By Julian Sanchez
November 20, 2008 - 10:00PM CT

If you believe author/activist Naomi Klein, there's a nefarious conservative conspiracy intent on making the world safe for capitalism by exploiting national crises to force political change. Whatever you think of Klein's "Shock Doctrine" thesis, Google CEO Eric Schmidt seems like an unlikely candidate for the cabal.

But at a talk in Washington D.C. on Tuesday, the head-honcho of the Search Engine That Walks Like a Verb did see a green lining in the current financial crisis: an opportunity to "stimulate the economy" by launching an ambitious infrastructure program that aims to fundamentally alter the American energy system. Schmidt spoke at an event sponsored by the New America Foundation. He argued that the green lining in the economic implosion is that it has created demand for a massive domestic stimulus, opening the door to large-scale public works programs of the sort undertaken by Franklin Roosevelt during the Great Depression.

Instead of subsidies for the foundering U.S. auto industry, said Schmidt, we have an opportunity to leverage the bailout to "decarbonize our economy." Clean energy sources like solar and wind power face a "grid problem," according to Schmidt: The optimal areas for renewable power generation aren't hooked up to the areas where the people who need power are. The effort to build out that infrastructure, said the Googler-in-Chief, could be sold as a jobs program for local contractors hard hit by the moribund housing market.

Federal pre-emption could be invoked to cut through the bramble of diverse state regulations and enable deployment of smart grids that manage power more efficiently, Schmidt believes. Citing the ARPANET—funded by the Defense Department, but partially built and then massively expanded by for-profit companies—Schmidt argued for a similar public-private collaboration to build a better power grid.