The Green New Deal – A Few High Level Thoughts

I’m obviously not an expert on this, but here are the best points from different sources.

The Argument

First of all, if you want to get a really good, high-level vibe on a policy proposal or other national political controversy, “The Argument”is a really great podcast. It’s concise, extremely civil, a smart, thoughtful panel, and a diverse point of view. Their latest is on the Green New Deal and I recommend listening to it for a basic overview.

Ross Douthat compares it to some of the wackier ideas that have come from the right during their presidential primaries – the flat tax, the 9-9-9 plan, the elimination of entire departments, etc. The left has historically mostly shied away from moonshot primary proposals, but it looks as if they feel emboldened to make bigger policy statements if only for symbolic purposes to potentially get long-term movement in this direction.

The panel describes it as more vision than policy, a kind of a blueprint that anticipates a political realignment away from 1980’s Reaganism that has dominated our political system for more than three decades now. This realignment is a long time in coming. Although, the vision has been uniformly supported by the democratic presidential candidates, there’s a lot of room for differentiation as the vision gets more specific. Although the candidates support the idea of a “Green New Deal”, they may not support every policy proposal found within.

As far as practicality, Goldberg believes it has just as good of a shot at getting passed as the more centrist ideas proposed to fight global warming, most notably the carbon tax. Imposing a broad tax in order to make carbon consumption more expensive is obviously going to be politically more difficult than simply spending money on green infrastructure. It’s a long shot but everything is in these hyper-partisan times. And spending money, verses spending cuts or raising taxes is an easier political pill to swallow.

The Atlantic

One way to look at this proposal is within the context of how most liberals view global warming. If you see it as a slow-moving global disaster that will likely impose catastrophic costs on the global economy on the order of our previous centuries’ global wars, then re-orienting our economy along those lines seems imminently reasonable.

A re-orientation of our economy around climate friendly technologies will be naturally disruptive so there are a slew of seemingly unrelated policy proposals thrown in to make that transition less painful.

VOX

Just to repeat the point above, we have two completely opposite political party responses to the potential global warming catastrophe. One party denies its existence and the other is certain of its catastrophic consequences to human existence. That neither party has any coherent response to it only makes sense for the Republican party. It’s imminently reasonable, then, that the democratic party is organizing itself around a proportionate response to the perceived danger.

Although many of these ideas have been percolating around the democratic party since the early 2000’s, some of which made it into Obama’s stimulus, and further back within Ralph Nader’s campaign, or in op-eds in liberal and even centrists opinion papers over the years, this particular proposal has been crafted by legislative newcomers who swept in during the 2016 anti-Trump wave election. Nancy Pelosi and other Democratic leadership have, so far, given it the “stiff arm”, believing, likely rightly, the bill is too extreme, too ambitious, and gives too much ammunition to Trump’s reelection campaign.

Forbes

One salient criticism of the Green New Deal is that it’s an aggressive spending program with no viable way to pay for it. Robert Hockett has a nice breakdown in this article explaining why it’s more complicated than a simple matter of aligning outflows with inflows. The bottom line here is that the US treasury can print all the money it needs. The trick is to make sure we properly balance the money supply with the goods and services our economy produces. Spending money on infrastructure, if done right, given this calculus, is kind of a magic trick in this regards. The government prints money and then uses that to generate the goods and services the new money can chase. This, in effect, keeps inflation in check.

The primary problem in our modern economy has not been inflation, but deflation. As our economy has become more efficient through automation, globalization, specialization, and education, we have not properly increased the money supply to match an increase in our production capacities.

Investing in ambitious new programs like the Green New Deal, is a way to counteract that to a degree.

National Review – Jonah Goldberg

The conservative criticisms of the “Green New Deal” are rather obvious, but Jonah Goldberg makes a less obvious criticism here. That government spending programs almost invariably favor big corporations with the political clout to influence and divert those funds in their favor.  I’m not sure how you can really work around this inevitability. In a marketplace, big businesses have all sorts of disadvantages to more nimble upstarts. They are entrenched in a business model that may become obsolete as the markets shift. New companies built from the ground up can drive market shifts and respond to them much faster.

These disadvantages can be assuaged in a couple of ways and big corporations use them all the time. They can collude and dominate market niches by forming oligopolies or monopolies and use their market power to either acquire or bury smaller, less resourced competitors. Or they can influence the government to prefer them in both regulatory laws or investments. Our politics is oriented right now in a way that makes these consequences inevitable.

For the Green New Deal to be effective, the benefits have to outweigh this likely negative.

Goldberg Again

This criticism echos the first alluding to the dangers of massive government intervention in remaking the economy as drastically as this vision lays out. Goldberg likely rightly describes the vision fantasy. But then, notably, pushes back on AOC’s assessments of the free market’s failure to address environmental concerns. His push backs are fair. We are and have been pretty successful at navigating powerfully effective markets while, in many cases, imposed regulation that effectively cleaned up our act without destroying the markets ability to function. Even with climate change, we have and are making improvements in CO2 emissions.

The American Conservative

I think this article is representative of the most straight forward criticism – it’s too expensive, we can’t afford it, and AOC’s plans to pay for it are accounting gimmicks that won’t work in reality.

My Take

First of all, we’re a long way to get anything as comprehensive as this passed. The Republican party as we know it would have to disappear. Given the way the electoral map is organized right now, the Republican party has basically locked themselves into a pretty stable minority-rule position. As long as they can get close to 50% of the popular vote, they get access to considerable power in the US government.

I personally don’t take the proposal seriously, politically, but it doesn’t make it a non-serious proposal. It is. The Democratic party is organizing itself for the long-haul as demographics potentially shift in their favor.

I believe that global warming is a significant threat worthy of significant proposals to address it. I don’t believe free-market only forces are ever going to be adequately aligned to address problems like these effectively. It’s going to require more broad-based cooperation to resolve it. I don’t believe our government or our corporations are hopelessly and so thoroughly corrupt that they can’t be trusted to do the right thing for the right reasons.

It’s incredible the Republican party has so fully bought into anti-science global warming denying that they have not only have failed to come up with policy solutions of their own but they actively block any attempts by the opposing party to do so as well. That’s a crime.

But let me say, I also believe global warming is one humanity ending catastrophe among many other possibilities. I don’t think we can predict the future very well and it’s possible scientific projections could be drastically incorrect. This is not an excuse to do nothing, but it does mean we have to assess all of the risks, all of the ways we can invest our finite resources, and make smart decisions accordingly.

I don’t think the Green New Deal really does that.