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The Green HouseThe recession is the best thing that could have happened to Barack Obama.

By Christopher BeamPosted Tuesday, Dec. 16, 2008, at 8:22 PM ET

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Newly Nobel-ed economist Paul Krugman has taken the lead in arguing that "the usual rules of economic policy no longer apply." Normally, if you wanted to retrofit a building or weatherize a home, you'd have to get the money from somewhere. The usual way is to increase revenues or reduce spending. No longer. With the economy in freefall and interest rates as low as they can go, the only hope for recovery is to spend—and to err on the side of spending too much.

The best part: Even though we have to borrow money, eventually the government can pay itself back by printing more. Yes, that would devalue the currency and therefore would not be, to use a technical economic term, free. But the way Dean Baker of the Center for Economic and Policy Research sees it, we have to spend the money now, anyway, to stimulate the economy: "It's like what Keynes said: Even if we pay people to dig holes and fill them up again, it's still good." And if we're going to spend, we might as well spend on something that's going to save us—both economically and environmentally—in the long term.

Then there's the problem of regulation. Sure, spending is fun and stimulating and possibly the only thing that will prevent total economic collapse. But regulation can slow growth. How can Obama implement a cap-and-trade plan without hurting the economy? Obama has admitted in the past that cap-and-trade isn't cost-free. After all, the whole point is to drive up the cost of electricity. In a debate on Jan. 5, he said, "We have an obligation to use some of the money that we generate to shield low-income and fixed-income individuals from high electricity prices, but we're also going to have to ask the American people to change how they use energy. Everybody's going to have to change their light bulbs. Everybody's going to have to insulate their homes. And that will be a sacrifice, but it's a sacrifice that we can meet. Over the long term it will generate jobs and businesses and can drive our economy for many decades." That was easy to say last January. It may be a harder sell in the midst of a recession.

Finally, energy efficiency may come at the cost of economic efficiency. Creating a solar panel does not create demand for a solar panel (a fact that Germany is currently learning the hard way). Another way of putting it is to say the economy moves faster than the government: By the time we're done installing all the solar panels, photovoltaic cells will be obsolete. Patrick Michaels likened it to Thomas Jefferson stimulating westward expansion by creating a state-sponsored nationwide network of barge canals. "By the time the barge network was done being built, the steam engine and the railroad would have been invented," Michaels said.

Despite all this, the economy is so desperate that the short-term outlook for Obama's plan is good. Any pledge to create 2.5 million jobs is bound to be popular. And the realignment in the House—particularly Henry Waxman's ouster of John Dingell as chairman of the energy and commerce committee—means he'll have the necessary congressional strength.

But by relying so much on an economic argument to support his green agenda, Obama risks losing momentum if the economy recovers. What happens when we no longer need to keep spending billions of dollars to create new jobs? Obama wants to reduce emissions by 80 percent by 2050. Does that mean the recession has to continue for that long, too?