In the Q&A session following a speech in Beijing by J.P. Morgan Chief Economist Bruce Kasman, one attendee asked whether the provisions for boosting green technology in the US stimulus package could spark a sustained wave of economic growth as we saw in dot-com era in the 1990s.
“No,” Kasman said. “I do not see the likelihood that government spending in this area will have that multiplier effect.” He did say however, that he would be quite happy to be proved wrong.
China Economic Review later spoke to an official with a European embassy who maintained that the drive toward increased energy efficiency and green technology could have a pronounced long-term effect on the US economy (not to mention the European energy companies providing these technologies to America). But another winner, besides good ol’ planet Earth, will be China, and Japan, to a lesser extent.
Lower US demand for oil will drive down prices, allowing China to boost its own imports and keep the economic engine humming along. Consequently, China and Japan will be more than happy to help the US finance its drive to clean energy. And by the way, any pain caused to Russia in the process is just a happy byproduct for the US.