With the US economy stuck in purgatory, former President Clinton has offered up perhaps the worst solution to our financial crisis yet: Greening the TARP. Apparently oblivious of the lax lending standards and shaky economics that precipitated the crisis, he suggested that the Treasury implement “a user-friendly ‘just say yes’ system” for environmentally friendly construction projects. Clinton went on to say that “they are 100 percent safe so the banks will get their sea legs again.”
This blogger considers himself an environmentalist however, in addition to granola in the cupboard, I have a basic understanding of finance. Nothing, no matter how green, is a “100 percent safe” investment and to say so is not only factually inaccurate but dangerous. Simple axioms like “housing prices never fall” which were based on the erroneous assumptions of a lot of otherwise reputable observers helped delude Americans into this crisis. The US needs to redouble its efforts to combat global climate change but using the TARP to jumpstart those efforts is a wrongheaded distraction. Geitner needs to save the banks, not the environment. And he’s having a hard enough time with it already.