Adam Tooze on the Biden administration

For some Joe Biden has already exceeded expectations. For others his economic program is nowhere near enough to address the climate crisis and American decline.  While his Covid relief package has seen billions dispensed immediately, the Jobs Plan proposes to invest $35 billion in green R&D over eight years – less than Americans spend annually on pet food. 

So how radical is President Biden? Is there such a thing as ‘Bidenomics’?  And does the new President represent a break with the orthodoxy of Democrat predecessors such as Bill Clinton and Barack Obama?

Discussing all those questions on the UK’s Downstream with Aaron Bastani is Adam Tooze, Professor at Columbia University.

He is the author of The Deluge: The Great War, America and the Remaking of Global Order, 1916-1931; The Wages of Destruction: the Making and Breaking of the Nazi Economy and Crashed: How a Decade of Financial Crises Changed the World —all outstanding books.

The video interview runs about an hour, which is long to watch something on a computer screen, but I think it is worth taking the time.  Tooze has a wide range of information, a powerful analytical mind and a sharp tongue.  He takes a global view rather than an American view.

All this makes him interesting.  He is, possibly, a little more inclined than I am to regard politics as a clash of opinions than a struggle for power or a conflict of interests.

Biden infrastructure plan isn’t all that big

Alexandria Ocasio-Cortez pointed out that Joe Biden’s $2.25 trillion-dollar infrastructure plan isn’t all that big, when you consider that it’s going to be spread out over 10 years.

Biden himself proposed a $7 trillion-dollar plan while campaigning, as Krystal Ball noted on her TV show.  Bernie Sanders proposed $11 trillion. 

The Congressional Progressive Caucus has proposed $10 trillion.  Even Joe Manchin of West Virginia, possibly the most conservative Democrat in the Senate, suggested $4 trillion.

The President has limited himself by proposing to finance it on a pay-as-you-go basis.  Since infrastructure contributes to future economic growth, it makes sense to finance it by borrowing, the same as taking out a mortgage on a house or any other long-term investment.

Politically, there is little to gain by holding back.  Senator Mitch McConnell, the Senate minority leader, and the U.S. Chamber of Commerce would be just as opposed to it if it were $2.25 billion or $2.25 million.

There are a lot of good things in Biden’s plan.  It’s bigger and better than anything Presidents Trump or Obama tried to do.  But is it enough?  Is it a first step, or is it all there’s going to be?

LINKS

Ocasio-Cortez on Biden infrastructure plan: “Not nearly enough” by Dominick Mastrangelo for The Hill

Biden’s Infrastructure Plan Is More Than That – But Does It Go Far Enough? by Kara Voght and Rebecca Leber for Mother Jones.

Biden’s Infrastructure Plan Needs More Climate Spending by Kate Aronoff for The New Republic.

Biden’s Infrastructure Plan Is No Green New Deal, Left Says by Zahra Hirji and Ryan Brooks for BuzzFeed News.

Biden’s New Deal and the Future of Human Capital by David Wallace-Wells for The New Yorker.  Hat tip to Steve from Texas.

The Biden administration begins

Joe BIden is sworn in as President

Joe Biden would be a reasonably good President for a nation enjoying peace and prosperity.

He is a nice person who doesn’t want to upset anybody’s apple cart. Like Warren G. Harding a century ago, he represents the human desire for “a return to normalcy.”

His predecessor’s administration was one long series of self-created crises, until last year, when the COVID-19 pandemic hit.

I don’t know how well a Biden administration will deal with the pandemic, but, unlike Donald Trump, Biden won’t be actively against doing reasonable things (like masking) to deal with the crisis. 

He has said he’ll bring the United States back into the World Health Organization, mandate masks on federal property and interstate travel and push for a huge $1.9 trillion COVID relief package (which may or may not get through Congress).  He’ll extend restrictions on evictions and foreclosures and continue the pause in student loan payments.

This could be good.  But he is not going to push for any overhaul of the U.S. health insurance or public health systems.  And the restrictions on evictions, foreclosures and student loan payments are not sustainable long term.  BIden assumes a quick return to normal, which may not happen.

Biden, unlike Trump, is not actively opposed to action on climate change.  He will rejoin the Paris climate accords, push for a “climate world summit” and order the drawing-up of a plan for 100 percent clean energy and zero net emissions by the year 2050—that is, 30 years from now.

We Americans have made progress in reducing emissions.  But to accomplish the goals that Biden has set forth would require shutting down the coal, oil and natural gas industries, and the industries that burn these fossil fuels, and replacing them with new industries that provide just as many jobs and, hopefully, just as much business profit.

There is a name for such a transition.  It is called a Green New Deal.  It would be a big change, bigger than the original New Deal.  I don’t know if Biden would be up for so big a change or not.

Biden promised to end the “Muslim ban,” which restricts travel and immigration to the U.S. from Syria, Iraq, Iran, Sudan, Libya, Somalia and Yemen, plus five non-Muslim countries added in 2020.  But he has not to my knowledge said anything about ending military intervention in those countries, which has resulted in hundreds of thousands of deaths and millions being made refugees.

The USA needs to end our forever wars if we are to regain our self-respect and the respect of the world.  But it would be no easy task.  A peace economy would mean shutting down a big part of the U.S. economy.  I don’t know whether Biden has even thought about this.

Lastly a large part of the U.S. population regards the present administration as illegitimate.  Biden has to deal with rioters and insurrectionists, while trying to unite the American people as a whole.

The new President faces challenges that would task the ability of an Abraham Lincoln or Franklin Roosevelt.  I don’t expect greatness of Joe Biden.  I expect him to be better than Donald Trump, which is a low bar.

LINKS

Joe Biden’s Inaugural Address.

What Joe Biden has promised to do on Day One and his first 100 days as president by Ed Erickson for CBS News.

Hard Times: Will America recover under Biden? by Andrew Cockburn for Harper’s magazine.

Biden’s American Rescue Plan and Its Opponents by Jack Rasmus.

The CDC’s Mission Impossible by “Yves Smith” for Naked Capitalism.  The pandemic crisis.

The New Domestic War on Terror Is Coming by Glenn Greenwald on Substack.

Image via Chicago Tribune.

Domestic fossil fuel industries in crisis

The domestic U.S. fossil fuel industry is in trouble.  Hundreds of thousands of jobs are at stake.  President Joe Biden will face a choice: try to save them or replace them with something better.  There is a good article in Dissent magazine about this.

In 2016,  [Donald] Trump charged Barack Obama with waging a “war against coal” and promised to bring the sector back to its former glory.

He manifestly failed to do so, but his rhetoric still proved an effective bludgeon against Hillary Clinton in Appalachia during the campaign.  In fact, more coal plants were retired under Trump than in either of Obama’s terms in office.

U.S. coal production had already been declining for years, as cheap natural gas edged it out of the energy mix used in power plants.  Coal jobs had been disappearing for years even before that, as the industry replaced workers with machines.

At its peak in the 1920s, the industry employed over 800,000 people in the United States.  Today, only about 42,000 coal mining jobs remain.

As coal companies have gone bankrupt, they have shed their pension obligations to former workers, leaving the federal government to pick up the bill.  Last December, Congress bailed out nearly 100,000 coal miners’ pensions.

In the long run, this was a good thing, not a bad thing.  Of all the important sources of energy production, coal is the dirtiest.  It generates the most air and water pollution and the greatest hazards to its workers’ health and the public health.  Still, that is no consolation if your livelihood depends on coal.

As energy researchers point out, coal is the canary for other fossil fuel industries. Oil isn’t on quite the same decline yet, but it’s headed in that direction.

The American fracking industry has expanded rapidly in the past decade with the use of cheap credit, and with encouragement from Obama, who boasted of making the United States the world’s leading oil producer.

But the shale oil that fracking produces is only profitable when oil prices are relatively high, and the overproduction of shale gas has glutted global markets.

The combination of a pandemic-spurred decline in demand and a price war between Saudi and Russian producers sent oil prices plummeting this year, resulting in a record number of bankruptcies among American oil producers.  An estimated 107,000 oil industry workers lost their jobs in the United States this year.

While some of those may come back as the economy recovers (whenever that is), many will not. Some energy analysts suggest that the world may have hit “peak oil demand,” as renewable energy begins to replace fossil fuels.  The Houston Chronicle reports that oil production employment in Texas “may never fully recover” as the overextended shale oil sector consolidates and learns to get by with fewer workers.

Source: Dissent Magazine

The fact that the fracking industry, or any other fossil fuel industry, is unprofitable doesn’t necessarily mean it will cease operations.  The economic incentive for an industry in the red is to do everything possible—in this case, extract every little globule of shale oil and gas—to minimize the loss.

Of course, moving away from fossil fuels is a good thing, not a bad thing—also overall.  Global warming is not imaginary.  Greenhouse gas emissions are real.  But what about all the people whose jobs depend on oil and gas?

We need something like a Green New Deal to create useful and sustainable jobs to replace jobs lost.  Without some such program, Americans will be forced to choose between short-run economic survivable and a livable planet in the long run.

The USA could use a disaster response corps

Click to enlarge. Source: Climate.gov.

Click to enlarge. Source: Climate.gov.

Cutting greenhouse gas emissions down to zero is not enough.  Any Green New Deal needs a disaster relief component, because climate change is already bringing floods, fires and other emergencies.

The United States needs a Disaster Response Corps, organized along the lines of the original New Deal’s Civilian Conservation Corps, to deal with climate emergencies.  Like the CCC, it also would be a jobs program.

Right now disaster response is the responsibility of state and local governments, and non-profit organizations.  The federal government’s role is limited to coordination and providing financial aid.

Commonly volunteer groups, such as the Cajun Navy or Occupy Sandy, have to step in when organized relief efforts fail.

The outlook is for more and worse climate- and weather-related disasters.  It won’t be just fires and floods.  As droughts become worse, we can expect internal climate refugees, like the “okies” who were driven off the land during the Dust Bowl disaster in the 1930s.

My idea is that virtually anyone would be able to enlist in the Disaster Relief Corps for a fixed amount of time.  Enlistees would agree to accept military-type discipline and go where they’re sent.  The time between emergencies would be spent in training or maybe taking on some of the tasks of the 1930s CCC..

Pay would be comparable, in inflation-adjusted terms, to what CCC workers or enlisted soldiers got in the 1930s.  Enlistees could be discharged for misconduct, neglect of duty or refusal to follow orders.

The Corps’ mission should not be assigned to the military.  The military is for warriors; the Corps would be for rescuers.

It would be tricky to set it up in a way that didn’t undermine existing efforts, programs and volunteer efforts, but I think it could be done.

Maybe in time the U.S. could help fund a United Nations International Disaster Relief Corps.  There would be plenty of work for it to do.

Climate change is already upon us.  Cutting back in greenhouse gasses will limit how much worse it gets, but that won’t make it go away.  We have to deal with what’s already happening.

LINKS

U.S. Disaster Relief at Home and Abroad by Rocio Cara Labrador for the Council on Foreign Relations.

34 Disaster Relief Organizations, a list by Raptim Humanitarian Travel.  They’re doing good work.  But should they be expected to do it all?

The needed radicalism of the Green New Deal

The Green New Deal resolution of Rep. Alexandria Ocasio-Cortez and Senator Edward Markey is more radical and far-reaching than Franklin D. Roosevelt’s original New Deal.

The non-binding resolution calls for a mass mobilization of American government and society against catastrophic climate change, on a scale as great or even greater than mobilization to fight World War Two.

The mobilization Ocasio-Cortez and Markey call for would mean a closing down or drastic shrinkage of industries that depend on fossil fuels.  This would be a threat not only to the profits of powerful vested interests, but to the livelihoods of millions of good, hard-working people.   

That is why the Green New Deal is also a deal.  It includes social reform and a job creation program  to get buy-in from working people and minorities, who might otherwise

There are two problems with the resolution.  One is that it is too radical to gain political acceptance anytime soon.  The other is that, radical as it is, its proposals may not be enough to deal with the crisis.

∞∞∞

If you read my previous post or the text of the resolution, you’ll see that it is largely a wish list of the environmental and labor movements for the past 20 or so years.  Getting these movements on the same page would be a big accomplishment, because they haven’t always been friends.

The environmental movement has sometimes worked to the benefit of the well-to-do, such as subsidies for electric cars and solar panels, while putting the burden of change on the less-well-off, with higher gasoline and fuel prices.  The labor movement has sometimes accepted the argument that it is necessary to sacrifice health, safety and the environment just to protect jobs.

Working people have good reason to be suspicious of promises that, if they give up what they have, they’ll be given something else just as good or better.  This was the promise of NAFTA and the other trade agreements under the Clinton administration and after—that the loss of grungy industrial jobs will be offset by new bright, shiny high-tech jobs.  This didn’t happen.

An expression that occurs repeatedly in the resolution is “vulnerable and frontline communities.”  This refers to the communities left behind by de-industrialization and globalization during the past 30 years.  It also refers to the communities that will bear the brunt of climate change—usually poorer, often minorities, such as the people left stranded in New Orleans after Hurricane Katrine.  The resolution promises they won’t be left behind this time.

What the Green New Deal proposes

ADDED 3/24/2019.  I MADE A BIG MISTAKE HERE.  THIS IS THE DRAFT PROPOSAL BY ALEXANDRIA OCASIO-CORTEZ, NOT THE VERSION THAT WAS ACTUALLY INTRODUCED.

The Green New Deal resolution introduced by Rep. Alexandria Ocasio-Cortez and Senator Ed Markey proposes to address a climate change crisis and a social-economic crisis.  Here’s a quick summary of what they specifically propose.

• Build infrastructure to create resiliency against climate change-related disasters
• Repair and upgrade U.S. infrastructure, including ensuring universal access to clean water.
• Meet 100% of power demand through clean and renewable energy sources
• Build energy-efficient, distributed smart grids and ensure affordable access to electricity
• Upgrade or replace every building in US for state-of-the-art energy efficiency
• Massively expand clean manufacturing (such as solar panel factories, wind turbine factories, battery and storage manufacturing, energy-efficient manufacturing components) and remove pollution and greenhouse gas emissions from manufacturing “as much as is technically feasible.”
• Work with farmers and ranchers to create a sustainable, pollution and greenhouse gas-free, food system that ensures universal access to healthy food and expands independent family farming.
• Totally overhaul transportation by massively expanding electric vehicle manufacturing, build charging stations everywhere, build high-speed rail at a scale where air travel stops becomes unnecessary and create affordable public transit available to all, with the goal of replacing every combustion-engine vehicle.
• Mitigate long-term health effects of climate change and pollution
• Remove greenhouse gases from our atmosphere and pollution through afforestation, preservation and other methods of restoring our natural ecosystems
• Restore all our damaged and threatened ecosystems
• Clean up all the existing hazardous waste sites and abandoned sites, identify new emission sources and create solutions to eliminate those emissions
• Make the US the leader in addressing climate change and share our technology, expertise and products with the rest of the world to bring about a global Green New Deal.