September 17th, 2012


Journalist, Author

Managing Partner, DBL Investors


President Obama’s economic stimulus, an $800 billion spending spree that Congress approved in 2009, remains front and center in the debate over what role government should play in steering the American economy. Was it an appropriate use of government funds to create jobs, rebuild infrastructure and advance clean technology, or was it a waste of public money that failed to deliver on its promises?

According to Michael Grunwald, senior national correspondent at Time and author of The New New Deal, the stimulus package was the purest distillation of what Obama meant by change. “It included the largest infrastructure investment since Eisenhower; the largest middle-class tax cut since Reagan; the largest research investment ever; ‘race to the top,’ which is the most important education reform in years. It’s really a big deal.” Having lost 800,000 jobs in January 2009, “we passed the stimulus, and the next quarter we had the best jobs improvement in 30 years.”

Was it welcomed by Silicon Valley? Nancy Pfund, managing partner at DBL Investors, answered with a definite “yes.” Private sources of capital had dried up, she said, and the portfolio approach the administration took funded grants and loans and supplemented the investment tax credits for renewables. “All of that combined was a lifesaver for many of the companies that are becoming the icons of the industry.” Tesla, for example, received a $500 million loan from the advanced technology program. “That was a pivotal moment for Tesla in terms of funding that last stretch of development of the car that we’re increasingly seeing on the roads.” She went on to say that the companies got many multiples of the government dollars from private sources. “So it helped to get private industry back in the game of funding innovation.” Comparing it to the Bush administration’s approach of sending each taxpayer $300, Pfund stated, “Certainly we wouldn’t have the advances in electric vehicles and solar and wind and storage and biofuels and biochemicals if we had just given $300 to each person. We focused it on critical needs of our energy infrastructure.”

“The scope of this thing was just incredible,” Grunwald added. “We had been spending maybe a few billion dollars on clean energy on the federal level.” In comparison, in Obama’s first month in office, he spent $90 billion, which leveraged more than $100 billion in private capital, “at a time when this industry was completely dead in the water.” The result was “unprecedented investments in wind, solar, geothermal, and renewables. And energy efficiency in every imaginable form—smarter grid, cleaner coal, electric vehicles—creating an entire advanced battery industry for electric vehicles out of thin air—factories to make all this green stuff in the US.”

Focusing on solar, Pfund said that the stimulus allowed for people to lease rather than having to pay the total cost up front, which opened up solar to the middle class. “In the second quarter of this year compared to last year, installations doubled in this country. That’s a fantastic number in any economy, but especially in an economy like we have today.” Grunwald agreed, stating that the solar industry has increased more than 600 percent since the stimulus was passed, and wind power has doubled.

While republicans trashed the stimulus—many republican governors said they were going to turn the money down—in the end, according to Grunwald, “Governor Sanford from South Carolina was the only one who made a real effort to turn it down, and he was overruled by his republican legislature.” In fact, “Paul Ryan sent five letters looking for stimulus projects that were going to reduce global warming.”

Overall, clean tech and clean tech jobs are nonpartisan. Pfund spoke of a recent DBL analysis, which showed that “job growth is happening in red states, blue states, swing states. And many of the fastest growing clean tech jobs are red states.”


– Lucy Sanna
September 17, 2012
Photos by Ed Ritger
The Commonwealth Club of California