A Google spokesman said Schmidt’s “endorsement was a personal matter, and Google is neutral in the campaign.” Schmidt has served as an informal economic advisor to Obama.
McCain’s inner circle is familiar ground for tech executives, too. Cisco (NASDAQ: CSCO) CEO John Chambers and the former chief executives of Hewlett-Packard (NYSE: HPQ) and eBay (NASDAQ: EBAY), Carly Fiorina and Meg Whitman, respectively, have each advised the Republican candidate. In an interview earlier this year, McCain named Whitman one of the three wisest people he knows.
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Checking the fundamentals
To New Mexico Gov. Bill Richardson, himself a one-time presidential hopeful and a former Secretary of Energy, the promise of vibrant clean-energy and high-tech industries begins with education.
“To build a new economy we need a trained workforce,” he said. Richardson went a step further than the Democratic nominee in calling for the abolition of the No Child Left Behind Act, the controversial education law that places an emphasis on measurable achievement and school accountability through standardized testing. Obama has said the law needs to be updated, but not scrapped entirely.
“I’d get rid of it and start over,” Richardson said, calling for increases in teachers’ salaries. “Put that money into the classroom for kids.”
Addressing the more immediate crisis of the credit supply and banking industry, Volcker, who helped stanch the stagflation crisis of the 1970s, called for a fresh look at government regulation to restore stability to an industry now heavily propped up by federal money.
“One of the biggest challenges for the next administration will be how do we re-privatize institutions that never should have needed to be socialized in the first place by this administration,” he said. “This is not a partisan matter. This is a problem that has to be dealt with in a nonpartisan way.”