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The Politics Of The Green New Deal: Conclusion

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Posts in this series:

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

The Green New Deal: OMG It’s Socialism!

The Politics Of The Green New Deal: We Can’t Pay For That

The Politics Of The Green New Deal: More Democracy

The Politics of the Green New Deal: The Conventional Wisdom

The premise of this series is that climate change is going to impose enormous costs on society, whether we do nothing and try to cope with the changes, or whether we try to ameliorate it. In our current version of unrestrained capitalism, those costs will be imposed on the working class*, and the capitalists will enjoy all the profits to be gained whatever we do. The Green New Deal promises to spread the costs and burdens fairly across society, meaning the capitalists will pay more and get less. This is fair, because the capitalists accumulated their wealth by underpaying the working class and by externalizing as much of their costs as possible onto the working class.

I slightly regret using the word politics in the title of this series because I’m no politician, and don’t have much to contribute beyond personal opinion and unlimited optimism about my fellow citizens; think of me as a John Dewey democrat**. (This 2011 post at FDL explains the term, and it holds up really well.) I planned to conclude by saying something like: So everyone has a good reason to support the Green New Deal, even on the off-chance that we have overestimated its effects on the planet and therefore the economy.

Sadly, in the weeks since it was first announced the Trump-led Republicans have poisoned the atmosphere with their unsurpassed and uncontroverted media. Here’s a good discussion of the attack and the results by David Roberts (@DrVox) writing at Vox. And here’s a nice piece on the Climate Change Communication website that shows changes in responses to a number of climate change questions over time and by different segments of the population.

Progressives have nothing like the right-wing media complex, and have utterly failed at reaching the broad public with their rationale for the Green New Deal and its benefits. The media is distracted by the shiny objects Trump skims over our heads daily. Liberals have dozens of critical issues that divide their attention. The Democratic Party lacks any focus at all, other than getting rid of Trump. That leaves huge numbers of people unable to formulate a coherent response to the right-wing media and its capitalist supporters. Far too many of us are unsure about the potential problem or the costs that that will come due as our climate changes.

I’ve read several analyses of the problem by people who know more about politics than I do. This is from the Roosevelt Institute. This is by Ezra Klein at Vox, responding to the Roosevelt Institute’s recommendations.
This one is by the indispensable Eric Levitz at New York Magazine; and there’s lots more on his author page. You won’t have trouble finding more.

I do have two thoughts.

1. I largely agree with this by Thomas Piketty. He writes about the disparity between the views of “voters with the lowest incomes, personal wealth or qualifications” (the “working classes” in his article) and their prosperous fellow citizens as shown in EU elections. The working classes mostly vote against the EU while the prosperous mostly vote for it.

The reason for this, according to those who are better off, is that the working classes are nationalist and xenophobic, perhaps even backwards.

But there’s a better explanation according to Piketty: the current structure of the EU unfairly favors the prosperous at the expense of the working classes, and the latter know this, resent it, and vote to change it.

In the US, many people respond to the obvious fact that their votes don’t change anything by refusing to vote at all. In the 2016 election turnout was about 58% of the voting age population. If the Democrats could get another 10% to the polls, raising turnout to 68%, they wouldn’t need swing voters and nervous Republicans, and they’d likely take the Senate and the House.

In my simple-minded approach, the failure of the Democrats is their absurd unwillingness to act like a political party. To take an obvious example, when Ed Markey and Alexandria Ocasio-Cortez announced the Green New Deal, some Democrats immediately indicated support. But the centrists just had to weigh in, whining about how radical it is and how much trouble it would be, and it might affect my chances of reelection and we can’t afford that. They just couldn’t keep silent, or say how much they were looking forward to working with their colleagues on this critical issue.

In my simple-minded approach, the Democrats act like a real party, where all of them are on the same team, and assert that they will pass legislation that will benefit non-voters, and will protect them from the depredations of the rich and their corporations. With control of the House, they can prove they will do so by passing legislation now.

2. Movies on TV have really long commercial breaks, three or four minutes or even more. Climate activists could make mini-movies for those breaks, 3-4 minutes long, that would basically be educational, with a very light touch of activism. As I see it, the right wing relies on fear, hatred, nationalism, and other highly emotional triggers. The viewers I would try to reach aren’t hooked on those emotional charges. They either are apathetic, or are turned off by those appeals. And those emotional triggers don’t work well late at night, they interfere with sleeping.

The idea is to show the problem directly, but keep the commentary to a minimum and keep it low-key. So, we could show the heavy rain, ice and floods in Nebraska, interview people who were damaged, like maybe a shot of farmer walking through a muddy field explaining he can’t plant and the financial effect on his business. We could interview the water treatment officials in Omaha whose system was flooded and poured raw sewage into streams and rivers. The commercials would be so long that people would look up during them even while playing with their phones, and the footage would be riveting.

The talk would be short, and focused on the people damaged. There would be large easy to read captions, because I think a lot of viewers mute commercials. There would be two or three open-ended questions in caption format from time to time. Can we afford to take the risk of more climate change? What happens to the price of food if we have wide-spread flooding in the Mid-west? How can we protect ourselves from the increased number of dangerous storms? Maybe we should talk about this with our friends and neighbors. And so on. Non-threatening, easy to understand, and non-judgmental, not didactic or pedantic. A soft approach might have an impact on people’s willingness to consider decarbonization.

The idea is easily expanded to teaching about other issues, including, for example, financial problems facing the 40% of us who can’t pay an unexpected $400 bill without borrowing, or people facing medical problems without decent insurance, people forced to move to chase jobs and so on, all problems addressed by the Green New Deal.

I don’t know if this is a good idea or not, but I know we have to do something new, because whatever we think we are doing now isn’t working.
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* I define the terms working class and capitalists in the first post in this series.
**Also, I generally agree with the views this post attributes to Sophie de Grouchy and others.

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The Politics of the Green New Deal: Conventional Wisdom

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Posts in this series.

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

The Green New Deal: OMG It’s Socialism!

The Politics Of The Green New Deal: We Can’t Pay For That

The Politics Of The Green New Deal: More Democracy

The Conventional Wisdom is that the Green New Deal is worse than useless, it’s dangerous. This essay by Jerry Taylor of the Niskanen Center lays out all the conventional analysis.

I worry, however, that despite all of the new energy you’ve unleashed on the political scene, you are setting your cause back, not moving it forward. Nothing about the seriousness of the threat we are facing changes the fact that politics is “the art of the possible,” not exhortation for the impossible. Given that serious action on climate will have to come out of the institutions we have — not those we might wish for — the strategies and tactics you are pursuing through the Green New Deal amount to political malpractice. Moreover, the policy initiatives you’re promoting are rightly difficult for political actors to swallow. As veteran Democratic operative Stuart Eizenstat warned this month, “Speaking from experience, by demanding the moon, their proposals will crash on the launching pad and lead to nowhere good.” Link in original.

Note the level of sadness Taylor expresses; some might call it concern trolling. The piece is long, but the basics are summed up in Taylor’s subheads:

Wishing for Ponies
Attack of the Killer Watermelons
Magical Thinking Regarding Partisan Power
Your Plan B: The Long War
Get Over the Overton Window
If Not the Green New Deal, What?

Taylor admits that the problem is serious and that he contributed to political inaction, and then dismisses the Green New Deal as impossible. The last section lays out Taylor’s ideas for doing a little bit toward solving the crisis: carbon pricing. He wants to use market mechanisms in some complex way to start reducing carbon emissions whenever that passes. I hardly need remind anyone that markets give all the power to people with money, and the more money, the more power. Market solutions automatically punish the working class who consume the product, especially those that lose their jobs as the economy changes; while benefiting those who control the markets. Taylor says tax revenues can be “rebated” to consumers to make them whole, which sounds pretty until you see that rebates come after consumers front the money, money large numbers of us don’t have to spare. History says whatever that program is, it will be too little and too delayed and too easily short-changed and too easily ended. And obviously rebates do nothing for people who lose their jobs. And Taylor doesn’t explain why passing some complex plan for carbon pricing is an easier project than the Green New Deal. Does he really think the forces of the fossil fuel industry will agree to major taxes on their wealth in the ground?

I argue in this series that the point of the Green New Deal is to insure that the burdens of climate change and our response to it are not shifted to the working class. Taylor acknowledges the concern but dismisses it:

Worse, your “it’s all related” argument validates and amplifies misplaced conservative objections to rapid decarbonization. For instance, you argue that a federal jobs guarantee and the like are critical because decarbonization will require immediate and massive transformation of the economy, necessitating federal action to ensure that radically transformed labor markets protect the well-being of millions of displaced workers. Conservative critics of climate action often make that same point in the course of arguing that the cost of decarbonization is staggeringly high.

Taylor assures us that the number of “displaced” workers will be “modest”. I hear echoes of Paul Krugman’a assurances that trade deals won’t cause job losses. Of course they do, and the jobs lost are the well-paying jobs. In exactly the same way, we can expect massive displacements, and the people hurt will have to pay the price of putting themselves in the right places, and too bad about the people who don’t have the money to move to wherever these supposed replacement jobs might be, and the older workers who cannot make the necessary changes to themselves to fit into the new jobs. Taylor is perfectly happy to stake your life on his market theory. The Green New Deal isn’t.

Taylor’s smug tone is infuriating. He hears your pain as the planet heats up, but really, we can’t do much and you are silly children for thinking we can anything that would actually work. Try for something attainable, and utterly ineffective against the inexorable force of climate change, it sure was a nice planet.

Taylor recommends that supporters of radical change to protect the planet learn from this essay in Politico by Stuart Eizenstat, a veteran of centrist Democrat politics. His title explains his thesis: I’ve Seen Civil War Destroy the Democrats Before. We Can’t Let it Happen Again. Eizenstat fears the left. He starts in 1968, blaming Eugene McCarthy for Hubert Humphrey’s loss to Richard Nixon.

But [Eugene] McCarthy failed to reconcile with his fellow Minnesotan and led his supporters back into the fold only after it was too late. Richard Nixon exploited the divisions in the party and the country and was elected by the thinnest of margins in November. His election led to an extension of the war Humphrey would have ended; during the next four years 21,000 more American soldiers were killed.

So it was those dirty hippies who lost the election for the Democrats. Then Eizenstat moves to the Reagan Carter election in 1980.

In 1980, Kennedy decided to challenge Carter from the left. The senator’s liberal supporters gummed-up the 1980 convention with more than 50 minority floor amendments to the party’s platform, demanding more and more spending and full-blown national health insurance. Kennedy lost, but the damage was done. His challenge irrevocably split the party.

And then Kennedy didn’t campaign hard enough for Carter, so it’s the left’s fault Reagan won by an enormous margin.

In the two cases Eizenstat relies on, the left was right and leadership was wrong. The war in Viet Nam was immoral. Johnson withdrew from the election because he couldn’t win the election. But the leadership of the Democratic Party wanted more war. They are responsible for Humphrey’s nomination and his subsequent defeat. (Side note: Eizenstat can bite my ass.)

In the case of Carter, national increased federal spending were the correct policy. The early Reagan years were a nightmare for working people brought on by Volcker’s extraordinary interest rates, which caused massive unemployment and weakened the unions even just as Reagan and his band of pirates and thugs moved the nation into neoliberalism. Volcker was protecting the assets of the rich. No one lifted a finger for the working class.

Eizenstat doesn’t mention HRC’s loss, but it’s the same thing. the leaders of the Democratic Party wanted her and not the changes Sanders demanded. The left was dismissed as impossible dreamers, and then blamed for her loss.

It’s past time for leadership to realize that their policies are the problem. Here’s an essay by Ed Kilgore in New York Magazine titled A New Role for Democratic Centrists: Helping the Left Win. Kilgore praises Clinton and Obama for holding back the worst of the increasingly “irresponsible and extremist Republican Party”. But

… their effort to revive progressivism by marrying it to market mechanisms — in part to secure business and moderate Republican support — never caught the public’s imagination or secured bipartisan support. It instead became a vehicle for deregulation and speculative excesses that helped produce the financial crisis and the Great Recession, a hollowing-out of industries employing the non-college-educated, and the kind of growing income inequality that looked to be waning for a moment in the ’90s. And even when this approach succeeded initially, as with the classic public-private structure of Obamacare, it conspicuously failed to inspire the sort of loyalty commanded by the supposedly archaic and sclerotic public programs of the New Deal and the Great Society.

The conventional wisdom got us into this nightmare. It won’t get us out.

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The Politics Of The Green New Deal: More Democracy

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Posts in this series.

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

The Green New Deal: OMG It’s Socialism!

The Politics Of The Green New Deal: We Can’t Pay For That

The Green New Deal restructures democracy in ways that benefit the working class at the expense of the donor class. The donor class gets its way most of the time, Here’s a recent discussion from Eric Levitz at tNew York Magazine. Levitz takes the Gilens and Page study farther, showing policies that are popular with majorities or large pluralities are not even considered by politicians. One example:

Take government drugs (…please): DFP and YouGov asked voters, “Would you support or oppose having the government produce generic versions of life-saving drugs, even if it required revoking patents held by pharmaceutical companies?”

Respondents approved of that idea by a margin of 51 to 21 percent. The proposal enjoyed the approval of a majority of Trump voters, and actually garnered more support in (stereotypically conservative) rural zip codes than in urban ones.

One of the drugs that meet this test is insulin; here’s a good description of the problem. In December 2018 Elizabeth Warren and Congresswoman Jan Schakowsky offered the Affordable Drug Manufacturing Act, which would put the government in the business of manufacturing generics to reduce prices. And here’s a predictable response, it’s evil socialism. Bills like this are not part of the discussion.

History tells us that capitalists will dominate the nation’s response to climate change, as they have in every economic disruption. The Green New Deal works against that outcome. Section 3 says

a Green New Deal must be developed through transparent and inclusive consultation, collaboration, and partnership with frontline and vulnerable communities, labor unions, worker cooperatives, civil society groups, academia, and businesses;

At present, the first three groups are rarely heard in legislative and policy circles, and civil society groups and academics are barely heard and pretty much ignored. This section alone will expand democracy. These unheard groups are nearly powerless, and other provisions of the Green New Deal are intended to strengthen these groups and increase their voice in the process of coping with efforts to salvage something from climate change. For example, Section 4.3 requires the government to

Provid[e] resources, training, and high-quality education, including higher education, to all people of the United States, with a focus on frontline and vulnerable communities, so those communities may be full and equal participants in the Green New Deal mobilization;

Section 4.6 requires

ensuring the use of democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers to plan, implement, and administer the Green New Deal mobilization at the local level;

Labor unions have played a strong role in protecting the interests of workers. Section 4.9 calls for strengthening labor unions and making it easier for workers to organize. Section 4.11 requires that trade agreements protect the interests of workers. Section 4.10 calls for

strengthening and enforcing labor, workplace health and safety, antidiscrimination, and wage and hour standards across all employers, industries, and sectors;

There is a connection between deeper involvement in strictly political matters and stronger unions. People start by participating in political decision-making, and learn that they can have actual control over public expenditures and policies. Then they apply that to their participation in union activities, and soon learn that they can have a say in the conditions that affect them for the largest part of their working day. They can change the conditions of work including safety, their schedules, and eventually they realize they don’t have to wear diapers to deal with lack of bathroom breaks, or suffer other abusive practices. Equally important for success in fighting climate change, working people often understand their jobs better than management. They can work smarter if they have enough power to make it happen. Perhaps the most important lesson I learned practicing Bankruptcy law is that no business ever failed because of its workers.

It works the other way, too. Participation in unions leads to more involvement in politics, and a clearer understanding of the issues. Unions have played a large role in Democratic politics, but the politicians have not done anything to protect unions and their interests. Stronger unions won’t accept their disregard.

Our lives seem different under this administration. The constant ratatat of garbage news from Trump’s brain and his erratic behavior swamp our news and our entertainment. At a personal level, the nonsense has dominated every dinner party I have hosted or attended since he got elected, leaving us struggling to change the subject or plunging us into a miasma of anger and despair. It took an out-of-town guest with a background in medieval history to break that chain, and remind me that politics has infected my life and that of my friends and family. The current level of democracy leaves us impotent. We can’t stop the damage, we can’t slow it down, and we can’t fix the real problems. We are powerless.

This in turn reinforced my reasons for thinking that the Green New Deal is vitally important. If it happens we open new channels for participation in the decisions that affect our day-to-day lives. Right now, Democratic politicians and their consultants and their rich donors tell us to work on their political campaigns, but not to upset them with primaries, not to establish purity tests, and most important not to demand radical change. Change is coming, they tell us, but just a little at a time and only if the Republicans won’t shout too loud.

My very first blog post at FireDogLake raised the question: what should Obama do for us? We supported him without making specific measurable demands. That’s not what the donor class did. But the Green New Deal is a demand from below. It’s a demand not just for climate action, but aspecific kind of action. It’s a demand for full participation by all of us in the decisions that affect our lives. It’s a statement that we aren’t going to allow the rich and their supporters to make the decisions and leave us to clean up the mess and eat the losses.

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The Politics Of The Green New Deal: We Can’t Pay For That

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Posts in this series:

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

The Green New Deal: OMG It’s Socialism!

Seriously. How on earth will we pay for the damage done by climate change? Water rising along the coasts and flooding huge parts of our oil and gas refining infrastructure? Resettling millions away from new floodplains in Nebraska and Florida? Food shortages? Dirty water? Hurricane and tornado damage? Storm costs already are running over $240 billion per year at least. The costs of three hurricanes and 76 wildfires last year alone ran to something like $300 billion. The National Climate Assessment identifies several areas of enormous concern: extreme heat, lost labor, infectious diseases, droughts and floods, decreased food production, and failing water and sewage systems.

We have a good current example in the recent floods in Nebraska. Flood water is running into the Missouri, where it overwhelmed the sewage treatment system in Omaha, dumping an estimated 65 million gallons of raw sewage. That fetid stream of filth is expected to continue for two to three months. Cities downstream will have to treat their water against unnamed pollutants, presumably e. coli among others.

Even without Omaha’s sewage, the floodwaters would not be safe because of human waste from septic tanks, animal waste and chemicals from farm fields, along with chemicals from urban and suburban parking lots and industrial sites, experts say.

That sewage and the related flood water is headed to the Mississippi through New Orleans. and the delta, washing out more of Louisiana on its way, and into the Gulf where the Red Tide from last year finally disappeared in February after a sixteen month bloom.

The floods are also causing serious problems for farmers. This story in the New York Times quotes farmers who are unable to get to their fields which are drowned by recent floods. The Kearney Hub of Kearney Nebraska says planting will be delayed; and adds fascinating details on how farmers should cope with wet fields. Eventually they may be driven off their farms. We can guess that capitalists will buy up the farms at foreclosure or otherwise. This will gradually concentrate food production in fewer and fewer hands, which leads to higher prices for food consumers.

But we never talk about how to pay for climate catastrophe. The financing talk is always about how to pay for efforts to cope with it. That’s apparently going to be a big part of Republican strategy, along with their other scare tactics. You have to admire the chutzpah of Republicans complaining about the cost of the Green New Deal after handing trillions in unfunded tax cuts to their donors. They are joined by plenty of moderate Democrats, and cost is one of the reasons.

It’s astonishing that no defenders of the Green New Deal ask their opponents how they plan to pay for climate disaster. Instead, they struggle to answer their detractors. Many advocates of the Green New Deal have turned to MMT because it makes it clear that we can do everything in the Green New Deal and more, subject to resource constraints such as adequate and trained labor, natural resources, technical knowledge and entrepreneurial skills. Here’s a good discussion from the excellent Stephanie Kelton.

I’ve read Randy Wray’s book, Modern Money Theory: A Primer on Macroeconomics for Sovereign Monetary Systems. I’ve also read some mainstream economics, some of which I discussed here at Emptywheel. For me, MMT is superior. Mainstream economics has a number of normative ideals at its heart, as we saw in my discussion of the theory of marginal utility of William Stanley Jevons (for example, here). As I see it, mainstream economics privileges the concerns of the individual over the well-being of the society in which the individual lives and works. On the other hand MMT gives a descriptive account of the economy, with no obvious normative implications. As Wray says in §7.10:

On one level, the MMT approach is descriptive: it explains how a sovereign currency works. When we talk about government spending by keystrokes and argue that the issuer of a sovereign currency cannot run out of them, that is descriptive. When we say that sovereign governments do not borrow their own currency, that is descriptive. Our classification of bond sales as part of monetary policy, to help the central bank hit its interest rate target, is also descriptive. And finally, when we argue that a floating exchange rate provides the most domestic policy space, that is also descriptive.

Functional finance then provides a framework for prescriptive policy.*

I don’t think mainstream economics will ever be merely descriptive in this sense. It isn’t even capable of getting rid of obviously bad ideas, like austerity or the Philips Curve, both of which are suffused with normative implications. There are still politicians who think we should have a constitutional balanced budget amendment. Stephen Moore, Trump’s nominee to the Fed, has argued for a return to the gold standard.

But you don’t have to accept MMT to see that the Green New Deal is affordable. Here’s a well-written paper by J.W. Mason of the Roosevelt Institute. I think Mason considers himself to be a heterodox economist, as opposed to a mainstream economist. He justifies financing important public projects like the Green New Deal in mainstream Keynesian terms.

In the end, someone is going to pay. We either pay to ameliorate the problem, or we pay to cope with the horrifying costs of surviving.

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*Quoted from this post.

Edited to correct name of Kearney, Nebraska and typos.

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The Politics Of The Green New Deal: OMG It’s Socialism!

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Posts in this series:

The Green New Deal Challenges The Domination of Capital

Part 1 on Labor

The Politics of the Green New Deal: Part 2 on Capital

The Politics of The Green New Deal: The Opposition Of The Rich

Capitalists as a class are wildly opposed to the Green New Deal. For years they have used their money to create a web of people devoted to denying obvious facts about our society, the science underlying those facts, and anyone who challenge their distortions. The tobacco industry set the example, working to undercut the scientific evidence that cigarettes cause cancer with fake studies and massive amounts of public relations garbage, including attacks on scientists and the scientific method. Exxon allegedly learned that burning fossil fuels was contributing to global warming in 1977. Here’s a nice summary from Scientific American.

Both industries were conscious that their products wouldn’t stay profitable once the world understood the risks, so much so that they used the same consultants to develop strategies on how to communicate with the public.

Of course it isn’t just consultants, and it isn’t just communicating. It’s publicists, some scientists, politicians, media personalities and a slew of people devoted to shaping public understanding and the language people use to understand and discuss society.* They purposefully created fog around the words “Capitalism” and “Socialism”, and exploited that fog to scare people. For these people Socialism seems to mean any program the they don’t like: Medicare, Medicaid, SNAP, Obamacare, Medicare for All, and now the Green New Deal. These legislative initiatives share an obvious similarity: they all focus on helping people, not capitalists or their corporations. That’s not Socialism in any normal sense of the term.

I don’t think it helps politically to point out that these shrieking people are completely misusing the word. I think we should focus on the other word that has dissolved in the fog: Captialism. I suspect the Socialism Shriekers think Capitalism is the economic system in the US as it currently exists. For them, It’s a static thing, and more important, a natural and just system, the only system capable of creating a better life for people, and one arising from natural law if not the Bible itself, and therefore the best of all possible economic systems. I don’t know, of course, because the Shriekers never say what it is.

Bruce R. Scott, the Paul Whiton Cherington Professor of Business Administration, Emeritus, at the Harvard Business School defined capitalism in a paper titled The Political Economy of Capitalism.**

Capitalism, as I define the term, is an indirect system of governance based on a complex and continually evolving political bargain in which private actors are empowered by a political authority to own and control the use of property for private gain subject to a set of laws and regulations. Workers are free to work for wages, capital is free to earn a return, and both labor and capital are free to enter and exit from various lines of business. Capitalism relies upon the pricing mechanism to balance supply and demand in markets; it relies on the profit motive to allocate opportunities and resources among competing suppliers; and it relies upon a political authority (government) to establish the rules and regulations so that they include all appropriate societal costs and benefits. Government and its agents are held accountable to provide physical security for persons and property as well as the laws and regulations. Capitalist development is built from investment in new technologies that permit increased productivity, where a variety of initiatives are selected through a Darwinian process that favors productive uses of those resources, and from the periodic modernization of the legal and regulatory framework as indicated by changing market conditions and societal priorities. Capitalist development requires that government play two roles, one administrative, in providing and maintaining the institutions that underpin capitalism, and the other entrepreneurial, in mobilizing power to modernize these institutions as needed.

Chapter 2 of his book, Capitalism: Its Origins and Evolution, is a detailed discussion of this premise. It begins with this formulation: “Capitalism is an indirect system of government for economic relationships.” He lays out several of the most important implications of this description. These seem especially important.

(5) the political authority has the administrative opportunity and in many cases the responsibility to shape the capitalist system to favor certain interest groups over others,, as well as the entrepreneurial responsibility to modernize the capitalist system over time; … (7) political authority inevitably shapes capitalism according to a strategy, no matter how implicit or imperfect that strategy might be;…

This description (it seems a bit long to call it a definition) has a ring of reality. Government takes a larger role in the economy in times of crisis. During and after economic crashes there are calls from all sides supporting this greater role. In times of war, the government takes direction of the industrial effort, and no one complains.

The Green New Deal starts with the assertion that impending climate disaster is a crisis requiring dramatic government intervention. The intervention is not aimed at government takeover of the means of production. Instead, just as in other times of crisis, the government, acting democratically through the legislature and the executive branch, sets the rules within which capitalism must operate. The government doesn’t tell industry how to make solar panels or wind turbines. But it can and should say that the national interest is not served by further use of fossil fuels, and that the national interest is furthered by use of renewable resources to the maximum extent possible. It is then natural for the government to set rules to make that happen.

For the last four decades we have followed an implicit and imperfect strategy of deregulation in line with the prevailing ideology, neoliberalism. Its premise is that capital is to be protected at all costs, regardless of the impact on society as a whole. We saw that in the Great Crash, when the bankers were not criminally investigated, let alone prosecuted, for crashing the economy and screwing millions of homeowners. Not only that, the bankers were bailed out. Not only that, they got to keep the money they extracted from the businesses and families they wrecked.

We have seen the results of Capitalism operating with no democratic control and with no accountability. It’s time for government to create and enforce a formal strategy to protect us from Capitalism, and to protect Capitalism from itself. That is the opposite of Socialism.

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* I didn’t use the more formal language of Pierre Bourdieu but it seems accurate. In his language, capitalists deploy their social and intellectual capital to create the symbolic structures people use to understand their world and their place in the world. He calls the exercise of this form of dominance symbolic violence. It is created by cultural producers whose job it is to elaborate the structure and spread it. I discuss this here, generally, and here, focusing on economists.

**I quoted this passage in this post.

*** I’ll take these issues up in a later post discussing the views of Elizabeth Anderson in a paper entitled Equality and Freedom in the Workplace: Recovering Republican Insights; the term Republican does not refer to the political party.

The Politics of The Green New Deal: The Opposition Of The Rich

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Posts in this series:

The Green New Deal Challenges The Domination Of Capital

Part 1 on Labor

The Green New Deal: Part 2 On Capital

Every discussion of the Green New Deal begins with the assertion that it can’t pass. In the US this means one thing: the donor class doesn’t like it. We need to confront this fact.

If the richest people in the US strongly supported the Green New Deal, it would be on its way to passage with the support of enough Republican legislators. As evidence, let’s look at a widely read study by Martin Gilens of Princeton and Benjamin Page of Northwestern of legislative actions and voter preferences. Here’s a short description. In this rebuttal of their critics, a group of researchers including Gilens and Page say this:

When only the affluent strongly support a proposed policy change, that policy is adopted 46 percent of the time; when only the middle-class strongly support a policy, that policy is adopted only 24 percent of the time.

The affluent are, not surprisingly, better at blocking policies they dislike than achieving policy change they desire. When a policy is strongly opposed by the affluent (less than 25 percent support) but not strongly opposed by the middle-class, that policy is adopted only 4 percent of the time. But when a policy is strongly opposed by the middle-class but not by the affluent, the policy is adopted 40 percent of the time.

Blocking the Green New Deal is obviously a priority of the capitalists in the donor class, and given their selection of old men in the Senate who won’t live to suffer the damage of climate disaster, the donor class will likely get its way in the near term.

Page and Jeffrey Winters published an article in December 2009 titled Oligarchy in the United States?. Here’s a less academic version. They think that oligarchs, meaning the very richest among capitalists, share three goals which I summarize as:

1. Protecting and preserving wealth
2. Insuring the unrestricted use of wealth
3. Acquiring more wealth.

I think most capitalists share those goals, and the richer they are, the more they agree.

In the past when confronted with economic disaster capital used its political and ideological power and of course its money to get the government to bail it out of economic difficulty, to direct the efforts of the government to deal with the problem (not necessarily solving it), and to enable capital to profit from dealing with the problem. We don’t have to look back but a decade to see this.

The Green New Deal is a direct threat to that approach. Capitalists. and their political allies are angry and outraged at the very idea that something should be done. It must be infuriating to hear politicians say that government should protect the working class and local communities from climate change and its consequences. It especially terrible because that protection will sometimes come at the expense of the three goals of the capitalists.

For example, Section 4.4 calls for increased research and development of new and renewable energy technologies and industries. Section 4.1 establishes a goal of:

providing and leveraging, in a way that ensures that the public receives appropriate ownership stakes and returns on investment, adequate capital (including through community grants, public banks, and other public financing), technical expertise, supporting policies, and other forms of assistance to communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization ….

In the past, the government has created valuable knowledge and technical expertise, and turned it over to the private sector to exploit at no or very little cost. Not only that, but there were no price controls to protect the consumers who are, of course, working class, not capitalists. This source of profit dries up under the Green New Deal. Capital is not permitted to impose excessive prices as it routinely has, for example in the drug business.

Section 4.5 adds this:

directing investments to spur economic development, deepen and diversify industry in local and regional economies, and build wealth and community ownership, while prioritizing high-quality job creation and economic, social, and environmental benefits in frontline and vulnerable communities that may otherwise struggle with the transition away from greenhouse gas intensive industries;

In the past, capital has invested where it chose for its own reasons. Capitalists use that power to extract tax preferences from state and local governments. Or they choose to locate in places with compliant, meaning non-union, workers, who are much easier to exploit. Section 4.5 seeks to change that. Section 4.7 calls for better jobs with higher pay. Section 4.6 insists on deep involvement of the community in planning for reaching the goals of the Green New Deal.

Taken together, these provisions should lead to a more resilient economy by spreading work and production across the nation. It’s true that the Green New Deal will reduce the freedom of capital to invest for its own benefit without regard to the costs it imposes on workers and society,and perhaps lower returns. Politically, making the economy work for everyone should be seen by the vast majority as a more important goal.

Until now, wealthier people, not all capitalists, have acted to ensure that factories, refineries, and other heavy polluters are kept in poor communities. The Green New Deal calls for moving to cleaner energy and production, and offers a path to that future. It also calls for cleaning up the mess the capitalists have imposed on society. It requires industry to go green as well, reducing pollution and damage to the people nearby. Thanks to the requirement for heavy community involvement, the balance of power related to the location of work should shift towards the working class. This, we can hope, will lead to a healthier and happier population.

It will also affect the profitability of some businesses because it forces capital to eat costs it has imposed on people and on the environment for decades. But the cost of improvements will be partly offset by government contributions of technology, financial assistance, and technical support under Section 4.1. And following Econ 101 logic, forcing capital to internalize all of its costs improves market outcomes by making the costs of production obvious.

The good things offered by the Green New Deal are not enough for the capitalists. They have always had their way, and they won’t give up without a fight. They’ve already started operating their most trusted tool: Shrieking About Socialism. I’ll look at that next.

The Politics of the Green New Deal: Part 2 on Capital

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Posts in this series
Part 1 on Labor

In Part 1 I discuss some of the ways the working class will be affected by disruptions brought on by climate change, and some of the ways the Green New Deal proposes to ease those burdens. Climate change will also hurt capital and capitalists. It’s not possible to outline all the potential damage and disruption so I’ll just lay out some of the obvious problems.

Real estate investments are in danger. Some of that impact will be borne by small landholders, owners of vacation homes on Galveston Bay or condos on the beach in Naples FL, for example. But much of it will be borne by larger holders, such as owners of apartment complexes near the coasts, marinas, and commercial property near the coast, and the owner of Mar-a-Lago. Rising sea levels will also affect the infrastructure of cities on the coast, such as Miami, which is already planning to spend $100M on flood protection.

The coasts aren’t the only areas facing weather problems. Wind storms are becoming more serious; recently extraordinary winds blew the roof off a warehouse near Dallas. Here’s a Wikipedia page documenting tornadoes in the US in 2019. It shows we have already had 3 intense tornadoes, including the two that struck Alabama recently. We can expect more.

Wildfires are a terrifying danger in drought-stricken areas. PG&E, the California utility giant, filed bankruptcy January 29, 2019 to deal with its liability for damage from wildfires it caused. The Los Angeles Times wrote:

PG&E said a Chapter 11 bankruptcy filing, which allows the company to continue operating while it comes up with a plan to pay its debts, was the only way to deal with billions of dollars in potential liabilities from a series of deadly wildfires, many of which were sparked by the company’s power grid infrastructure.
…
Financial pressure has been mounting on PG&E since October 2017, when a series of wildfires ravaged Northern California, killing 44 people. State investigators determined that PG&E’s equipment sparked or contributed to more than a dozen of those fires, which killed 22 people. The company’s crisis only grew with the November 2018 Camp fire, which killed 86 people and destroyed most of the town of Paradise.

PG&E arranged a $5.5bn interim loan from a consortium of banks but creditors objected and then the Bankruptcy Judge stated serious concerns. According to the Wall Street Journal, the Judge noted that PG&E was under criminal probation after a criminal conviction on six counts arising from the deadly San Bruno fire. The federal District Court in that case imposed a public safety regime on PG&E, and the later fires might be deemed to be the result of violations of parole, in which case the supervising court could replace management. That would be a breach of the financing loan. The Bankruptcy Judge also noted the strong possibility of more wildfires in 2019, saying that more damages could tip PG&E into default. Either default would give the bank lenders control of the company in Chapter 11 and the creditors objected to that possibility. The costs of this bankruptcy are horrendous, and will be borne at least in part by people forced to be customers of PG&E because it’s a monopoly. Some shareholders have suffered losses in stock value, and more may be lost. The stock is down $50 since September 2017 to about $20. It’s an ugly story and it’s going to be repeated.

Climate change will also damage the oil and gas industry. A number of huge petrochemical plants and refineries are located in hurricane territory. Here’s a detailed map; see for yourself. Last year refineries on the gulf coast of Texas were hit by Hurricane Harvey. Harvey weakened to a Category 3 hurricane before making landfall, and the damage was mostly from flooding. The loss of capacity caused spikes in gasoline prices for consumers. Some of the losses to refineries will be covered by insurance. But insurance companies are just for spreading risk, not eating it, and that implies a rise in the cost of insurance. Here’s an excellent article by Bradley Hope and Nicole Friedman in the Wall Street Journal from October 2018, focused on the impact on reinsurance companies. Here’s a taste related to studies predicting increased likelihood of hurricanes in the Persian Gulf:

“Climate change makes the historical record of extreme weather an unreliable indicator of the current risk,” says Stephen Pacala, a board member at Hamilton Insurance Group Ltd. and a Princeton professor, who wasn’t involved in the study. “So, what’s the insurance industry to do? No hurricane has ever threatened the massive unarmored oil and gas infrastructure in the Persian Gulf.”

So what dose the Green New Deal offer to capital?

Section 2.1 (I think; whoever made up this numbering system is a traitor to clarity) calls for

… building resiliency against climate change-related disasters, such as extreme weather, including by leveraging funding and providing investments for community-defined projects and strategies …

The emphasis on community planning is notable. Section 2.2 calls for rebuilding infrastructure. Section 2.4 calls for upgrading the power grid. Section 2.5 calls for rebuilding existing buildings to improve durability among other things. Section 4.1 requires insuring sufficient capital for entities, including businesses, working on the goals of the Green New Deal. Section 4.4 calls for educating workers so they can handle the new work that will need to be done. Section 4.11 calls “… enacting and enforcing trade rules, procurement standards, and border adjustments with strong labor and environmental protections ….” Section 4.14 calls for strict enforcement of anti-trust and other laws to encourage competition and discourage monopoly.

I’d say that’s a fairly strong plan for decent businesses under the Green New Deal. True, it doesn’t give capital a free hand to make the overarching decisions, and it doesn’t give capital all the money, and it has other provisions that hem in capital, but it sure doesn’t sound like the socialist dystopia the Republicans are shrieking about.

The Politics of The Green New Deal: Part 1

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The Green New Deal starts with the recognition that drastic changes to society and the economy are necessary to cope with the dangers of climate change. I see two basic assertions behind the Green New Deal. First, it says that the pain and costs of restructuring the economy will not be borne by the working class, as has been the case in every other economic disruption. Second, as a nation we cannot allow capitalists to dominate our future. There is a lot to unpack in these two issues, so this is the first of a short series.

In the course of the first part of my neoliberalism project we saw the effects of capitalism on the working class*. This aphorism from Thucydides sums up human history nicely: “the strong do what they can and the poor suffer what they must”. We saw this in the history of the English enclosures discussed by Polany; the use of state militias to break strikes in the US; and in Foucault’s discussion of the way the state forced people into becoming good little factory workers, supervised closely, but largely self-governing, self-controlled.

Republicans have hated the New Deal since forever. The Democrats started cringing over it right after WWII amid Republican fear-mongering about Communists. The Democrats gave the capitalists their first win with the passage of Taft-Hartley in 1947 and their aggressive purge of every element of leftist thinking in their ranks. Liberals joined the Capitalist Celebration; they gradually embraced deregulation, and they did nothing to protect unions, the source of worker power. Democratic wonks became experts at explaining the virtues of the market and the evils of Big Government, and crafted ever more complicated solutions to the problems created by rampant capitalism.

It was with this mindset that the US confronted the biggest crisis facing the working class, globalization. Clinton and the Democrats embraced NAFTA, and so did Democratic wonks. Paul Krugman wrote an article for Foreign Affairs attacking unions for saying that NAFTA would cost US workers their jobs. Nonsense, said Krugman. The impact would be marginal, and the Fed would simply cut interest rates to keep the economy roaring; special bonus: job training programs. This mentality continued to dominate US politics and Democratic party wonks as manufacturing jobs vanished. The promised solutions didn’t work. Capitalists got rich, and the burdens were pushed off onto the working class and small towns across the country.

Here’s a recent defense of NAFTA from the Council on Foreign Affairs. It admits that NAFTA contributed to the decline of US manufacturing jobs, but ignores what happened to the fired workers. It claims that NAFTA provided benefits to the economy as a whole, without specifying who reaped those benefits. It adds this:

Edward Alden, a senior fellow at the Council on Foreign Relations, says anxiety over trade deals has grown because wages haven’t kept pace with labor productivity while income inequality has risen. To some extent, he says, trade deals have hastened the pace of these changes in that they have “reinforced the globalization of the American economy.”

Translation: capitalists replaced well-paid manufacturing jobs with cheaper foreign labor, to their benefit and that of their corporations. They ignored the impact on workers, who lost their livelihoods, their insurance, and more. The impact of free trade with China is even greater, according to a recent study, and neither party lifted a finger to help.

The Green New Deal recognizes that climate change is going to create massive disruption, including staggering losses in economic output and damage to property and infrastructure. In the ordinary course of things, the costs of coping with these disruptions would be borne by the working class. After all, the entire point of capitalism is rising profits for capital, and if that imposes costs on the working class, so be it.

To meet the goals of the Green New Deal we will have to reduce our reliance on fossil fuels. Coal mining jobs are already vanishing, and jobs in oil and gas production are next to go. The latter sector currently employs an estimated 2.1 million people directly and indirectly. Every one of those jobs lost in these and other fields will cost families their incomes, their health insurance, their physical and mental well-being, and their hope of retirement security. Their home lives will be damaged as they cope with unemployment. Marriages will be lost, children will be injured, and elderly parents will be affected in their own financial security, and the pain of seeing the injuries to their children and grandchildren.

New jobs will be created, but where? If the jobs are far away, the unemployed will have to bear the cost and emotional drain of moving. It’s especially difficult for older workers, and the strains of moving teen-agers adds another layer of difficulty. For some, moving will be a positive, an opportunity to start over. But for many others, it’s the loss of a sense of place, the connection to the people and places in which they are comfortable.

One critical roblem is the loss of a home. Home ownership has decreased from 68.6% to 63.7% since the 2007 Survey of Consumer Finances, but for many Americans the home represents a significant part of family wealth. See Tables accompanying the 2016 Survey of Consumer Finances, Tables 9.07, line 6, and 9.16 line 6 and line 89 et seq. If there is mass migration to new jobs, there will be substantial losses of wealth for many families. To the extent people are forced to move from areas with low-cost housing to high-cost housing, there will be financial difficulties.

The Green New Deal says that we need to deal with these problems directly, not through some complicated 60 point plan relying on some newly created market or capitalists, but by direct government intervention. Section 4.5 requires the government to direct :

… investments to spur economic development, deepen and diversify industry in local and regional economies, and build wealth and community ownership, while prioritizing high-quality job creation and economic, social, and environmental benefits in frontline and vulnerable communities that may otherwise struggle with the transition away from greenhouse gas intensive industries;

Section 4.15 directs the government to provide

…all people of the United States with—
(i) high-quality health care;
(ii) affordable, safe, and adequate housing;
(iii) economic security; and
(iv) access to clean water, clean air, healthy and affordable food, and nature.

Taken as a whole the Green New Deal rejects the neoliberal program of protecting capital at all costs, in favor of putting people and the planet first.

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* I’m going to use the term working class in this series, because as I see it, the conflict is between the working class and the capitalists. In general, by working class I mean everyone who must sell their labor in order to eat. I’ve been in the habit of using the term “workers” but I’m tired of euphemisms. This definition covers a wide range of incomes, but it’s stupid to pretend that middle class people living paycheck to paycheck or people with much higher incomes who have little wealth have interests that are differentiable in any meaningful way. The Fed says that 40% of US households could not pay for an unexpected $400 expense without borrowing or selling an asset. The most recent Survey of Consumer Finances (2016) says that the conditional mean value of retirement accounts for the group with income between the 50th and 90th percentiles is $157K, from which I’d estimate median net financial wealth for that group is in the range of $300K. That means they have to keep working. I’d guess that most of the people in the top 10% of wealth could mostly make it if they were forced out of work, but certainly not all of them. They may think of themselves as wealthy because they own real estate and financial assets, and they may identify with the truly wealthy more than the working class; but I see it their real interests are aligned with those of the working class, because if that group fails, their wealth will be worthless.

The Green New Deal Challenges The Domination Of Capital

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The Green New Deal is an overarching statement of political goals for the Democratic Party, something the party has not had for decades. It lays out a vision of a future inspired by the best the party has to offer, Franklin Roosevelt’s Four Freedoms, which he laid out in January 1941 as the US stared at the unfolding crisis in Europe. In this post I called for just such a statement, and this is everything I could have hoped for. It is a combination of Roosevelt’s unfinished goals and the massive work done by liberals to expand the reach of the Constitution to previously disfavored groups. It offers hope and possibility as we confront the crisis of environmental disaster.

It also offers a stunning contrast to the closed and frightened Republican/MAGA plutocratic vision for this nation. Their hounds immediately attacked the messenger, the message and anyone who might want to consider the message with their usual childish insults and trollish memes, their version of political discussion. A few conservatives recognize the seriousness of the problem of climate change, but have nothing to offer, as reported by Emily Atkin in The New Republic.

Here is the text of H.R. 109. I encourage everyone to take a few minutes and read it. The summaries I’ve seen are insufficient to convey the brilliance of the document.

The Green New Deal acknowledges that meeting the challenge of impending climate disaster will be enormously disruptive. It’s most important virtue is that it doesn’t assume that the entire burden of the disruption will be borne by working people. Instead, it insures that workers are protected from disruption, not with some phony job training program, but with real protection. Equally important, it insures that capital will not be able to grab vast profits or control adaptation for their cash benefit.

Capitalism has brought staggering social and environmental changes in this country. Frequently, the technology that has produced those changes was the product of government research and development. Capitalists imposed all the costs of those social and environmental changes on working people and the poor while sucking up all the benefits for themselves. You don’t see the rich living next door to petroleum processing plants or airports or gravel pits or trash dumps. You don’t see their kids suffering from asthma caused by factory pollution or heavy truck traffic or worse. You don’t see them unable to pay medical bills or take their kids for needed medical attention. That’s for the little people.

The Green New Deal says that’s over. When the price of natural gas dropped, capitalists stopped using coal, and coal miners lost their jobs, their insurance, their homes and their futures. Under the Green New Deal, when natural gas is phased out every displaced worker will have a job and health care, because the Green New Deal offers a job guarantee and insists on universal access to health care. Communities, especially marginalized people, will participate in decisions about location of new manufacturing facilities and other issues affecting them, and that participation will enable all of us to protect ourselves from the costs capitalists impose on us today.

The Green New Deal recognizes that a substantial research and development program will be needed to create new technology to meet its goals. That’s going to be funded by the government. But this time there is no free ride for the capitalists. Section 4.1 requires the government to provide and leverage

… in a way that ensures that the public receives appropriate ownership stakes and returns on investment, adequate capital (including through community grants, public banks, and other public financing), technical expertise, supporting policies, and other forms of assistance to communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization ….

The entire document is designed to rebalance power in deciding the future of the nation. It is explicitly small-d democratic. It explicitly favors the interests of the vast majority. It explicitly slashes the power of the rich to dictate what, if any, response will be made to the threat of climate change.

This rebalancing is a serious challenge not just to capital and the rich, it is a serious challenge to both parties. Democrats claim to be the party of the people. The Green New Deal forces them to prove it. The Republicans represent the interests of the rich against the interests of working people. The Green New Deal makes this contradiction concrete. Both parties claim to want the best for the future of the country. The Green New Deal forces them to come up with positive programs or to do nothing in the face of mounting inequality, a zero-sum political economy, and impending environmental catastrophe.

There’s an even more direct assault on the dominance of capital in the Green New Deal. It calls for decarbonization of the economy. That directly threatens the wealth and power of a number of rich people, for example, the Koch family, whose fortunes are grounded on petroleum. The value of their fortunes will fall as oil becomes a mere feedstock for chemical processing. So will the fortunes of others, Russian oligarchs, Saudi princes, and African kleptocrats. The finances of a number of regimes of varying degrees of hostility to the US, including Russia, Saudi Arabia, the oil emirates, Iran, Iraq, and maybe ISIS. Their power will drop as the value of their natural resources falls. These are ruthless people with no interest in planetary survival. They will fight to the death to prevent the loss of power and wealth.

Meanwhile the media focuses on the horse-race and the cost. Can the Green New Deal pass? How could we ever pay for it? Every single article I’ve read makes a point of saying it’s politically impossible and almost all whine about the money. No one thinks the Senate with its piratical crew of Republican science deniers and Trumpists will ever pass it. And costs are not an issue until we agree to move it forward, and when it becomes real, brilliant economists like Stephanie Kelton will lead the way.

Right now every Democratic politicians opposed to the idea has to explain why their tweaks to neoliberal capitalism will accomplish something without crushing their voters. Republicans will continue to deny until the evidence overwhelms even their astonishing capacity for self-delusion. The rest of us have a planning document, something we can turn into legislation, something we can actually do that will make a difference. We’ll be working on it while the brain-dead bitch about the impertinence of the youngs, and politicians pour perfume on their campaign treasuries to hide the stench of raw petroleum.

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