Month: January 2023

Melting Alaska Wants To Drill More Oil

Posted on January 31, 2023

If you wanted an example of the reason we’re still losing the fight to slow the earth’s heating, the proposed Willow oil project in Alaska should suffice.

This should be the no-brainer of all time. The ConocoPhillips plan for a massive new oil field development flies in the face of all climate science and reason. It would be producing huge quantities of oil for at least the next three decades—long past the point when scientists say we must stop using it (and long past the point when, with a serious effort to electrify transportation, we’d need it).

And it would do so in a place—Alaska—already warming faster than almost any place on the planet. Warming so fast that taxpayers are already having to pony up huge sums of money to relocate coastal villages inland. Emissions from the Willow project’s oil would cause $19.8 billion in climate damages; it would generate $3.4 billion in federal tax revenue, which is…a lot less.

How insane is this project? ConocoPhillips has said it may need to freeze the rapidly thawing ground with massive chillers in order to drill for the oil that will drive that melt even higher. “Where necessary we use cooling devices (thermosyphons) that can chill the ground enough in the winter to help it remain frozen through the summer,” ConocoPhillips Alaska spokeswoman Natalie Lowman explained, a sentence that historians (assuming there are some) will someday parse in an effort to understand exactly how off-track a civilization can go.

It would be an enormous step backward for the U.S. All the way back in 2015, when the Obama-Biden administration rejected the Keystone XL pipeline, the president said “America is now a global leader when it comes to taking serious action to fight climate change, Frankly, approving this project would have undercut that global leadership.” That’s far truer now—back then we hadn’t yet signed the Paris climate accords. Back then we hadn’t had the massive heatwaves in the Pacific Northwest, nor the massive fires in California, nor the massive floods in Pakistan. Back then Sudan hadn’t suffered through five straight dry rainy seasons. Back then large swaths of Alaska’s waterways had not yet turned orange from a warming-driven plankton bloom that threatens local drinking water supplies.

If you want numbers, an analysis from the Center for American Progress finds

the carbon emissions expected from Willow would negate the estimated 129 MMT of carbon emissions avoided by reaching the president’s goals of deploying 30 gigawatts (GW) of offshore wind energy by 2030 and permitting 25 GW of solar, onshore wind, and geothermal energy on public lands by 2025. Put another way, allowing the Willow project to proceed would result in double the carbon pollution that all renewable progress on public lands and waters would save by 2030.

President Biden has done good work for the climate—from the Inflation Reduction Act to the recent decision to protect Alaska’s Tongass National Forest. But physics doesn’t grade on a curve. When Interior Secretary Deb Haaland makes the call on this project, she’ll be deciding whether to put a truly massive slug of carbon dioxide into the air—co2 that will long outlive her, and all the rest of us.

She’ll come under huge pressure: as always, Alaska’s politicians, Democratic and Republican, want more drilling. The power structure is so pervasive that Alaska Public Media, when it ran a story on the fight, put it right next to a big notice thanking ConocoPhillips for its support.

The Willow complex is located on the National Petroleum Reserve, created many decades ago by people with foresight, who knew that the smart decision in the moment was to save the oil so we would be able to see if we needed it later. In 2023, the best and highest use of that oil is clearly to keep it in the ground. If we don’t reserve that oil, if instead we spill it into the air, we will pay a huge price. Alaska will pay more price than most (though those same politicians will do their bipartisan best to make all Americans share the cost of the damages.) We can’t keep doing this; this is clearly the place to stop. Deb Haaland, and Joe Biden, need to stand up to the pressure.

The “National Debt” Is No One’s Fault

Posted on January 30, 2023

On March 27, 2018, a group of economists from the conservative Hoover Institution published an op-ed declaring that A Debt Crisis is on the Horizon. They wrote:

For years, economists have warned of major increases in future public debt burdens. That future is on our doorstep…Unless Congress acts to reduce federal budget deficits, the outstanding public debt will reach $20 trillion a scant five years from now, up from its current level of $15 trillion…When treasury debt holders start to doubt our government’s ability to repay, or to attract future lenders, they will demand higher interest rates to compensate for the risk…Such high interest payments would crowd out financing of needed expenditures to restore our depleted national defense budget, our domestic infrastructure and other critical government activities…

About a week later, five former chairs of the White House Council of Economic Advisors—including Janet Yellen and Jason Furman—countered with an op-ed of their own. They titled it A Debt Crisis is Coming. But Don’t Blame Entitlements. Here’s their opening paragraph. Notice how it affirms rather than counters the core of the conservative argument.

A group of distinguished economists from the Hoover Institution, a public-policy think tank at Stanford University, identifies a serious problem. The federal budget deficit is on track to exceed $1 trillion next year and get worse over time. Eventually, ever-rising debt and deficits will cause interest rates to rise, and the portion of tax revenue needed to service the growing debt will take an increasing toll on the ability of government to provide for its citizens and to respond to recessions and emergencies. None of that is in dispute.

As a reader of The Lens, you know that when the debate is broadened to include voices like mine, all of that is in dispute. But among establishment figures on both sides of the political aisle, there is shared agreement that something must be done to address America’s looming debt problem.

Thus, the debate—such as it is—revolves around who’s policies got us into this (supposed) mess, what we should do about it, and how much time we have to address the so-called problem.

That debate will intensify tomorrow, when President Biden meets with House Speaker Kevin McCarthy (R-CA) to discuss raising the debt limit. McCarthy has made it clear that republicans are seeking (unspecified) spending cuts in exchange for their help in lifting the debt ceiling. Meanwhile, the White House says it’s in no mood to negotiate. The president wants a clean vote to raise the debt limit, and he has threatened to “veto everything” if Congress sends him a deal that includes spending cuts that would jeopardize the economic recovery.

It’s anyone’s guess as to how this ends. But one thing is clear: no one in either party seems to want to have an honest conversation with the American people. Already, lawmakers from both sides of the political aisle are talking and tweeting about how our (supposed) debt dilemma is mostly the fault of the other party.

You could argue that it’s endemic to our politics. I know from my time working for the democrats on the US Senate Budget Committee that messaging is everything and that politicians rarely stray from their talking points. There is also comfort in the familiar.

 

Pointless Finger-Pointing

It’s not that there isn’t a cohort of lawmakers who have been exposed to alternative ways of thinking about these issues. It’s that most of them haven’t figured out how to talk to the American people without starting from the shared premise that our nation is facing a serious debt problem. And once you concede that there’s a debt crisis, you have little choice but to identify the culprit.

Unfortunately, you find the same finger-pointing among economists.

For example, the conservative economists at the Hoover Institution pointed the finger at programs like Social Security and Medicare, singling them out as the main drivers of our (supposed) debt crisis:

As is well-known, our deficit and debt problems stem from sharply rising entitlement spending…To address the debt problem, Congress must reform and restrain the growth of entitlement programs and adopt further pro-growth tax and regulatory policies…If Congress acts now, it can avoid a fiscal collapse…It is time for action.

Not so fast, said the former CEA chairs who served under democratic administrations:

It is dishonest to single out entitlements for blame…[They] are not the primary cause of the recent jump in the deficit…The federal budget was in surplus from 1998 through 2001, but large tax cuts and unfunded wars have been huge contributors to our current deficit problem. The primary reason the deficit in coming years will now be higher than had been expected is the reduction in tax revenue from last year’s tax cuts, not an increase in spending.

In other words, our guy (President Clinton) presided over a balanced budget, and then your guy (President G.W. Bush) came in and piled on a bunch of debt with his tax cuts and “unfunded” wars in Iraq and Afghanistan. Yes, we’re in trouble, but it’s your fault, not ours.

It’s so counterproductive.

The pandemic gave us a brief reprieve from this pointless finger pointing, as democrats and republicans—working together—used fiscal deficits to shore up the balance sheets of families, businesses, and state & local governments. When reporters raised concerns about how much money the government was preparing to spend, President Trump dismissed any cause for alarm, explaining, “It’s $6.2 trillion and we can handle that easily because…it’s our money. It’s our currency.”

I hate to tell you, but he was right.

  


In the early phase of the pandemic, almost no one pointed a finger at the mounting fiscal deficit or the rise in the (so-called) national debt. Headlines like this one, proclaiming that we are all MMTers now, became commonplace. It started to feel like we might actually have an honest conversation about the limits to government spending.1

But now we are backsliding.

The debt ceiling fight has brought renewed attention to the anticipated path of future spending relative to income. The annual deficit already exceeds $1 trillion, and it is expected to rise sharply (for a variety of reasons, including the Federal Reserve’s hiking of interest rates) in the coming years.

Instead of opening up an honest dialogue about what this all means (and doesn’t mean) for the lives of everyday people, it’s back to finger-pointing.

 

 

We can go down this path for another half-century, trading barbs like, “Republicans only care about deficits when a Democrat is in the White House.” Or we can stop it and finally have an honest conversation.

How refreshing would it be to turn on the TV and find a member of Congress flipping the script? Pressed to share their ideas about how do deal with America’s “ballooning debt problem,” imagine hearing them riff from these talking points:

There is no debt crisis. Not today and not on the horizon.

The national debt poses no risk to our nation’s finances.

The so-called “debt” is just the dollars we spent but didn’t tax back.

It’s part of the broader US money supply.

It will not leave future generations with a lower standard of living or a crushing burden of debt and taxes.

It is nothing like running up your personal credit card.

We do not eventually need to “pay it off.”

That’s not a comprehensive list—feel free to add your own in the comments—and lawmakers would obviously need to be well equipped to defend each statement. It would take hard work, but it can be done!

How do I know? Because the (now former) Chairman of the House Budget Committee, John Yarmuth, has done it.

 

 

In Closing

There’s another reason why the finger-pointing is so frustrating. While democrats and republicans blame one another for “blowing up the deficit” with tax cuts, unfunded wars, spending on social programs, etc., the truth is that so much of what happens really just depends on the state of our economy.2

As MMT economist Eric Tymoigne shows in this recent article, deficits shrink in a booming economy (mostly because a progressive tax code substantially boosts tax revenue). Over time, if the deficit gets too small to support the private credit structure, it chokes off the boom. Unless something happens to recharge aggregate demand, the slowdown can evolve into recession. When that happens, the automatic stabilizersswing the other way, moving the deficit higher.

You can see this clearly in the data. When the unemployment rate is rising (blue line), the government budget tends to move more deeply into deficit (red line). Over the last year, the opposite happened. As President Biden likes to remind us, the fiscal deficit shrank from $2.6T to $1.4T last year. That was, in part, due to the ongoing economic recovery.

 

 

But what happens if the recovery falters, as most economists anticipate, sometime this year?

I would suggest that Democrats should be particularly cautious with the finger-pointing right now. Setting aside the fact that their rhetoric reinforces dangerous myths about the government’s finances, they should think about whether all of this bragging about shrinking the deficit is going to serve them well if/when the US economy tips into recession ahead of the next election. If that happens, then there’s a good chance the deficit will be increasing as we head into 2024.

So let’s stop the finger-pointing and improve the conversation. Here’s another talking point to get us started.

 

 

1- At its core, MMT is about replacing an artificial/imaginary/phony budget constraint with a real resource/inflation constraint.

2- In MMT parlance, it is driven by the net savings desires of the non-government sector.

Ben Jealous On Authoritative Brutality And How To End Racism In America

Posted on January 30, 2023

The nation is in shock over the vicious beating death of Tyre Nichols at the hands of police officers in Memphis, Tennessee. What’s even more perplexing is that the crime—all five officers have been charged with second-degree murder—was committed by five fellow Black men.

“It confuses a lot of people,” says Ben Jealous, author, advocate and former NAACP president. “A lot of people think abuse of policing is simply about racism. When we think about the Black experience with racism, it’s so traumatic for us as individuals that we often disconnect from its very colonial, authoritative system. The way kings built empires was to divide people in order to conquer them. The way they kept everybody in line, whether they were indentured Europeans or African slaves, was with authoritarian policing. This is an extension of that.”

Studies prove that officers who have a sense of higher authoritarianism, “results in you being killed even more than racism,” Jealous points out. He explores the root cause of racism and more in Never Forget Our People Were Always Free: A Parable of American Healing, inspired by Jealous’ own life experience of a biracial upbringing. “I was born on a bridge between Black and white, North and South, and even the old 13 colonies and the new world of California and the Pacific Rim,” Jealous declares. “And while much of my life that bridge has been on fire, never has it been more on fire than it is right now.”

Jealous’ book is a collection of parables that aim to heal America’s wounded heart and end the social caste system that established racism by strengthening the bonds among Americans of all races, creeds, colors and political ideologies. Jealous draws inspiring lessons and hope for restoring our country’s strength and unity from stories of his ancestors, and interweaves vivid anecdotes from family, friends, mentors, colleagues and strangers who have shaped his life’s mission and his faith in humanity.

“I grew up in a southern family with a long tradition of telling the same story over and over and over again, usually my grandparents. They were trying to teach you something,” shares Jealous. “So these are all stories with a lesson. They’re drawn from my lived experience and weave back into ancient history pretty fast. And maybe the hardest part is I had to dig into my own family history in order to really write this book.”

Living in the Chesapeake Bay area of Maryland, Jealous has been surrounded by conservative views, but his interactions have yielded a surprising conclusion. “Getting to know my neighbors better, fishing, drinking, and walking the dog with a lot of them who voted for Trump, what was top of my mind is how much we have in common: similar aspirations for our kids and values and families and a similar preference in whiskey,” he says. “The overwhelming majority of this country wants to be one nation, to see their kids raised with hope and have that hope turn into real prosperity. And that’s what this book is.”

One of the book’s most compelling parables centers around a minister/Ku Klux Klan member who had a nervous breakdown in the 1940s after participating in a heinous act. He left the klan and moved to a diverse area to regain his sanity, decency and command of his family. “This is a story that ultimately underscores the need for us to practice the Golden Rule,” Jealous notes, adding how the lesson was explained to him by the man’s son. “He said his dad would say, ‘ Any poor white man who has his hand on the neck of a Negro pulling them down in the ditch needs to recognize he’s down in the ditch with them. And a rich man walks down the middle of the road, laughing at them both.’ That’s ultimately what Dr. King was trying to teach us at the end of his life. Dr. King was not assassinated in the midst of a desegregation battle. Dr. King was assassinated trying to bring poor whites and poor Blacks together. That was the purpose of his Poor People’s Campaign.”

Jealous recalls how many leaders have lost their lives in that quest to unite Blacks and whites, including Black Panther’s Fred Hampton, who was assassinated in 1969 by the Chicago police department. “He was mostly focused on bringing poor whites and poor Blacks together through the Black Panther Party and the Young Patriots Organization,” Jealous exclaims. Another was NAACP leader Harry T. Moore, who was murdered in 1951 for his activism. “He was the president of Florida’s progressive party, which was seeking to unite whites and Blacks in Florida.”

At the end of this month, Jealous will become the first Black head of the Sierra Club, the nation’s oldest and largest environmentalist organization. “Our Black and Brown communities are the most likely to support environmental protection,” he shares. “Our family history is very close to the earth, historically we come from farms in rural communities. We come from Africa. We come from people who have been aware of their environment for centuries, even though we may have been for the last several decades in urban environments. And even there, we’re the most vulnerable to climate change. My hope with the Sierra Club is to build an even bigger coalition by opening the doors wider and making more strategic alliances with Black and Latino pastors and business people and those leading poor whites as well. The reality is, when it comes to planet Earth, we are truly all in the same boat. With climate change, we need to be doing everything we can to stop it. The fate of this planet is the fate of us all.”

At A Time Of Inflation, California Should Take A Bold Step To Tame Rising Health Care Costs

Posted on January 11, 2023

The word of the year for 2022 could have been “inflation.” Air travel prices rose nearly 40% from a year earlier. Grocery, housing, energy and other prices are also up. And once again, the cost of health care, which makes up nearly a fifth of our economy, is rising sharply.

Most health insurers in the individual market are expecting premium increases between 5% and 14% this year, according to Axios, and family out-of-pocket health care costs have jumped 10%.

But health care is different from other elements of the consumer price index. There is a way to control health care inflation while providing everyone with high-quality coverage.

Universal public financing of health care — often called single-payer coverage or “Medicare for all” — can cure what ails us both medically and financially.

Single-payer coverage would control health care inflation by eliminating the excessive profits and charges, outrageous drug prices and bureaucratic waste inherent in our current system of private health insurance.

Want proof? We have it.

The single-payer advocacy coalition Healthy California Now and the National Union of Healthcare Workers recently developed a household health care cost calculator for use by individuals and families who live in California. It’s designed to compare the costs associated with a single-payer program to current health care expenses.

So far, 4,000 households have tried it. Users enter their premium payments for the prior year, employer premium contributions, out-of-pocket expenses and annual income. The calculator then compares their costs under the current system to projected single-payer taxes at their income level.

Eighty-seven percent of those who used the calculator found average annual savings of more than $6,000 per household. Medicare beneficiaries were more likely to achieve net savings at a slightly lower average, $5,150 per household. The 13% of households that wouldn’t enjoy net savings generally had very low current premium and out-of-pocket expenses due to extremely generous health plans or annual incomes exceeding $350,000.

Take five minutes and try this exercise for yourself at Healthy California Now’s website.

The results are consistent with economic studies of single-payer health care systems. Most people save under single-payer for two reasons. First, single-payer actually lowers total costs while improving coverage by drastically cutting spending on profits and paperwork. Second, a single-payer insurance program is funded by a tax plan that everyone contributes to, so the burden increases at higher incomes and for corporations paying their share.

While divided government in Washington, D.C., will stop single-payer from moving onto the national stage anytime soon, California is a different story. Our leaders in Sacramento already have the initial steps out of the way, and they have the power to make single-payer a reality for the state.

The Healthy California for All Commission, formed by Gov. Gavin Newsom and the Legislature last year, defined a “unified financing” plan offering universal coverage and comprehensive benefits for everyone. Under this plan, out-of-pocket costs and cost-sharing would be eliminated. Rather than payments to private insurers, the funding would come from a progressive tax that can easily generate the necessary funds.

The tax plan used in the calculator includes a 2% sales tax on nonessential items plus a payroll tax that starts at incomes of at least $75,000 and a personal income tax that starts at $300,000 a year. Additional taxes would be levied on the state’s wealthiest individuals and corporate profits.

It’s true that some well-paid professionals would be at risk of paying more for single-payer coverage, and the super-wealthy would have to share some of the burden. But in exchange, all Californians would get a system that guarantees excellent coverage, including for long-term care, and a health plan that efficiently and equitably covers health care costs for everyone.

We can fight health care inflation while providing quality care for all, and California can show the way. The words on everyone’s lips this year should be “Medicare for all.”

Michael Lighty is an Oakland-based advocate of Medicare for all.
James G. Kahn is a professor emeritus at UC San Francisco.

The Trump Coalition Of MAGAs And Oligarchs Lives On, As Dangerous As Ever

Posted on January 9, 2023

The two parts of the Republican Party — the MAGA cultural warriors and the economic oligarchs — need each other.

The oligarchy — billionaires, top CEOs, and moguls of Wall Street — wants lower taxes (which requires less government spending) and fewer regulations. Most basically, it wants to continue to siphon off more of the economy’s total gains.

To do so, it needs the MAGA cultural warriors to keep America divided over non-economic issues (abortion, gay rights, immigration, voting rights, religious freedom) so most Americans won’t look up and see where all the money has gone.

And the MAGA warriors need the oligarchy’s money for their campaigns.

This was the coalition and the strategy Trump relied on. The oligarchy financed Trump Republicans. In return, the oligarchs got lower taxes and regulatory rollbacks, while Trump and his MAGAs distracted the public with culture wars and warriors.

Even though Trump is no longer president and Kevin McCarthy has been installed as Speaker, little has changed. The same MAGA-Oligarchic coalition is still aiming to siphon off the economy’s gains for the oligarchy while disguising its effort with culture wars that keep Americans angry and divided. The MAGAs, meanwhile, feed off oligarchic campaign money.

Yes, the congressional Republican Party is factious. But don’t mistake it for a civil war. In reality, as the MAGAs and oligarchs jockey for positions in the lead-up to the 2024 election, each is testing the other’s power — making small compromises and adaptations where necessary.

Look, for example, at the critical role played last week by two oligarchic SuperPACs bankrolled by billionaires — the Congressional Leadership Fund (CLF) and the Club for Growth. The Club for Growth describes itself as a “leading free-enterprise advocacy group” that promotes tax cuts and deregulation — pure oligarchy. CLF spent nearly $260 million during the 2022 election cycle, helping McCarthy and his allies win the House. Its top donors are billionaires — banking scion Timothy Mellon, Blackstone CEO Stephen Schwarzman, and Citadel CEO Kenneth Griffin, as well as the Koch network.

To win the House for Republicans in the midterms, these SuperPACs quietly swung primaries away from controversial candidates such as Madison Cawthorn in North Carolina and Joe Kent in Washington. This caused some anxiety among the MAGAs. So during negotiations for making McCarthy Speaker, the two SuperPACs agreed not to spend money in future open-seat primaries in safe Republican districts. A small concession.

To cinch the deal, McCarthy also promised to hold a vote on a budget that will balance the deficit in a decade and cap discretionary spending levels at fiscal 2022. This will require major spending cuts — thereby opening the way for more tax cuts and bigger tax loopholes. The oligarchs couldn’t be happier.

The fiscal deadlines looming this year over spending bills and an increase in the debt ceiling also favor the oligarch’s economic conservatism because they too may lead to reduced spending and create opportunities for tax cuts.

But they also pose a potential problem for the billionaires. If the deadlines result in government shutdowns or the serious threat of a default on the nation’s debt, the oligarchy could lose a boatload of money. So expect backroom negotiations between the oligarchs who don’t want economic chaos and the extreme MAGAs who would be happy with it. This bargaining will be a central drama inside the congressional Republican Party over the next nine months.

The House MAGAs will spend most of their energies on fiery culture war investigations — of Joe Biden, Hunter Biden, the FBI, the IRS, other Democrats, and alleged socialists and pedophiles. The fireworks will conveniently distract the public’s attention from the oligarch’s economic looting.

Trump continues to be the central force within this coalition of economic oligarchs and MAGA culture warriors.

Speaking to reporters after he became Speaker, McCarthy was effusive in thanking Trump, who backed him for Speaker (after McCarthy helped rescue Trump by visiting him at Mar-a-Lago soon after the attack on the Capitol). “I don’t think anybody should doubt his influence,” McCarthy said. “I was just talking to him tonight, helping get those final votes.”

The is the reality we’re in, folks. But it is not a cause for defeatism or cynicism. The Democratic Party under Joe Biden will continue to fight back. The rest of us must continue to try to get big money out of politics, make the electoral college irrelevant, and protect and expand voting rights.