The U.S. saw $34 billion in private equity invested in the sector last year, a 51 percent jump from 2009, but China received $54.4 billion, increasing the lead it’s held over the U.S. since 2008. Germany last year passed the U.S. with $41.2 billion invested in clean energy.

“The United States’ position as a leading destination for clean energy investment is declining because its policy framework is weak and uncertain,” Pew Clean Energy Program Director Phyllis Cuttino said in a release.

“We are at risk of losing even more financing to countries like China, Germany and India, which have adopted strong policies such as renewable energy standards, carbon reduction targets and/or incentives for investment and production. In today’s global economic race, the United States can’t afford to be to be a follower in this sector.”

The new Republican majority in the U.S. House of Representatives – including Colorado’s four GOP lawmakers – has been systematically trying to dismantle U.S. Environmental Protection Agency clean air standards in recent weeks while simultaneously pushing for further deregulation of domestic fossil fuel production.

Calling EPA regulation of greenhouse gases a backdoor attempt at cap-and-trade, there’s a growing wave of climate change skepticism among Republicans and Tea Party newcomers. Even some moderate Republicans have warned such attitudes will further erode global investment in U.S. clean energy industries.

Michael Liebreich, CEO of Bloomberg New Energy Finance, pointed out the U.S. still leads in areas of innovation but is lagging in investment headed toward actual deployment of renewable energy.

“The United States remains the global leader in clean energy innovation, receiving 75 percent of all venture capital investment in the sector — a total of $6 billion in 2010,” Liebreich said in a release. “But the U.S. has not been creating demand for deployment of clean energy. As a result it is losing out on opportunities to attract investment, create manufacturing capabilities and spur job growth. For example, worldwide, China is now the leading manufacturer of wind turbines and solar panels.”

Immigrant men and youth have suffered the highest unemployment, largely due to shrinking of male-dominated industries such as construction. Women fared substantially better, according to the report.

Seeing fewer economic opportunities in developed countries, many would-be immigrants are staying put. This applies to legal as well as illegal immigration, according to the report:

Inflows to the United States fell in almost all temporary work visa categories, including a 23 percent drop in intracompany transfers and a 50 percent decline in visas issued to low-skilled seasonal workers. But, other legal flows have also been affected. Even family immigrants who have waited several years to receive a green card granting legal permanent residence in the United States seem to have become less willing to take up their visa when they reach the front of the line. In some countries, such as Ireland and the United States, foreign-born populations have actually fallen.

In some cases, such as for illegal immigration, the lower immigration numbers could be considered a silver lining to the recession. Still, this information points to an important side note when discussing how to decrease illegal immigration: While increased border security measures and enforcement can account for some of the drop in illegal immigration, the economy is also a major factor.

As for legal immigrants, the recession has shown they need more aid to avoid passing poverty to the next generations, the BBC World Service/Migration Policy Institute report argued:

Perhaps more critically, the recession has exposed an underlying weakness in the longstanding assumption that, as in the past, a dynamic labor market alone would effectively integrate the latest wave of immigrants to the United States. A growing body of research points to the importance of the social safety net in limiting the intergenerational transmission of poverty among the less educated.

One answer, according to the nonpartisan report, would be comprehensive immigration reform. If done properly, reform could aid with some of these problems by creating long-term solutions to limit illegal immigration and integrate legal immigrants into the United States.

If demand falls in markets for other productive factors — say, wheat as an ingredient in the baking of bread — the price usually drops until the excess supply is mostly gone. What is unusual about the market for labor is that excess supply, which shows up as unemployment, can be prominent and persistent. Why? In short, the difference is morale. Factors of production like wheat or trucks or pumps don’t have morale issues. Human beings do.

How these issues affect the labor market is a major focus of the research of Professor Bewley, who is a colleague of mine at Yale. He has developed an idiosyncratic approach, interviewing hundreds of corporate managers at length about the driving forces for their actions. The managers consistently told him that they are concerned about the emotional state of their core employees. They said that their companies’ continued success depends on the positive feelings and loyalty of these workers — and lamented the hard choices that would need to be made in a severe downturn.

Keeping all employees relatively idle while reducing their pay or cutting their working hours will hurt everyone. Managers say they usually consider it better to protect the crucial workers — and to engage in sudden mass layoffs of others.

This makes sense, from the business owners’ perspective: Sacrifice a few to save many. But unfortunately, the logic is a bit false. Often, managers let go of too many workers, eager to avoid another round of layoffs. That overworks the survivors. Moreover, studies show that the employees spared layoffs don’t feel relieved — they feel guilty. That means they spend less. And, often, they convince their bosses to put off new projects or investments, to avoid seeming like the company privileges products over people.

Job-sharing programs or pay cuts to avoid layoffs, when explained clearly to workers, actually aren’t as bad as they seem. The United States uses such programs only sparingly, but other countries do so enthusiastically. Germany, for instance, has a program called “Kurzarbeit,” or short work. Big employers cut workers’ hours, rather than making layoffs. If the company’s workers suffer a 10 percent reduction in hours or wages, the government helps make up the difference.

It works! The workers feel more secure, and more willing to spend, knowing they have a safety net. Businesses don’t need to justify investments or other expenses. And the benefit shows up in the headline numbers. Five years ago, Germany’s unemployment rate was 11.2 percent, versus the United States’ 5.1 percent. Now, the United States’ rate is 9.6 percent and Germany’s is 7.2 percent — even though, GDP-wise, the German recession was worse.

A report released this week by the Gerson Lehrman Group compares the two countries’ response to the recession in more detail.

During the recession, Germany continued a complex set of labor reforms called the Hartz Reforms, cutting some payroll taxes, deregulating labor markets, reducing the length and size of unemployment benefits, and paying employers to keep underutilized workers. In brief, German laws were changed to give employers strong incentives to retain existing workers and hire new ones despite economic hard times. And German laws gave workers every incentive to find work rather than remain unemployed.

Congress did the opposite. It gave workers every incentive to remain unemployed by granting the unemployed longer benefits (up to 99 weeks, in some cases). It also discouraged employers from retaining existing workers or hiring new ones by raising the minimum wage over a three-year period, and announcing future mandates on employers with the new health care and financial regulation laws. Although payroll tax cuts were proposed, they were never implemented.

The contrast between unemployment rates and labor force participation rates in Germany and the United States is stark. Since 2007, unemployment has risen in America and declined in Germany. At the same time, the percentage of people participating in the labor force has declined in America and risen in Germany.

I think this overstates the effect of the rapid expansion of unemployment benefits on the U.S. unemployment rate, and elides some other important differences between the U.S. and German economies. But I agree that there were and are better ways to help the country’s 14.9 million idled workers — particularly as economists forecast the unemployment rate will start rising again this fall.

President Obama at the G-20 Summit in Toronto on June 27 (Xinhua/ZUMApress.com)

BERLIN — President Obama’s push for additional economic stimulus is not just hitting a wall in Congress. The president has also been rebuffed by the largest European countries — with potentially profound consequences for the U.S. economy and Obama’s national agenda.

[Economy1] In the run-up to the G-20 summit in late June, the Obama administration went on a PR offensive, urging other wealthy nations to keep pumping stimulus into their economies. But with the Greek budget crisis heightening anxieties over public debt, conservative governments in Berlin, Paris, London and Rome are all on an austerity track. Instead of a pledge to inject more capital into their economies, all Obama got at the Toronto conference was a communique that emphasizes savings over stimulus.

Some economists fret that Europe’s fiscal retreat threatens to tip the U.S. deeper into recession. Meanwhile, leading analysts in Germany, the continent’s largest economy, say the trans-Atlantic spending spat underscores Obama’s limited maneuvering room in his effort to steer the fragile recovery back home.

“America is having enormous difficulties,” said economist Gustav Horn of the Macroeconomic Policy Institute, part of a labor-affiliated foundation in Düsseldorf, Germany. “At the moment, [the U.S.] is dependent on the rest of the world offering it a friendly economic environment.”

For Obama, the environment is less friendly than he would like. In an open letter to other G-20 heads of state before the summit, the president wrote that leaders should “learn from the consequential mistakes of the past when stimulus was too quickly withdrawn.” Treasury Secretary Tim Geithner, meanwhile, told the BBC, “Growth in the future around the world can’t depend on the United States as much as it did in the past.”

Some economists warn that austerity in the largest European economies, combined with severe budget cuts in countries such as Greece and Spain, could push the continent into a double-dip recession. If so, the consequences for the U.S. could be severe. A European downturn, Horn said, would hurt American exports, both by lowering demand and by strengthening the dollar. Perhaps more importantly, he added, a stumbling Europe could weaken crucial U.S. trading partners in Asia. Likewise, Nobel Prize-winning economist Paul Krugman recently warned that the resistance to more stimulus in Europe and the U.S. raises the specter of a depression.

But the dominant view in Germany is that such fears are misguided. Supporters of budget consolidation note the country is on an upswing, with GDP growth expected to reach as high as 2 percent this year as exports accelerate. Moreover, they argue that fiscal retrenchment will spur private-sector spending. A recent report by the Ifo Institute for Economic Research, a Munich-based think tank with government funding, says cuts would lead to an “expansive confidence effect on German consumers and investors.”

The fear that a European slowdown could hurt American trade underscores a more fundamental challenge that German economists say the U.S. must tackle: expanding exports as a source of economic growth.

“Before the crisis, we had a consumption boom in the U.S. that was not sustainable,” said Ifo economist Klaus Abberger. “And so we think there is a need for some redirection.”

That redirection, economists say, will be outward.

“The growth driver you’ve got left is ultimately net exports,” said economist Christian Dreger of the Berlin-based German Institute for Economic Research, another government-funded think tank.

The Obama administration has come to a similar conclusion. In his State of the Union speech in January, the president announced a new initiative to double American exports within five years, though many analysts called the goal unrealistic.

“For too long, America served as the consumer engine for the entire world,” the president said in follow-up remarks in March. “But we’re rebalancing. … Countries with external deficits need to save and export more.”

But the future of U.S. exports is not entirely under American control. The country can only reduce its trade deficit if the rest of the world has sufficient buying power, Horn said. The G-20 has been touting a new initiative to ease trade imbalances, which would require net exporters like Germany to buy more from net importers like the U.S. But it remains to be seen whether there will be any action to follow the talk.

Obama’s inability to induce Europe to boost its stimulus spending is rendered even more discouraging by the limited traction his spending proposals are getting in Congress. And it does not help that Obama is looking increasingly isolated among world leaders in pushing a more expansive fiscal policy.

“You don’t win something in Congress by saying, oh, Europe’s doing this,” said economist Dean Baker, co-director of the left-leaning Center for Economic and Policy Research in Washington. “[But] you don’t want the U.S. to look like an outlier.”

The president should not get his hopes up for a hand from Berlin, though. As the Berliner Zeitung newspaper declared of Germany’s chancellor in a recent headline: “Merkel won’t listen to Obama.” The country has a culture of thriftiness to rival even the fiscal-conservative wing of the Republican Party. The traumatic hyperinflation that racked the Weimar Republic during the 1920s has made Germany hyper-sensitive to price stability. The country last year amended its constitution to include limits on government debt. Deep concern that the aging of the population will soon make Germany’s welfare state unaffordable have made people here anxious to get back to budget cutting. Meanwhile, unemployment is lower than in the U.S., so the economic pain is less acute.

Deficit hawks here also argue the turmoil in Greece is a warning to profligate governments across the continent.

“We saw with the Greek crisis how vulnerable highly indebted countries are to [speculative] attack,” said Norbert Barthle, a member of the German parliament from the ruling center-right Christian Democratic Union party (CDU) who specializes in budgeting.

The American economy has managed impressive growth so far this year, but it has largely been driven by the effects of government stimulus, Horn said. And the looming dry-up of stimulus funds around the world amounts to a serious problem for the American president.

“He has to do more if other countries do less,” Horn said. “And in that sense, his worries are absolutely understandable.”

David Dagan is a freelance journalist living in Berlin.

I think it’s pretty safe to predict that this is going to be an extraordinarily difficult process. I doubt that it’s going to be measured in terms of one meeting, although we’ll see how the Iranians approach the meeting tomorrow.

That’s a way of saying that the talks will establish either that there’s a basis for further diplomatic engagement — predicated on Iranian disclosure — or that the Iranians are not interested in disclosure and the P5+1 will consider more punitive measures like sanctions. So, what specifically does Iran have to begin to provide the P5+1?

One, as I mentioned, is to fulfill their obligations to the IAEA on Qom, on the clandestine facility.

They also have an obligation to be transparent about their entire nuclear program. In the past there was a period of time where they applied the Additional Protocol, which allowed for wider inspections by the IAEA in Iran. That’s certainly an example of the kind of thing that would help restore confidence.

But the bottom line is we need to see — not just we, but the international community needs to see — actions, not just words. Particularly in light of the most recent revelation.

At the same time, in addition to increased transparency, as I said, concrete steps to build confidence in the program too, whether it’s based on the proposal that we’ve had on the table for some time that begins with freeze-for-freeze or other kinds of ideas, but there have to be measureable results.

Portugal is the third European Union country to accept Guantanamo prisoners from the United States, following on the heels of Ireland and France. Outside the EU, Albania and Bermuda have taken some detainees, and Britain has said it would consider accepting some if they have residency or citizenship connections. Silvio Berlusconi, meanwhile, recently told President Obama that Italy would accept three Guantanamo detainees, though the details haven’t been made public. Spain, too, is also reportedly considering the United States’ request to take four of the prisoners.

In all, 11 Guantanamo detainees have been transferred to foreign countries since Obama’s inauguration, said Justice Department spokesman Dean Boyd.

Germany and Sweden are among the European Union countries that have so far refused to take any Gitmo inmates, saying they need a good reason to do so.

Given that the United States Congress has passed a law barring the expenditure of any funds to bring Guantanamo detainees to the United States, and that Obama has given no indication that he’ll defy that ban and release any here anyway, the reluctance of some European nations to help us deal with the problem is not surprising.

It doesn’t help that in U.S. federal court, the Department of Justice has been arguing in each of the detainees’ habeas corpus cases that the men are too dangerous to be released and deserve to remain in prison. At the same time, the State Department continues to work through diplomatic channels to try resettle some of them abroad.

Some of the men released abroad have won court determinations that the United States has no right to legally hold them, notwithstanding the Justice Department’s arguments.

German Chancellor Angela Merkel visited the White House today. And by the White House Communications Office’s own admission (!), this is how Obama began his joint appearance with Merkel. Remember, I’m not making this up. It’s from the official transcript:

PRESIDENT OBAMA:  Willkommen.

Like I said, I am not making this up. Barack Obama has now converted to German. Just like Andy McCarthy promised, his totalitarian-liberal instincts preordained this moment.  Obama’s both a Nazi and a Muslim, an unstoppable Islamofascist Voltron. Destroy this mad brute!

Yet the plan has come under some criticism, the basic thrust of which appears to be that it might be too successful.

Some environmentalists have argued that by spurring new car production, it could actually lead to higher carbon emissions, rather than reducing emissions as intended, since 10 to 20 percent of a car’s lifetime emissions come from its manufacturing. Still, with Detroit on its knees and many thousands of Americans out of work, few would argue that stimulating the auto industry would be a bad thing, particularly if it’s producing more fuel-efficient vehicles. There may be merit to this line of reasoning, but it’ll never fly in Congress or with the public at large.

Other critics point to the example of Germany, where a similar cash-for-clunkers program was so popular (car sales rose 11.9 percent in February, as they fell just about everywhere else in the world) that it cost the government three times the anticipated price tag. Sure, Berlin might have to scrounge a bit to come up with the extra 3 billion euros (roughly $4 billion). But if we can turn around Detroit with just a few billion dollars, none but the fiercest deficit hawks will complain — particularly when we’ve already spent over $17 billion trying to do just that, and could end up shelling out as much as $130 billion.

Now, there are some legitimate causes for concern, such as the potential impact of cash-for-clunkers on used car dealerships. Still, with the auto industry in such perilous straits, it’s hard to turn down the prospect of a program that can simultaneously encourage fuel efficiency and improve the long-term health of Detroit.

And the results in Europe have been impressive. A cash-for-clunkers program in Germany helped boost new car orders by 63 percent in February, according to the Verband der Automobilindustrie, a German automobile interest group. As a result, the country’s auto fleet became more fuel efficient and kinder to the environment.

Sound too good to be true? That’s because it is — for the United States, at least. As The Wall Street Journal points out, gas costs nearly $6 a gallon in Germany, even with oil prices way down from last year. The incentive to trade in your old Land Rover for a new Smart car are huge there, when you can save nearly $100 on a long day of driving with the smaller vehicle.

Here in the United States, where gas is a third of the price of Germany’s and a high gas tax seems politically impossible, there’s no way that a cash-for-clunkers program could have the same kind of traction.

Still, if Rep. Betty Sutton’s (D-Ohio) Consumer Assistance to Recycle and Save (CARS) Act does pass and provide credits of up to $5,000 for people seeking to trade up, it would be a small but important step toward the creation of a strong, fuel-efficient U.S. auto industry.

Update: Evidently Sutton’s CARS bill has its flaws. From the American Council for an Energy-Efficient Economy:

The most serious shortcomings of the bill are:

-The qualification for vehicles to be scrapped under the program is based on age (model year 2000 or earlier) rather than poor fuel economy; and

-The fuel economy threshold for U.S.-assembled cars to be purchased under the program (27 miles per gallon highway) is very weak, with well over half of all cars sold meeting this threshold.

Scrapping all pre-2001 vehicles indiscriminately does not serve any valid purpose and should not be funded by taxpayers. Fuel economy in the U.S. has been roughly flat since the late 1980s, so replacing an older vehicle with a newer one does not generally save fuel. The bill as currently drafted fails to ensure that a new vehicle purchased under the program will be significantly more fuel-efficient than the vehicle that is scrapped.

Crafting a bill that will both accelerate our transition to a vehicle fleet that dramatically reduces oil consumption and greenhouse gas emissions AND stimulate demand for new vehicles to help our auto industry recover is an achievable goal. Any bill offering federal subsidies for new vehicle purchases should require that the scrapped vehicle is a fuel-inefficient vehicle, not simply an old vehicle, and that the purchased vehicle is a highly fuel-efficient vehicle.

We recommend the approach taken in H.R. 520, the ARIVA bill introduced in January by Rep. Israel, which promotes scrappage of vehicles having a combined fuel economy under 18 miles per gallon and purchase of vehicles exceeding Corporate Average Fuel Economy (CAFE) standards by at least 25 percent.