Democrats vs. the New Deal: The party is now firmly anti-New Deal

Who really runs the party — and why it might surprise you

Democrats vs. the New Deal: Who <em>really</em> runs the party -- and why it might surprise you

In the aftermath of the shellacking they took in the midterm congressional and state elections, many Democrats are calling for their party to return to its New Deal roots.

This is inadvertently comical.  The present-day Democratic Party has next to nothing to do with Franklin Roosevelt’s New Deal or Lyndon Johnson’s Great Society.  Today’s Democratic Party is a completely different party, which coalesced between 1968 and 1980.  And this half-century-old party has been anti-New Deal from the very beginning.

Now that I have your attention, allow me to explain.

While there have been two parties called “the Democrats” and “the Republicans” since the mid-19th century, these enduring labels mask the fact that party coalitions change every generation or two.  Franklin Roosevelt created a new party under the old name of “the Democrats” by welding ex-Republican Progressives in the North together with the old Jacksonian Farmer-Labor coalition.  The contentious issue of civil rights nearly destroyed the Roosevelt Democrats in 1948 — and finally wrecked it in 1968, when George Wallace’s third party campaign proved to be a way-station for many working-class whites en route from the Democrats to the Republicans.

Today’s Democratic Party, in contrast, took shape between 1968 and 1980.  Although George McGovern lost the 1972 presidential race to Richard Nixon in a landslide, the McGovernites of the “New Politics” movement wrested control of the Democratic Party from the old state politicians and urban bosses of the Roosevelt-to-Johnson New Deal coalition.  Robert Kennedy’s aide Fred Dutton, one of the architects of the disempowerment of the old New Deal elite, called for a new coalition of young people, college-educated suburbanites and minorities in his 1971 book “Changing Sources of Power: Politics in the 1970s.”  Sound familiar?  That’s because, nearly half a century later, the same groups are the core constituents of today’s Democrats.

Jimmy Carter was the first New Politics president (or New Democrat or neoliberal, as they were later called).  He was a center-right Southern governor who ran against big government and touted his credentials as a rich businessman.  He did not get along with organized labor, one of the key constituencies of the Roosevelt Democrats.  His major domestic policy achievement was dismantling New Deal regulation of transportation like trucking and air travel.  He appointed a Federal Reserve chairman from Wall Street, Paul Volcker, who created an artificial recession, the worst between the Great Depression and the Great Recession, to cripple American unions, whose wage demands were blamed for inflation.



Even before Carter’s election, the Democratic “class of ’74” in Congress wrested power from the old largely Southern politicians of the New Deal era. The  northern Irish Catholic-Southern alliance, symbolized by House Speakers Tip O’Neill and Jim Wright, gave way among congressional Democrats to a new Northeastern-West Coast domination, beginning with Democratic House Speaker Tom Foley, of the state of Washington.  Many of these younger Democrats were deficit hawks, like Bill Bradley of New York and Paul Tsongas of Massachusetts.  Democrats like these supported the 1983 Social Security “reform,” which cut Social Security benefits by raising the formal retirement age from 65 to 67.  In his 1984 presidential campaign, Carter’s former vice-president, Fritz Mondale, made deficit reduction his central issue.

Bill Clinton had worked for McGovern’s campaign in 1972.  A center-right Southern governor like Carter, he too combined moderate economic conservatism with social liberalism.  Like Carter, Clinton attacked a major New Deal program, teaming up with the Republicans in Congress to abolish a New Deal entitlement, Aid to Families with Dependent Children, and replacing it with what conservatives wanted: federal grants to state-based programs.  Clinton made deficit reduction rather than public investment central to his presidency. Clinton also supported the dismantling of New Deal regulations of the financial sector, completing the dismantling of the New Deal in the economy that Carter had begun.  In the 1994 midterms, many of the remaining Southern “blue dog” Democrats were replaced by Republicans, shifting the regional base of the party even more to the former liberal Republican states of the Northeast and West Coast.

Barack Obama is the third New Politics Democrat in the White House, following Carter and Clinton.  His base is the Fred Dutton constituency — young people, some college-educated whites, and blacks and Latinos.  Like Carter and Clinton, he went after a major New Deal program — the most iconic of them all, Social Security.  Obama proposed cutting Social Security by means of inflation adjustments or “chained CPI” as part of a “grand  bargain” with Republican conservatives.  He backed off only after a rebellion from what remains of the Democratic left.  Those who call him an “Eisenhower Democrat” recognize that he is closer in outlook to penny-pinching, dovish mid-20th century liberal Republicanism than to “guns and butter” Rooseveltian liberalism.

The New Politics Democrats, in class terms, are an “hourglass party,” uniting the disproportionately nonwhite working poor with affluent whites who are drawn to the Democrats by non-economic issues like environmentalism and feminism and gay rights, not the bread-and-butter issues of the older Rooseveltian New Dealers.  While the New Dealers preferred universal jobs programs and universal social programs like Social Security and Medicare to means-tested “welfare,” all of the social insurance programs pushed by the New Politics Democrats since the 1970s — SCHIP, the earned income tax credit, Obamacare — have been means-tested welfare programs targeted at the working poor, not at the better-paid but still struggling working class or middle class.

The policies of the New Politics Democrats are frequently the exact opposite of those of the old New Deal Democrats.  Here are a few examples:

Foreign policy.  The New Deal Democrats were more hawkish than mid-century Republicans. New Politics Democrats, from McGovern to the present, have been more dovish than post-Reagan Republicans.  Even the hawks in the Democratic Party in the 1980s and 1990s distanced themselves from the greatest New Deal presidents — FDR and his protégé LBJ.  Instead, they tried to rehabilitate Woodrow Wilson and Harry Truman.  Because of Vietnam, the erasure of LBJ by embittered antiwar baby boomers is understandable.  But didn’t FDR win World War II, while Truman’s Korean policy was a bloody debacle?  It is bizarre that partisan Democrats created the Truman National Security Project instead of a Roosevelt National Security Project.

Civil rights.  The liberal rather than radical proponents of desegregation in the mid-20th century, like Bayard Rustin and Hubert Humphrey, favored race-neutral remedies, instead of race-based affirmative action (Martin Luther King Jr. was ambiguous).  Today any Democrat who questioned race-based affirmative action — including preferential policies for Latinos who arrived following the Civil Rights Act of 1964 — would be ostracized.

Immigration.  To protect the working class from wage-lowering immigrant competition, the New Deal Democrats abolished the Bracero program (a Mexican guest-worker program).  The Hesburgh and Jordan commissions, appointed by President Carter and President Clinton, respectively, reflected this older pro-labor emphasis by calling for reductions in low-wage immigration.  Today’s orthodox Democratic position favors not only an amnesty for undocumented immigrants already here, but also more legal immigration and fewer penalties for “illegal” immigration.  This was, and still is, the position of Republican business elites, who want to use immigration policy to create a buyer’s market in labor.

The white working class.  The loss of the white working class to the Democrats is hardly a new development. It goes back to George Wallace in 1968. Every decade since then there has been a debate in the New Politics party about whether to try to get the white working class back.

You get the point. Today’s Democrats have no more in common with Franklin Roosevelt, Harry Truman, John F. Kennedy and Lyndon Johnson than today’s Republicans have in common with Abraham Lincoln or Dwight Eisenhower.  From its origins in the 1970s to the present, the contemporary Democratic Party has had deficit reduction, cutbacks of New Deal-era entitlements and regulations and identity politics in its DNA. This is a party that is not only post-New Deal but in many ways anti-New Deal. It was born that way.

If I am right, the New Politics party, as the most recent party to use the Democratic label, is between 40 and 50 years old.  In the 1960s and 1970s, the steam had pretty much gone out of the New Deal Democrats, many of whose young idealists had aged into corrupt hacks. Today it is the New Politics Democrats who are running on fumes.  The neoliberal combination of center-right economics, deficit reduction at the expense of middle-class entitlements, and means-tested small-bore welfare programs for the working poor is tired and uninspiring.

For their part, the Republicans can’t go on for much longer trying to revive the imagined glories of the Reagan presidency in the 1980s.

Real change may not come in 2016, or even in 2020.  But no party system lasts forever. The Great Recession failed to shake up the New Politics-Movement Conservative dichotomy that has held since the 1980s. But maybe at some point sheer boredom will succeed.

Chomsky: U.S. Plunges the Cradle of Civilization into Disaster

…while Its Oil-Based Empire Destroys the Earth’s Climate

Humanity has the effect of an immense asteroid hitting the planet.

Photo Credit: Kelly Maeshiro/Creative Commons

It is not pleasant to contemplate the thoughts that must be passing through the mind of the Owl of Minerva as the dusk falls and she undertakes the task of interpreting the era of human civilization, which may now be approaching its inglorious end.
The era opened almost 10,000 years ago in the Fertile Crescent, stretching from the lands of the Tigris and Euphrates, through Phoenicia on the eastern coast of the Mediterranean to the Nile Valley, and from there to Greece and beyond. What is happening in this region provides painful lessons on the depths to which the species can descend.
The land of the Tigris and Euphrates has been the scene of unspeakable horrors in recent years. The George W. Bush-Tony Blair aggression in 2003, which many Iraqis compared to the Mongol invasions of the 13th century, was yet another lethal blow. It destroyed much of what survived the Bill Clinton-driven UN sanctions on Iraq, condemned as “genocidal” by the distinguished diplomats Denis Halliday and Hans von Sponeck, who administered them before resigning in protest. Halliday and von Sponeck’s devastating reports received the usual treatment accorded to unwanted facts.
One dreadful consequence of the US-UK invasion is depicted in aNew York Times “visual guide to the crisis in Iraq and Syria”: the radical change of Baghdad from mixed neighborhoods in 2003 to today’s sectarian enclaves trapped in bitter hatred. The conflicts ignited by the invasion have spread beyond and are now tearing the entire region to shreds.
Much of the Tigris-Euphrates area is in the hands of ISIS and its self-proclaimed Islamic State, a grim caricature of the extremist form of radical Islam that has its home in Saudi Arabia. Patrick Cockburn, a Middle East correspondent for The Independent and one of the best-informed analysts of ISIS, describes it as “a very horrible, in many ways fascist organization, very sectarian, kills anybody who doesn’t believe in their particular rigorous brand of Islam.”
Cockburn also points out the contradiction in the Western reaction to the emergence of ISIS: efforts to stem its advance in Iraq along with others to undermine the group’s major opponent in Syria, the brutal Bashar Assad regime. Meanwhile a major barrier to the spread of the ISIS plague to Lebanon is Hezbollah, a hated enemy of the US and its Israeli ally. And to complicate the situation further, the US and Iran now share a justified concern about the rise of the Islamic State, as do others in this highly conflicted region.
Egypt has plunged into some of its darkest days under a military dictatorship that continues to receive US support. Egypt’s fate was not written in the stars. For centuries, alternative paths have been quite feasible, and not infrequently, a heavy imperial hand has barred the way.

After the renewed horrors of the past few weeks it should be unnecessary to comment on what emanates from Jerusalem, in remote history considered a moral center.

Eighty years ago, Martin Heidegger extolled Nazi Germany as providing the best hope for rescuing the glorious civilization of the Greeks from the barbarians of the East and West. Today, German bankers are crushing Greece under an economic regime designed to maintain their wealth and power.

The likely end of the era of civilization is foreshadowed in a new draft report by the Intergovernmental Panel on Climate Change, the generally conservative monitor of what is happening to the physical world.

The report concludes that increasing greenhouse gas emissions risk “severe, pervasive and irreversible impacts for people and ecosystems” over the coming decades. The world is nearing the temperature when loss of the vast ice sheet over Greenland will be unstoppable. Along with melting Antarctic ice, that could raise sea levels to inundate major cities as well as coastal plains.

The era of civilization coincides closely with the geological epoch of the Holocene, beginning over 11,000 years ago. The previous Pleistocene epoch lasted 2.5 million years. Scientists now suggest that a new epoch began about 250 years ago, the Anthropocene, the period when human activity has had a dramatic impact on the physical world. The rate of change of geological epochs is hard to ignore.

One index of human impact is the extinction of species, now estimated to be at about the same rate as it was 65 million years ago when an asteroid hit the Earth. That is the presumed cause for the ending of the age of the dinosaurs, which opened the way for small mammals to proliferate, and ultimately modern humans. Today, it is humans who are the asteroid, condemning much of life to extinction.

The IPCC report reaffirms that the “vast majority” of known fuel reserves must be left in the ground to avert intolerable risks to future generations. Meanwhile the major energy corporations make no secret of their goal of exploiting these reserves and discovering new ones.

A day before its summary of the IPCC conclusions, The New York Times reported that huge Midwestern grain stocks are rotting so that the products of the North Dakota oil boom can be shipped by rail to Asia and Europe.

One of the most feared consequences of anthropogenic global warming is the thawing of permafrost regions. A study in Science magazine warns that “even slightly warmer temperatures [less than anticipated in coming years] could start melting permafrost, which in turn threatens to trigger the release of huge amounts of greenhouse gases trapped in ice,” with possible “fatal consequences” for the global climate.

Arundhati Roy suggests that the “most appropriate metaphor for the insanity of our times” is the Siachen Glacier, where Indian and Pakistani soldiers have killed each other on the highest battlefield in the world. The glacier is now melting and revealing “thousands of empty artillery shells, empty fuel drums, ice axes, old boots, tents and every other kind of waste that thousands of warring human beings generate” in meaningless conflict. And as the glaciers melt, India and Pakistan face indescribable disaster.

Sad species. Poor Owl.

 

Workers and environmentalists of the world, unite!

by Stefania Barca on June 3, 2014

Post image for Workers and environmentalists of the world, unite!

The conflict between labor and the environment is a neoliberal construct. What we need is a broad coalition that can fundamentally transform production.

Nowadays it sounds so familiar, almost natural: the mutually exclusive demands and apparently opposing agendas of labor and the environmentalist movement. But in fact, this artificial division is nothing more than a crucial neoliberal strategy to divide two of the most powerful social movements of the industrial era, whose alliance could be a dangerous liaison with the capacity to call into question the very essence of the capitalist “treadmill of production.” It is thus essential that labor and environmental/public health organizations gain a historical perspective on their current state of conflict and become aware of the revolutionary potential of a common political project.

One place where this fact has become much clearer in recent years is the Italian city of Taranto, Apulia, where a number of citizens’ organizations and “committees” emerged in response to one of the most serious occupational, environmental and public health crises of the last decade. These organizations and committees have now begun mobilizing different resources and forms of action — from cyber-activism and film-making to street demonstrations and campaigning — to fight against the occupational blackmail of a local employer. At the last May Day celebrations, they managed to gather more than 100,000 people for a self-organized, crowd-sourced mass concert, held in open competition with the one traditionally organized in Rome by the trade unions confederation and RAI, the national public television.

Liberate Taranto!

As the biggest and one of the oldest steel factories in Europe, counting about 20,000 employees in 2012 and belonging to the formerly state-owned ILVA group (now controlled by the Riva family), the Taranto plant rose to national attention in 2011. A court decision found the company guilty of outrageous violations of environmental regulations and ordered its immediate closure until a thorough technical renovation and the environmental clean-up of damaged areas would be put into place.

The company’s response consisted in arrogantly restating the incompatibility of environmental regulation with its economic plans, thus re-enacting the occupational blackmail strategy which has traditionally functioned as way to structurally block any actions against business interests. The management even went so far as to actively organize workers’ demonstrations against the court decision, gaining ample and complicit media coverage, in order to convince public opinion that there was in fact real opposition in the city of Taranto — in which ILVA is by far the largest employer — against the public prosecutors and local environmentalist organizations.

Taranto is just one striking manifestation of the unbearable contradiction forced upon people of what Allan Schnaiberg has called the “treadmill of production” (and consumption and waste): the contradiction between production and reproduction. This can be imagined as a Hydra-like monster with many heads: occupational illnesses, job accidents, environmental contamination and ecocide, public health disasters, the annihilation of possibilities for alternative/autonomous forms of local economy, and so on. For the past 50 years, this monster has provoked an unbearable concentration of cancer, malformations and other health disorders in the Taranto bay area, something rendered even more unbearable by the weakness of public health infrastructure and the lack of adequate healthcare. Like the Alien of the science-fiction movie, the Hydra-like monster has now entered the local space and people’s bodies, taking possession of them from within.

In important ways, Taranto’s May Day concert was therefore a manifestation of discontent with what the organizers (and much of the city’s inhabitants) perceive to be the politics of the main trade unions in matters of ecology: 1) they are seen to be largely complacent with corporate occupational blackmail; 2) they are insensitive to the threats to public health that come with environmental contamination; and 3) they often strongly oppose grassroots environmental mobilization at the local level.

The truth, however, is that it is simply impossible to separate or to alienate life from work — as the industrial economy and society have tried to do for so long. Another type of economy must be built; one that makes work the human activity that sustains life and that all members of a community share in its different forms across space (the city, its sea, its hinterland, and the local ecosystem), and even across species, in respect for the daily work made by non-human nature in sustaining life in the local environment.

Another type of economy is undeniably, urgently needed. All the rage, the frustration, the pain and the conflict that working-class communities of industrial areas have embodied and carried in their lives must now lead towards a new horizon of struggle, a new and better dream than those fabricated by the market and the neoliberal state, and by the unions and political parties associated with them. A dream that can finally liberate local people from the unbearable contradictions of the “treadmill of production”; of the Alien within. The slogan Taranto libera! (“liberate Taranto!”) which was screamed again and again during the concert, spoke to just that.

Instruments of liberation

But for another world to become possible, it has to be imagined first, not only by individuals or activist groups, but also at the political level. Imagining a new world becomes essential for the struggle not to close in on itself and reproduce the contradictions of the old world, but to become constructive and hopeful. Here it is that political memory becomes essential, as a project of activist knowledge-production which engages with the world’s transformation as an instrument to usher in new possibilities for politicization. By becoming aware of what has already been done by other people, past and present, with their struggles and movements, either in our own communities or elsewhere, we will immediately get a much clearer perception of the possibility of not just one but many other worlds.

Seeing those possibilities in their reality, with their dreams and their challenges, with their victories and their contradictions, will help us envision our own possibilities here and now and better organize our own struggles. This is the contribution that this article aims to give to all those who are struggling for self-liberation from the straitjacket of occupational blackmail. In the following part, I will “unearth” a few stories, in the hope that they may become (figurative) axes of war, as the Wu Ming writers’ collective would put it: instruments of liberation operating through the political imagination.

Worker/environmentalist coalitions operating on common platforms of labor and political struggle are not uncommon in the history of the post-war world. When truck drivers and eco-activists marched together in the streets of Seattle during anti-WTO demonstrations in 1999 under the banner of “Teamsters and turtles”, this was nothing new, but simply the resurgence of a political strategy that had already been successfully experimented with during the Fordist era, leading to important legislative reform in occupational and public health as well as in environmental protection. It was the active collaboration between labor, environmental, student and feminist movements that allowed the passage of the Clean Air and the Clean Water Acts (1972) in the USA, strongly supported by the most powerful trade-union confederation of the time, the Oil Chemical and Atomic Workers (OCAW).

In Italy, the very institution of the Public Health System (Sistema Sanitario Nazionale) in 1978 was the result of a decade of intensive  struggles and two general strikes, promoted by what was known as the “environmental club” within the unions’ confederation: a coalition of labor physicians, sociologists and union leaders who had previously produced revolutionary changes in the regulation of the work environment, promoting the principle of direct workers’ control (articles 4 and 9 of the Labor Statute, passed in 1970).

Other relevant examples of such strategic coalitions can be drawn from very different places and economic sectors, such as the successful struggle against pesticide use that was conducted in the mid-1960s by the United Farm Workers union, organizing the Latino wage laborers of the orange fields and vineyards of California to obtain decent working and living conditions and the recognition of labor rights. A struggle centered on the serious health threats that agro-chemicals posed not only to the farmers and their families, but to the American consumer and environment at large.

But perhaps the most striking example of workers’ environmentalism can be found in the deep of the Amazon rainforest of Brazil, where, in the mid-1980s, a union of rubber tappers — the seringueirossuccessfully organized to defend the forest from the attack of powerful lumber companies and ranchers, while at the same time defending their right to live and work in the forest, forming cooperatives for the management of sustainable extractive activities, such as rubber and nut collection or fisheries. Despite the violent opposition raised by powerful local interests, leading to numerous assassinations of trade unionists and environmentalists, the rubber tappers’ struggle did succeed in obtaining the creation of a number of “extractive reserves”, where landless local people are legally recognized and supported by the state as the legitimate “owners” and safeguards of the forest.

What the above stories tell us is that it is indeed possible to build social struggles that are, at the same time, environmental struggles, even though they emerge from a working-class experience, and vision, of what ecology is.

More solid premises

However, the renewed alliance between labor and environmental movements must be rebuilt on more solid premises than in the past. The ideology of economic growth as a panacea for all social problems and the only way to produce social welfare must be thoroughly questioned and ultimately abandoned by the labor movement, because growth imperatives are powerful justifications for the most shameless disregard for the well-being of people and of non-human nature. The same applies to the illusion of greening the economy (i.e., capitalism) through eco-efficient technologies and market mechanisms; an illusion embraced by large parts of both the labor and the environmental movement, with support from governments and financial institutions.

The process of de-industrialization in “developed” countries in the last 20 years shows how the greening of the economy has led to the simple transmigration of industrial hazards and their death toll to less developed countries, acting through the ferocious logic of the “double standard” regime, by which multinationals can shift abroad those productions/technologies which are banned or heavily regulated in their countries of origin. This same mechanism makes working-class communities in the first world more and more vulnerable to occupational blackmail, threatening them with the shifting of industrial activities elsewhere.

Moreover, many of today’s so-called “green” technologies actually have a very negative impact on the environment, on labor conditions, and on public health as well, especially when implemented on a large scale — a fact that has been demonstrated by grassroots struggles (and engaged research) on a number of such “green economy” projects over the last decade. Windmill parks, for instance, have been strongly opposed by local communities in Greece and Spain due to the impact they have had on extended rural areas, altering local climates and landscapes, as well as heavily conditioning land use patterns.

Even greater impacts on soil, local climate and ecosystems are associated with large solar power plants — also an object of contestation and a cause of serious occupational hazard. But the most striking example comes from the biofuel business in Brazil (and elsewhere in Latin America), where extensive monoculture plantations of sugarcane have replaced millions of hectares of forest, and are often run through semi-slave laborers working in conditions of horrible toil and health risk.

Clearly, the point is not to cynically dismiss any form of alternative energy production as equally threatening to environmental and public health. There is no doubt that renewable and non-fossil energy sources must be developed as the only possible way out of the current climate crisis. But the issue of dimension and scale is of fundamental importance: alternative energy can and should be developed on the small scale, aiming at autonomous and decentralized forms of self-provision for households and local communities. Renewable energy technologies can be really sustainable only if implemented at such a de-centralized and locally-controlled level, even if this is not the scale at which huge concentrations of profit (and political power) can be made. But this would imply a thorough transformation not only of the form and structure of urban life, but of the social organization of work itself.

Breaking out of the multiple crises that afflict the world today — both in the domains of the economy and work as well as in the domain of ecology and public health — requires no lesser effort than completely abandoning the “treadmill of production”, including the politics, economics and ideology of unlimited growth. This requires an ecological revolution as theorized by Carolyn Merchant: a complete shift in the social organization of production, reproduction and consciousness. Another way of working and living, of producing and distributing wealth, rooted in non-alienated work, in respect for life and in commonality, must be the political platform on which to build this new alliance. Workers and environmentalists of the world, unite!

Stefania Barca is an environmental historian and political ecologist working at the Center for Social Studies of the University of Coimbra, Portugal. She has published extensively on the history of the commons and on working-class environmentalism.

A Better Yardstick for Measuring Inequality

 

Too Much
THIS WEEK
How many of America’s most awesomely affluent would have to come together to create a group with enough combined wealth to equal $1 trillion? Phoenix tax lawyer Bob Lord posed that question last fall. His initial answer, based on an analysis of the September 2013 Forbes list of America’s 400 richest: just 51.

Those 51 deep pockets, Lord calculated in the Arizona Republic, held 1.5 percent of America’s wealth. Back in 1982, the year the annual Forbes 400 list began, that same 1.5 percent share sat in the hands of about 1,500 rich Americans.

And what about today? Bob Lord last week updated his figures, based on the latest available billionaire data. We now need to gather together, he notes, just 37 super-rich Americans to reach the $1 trillion threshold. And to hit $1 trillion 20 years from now, if current trends continue, we’ll likely need only five.

What would have to happen for current trends not to continue? We have some statistical ideas on that score. More on them in this week‘s Too Much.

GREED AT A GLANCE
First we had primaries, contests where candidates chased after real voters. Then came what reporters dubbed the “money primary.” In an ever more unequal America, candidates were first chasing after billionaires, to raise enough cash to prove their “viability.” Now comes what the Washington Post is calling the “Sheldon primary.” The nation has become so top-heavy that candidates today need only corral one billionaire to prove their mettle. For Republicans, Sheldon Adelson, the casino king who spent over $92 million on the 2012 election, has emerged as that one. Adelson is now looking for a horse to back in 2016, and “a lengthy list” of Republican presidential contenders, says the Post, is “jockeying” to win his affections. Last week, four top GOP hopefuls joined Adelson for a VIP dinner at the Las Vegas hangar where Adelson keeps his private jet fleet . . .

Richard GonzalezAmerica’s pharmaceutical giants had a real problem a dozen years ago. Their monopoly power had raised drug prices so high that Americans couldn’t afford their prescriptions. But to the rescue came the Bush White House, with legislation that gave seniors taxpayer subsidies to pay for drugs that cost Americans as much as five times what people elsewhere in the world are paying. The latest beneficiary of this generous subsidy: Richard Gonzalez, the CEO of AbbVie, an Abbott Labs spinoff. Gonzalez took in $18.2 million last year, after hitting, says AbbVie, all his “performance targets,” including one goal of getting the firm’s 25,000 employees fired up about the new company’s mission. Hitting that target must have come easy. Nothing, after all, gets employees fired up more than working for a CEO making $18.2 million . . .

Luxury Swiss watchmakers, reports Reuters, have come up with a new way to separate the financially fortunate from tidy chunks of their fortunes. Innovators in the fine timepiece industry are now letting the uber wealthy personalize their wrist wear with just about anything from diamond stars to engraved images of their nearest and dearest. The jewelers at Buccellati, for instance, are offering “a bespoke service where the customer has a say on everything: the material, the case, the dial, the hands.” The cost for this bespoking: a minimum of 100,000 Swiss francs, about $113,000. What’s driving the new personalization push? Industry analyst Mario Ortelli has an explanation: “Customers will pay more if they feel a stronger emotional link to the product.”

Quote of the Week

“The rich can buy more of everything. More food. More cars. More houses. More vacations. More boats. But for a democracy to function properly, they should be forbidden from buying more votes.”
Leo Gerard, president, United Steelworkers, Our Plutocracy Problem, March 25, 2014

PETULANT PLUTOCRAT OF THE WEEK
Howard SchultzHoward Schultz, the CEO of Starbucks, doesn’t think much of the emerging national movement to establish a $15 minimum wage, an effort that’s running particularly strong in his own Seattle backyard. Schultz told reporters earlier this month that “most companies, especially small and midsized companies, would not be able to afford” a minimum set at $15 an hour. Added the billionaire: “I wouldn’t want to see the unintended consequences of job loss as a result of going that high.” Activists at the “15 Now” campaign quickly noted that the billionaire Schultz makes $9,637 an hour. The campaign is urging the Starbucks chief to “stop hiding behind small businesses and pay your own workers 15 now!”

IMAGES OF INEQUALITY
Cook Islands

Sand, palms, breezes. None of these wonders are attracting the world’s wealthy to the Cook Islands, tiny flyspecks halfway across the Pacific. What is? The Cooks, says the International Consortium of Investigative Journalists, have become “a global pioneer in offshore asset-protection trusts,” devices that can shield the assets of the rich from nasty lawsuits back home. Island officials had a Denver attorney write their nation’s trust law, and so far Americans have parked the most money in Cook Islands accounts. Among them: wealthy doctors convicted of Medicaid fraud and execs who’ve bilked employee pension funds.

Web Gem

PolicyShop/ This site, hosted by the Demos think tank, frequently features inequality-related resources, like this chart pack on how “class haunts people from womb to grave, limiting their ability to flourish and pursue the good life as they define it.”

PROGRESS AND PROMISE
Sanjay SanghoeeLawmakers love business tax credits. They hand them out all the time, ostensibly to encourage investment and innovation. Why not use tax credits instead, asks former Lazard Freres banker Sanjay Sanghoee, to rein in CEO pay? Sanghoee has spelled out one approach toward that end in the business magazine Fortune. Under his proposal, a 3,000-worker firm with a 250-to-1 CEO-worker pay ratio would get a credit that equals $1,000 multiplied by 3,000 multiplied by 1/250, the inverse of the pay ratio. Total credit: just $12,000. But if that company’s CEO-worker pay ratio dropped to 25:1, the credit would jump to $120,000, the sort of incentive that might encourage companies to moderate their CEO pay. How to pay for the credits? Start closing, says Sanghoee, the offshore corporate tax loopholes that run $150 billion a year.

Take Action
on Inequality

Tell the nation’s top lawmakers that inequality in the United States has gone “too damn high.” Sign this new petition that proposes a progressive wealth tax and more.

inequality by the numbers
Penthouse prices

Stat of the Week

Business income in the United States sits increasingly in the hands of a few. In 1979 the top 1 percent of America’s households accounted for 17 percent of the nation’s business income, notes economist Paul Krugman. By 2007: 43 percent.

IN FOCUS

A Better Yardstick for Measuring Inequality

We always get what we measure. And if we measure inequality with a yardstick that only wonks can decipher, we’ll end up with a society too confused about inequality to do anything meaningful about it.

Just 85 of the world’s billionaires, the anti-poverty group Oxfam reported earlier this year, hold as much wealth as the entire bottom half of the world’s population, 3.5 billion people in all.

Seven of every ten people on earth today, Oxfam added, live in nations where inequality has jumped since the 1980s. Our richest global 1 percent currently own a whopping 46 percent of the world’s wealth.

Corrado GiniWe can’t blame Corrado Gini for this incredibly extreme global divide. He never set out to create inequality. He just tried to measure it.

This eminent Italian sociologist once ranked as one of the world’s premiere statisticians. Almost exactly a century ago, he developed what would become the most widely accepted default statistic for measuring inequality, a yardstick now commonly known as the “Gini coefficient.”

In Gini’s formulation, a society where one person grabbed all the income would have a value of one. A society with all income shared evenly would have a value of zero.

No nation, of course, has ever had either absolute income equality or absolute income concentration. Most nations end up with Gini numbers like 0.57, the Gini rating for the United States last year, or 0.49, the Gini for Japan.

These numbers tell statisticians a great deal. A rise or fall of a mere 0.1 in Gini values can be a big deal and signify a major change in income distribution. But these abstract numbers mean nothing to the general public and, consequently, essentially do nothing at all to raise inequality’s political profile.

The Gini numbers have other problems as well. Gini ratings say a good bit about a society’s overall level of inequality, but offer no clue about what’s driving changes in that level. Are the rich grabbing more or less of the income pie? Are the poor losing ground? Or households in the middle?

On questions like these, note inequality-watchers Andy Sumner and Alex Cobham, “the Gini won’t be a great deal of help.”

Gabriel PalmaSumner, the co-director of the International Development Institute, and Codham, a Center for Global Development researcher, have been beating the drums for a new inequality yardstick based on the work of Gabriel Palma, a Chilean economist now based at Cambridge University.

In almost every society, Palma’s research shows, the income share of people who make less than the most affluent 10 percent and more than the poorest 40 percent tends to remain fairly stable. Substantial shifts in income share typically only turn up in that top 10 and bottom 40.

The “Palma ratio” addresses this volatility at the edges by defining income inequality as a ratio between the top 10 and bottom 40. In a society with a Palma ratio of 4, the top 10 percent is grabbing four times the income of the bottom 40 percent.

This simple relationship gives every Palma ratio figure a readily understandable meaning. In a society where the Palma ratio has gone from 2 to 3, households in the top 10 percent have gone from making double the income of that society’s poorest 40 percent to making triple the bottom 40’s income share.

Last March 90 noted social scientists urged a key UN economic development panel to place the Palma ratio front and center. The top 10-bottom 40 inequality that Palma stats measure, they argued, really matters. Nations with shrinking Palma ratios, as researchers have detailed, turn out to be three times better at reducing extreme poverty and hunger than nations with rising Palma ratios.

Nobel Prize-winning economist Joseph Stiglitz has just added to this growing push for the Palma yardstick. In a new co-authored paper, he’s asking world leaders to add a new ninth goal — eliminating extreme inequality — to the eight adopted at the UN Millennium Summit in September 2000.

Top-heavy income distributions, Stiglitz and his colleague Michael Doyle observe, “undermine both political equality and social stability” and generate chronic underinvestment in infrastructure, education, and other public goods that make for “long-term economic prosperity.”

Stiglitz and Doyle, a former UN assistant secretary-general, suggest a specific target for ending these top-heavy distributions. By the year 2030, the two analysts advise, all nations should have their top 10 percents taking in no more income than their bottom 40 percents, a Palma ratio of just 1.

Scandinavian nations already at or near this Palma ratio level, the pair adds, are benefiting from an “equality multiplier” that has left them not just more “equitable and stable” economically but more “efficient and flexible” as well.

“Sustainable development,” Stiglitz and Doyle sum up, “cannot be achieved while ignoring extreme disparities.”

And shoving Gini aside for Palma might make that ignoring all the harder.

Want to learn more about Palma ratios? Check this two-minute video.

New Wisdom
on Wealth

Ryan Cooper, Free Money for Everyone, Washington Monthly, March/April 2014. In an unequal America, the old tools for managing the economy no longer make much impact.

Doug Henwood, Capital in the Twenty-First Century, BookForum, March 25, 2014. An important review of Thomas Piketty’s new take on the long-term reign of the 1 percent.

Helaine Olen, Self Help is no help for inequality, Reuters, March 25, 2014. How the self-help industry is poisoning our politics.

Tony Atkinson and Salvatore Morelli, The chartbook of economic inequality, Vox, March 26, 2014. A new summary of changes in inequality for 25 countries over more than 100 years.

Paul Caron and James Repetti. Revitalizing the Estate Tax: Five Easy Pieces, Tax Prof, March 27, 2014. The estate tax could again make a difference.

Dan Rodricks, With Democrats like these, who needs GOP? Baltimore Sun, March 27, 2014. A Democratic-dominated legislature is throwing millions at millionaires.

Paul Krugman, America’s Taxation Tradition, New York Times, March 28, 2014. The demonization of anyone who talks about really taxing concentrated wealth reflects a misreading of both the past and the present.

Stein Ringen, Is American democracy headed to extinction? Washington Post, March 29, 2014. In Athens, democracy ended when the rich grew super rich and undermined the polity, a point the United States has now reached.

John Cassidy, Forces of Divergence: Is surging inequality endemic to capitalism? New Yorker, March 31, 2014. Another solid write-up on Piketty’s new blockbuster.

The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class cover

Now online: the full Introduction to Too Much editor Sam Pizzigati’s new history of the triumph over America’s first plutocracy.

NEW AND notable

Must Taxpayers Pay Tribute to Wall Street?

No Small Fees reportNo Small Fees: LA Spends More on Wall Street than Our Streets, A Report by the Fix LA Coalition, March 25, 2014.

Wall Street banks handed out $26.7 billion in bonuses last year, the New York state comptroller recently informed us, to some 165,200 execs and staff.

This same $26.7 billion, an Institute for Policy Studies analysis noted earlier this month, would have been “enough to more than double the pay” of all 1,085,000 Americans who work full-time at the current federal minimum wage.

And where did all those bonus billions come from? A hefty share came directly from America’s taxpayers, this clever new study makes outrageously plain.

No Small Fees drills down deep into the finances of a single city, Los Angeles. L.A. city officials, the study details, are annually passing Wall Street at least $204 million in financial fees, for everything from managing the city’s pension funds to selling the city’s bonds.

Some perspective: Last year L.A. spent only $163 million on its own streets.

The difference between what Los Angeles pays for its own streets and to Wall Street actually runs wider than these numbers suggest. The Wall Street total doesn’t include city dealings with private equity and hedge funds, exchanges, notes the Labor Institute’s Les Leopold, that don’t have to be publicly disclosed.

Nationwide, estimates Leopold, “the fees Wall Street extracts from public entities could total more than $50 billion a year — enough to provide free tuition at every public college and university in the country.”

We have, adds Leopold, distinct alternatives to Wall Street’s gouging of America’s public entities. State public banks — with modestly salaried executives — could save localities big-time on fees. North Dakota already has one.

The Federal Reserve could also “directly purchase municipal bonds from cities and states,” as the Fed is already doing with the toxic mortgage securities held by Wall Street’s largest banks. That move would save states and localities billions in fees and also “dramatically reduce municipal interest rate costs.”

Conclude the labor, religious, and community groups in the Fix LA Coalition: “City leaders have a choice: invest in our streets or Wall Street.”

Defining What We Stand For

Popular Resistance Newsletter

This week, we re-launched It’s Our Economy, a project dedicated to reporting on and assisting the growing movement for economic democracy. 

February marks the third anniversary of the 2011 revolt in Wisconsin. At that time, across the United States there were a series of protests against foreclosures, austerity and the unjust economy. It was the Wisconsin uprising, along with the Arab Spring and Indignado movement in Europe, that inspired Occupy, a revolt against an economic system – big finance capitalism – that is causing the corrupt, unfair economy; as well as against a government that serves the interests of the wealthiest before meeting the necessities of the people.

People often want to know what the movement for social and economic justice wants. Occupy Wall Street issued its Declaration of the Occupation of New York City which laid out a series of grievances. But, in addition to knowing what we oppose, we need to define what we stand for. If we do not like big finance capitalism, what would replace it?

1freedomDuring the organizing of the occupation in Washington, DC on Freedom Plaza, we developed a list of 15 core crisis issues that the country is facing and we outlined solutions to them. These solutions are supported by super-majorities of Americans who, polls show,  could rule better than the elites.

At the core of these solutions is creating an economic democracy agenda, building institutions that are controlled by and benefit communities while also protecting the planet. A democratized economy shifts political power away from concentrated capital to the public and further empowers people by meeting their basic needs for shelter , food, education, healthcare and work.

How do we get there? In her book, Getting Past Capitalism: History, Vision, Hope, Cynthia Kaufman suggests we are in a variety of struggles and rather than seeking to total replacement, we need to build healthy institutions while challenging those unhealthy ones we can defeat. Gar Alperovitz defines the transition as ‘evolutionary reconstruction,’ a way that we gradually build a better world.

Economic Democracy

1balt4We define economic democracy as:

“…premised on the idea that people should not cede power to mega-corporations, big finance, or a “professional” political class. The people have the shared knowledge to help build an economy that works to strengthen communities and build wealth for all, not just a few. We recognize the internal contradictions of big finance capitalism and we have seen the failures of state-based socialism and are seeking to create a new type of economy that is democratized, empowers people to gain control over their economic lives and encourages cooperative solutions that create wealth for ourselves and our communities….

Economic democracy also emphasizes the commonwealth.  The commons includes not only roads, land, water and resources but also the knowledge and technology developed, often with public dollars, which has been built up over  generations….

Economic democracy stands in contrast with neoliberal economics. Neoliberalism privatizes public goods and seeks to commodify everything possible to create profit-centers while cutting public services in the name of austerity.”

1hchrOne way to understand what makes healthy institutions that serve the people is to use a human rights framework. There are five human rights principles. These include:

  • Universality: Human rights must be afforded to everyone, without exception.
  • Equity: Every person is entitled to the same access to services and public goods.
  • Accountability: Mechanisms must exist to enforce the protection of human rights.
  • Transparency: Government institutions must be open and provide the public with information on the decision-making processes.
  • Participation: People need to be empowered to participate in the decision-making process.

The need for a new economy based on the goal of benefiting all people, not just the wealthiest, has become more urgent as the impact of the economic collapse and its false recovery are felt. These include high rates of Americans dropping out of the labor force, the wealth divide expanding, record poverty and lowered incomes for most people.

People Creating the New Economy in Many Ways

Political and economic leadership continues to go in the opposite direction of what people want: cutting the social safety net and doing little to invest in re-building the economy while the costs of energy, food, healthcare and other necessities rise.  People across the country are acting on their own to build an economy that will serve them.

1localThe building of the new economy, sometimes called a ‘solidarity economy,’ has been developing for many years, particularly in other areas of the world such as Latin America. As a result we can now see reports of its success. A fundamental view of economic democracy is to build from the bottom up, starting with local communities. A report this week from the Institute for Self Reliance found that communities with buy local programs have seen local businesses grow three times as fast as communities without such programs.

One key aspect of buying local is our food supply. The International Forum on Globalisation reports that “the average plate of food eaten in western industrial food-importing nations is likely to have traveled 2,000 miles from source to plate.” Around the country people are working to change that. Two programs that were in movement news this week were “Our Harvest” and “CropMobster.”

1cropmobOur Harvest comes out of a 2009 agreement between the United Steelworkers and the Mondragon Co-op to create union co-ops. Our Harvest is a produce farm and food hub for aggregation and food processing. CropMobster is a project from Petaluma, CA that seeks to redistribute food to reduce waste and to provide healthy food while growing a shared economy.

Another issue that has been in the news lately because of multiple environmental disasters is the quality of drinking water. The chemical spill in West Virginia, coal slurry spills, fracking well explosions and pipelines bursting in multiple states have been a few examples of how fresh water is now at risk. In addition, the extraction of fossil fuels and uranium are consuming tremendous amounts of water even in areas that are facing droughts. Water will be an item on the political agenda at the state and national level.  This week in Europe, 1.66 million people were able to put the issues of the right to clean water and stopping water privatization before the Parliament.

At the center of so many issues – the environment, climate, water, air, jobs – is energy. The corporate duopoly seems unable to challenge big oil, gas, coal and nuclear to put in place the carbon-free, nuclear-free energy economy that is needed.

In the absence of national leadership, people are moving forward. Over 80 landowners have dedicated nearly 20,000 acres to what will become the largest wind farm in South Dakota that will increase the wind energy output in the state by 50%. As solar rapidly grows in the United States, research is now showing that more people will be employed by solar than by oil and coal combined.

1peetBig changes are also on the horizon in the labor front. There are widespread battles for raising the minimum wage to a living wage. And while many companies treat their employees as if they were disposable, in other workplaces employees are becoming owners. There is a growing movement for worker-owned cooperatives with national meetings in the United States and in Europe. An example that was in the news this week was WinCo, a growing competitor to Walmart.

Other businesses are creating a more just world by redefining corporate charters so that one of their purposes is to provide public benefits rather than profits to investors. Delaware, the home of half of US corporations and two-thirds of Fortune 500 companies, enacted a B Corp. law. This status protects corporations from lawsuits by shareholders for not maximizing profit, and even gives some shareholders the right to sue the corporation for failing to optimize its social mission.

We are in a Renaissance

The examples above just give a taste of all of the changes that are taking place to create new systems that replace the old failing ones. For more ideas, visit the “Create” section of PopularResistance.org or ItsOurEconomy.us.

1solidarityWhat is amazing is that around the world, the same ideas and values are being put forward. People are joining together to create societies that respect life and the planet and that are more horizontal and just. We are truly in a time of transformation which is made more urgent by the many crises we face.

There has been talk of global revolution, and in some areas, revolution – the changing of governments – is occurring. But we are not yet in a global revolution. In his article, “Revolution, or Digital-Age Renaissance,” Bernardo Gutierrez writes, “Ruskoff argues that the revolution has not arrived and what we are experiencing is a new renaissance. ‘Renaissances are historical instances of widespread recontextualisation. It is the rebirth of old ideas in a new context. Renaissance is a dimensional leap, when our perspective shifts so dramatically that our understanding of the oldest, most fundamental elements of existence changes. The stories we have been using no longer work.’”

Currently people are not only creating new systems, but they are questioning the stories that have been told to maintain the status quo and are recognizing that many of our restraints are artificial. People do have the ability to rethink the premises upon which we base our assumptions and to change their views and behaviors.

1capitalFor decades we have been taught to believe in capitalism and neo-liberalism. We have been told that there will always be poor people and we must accept that. We’ve been told that wealth trickles down and that we should all compete to achieve the “American Dream.” We’ve thought that in order to achieve that dream we must go into debt. And we’ve believed that the people in power should be trusted to make decisions for us, that we didn’t have the capacity to make them.

All of that is changing and being turned in its head. Awareness is growing that we can do things differently. People are actively confronting the old ways through both resistance and the creation of new ways or the re-emergence of older ways. One area is the recognition that there are alternatives to debt-based economies. This is not a new idea. There were debt jubilees in ancient history.

In the article, “Debt Refusal Essential To Rebuilding Popular Democracy,” the editor writes that “resisting debt is not only moral, it may be essential to re-envisioning a democracy built on legitimate bonds to our community.StrikeDebt, which was organized after Occupy Wall Street, teaches us thatworking together to build greater economic democracy would mean weaving a dense, creative network where our debts are to each other, not to them (read: the big banks).”StrikeDebt created a Debt Resister’s Manual and is organizing a nationwide debt resistance movement. Their new manual is due out soon.

Another area of renaissance is globalization. To date, globalization has been based on the neoliberal economic model that leaves poverty and environmental destruction in its wake. But now that we understand these consequences , it is becoming more difficult for governments to continue on this path. A case in point is the current Trans-Pacific Partnership which was negotiated for years in secret and the plan was to pass it quietly through Congress using Fast Track. That effort has stalled for now and instead civil society groups are working together to redefine what global trade should look like and how it should be governed.

1gcc2There is a call for ‘deglobalization’ which refers to orienting our communities to build local economies, to produce goods that are needed and to become more self-reliant. A detailed plan for this is outlined in the blog on systemic alternatives.

We have an opportunity right now while trade deals are stalled to redefine global governance. Collectively, the people can confront the dominant paradigms and global power structure and rebirth a world grounded in the principles of human rights and protection of the planet. Resistance is not only protest, but includes acts of creation. When you get involved in your community to build democratized economies, you are part of the global transformation.

 

A Keystone Pipeline Project Will Lead to Disaster

 


The State Department Impact Statement illustrates that the U.S. Government
is just a helpless bystander to climate calamity.

Photo Credit: Tara Lohan

The new State Department Environmental Impact Statement for the Keystone Pipeline does three things. First, it signals a greater likelihood that the pipeline project will be approved later this year by the administration. Second, it vividly illustrates the depth of confusion of US climate change policy. Third, it self-portrays the US Government as a helpless bystander to climate calamity. According to the State Department report, we are trapped in the Big Oil Status Quo We Can Believe In.

The proposed pipeline will complete a pipeline network running from Alberta, Canada to the US Gulf Coast, carrying petroleum produced from Alberta’s oil sands to the Gulf refineries. The volumes will be enormous, roughly 830,000 barrels per day. The pipeline will thereby facilitate the mass extraction and use of Canada’s enormous unconventional supplies. Therein lies the problem.

The overwhelming scientific consensus is that human-induced climate change is occurring; that the world is experiencing a rapidly rising frequency of extreme climate-related events such as heat waves; and that there is much worse to come unless we change course on the use of fossil fuels. Specifically, with energy business as usual, the world is on a trajectory to raise the mean global temperature by at least 3 degrees C (5.4 degrees F) by the end of century, and possibly far more, a climate disruption that most scientists regard as catastrophic. The world’s governments have agreed to try to keep the temperature increase below 2-degrees C, yet until now they’ve done far too little to meet that target.

(Note that after decades of rapid temperature increases up to 1998, the rise in global mean temperatures slowed a bit after 1998. With the post-1998 Pacific Ocean tending towards La Nina conditions, the Pacific Ocean rather than the Earth’s land area has been absorbing much of the excess thermal energy trapped by CO2 and other greenhouse gases. Yet once the Pacific Ocean swings back to the El Nino or neutral conditions that prevailed up to 1998, rapid global warming is likely to resume. Therefore the slight recent pause in the upward ascent of temperatures is only a short respite from the ongoing long-term process of rapid global warming.)

The economic implications of the climate science are clear. Either we keep some of the world’s oil, gas, and coal reserves under the ground (rather than burning them in cars, factories, power plants, and buildings), or we wreck the planet. The atmospheric CO2 concentration is determined by the cumulative combustion of fossil fuels. We’ve already burned enough fossil fuels to raise the world’s temperatures by around 1 degree C. Burning the rest of the proved reserves would cause humanity to overshoot the 2-degree target by several degrees.

The urgent planetary need is clear. The world has to wean itself from fossil fuel dependence in the coming 20-40 years. We simply can’t go on drilling, excavating, and burning every ton of coal, oil, and gas the fossil fuel industry finds. If we do so, the basic “carbon arithmetic” of CO2 buildup spells disaster.

In the current market jargon, the world needs to strand some of its fossil fuel reserves, meaning that some must be left under the ground rather than extracted and burned. We must substitute these stranded fossil fuel reserves with low-carbon alternatives, including nuclear, solar, wind, hydro, and geothermal power. There are ample supplies of these low-carbon alternatives, but to build up the use of these alternatives will require considerable investments for several decades to come.

The most important single step is to keep most of the coal from being burned. The next is to avoid the temptation to develop every bit of “non-conventional” oil and gas that can be found. With new technologies, unconventional oil and gas like Canada’s oil sands can now be developed at today’s market prices, but at great peril for the planet.

Using climate science, it is possible to calculate the tolerable limits on total future fossil fuel use. The basic idea is the need for the world to adhere to a “carbon budget,” meaning the total amount of fossil fuels that can be burned while avoiding global warming by more than 2-degrees C. (We should note that even the 2-degree C target, which we are now overshooting by a wide mark, would cause very damaging changes to the Earth’s climate systems, and result in devastating famines, floods, heat waves, and other catastrophes.)

The Keystone pipeline is crucial to the global carbon budget. If the world deploys massive unconventional oil sources like Canada’s oil sands we will exceed the carbon budget, unless there is a simultaneous strategy to offset that excess carbon some other way. But to do so would be using Canada’s expensive, dirty, and CO2-intensive oil when cheaper, (relatively) cleaner, and lower-CO2 oil is available. Under any circumstances, to evaluate the Keystone Project properly, we need to judge it against the global carbon budget.

Herein lies the tragic, indeed fatal, flaw of the State Department review. The State Department Environmental Impact Statement doesn’t even ask the right question: How do the unconventional Canadian oil sands fit or not fit within the overall carbon budget? Instead, the State Department simply assumes, without any irony or evident self-awareness, that the oil sands will be developed and used one way or another. For the State Department, the main issue therefore seems to be whether the oil will be shipped by pipeline or by rail.The State Department doesn’t even raise the possibility that the pipeline should be stopped in order to keep a lid on the total amount of unconventional fossil fuels burned around the world.

The core assumption of the report is that the US Government has no role to play, either alone or in conjunction with Canada and other countries, to stay within an overall global carbon budget.

[A]pproval or denial of any one crude oil transport project, including the proposed Project, is unlikely to significantly impact the rate of extraction in the oil sands or the continued demand for heavy crude oil at refiners in the United States based on expected oil prices, oil-sands supply costs, transport costs, and supply-demand scenarios. [ES-16]

According to the State Department, in other words, the US Government is just a passive spectator to global climate change. Either the pipeline is built or the oil will be shipped by other means. Full stop. The State Department doesn’t even broach the idea that the pipeline discussion really needs to be about the urgent need to shift from fossil fuels, including the need to keep unconventional hydrocarbon reserves under the ground.

I can hear the skeptics scoffing: What would make Canada not develop these resources? And why shouldn’t Americans profit from the oil sands? The answer should be the future survival and wellbeing of humanity, an idea admittedly of little apparent interest in Washington or Ottawa, centers of greed, cynicism, and shortsightedness. There is money to be made NOW, the future be damned.

But do not lose hope. The greed and incompetence on display in Washington and Ottawa is not a permanent reality, but a passing phase. Teddy Roosevelt, Franklin Roosevelt, and John Kennedy were able to face down gilded interests for the greater good. Many oil companies, including leading companies in Europe and also some in North America, are already on side to stay within the global carbon budget. The vast majority of Americans want safety for themselves, their children, and the rest of humanity. Our generation can still turn the tide against environmental disaster.