Wall Street vs. CleantechHow to tell a West Coast businessman from an East Coast businessman.

A solar-energy source in Mt. Laguna, Calif.Finance and clean technology—alternative energy, energy efficiency, the smart grid, etc.—are two vital industries centered on opposite sides of the country. Finance is New York, suits, and golf. Cleantech is San Francisco, khakis, and bicycling.

The cultural differences between the two industries can also be seen in the attitude they have toward government intervention in, and assistance to, their markets. I spent the first part of this week hanging out in New York, talking to the glum-faced denizens of Wall Street, observing the anniversary of the Lehman Bros. debacle, and gauging reaction to President Obama's speech. And I spent Wednesday at the Always On: Going Green Conference in greater San Francisco, a gathering of venture capitalists, start-up companies, and large corporations at a Sausalito, Calif., resort. In one place, the big shots were surly, somewhat clueless, and resentful of the government hand that's feeding them. In the other, the big shots were friendly, clued-in, and generally pleased with the way things are going in Washington. Can you guess which is which?

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A year later, the financial sector still does not seem to have come to terms with how badly it screwed things up and how much its success in the future is dependent on assistance from Washington. As a class, bankers, hedge funders, and private equity tycoons resent the fact that Washington is playing a bigger role on Wall Street. They believe it impairs their ability to run their businesses. Having saved the banking system from failure and taken a significant ownership stake in the system, the government is now interested in telling banks how much they should pay employees, how much leverage they should use, and how aggressive they should be in modifying mortgages. And since such proposals would influence profitability, Wall Street detests them. Bankers were put on this planet to take risk with other people's money and pay bonuses. Once you remove those two arrows from their quiver, all the fun is gone.

It's common to hear bankers complain about the onerous terms of the TARP and how many banks didn't really need it. The same folks, however, downplay the positive impact of other policies – the FDIC boosting deposit guarantees, the government guaranteeing the commercial paper market, the taxpayers standing behind the debt of Fannie Mae and Freddie Mac, the Fed's zero-interest policy—that have allowed the banks to survive and even thrive in a tough environment. They're like people who show up at a restaurant, chow down at the cheap all-you-can-eat buffet, and then complain that there wasn't any pudding. Speaking to the Financial Times, Wells Fargo CEO John Stumpf, whose bank received $25 billion in TARP funds, called for the government to improve his businesses by having government-controlled Fannie Mae and Freddie Mac start buying jumbo mortgages. Bankers are self-conscious and sheepish—and occasionally hostile—about needing the help in the first place. They're used to dictating terms to Washington, not the other way around. And they dislike all the focus on government assistance to the banks because it highlights the fact that society at large doesn't get all that much return on its investment.

In the Cleantech world, the attitude couldn't be more different. While there's some skepticism about the ability of government to manage programs properly, the executives I spoke to were generally enthused about the stimulus package and welcome the government into their markets with open arms. I chalk this up to the curious amalgam of engineering-inspired practicality and wide-eyed, hucksterish, world-changing idealism that animates Silicon Valley.

Unlike the financial world, Cleantech accepts as a simple reality the fact that their industry would probably not exist—or would exist in much smaller form—were it not for the lattice of government incentives, standards, and requirements that mandate and encourage the use of their products and services. That sense is heightened now that Wall Street—a traditional source of funding for large-scale Cleantech projects—is largely on the sidelines. A year ago, 15 to 20 investment banks provided so-called "tax equity" financing for large-scale alternative energy projects. (Companies with taxable income could offset that income by investing in wind farms.) Today, that financing has all but vanished. "Cleantech lost 75 percent of the investment capital we'd expected on a regular basis," said John Woolard, CEO of Brightsource Energy, which constructs large-scale solar electricity systems. And with fewer companies having profits to offset, that source has dried up. That is why firms are enthusiastic about the stimulus package providing grants, tax credits, and loan guarantees to companies building solar arrays and wind farms. "Without tax credits, there is no market," as one participant put it.

In addition, the very presence of government funds to back certain projects has made it easier for Cleantech companies to raise money. Adrian Tuck, CEO of Tendril Networks, which makes software and products that allow consumers to measure energy use, was trying to raise cash from investors last fall and in the winter—with little luck. Once Washington began talking about the stimulus bill, which contained several billion dollars in grants to utilities to develop smart grids—i.e., to spend money on the kinds of services Tendril provides—it was as if a switch flipped. Tendril, which has hired 55 people so far this year, raised $30 million in new capital in May.

The government involvement may offend the free-market sensibilities of Cleantech executives, but it doesn't offend their pride and self-image. By accepting aid, Wall Street is essentially admitting that it needs government help to make money. Silicon Valley can justify the assistance because it knows that it's doing good. In Silicon Valley, from the personal computer to the Internet to nanotechnology and green energy, the message is that these companies are fundamentally changing the world and, in the case of green tech, saving the planet from extinction. John Woolard of Brightsource, which is hoping to get significant government backing for a huge project it's constructing in the Southwest, began his presentation by talking about the number of species that had gone extinct in recent years and how many more might disappear if we don't do something about global warming soon.

On Wall Street, very few bankers boast that their credit products and proprietary trading strategies can change the world. That's what you do with your cash after you've made your pile moving paper and trading. In the Cleantech universe, making oodles of cash is just the good stuff that comes with revolutionizing the way people live and work.

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Daniel Gross is the Moneybox columnist for Slate and the business columnist for Newsweek. You can e-mail him at and follow him on Twitter. His latest book, Dumb Money: How Our Greatest Financial Minds Bankrupted the Nation, has just been published in paperback.

Solar Power Panels in Mt. Laguna, Calif., by Digital Vision/Getty Images.

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