We Need Something Different to Face Pending Environmental Crisis

By Mike Koetting October 17, 2021

Upcoming news will no doubt be full of the imminent big deal Glasgow Climate Summit. But that’s just the political deal. The real deal was the UN report on climate change that was issued in August. It wouldn’t be totally surprising if you don’t remember it since it seems there is a new UN report on climate every couple of weeks that are all variations of the same theme. But suppose you really took note back then. What do you hope for?

Most fundamentally, we should all hope that the 234 scientists who participated in this report got it substantially wrong. They would all admit there are certain margins for error and they would be relieved to be found out wrong.

But maybe you’ve got kids and grandkids and you are worried the reports’ authors might be substantially right about the speed of the trajectory. What then do you hope for?

Well…you could hope that there is a grand awakening and the world comes together and uses its problem solving capabilities to mitigate the threat. But how that is going to happen?

Let’s focus specifically on the U.S. Saving the environment is absolutely a global issue—the U.S. cannot do it by itself. On the other hand, we do still cast an outsized shadow and we don’t have time for a Laurel and Hardy routine of “After you…” (Unless, of course, you’ve decided to put all your eggs in the “scientists are wrong” basket, in which case the rest of this blog might as well be written in Sanskrit.)

The single most important thing for America to do is to realize this issue cannot be addressed by business as usual. We need to drastically redefine how we live our lives and we have about 20 years to do it.

Not that I know exactly what will be needed. At this point, this is only roughly understood. But it seems highly likely it will need to be dramatic. We have wasted too much time pretending that small, even medium, changes were going to avert a crisis. That is why the first step is discarding our immediate instinct that various options are “too extreme.” Of course there will be proposals that should be rejected for a variety of reasons; because something is bold doesn’t make it a good idea. But, by the same token, I can’t imagine any small action that is going to stop the temperature clock. If we allow knee-jerk reaction to dismiss all bold moves as “too extreme”, it is going to be very hard to avoid the rolling catastrophes that threaten us. My read of August’s UN report is that the situation we are facing is extreme.

If you have ever thought about environmental issues even semi-seriously, it has almost certainly crossed your mind that solving these problems is going to require disruption in our lives. Moreover, I’ll also bet that, if you’re honest with yourself, you know you have avoided thinking too much about those implications. A prick, perhaps, at the back of your mind as you have realized this or that behavior is really environmentally problematic—but dismissed with a hazy notion that someone will figure out something. Or perhaps, well, my individual action wouldn’t make any difference.

Of course, the latter is almost certainly true. We can’t save the environment by individual actions. We need mass movement. Ultimately, in a world this complicated, that means government actions to create and monitor the “rules of the road”. They lubricate the way to collective action. The conversion to unleaded gas saved lives and measurably improved quality of life. But there is no chance this conversion could have happened if it were not mandatory.

The immediate difficulty is getting from here to there, putting in place policies commensurate with the magnitude of the problem.

As near as we can tell from public opinion surveying, a healthy majority (greater than 60%) of the population thinks government isn’t doing enough to protect the environment. Of course, that doesn’t easily translate into legislative action. For openers, there’s the structural problems that plague our national government. While the percentage of people wanting more governmental action on climate has been increasing in both parties, the partisan difference is stark. Consequently, Republican legislators are slow to put votes on environmental issues. This partisan difference has effectively blocked most action for the last 25 years–25 years, I might add, when we knew this was on the way.

There is also a second, and not unrelated problem. I don’t think our society has truly decided we need dramatic action. My guess is that even among the 60% who think government should be doing more, many have not thought through what that means and don’t have the sense of urgency necessary to upset the status quo. The general lack of political leadership on this issue makes it a lot easier to avoid hard questions.

So we are faced with a “chicken and egg” issue. Cautious political leadership facilitates measured public opinion which encourages cautious leadership and so forth. Except the clock is running. This is probably not an issue where patience will be rewarded. Each year we dawdle, the greater effort will be required in ensuing years.

At this point I start thinking radical thoughts.

I’m taken back to the 1850’s. The issue of slavery had been contentious since even before we had a constitution. For years a large part of the population objected and attacked the institution, but one compromise after another kept slavery in place. What finally broke the deadlock was the emergence of a new party, the Republicans, for whom abolition was their raison d’etre. Their ascension to power was enough that the South pre-emptively started the Civil War—which led to end of slavery. (At least that version.)

I don’t think a civil war over environmental issues is a good way forward, but perhaps a new political party explicitly focused on protecting the environment might be a good idea.

Before indulging in all the very real reasons this is an impractically naive idea, what’s the alternative? Perhaps it’s a limit of my imagination, but I can’t imagine Republicans and Democrats coming together on this issue. That leaves the only other alternative as the Democrats really getting this religion and then carrying out a dramatic agenda. But are we willing to bet the future of the planet on the existing Democratic party? As I write this, a group of moderate Democrats are as much in the way of some major infrastructure investments necessary to start making substantial progress as are Republicans.

I think there is another, more subtle, problem: the Democrats’ options for creating a national unity party are starkly limited. The last 50 years have hardened the divide between Republicans and Democrats so that even when they agree they hate each other. To reiterate the point I keep making: what we are going to have to do will require big changes. I think this will require something closer to a national will, perhaps like the population had during World War II. I don’t think we can get there with political arm-wrestling around paper-thin majorities and I don’t think there is much chance of mass defections from Republicans to Democrats. It would be like asking Red Sox fans to become Yankee fans. They may both love baseball, but the banner under which they love is hugely important.

Could a new big tent work? There is no shortage of reasons why the idea is preposterous. I’ll leave spelling those out to others, who will no doubt think of plenty of reasons even beyond the multitude that occur to me. But how else can we imagine enough agreement on a national program that limits corporations, curtails freedoms, and asks for individual sacrifices?

Key to accomplishing those is political leadership. Under the current regime, the population is largely hardwired to re-interpret anything a politician says as somehow in their narrow self-interest. Maybe there is enough sense left in the country that if a new wave of leaders emerged with less of the taint of the existing parties, people could hear a message that articulated a pressing common need in a way that a broader section of people could rally around it.

This is anything but a sure thing. But at this point the most sure thing is that we are facing the potential for a major disaster and that neither the current political structure nor the general population are prepared for the kind of action that is necessary. Maybe the first of our dramatic imperatives is to face the situation by creating a political infrastructure that can lead in a time of peril, which of necessity includes the need for people being willing to follow.

If not this, what then?

“Affordability” of Infrastructure Bills Is a Smokescreen

By Mike Koetting September 29, 2021

I assume all readers of this blog are familiar with the current state of play in the massive infrastructure expenditures proposed by the Biden administration. In very short, the Senate agreed on a bi-partisan “hard” infrastructure bill with the idea, among Democrats at least, that a larger ($3.5T at proposal) “softer” infrastructure bill be adopted by House Democrats and be passed by reconciliation in the Senate to avoid a filibuster.

At present, both are stalled in the House over the size and contents of the total package and, as really a subsidiary issue, the process for moving forward. The stall in the House is caused primarily by a small group of centrist Democrats, reinforced by the specific threats of Senators Manchin and Sinema to not support a reconciliation bill that is $3.5T should it get to the Senate. Their argument, made by Joe Manchin in a Wall Street Journal op-ed, is that we can’t afford this much infrastructure.

While I’m reluctant to make iron-clad pronouncements about the future, I think the odds are pretty good that they are just wrong. Also, since it doesn’t require as much future gazing, I think the odds are even better they are not being precisely honest about their motivations, perhaps to themselves as well as the voters.

General Affordability

Affordability sounds like a straightforward concept—until you think about. There are cases where something is simply unaffordable. No bank would give my wife and me a loan to purchase a $10M penthouse. That’s unaffordable. But get more realistic. Could we afford a condo that’s 50% more than our current abode? Well…yeah, we could. We’d have to rearrange some other expenditures, but in truth we could without completely upending our life. But we think of it as “unaffordable,” which, in fact, is simply short-hand for a complicated stew of factors—whether it makes economic sense, whether there are things we would rather spend our money on, what risks we are willing to take with long term resources, and so forth. Affordability, as it turns out, is a pretty squishy concept.

Somehow, we spent trillions and trillions of dollars on wars in Iraq and Afghanistan and there was never a serious discussion whether we could afford it. We just did it. Same for covid relief. One specific example ties in with my last blog about how the pandemic made it clear how poorly the official description of our government corresponds to the underlying reality. Last spring, the Federal Reserve bought five percent of the entire $20T bond market—at peak. buying bonds at the rate of $1M per second—and not only did no one ever ask if that was affordable, no one even remembers. I am not saying these were bad expenditures; in fact they probably staved off bigger problems. But this unelected group, with no specific Congressional authorization, just did it. Somehow saving bond traders is automatically affordable while infrastructure is not.

Ezra Klein, in a really enlightening interview with economic historian Adam Tooze, puts it this way:

It is just weird that we have an institution of checks and balances and filibusters and committees and divided government that operates when you need to ask, should people get help in their everyday lives? But then an institution functionally run by just Chairman Powell and the Fed board operates around the question of, well, do we just need to begin buying up all the debt anybody wants to sell us?

Consider this another way. According to analysis from Brookings, infrastructure spending was about 2% of GDP during the late 70s/early 80s at the height of building out the interstate highway system. Since then, it has averaged around 1%. Would anyone suggest we couldn’t have afforded the Interstate highway system? We could, we did and we have been reaping significant benefits ever since.

More Specific Arguments

Setting aside the sloppy rhetoric, there are two arguments that could be made against the high level of infrastructure investments—it creates excess inflation and it makes “too great” a claim on future revenue streams. The first is, at best, debatable, and the second is a philosophical judgement that buckles on inspection.

Inflation is the more immediate concern. Prices are rising and there is reason to be concerned about those impacts. But, reading among various economists suggests their basic sentiment is profound uncertainty. It is not just about the possible impact of a very large infrastructure investment. It extends to great uncertainty about the connection of macro-economic policy and inflation: there has been no serious inflation since the mid-eighties, pretty much regardless of what happened, even when the pre-covid unemployment rate dropped to previously unthinkable levels. Moreover, there can be no question but the circumstances surrounding the pandemic are quite unique and that makes it even harder to understand what would be the likely impact on inflation.

There is nothing even remotely like a consensus that these bills pose a clear inflationary threat. Seems to me majority sentiment is pretty well summarized by Mark Zandi, a Moody’s Analytics economist who has extensively modeled Biden’s plan. He says he can’t find any reason to be very concerned about inflation from these bills given the way they are targeted and paid for. He even suggests that some of the provisions, particularly around housing, might have a modest deflationary effect in out years.

This doesn’t mean we can ignore the issue of inflation. But at worse what we’re seeing is a caution flag and probably a weak one at that.

So what about the issue of “too great” a claim on the future. From my perspective, the cartoon says it all.

The salient point here is that not making these expenditures also puts a claim on the future, and maybe even a larger claim than making them. When I was a kid there was a commercial for oil filters that ended with the auto mechanic turning to the camera, shrugging his shoulders and saying: “You can pay me now, or you can pay me later.”

The question then is who speaks for the future? That’s a heavy-duty question. You can make an argument that just about any plausible expenditure is necessary for the future—and “just about everything” is truly unaffordable.  Still, it seems to me the opponents of this bill, mostly older, mostly white males, are peculiarly limited candidates to represent the future.

Which brings me to another issue.

Sketchy Motives

Let’s start with the fact that the expenditures proposed within these bills are very popular with voters, even among Republicans. So, opponents find it hard to attack these bills on the substance. The alternative for them is to shake their head sympathetically, then sadly pronounce the measures unaffordable. But as averred above, what that really means is that one chooses not to make those expenditures because you would rather make other ones. And what are the other expenditures they would rather make? Apparently, it is not expenditures in the usual sense, but it is not raising taxes to pay for these bills. Corporations and their ilk have locked arms in opposition to the taxes included in the $3.5T bill. For instance, the larger infrastructure bill includes measures to reduce subsidies to fossil fuel industries and, I know you’ll be surprised, those companies are lobbying against them like crazy. Of course, their lobbing focuses on why we can’t “afford” the expenditures in the bill, not on attacking the fossil fuel taxes per se, something that would be a good idea in any event. Another example: savings from negotiating Medicare prescription drugs is opposed by pharma and specifically opposed by a small group of centrist Democrats, three of whom have received more than $1.6M in pharma funding.

This underlines the disingenuousness of the “affordability” argument. As proposed, the $3.5T bill is primarily paid for by additional taxes on corporations and the wealthy, ideas that are also very popular. So instead of attacking them directly, the arguments focus vaguely on the “unaffordability” of the proposals. If you listen to the opponents of these bills, you’d think the proposed expenditures went directly to the deficit. Nope. They increase taxes on the rich and increase services to people in the middle and lower end of the economic spectrum, which is to say making a step toward improving the overall economic equity of the country without increasing the deficit.

I don’t want to trivialize the many real issues involved in current discussions about the infrastructure bills. There is no easy answer, nothing is unambiguously good and there are all kinds of risks associated. But I do think it fair to say that most of the arguments about the size of these bills are smoke-screens for maintaining a status quo that over favors the rich and entrenched.

The Vaccine Story Shows How Unmoored Governance Has Become from Concept

By Mike Koetting September 19, 2021

Among other things, the ongoing controversy over the public health response to Covid serves as a kind of political x-ray machine illuminating the gap between our mental image of how our government works and how it actually works, something that can get lost in the trivia of day-to-day politics.

Congress Is Hopelessly Broken

In civics we teach that in America the elected representatives address serious problems through law. While at first onset, responding to Covid is something that would require emergency Executive action, this issue has been roiling for 18 months now. Any textbook description of our democracy would suggest some of these issues should be taken up by Congress and resolved through the passage of a law that reflected democratic debate and resolution. The Executive branch would then be charged with implementing the resulting law.

Of course, anyone who has paid the least bit of attention to recent American politics would giggle at this idea. I have never heard anyone even suggest this as an alternative route for addressing how forceful the government should be in addressing the pandemic. The country takes for granted that there is no amount of scientific evidence that would compel Republicans to seriously consider public health mandates and the structure of our system is such that any substantial minority can bring the system to a halt.

Whether this is an indictment of the current status of the Republican party, the structure of our government or both is not relevant to this discussion. The point here is that no one can even imagine Congress usefully addressing this issue.

This is not an isolated case. Despite the fact that Congress passed large COVID relief packages—and may actually pass one or two large-ish infrastructure bills—the Congressional record for this century accomplishes little beyond firmly establishing its inability to address the fundamental problems of the country. Whether it is immigration, environmental issues or inequality, Congress is at best a debating society and, probably more accurately, a sink-pool for various rhetorical themes. Ten years ago, Ornstein and Mann titled their book on Congress It’s Even Worse Than It Looks. The intervening ten years have only made it look worse. A recent Pew Survey found that a substantial majority of Americans think Congress is broken—73% think citizens, not Congress, should decide on laws, a horrifying prospect.

The implications of this lack of confidence in Congress are far-reaching. The country spends billions of dollars on Congressional campaigns to elect a Congress that will consume a very substantial percentage of the media time devoted to policy discussions for an institution that is largely derided in the rest of the country and has become functionally irrelevant to actually solving problems. Both sides hope for little more than to block the other side from getting what it wants.

Courts Are Worrisome

The absence of Congressional ability to do much of anything, splits up power between the President and the Courts, in a funny kind of way. Since Congress no longer actually does anything about hard issues, if anything is going to happen, it is up to the President to issue some kind of Executive Order to mandate his (or, maybe even someday, her) idea of what needs to be done. Then the courts get to decide whether or not to let it stand. Since there is no specific law on which the courts can base their decision, they have a lot of leeway.

Although this is neither the original design nor the historical practice, so far it has not been disastrous. The courts allowed many of Obama’s Executive Orders to stand and stopped some of the worst of Donald Trump’s. But Executive Orders are no substitute for legislation.

Nor is there any guarantee going forward. Republicans understood the direction this was moving before Democrats were able to respond effectively and stacked the courts with ideologues who had life-time appointments. Surely at this point Democrats would do exactly the same thing if they could; once the trend started, the other party has to respond similarly as a matter of self-defense. The functional outcome is that the courts will be reflecting the preferences of whichever party (or fraction of a party) managed to cobble together enough votes at a time when there were court openings. Any changes in popular will or circumstances since then may or may not be relevant.

The case of a vaccine mandate illustrates the difficulty in technicolor.

The standing law on this matter is pretty clear. Dating back to the 1905 in Jacobson v. Massachusetts, the Supreme Court decided that jurisdictions do have the right to require people to get vaccinated. Justice Harlan, at the time, wrote:

Of paramount necessity, a community has the right to protect itself against an epidemic of disease which threatens the safety of its members.

That position has been challenged and rechallenged in the years since and in all cases the ability to impose mandates was upheld.

Nevertheless, I am not sure that the current Supreme Court would uphold a broad vaccine mandate. I think they would. But I am not particularly confident. Others share my uncertainty. The underlying nature of the courts has taken some serious hits in the era of Mitch McConnell. While the idea of checks and balances among branches makes sense, when it’s taken to the extreme that has happened over the last several years, one has to wonder whether the practice has overshot the original rationale.

Not Much Guidance for Executive Branch

This leaves the President in a difficult situation. He can’t rely on Congress and he can’t be certain the courts will pay attention to previous rulings, to popular sentiment, or indeed anything beyond their preferences. He also faces a situation where there is little agreement on what constitutes the safety of the community that Justice Harlan said was paramount. More than 660,000 Americans have already died of Covid and another 100,000 may die by December. Most of the deaths since early summer have been among the unvaccinated. But even that is not enough to create a political consensus.

If the unvaccinated and others ignoring public health recommendations did damage only to themselves, the grounds for a mandate might be murkier. Unfortunately, it is indisputable that these folks contribute significantly to the continuing spread of the disease to the vaccinated and pose the risk of generating mutations that may do even more damage. It is also the case that caring for the unvaccinated runs up healthcare costs for all of us and, in many communities, is flooding medical facilities to the extent others are in danger. Over 95% of Covid hospitalization since June are for unvaccinated people with an estimated preventable cost approaching $6B—through August alone.

This is aside from any benefit that might accrue as a result of saving people from themselves, although I concede it’s a bit tricky to figure out what the correct balance is when it comes to saving people from themselves. As a society, we do a fair amount of trying to save people from themselves and the results are mixed. Still, this seems like a relatively clear case.

Despite all that, a material number of people in the country seem to believe that any infringement on their ability to do whatever they want is a violation of America’s promise of individual freedom. Relatedly, segments of the population have completely rejected expert opinion as a basis for policy, which further undermines the ability to generate consensus.

With few universally accepted guidelines for making policy choices, it is inevitable that any decision the President makes on a major issue is going to be hotly disputed by a big enough fraction of the population to make actually implementing an Executive Order extremely difficult. It is particularly problematic when those dissenters are disproportionately concentrated in a few states which gives those Governors incentives to use the power of their offices to actively obstruct any Executive Orders.

Common Factor

All these aberrations from the understood machinery of our government have a common problem—the loss of willingness to put a common notion of democracy over one’s individual opinion.

To a certain extent all democracies require this kind of compromise and all are facing increased challenges in this regard. But, as Max Boot points out in the Washington Post, other democracies have been able to do a better job of getting their populations vaccinated—the US is behind every other Group of Seven country’s vaccination rate. He suggests this is not the only important issue where the US gets tangled in its own shoelaces and argues that the problem is the United States has developed an “uniquely dysfunctional political system.”

Whether this system can be fixed is probably an even more important question than vaccine mandates.

Can We Control Covid Without Controlling Capitalism?

By Mike Koetting September 2, 2021

With the announcement that a third shot (or second for J & J recipients) may be desirable as a booster—arguably running ahead of the science on the issue–many Americans are already jockeying to get one. Understandable. I expect I will get one soon myself. We all want to avoid Covid and the delta variant is scary.

But, at the same time, we also need to consider context. And the key contextual fact is this: unless the virus is brought under control on a global basis, there will continue to be waves of deadly variants. There will be some regardless. The only absolute is the lack of absolutes. But we are talking about speed, size and odds, things that make a big difference in how world-wide reality plays out.

This is not a newsflash. We’ve known the global nature of the problem since the beginning. That was one of the arguments for sharing the genomic code so widely. But after the rich nations got vaccinated, we stopped acting like that…or, more accurately, we continued to recognize the importance of that concept by giving away many doses of vaccine, but nowhere enough to meet need. Just over 1% of the population in the world’s poorest countries have been vaccinated. To meet global need would require suspending the usual capitalist order. That hasn’t happened.

While it is certainly true that the existing facilities could not meet this need, there are options for expanding that capacity. For multiple reasons, it is probably not as simple as the loudest advocates suggest. But “greater complexity” is not at the same as “impossible”. Various vaccines are manufactured all over the world in partnership agreements. As early as March, the former director of chemistry for Moderna said that with blueprints and advice, the world is full of factories that could be manufacturing in four months at most. That is opposed to the current rate of production, which will not have many countries even starting vaccination campaigns until 2023.

The Biden administration recognized this issue and in May, to the surprise of many observers, urged the World Trade Organization to grant a waiver of intellectual property rules which would force Pfizer/BioNTech and Moderna to let others manufacture their vaccine. For this to have the desired effect, it would probably also be necessary to use the Defense Production Act to force Pfizer/BioNTech and Moderna to actually transfer applicable technology to places that might be capable of producing the vaccine. They would still get royalties for these products, but they would lose the ability to control pricing and volume. Pharma, of course, went ballistic.

Since May, two things have happened. Well…one thing didn’t happen and one thing did.

What didn’t happen is the WTO actually issuing a waiver. It is being blocked by Germany and the EU. And as near as can be readily seen, the Biden administration isn’t doing anything about that: it didn’t even come up in the recent Biden-Merkel summit. At this point, it’s hard to know whether Biden was serious about this in the first place or was just posturing.

What did happen is that both Pfizer/BioNTech and Moderna raised their vaccine prices. This appears consistent with their stated strategy that they will make the real money on longer term demand, specifically the sale of booster shots in countries that can afford the high prices. These increases—which are obviously driven by market power rather than incurring new costs of innovation—will be on top of terrific, and growing, profits in both companies from the vaccine.

Takeaways

The most obvious take-away is that Big Pharma, indeed all mega industries, still wield power. No surprise.

But the way this is playing out puts an usually sharp focus on the implications of how we have given one concept of our economy a greater priority than human needs.

In April, Mihir Swarup Sharma, a columnist with Bloomberg, described the production and distribution of the vaccine as an existential challenge for capitalism.

This isn’t about inequality, which we always knew capitalism could create. It’s about inefficiency, which capitalism is supposed to avoid. When it comes to desperately needed COVID-19 vaccines, capacity is being wasted and innovation isn’t benefiting everyone. Twelve billion vaccine doses could be produced this year, if all current projections are aggregated. But we’re nowhere close to that in actuality. And the doses that are available have largely been gobbled up by rich countries.

We have a system that used the challenge of a world-wide crisis to virtually create magic in the form of vaccines developed in record time. This is an awe-inspiring achievement. No one begrudges substantial rewards for the people and institutions who made this happen. But now Pharma is using its leverage to extract mega profits. There is no magic in this; only raw power.

There is a serious chance this will be self-defeating. In the short run, if we don’t take the next step, even the world’s elite nations might not be able to protect ourselves against the variants that will get spawned in the un-vaccinated nations of the world. Of course, depending on your level of cynicism, you might even imagine that the ongoing wave of variants strengthens Pharma’s prospects for a permanent demand for boosters.

In the longer term, it is hard to imagine that the poorer nations of the world will be indefinitely acquiescent to the notion that preserving intellectual property rights to insure that capitalist Pharma can reap super-rewards is necessary. Yes, this was a stupendous achievement, but it was achieved (and back-stopped) with substantial governmental supports. Why should these circumstances allow people who are already rich beyond imagination, get even richer still by standing in the way of vaccines for the poor countries? If that’s somehow offered as an imperative for capitalism, global support for capitalism will decay at an ever-increasing rate.

Indeed, if capital can’t control its appetite for profits, erosion of support may be a necessary development. In The Ministry for the Future, Kim Stanley Robinson says economic systems are simply the measurement of quantified ethics and power. As an explanatory statement, that sounds about right. And, thus, we might consider carefully if the system of uncontrolled profits represents the ethics we really want to pass on to future generations.

We will of course get the booster. But, as suggested by Yoo Jung Kim, a practicing Chicago physician, we should at least feel uncomfortable about it.

We bear some degree of individual responsibility toward our unknown brethren thousands of miles away, however small or indirect. We may never get to know them, but don’t they also deserve a chance to avoid the worst effects of COVID-19?….The booster will buy those of us in the United States some more time and keep many of us safe from the delta variant, but it is not a cure to the pandemic. We can’t solve this on our own, and to help ourselves, we must help others.

Looking across the world, one can see many other problems that can only be solved by helping, really working with, others. We don’t want to destroy those aspects of capitalism that create the magic of innovations. But as the question of vaccine makes clear, our economic system needs recalibrating if we want to have a different set of ethics than “winner take all.” That system runs the risk of making all the rest of us losers.

****

And One More Thing

My last blog spotlighted water shortages along the Colorado River. A week after I posted, The Atlantic Monthly had a really sobering article (“The Well-Fixer’s Warning”) by Mark Arax on water shortages in the almond growing country along the San Joaquin River in the central California valley. The article was essentially an interview with a guy who maintained irrigation systems in that area. The well-fixer’s warning wasn’t based on academic modeling about future problems; it was a sophisticated, on-ground the assessment of how the water supply was, literally, drying up. Every year now, the water being drawn out for the orchards was greater than the water going in and the aquifer was collapsing. By his evidence, it would be necessary to reduce water usage by 1/6 to maintain the aquifer. He was skeptical of that happening because no one wanted to give up the profits they were making now.

Who is representing the future in this scenario?

It’s a System, Stupid!

By Mike Koetting August 22, 2021

As much as extreme weather conditions have caught our attention, we don’t seem ready to acknowledge those are just the warnings. The main events are the ones that fundamentally change life conditions—persistent lack of water, rising sea levels, acidification of the oceans, loss of species.

At its core, the issue is simply that the environment isn’t free forever. Each action creates a reaction. It’s a system with feedback loops, long and, to a point forgiving feedback loops, but eventually the accounts have to get balanced.

Western civilization got off on a bad foot in this regard, choosing for guidance the biblical passage:

Then God blessed them, and God said to them, “Be fruitful and multiply; fill the earth and subdue it; have dominion over the fish of the sea, over the birds of the air, and over every living thing that moves on the earth.”  Genesis 1:28

The problem, as both economists and ecologists can agree, is that there are no free lunches. Dominion is not a blank check; God only created so much earth and so much sea. And all the parts are connected.

None of us are truly shocked when reminded of this. We give easy intellectual assent to the different folk wisdom of Chief Seattle of the Suquamish tribe:

The earth does not belong to man, man belongs to the earth. All things are connected like the blood that unites us all. Man did not weave the web of life; he is mere a strand in it. Whatever he does to the web, he does to himself.

But intellectual assent to an abstract proposition does not even begin to replace realities on the ground. We continue to enjoy the benefits of simply taking from the environment without a real plan for replenishing.

Recently, at the Colorado History Museum, I saw an exhibit that asserted that in the first toilet flush of the morning, a citizen of Denver uses more water than the daily average of a Pueblo Indian living at Mesa Verde. So maybe we shouldn’t be so surprised when the Department of the Interior issued the first ever official water shortage warning for the Colorado River, a so-called Tier 1 mandate that will require decreased water allotments throughout the Southwest. The size of these decreased allotments will range between 5% and 8% of the water supply in the adjacent mountain states.

But we are still surprised. Tom Davis, president of the Agribusiness and Water Council of Arizona, a state where some farmers will feel the cuts, said “It is a sobering thing to realize we are at Tier 1 already. A few years ago, no one was thinking this would happen.” (And, for the record, the experts are saying Tier 2 is closer than “anybody ever imagined.”) The impacts of reduced water allotments are going to reverberate beyond the immediate region. Fewer crops will be planted and there will be lower yields from those that are. We are connected.

The point here is not that we are running out of water in the Southwest. Everyone with an ounce of sense knew that was inevitable. It is that we have been unwilling to act on the systematic issue: the environment is a finite system. We know that, but are apparently incapable of believing it until we’re kicked in the teeth. And even then we can’t kick the habits.

As evidence mounts, many Republican legislators have felt compelled to shift their narratives and admit that carbon emissions are significantly contributing to environmental problems. But their response is to focus exclusively on the consequences while avoiding the causes. Their only concession is willingness to help cities and states prepare for the increasing fallout. This is a necessary step—although it needs to be done in a way that builds on the systemic elements of nature rather than attempting to simply dominate them as we have done in the past. But a longer term solution must get to the underlying cause, which the Republicans are apparently unwilling to do. Representative Cassidy summarized the Republic position: “We cannot live without fossil fuels or chemicals, period, end of story.” Unfortunately, it may turn out that we can’t live with them either.

Much of Republican concern is focused on the local, immediate economic impacts. Yes, there will be economic impacts from addressing environmental issues. Those must be considered, but they must be considered in the larger context. The fundamental issue: the environment is a system and it is being overwhelmed. We have reached the end of its natural resilience. The feedback loops are every day accelerating the process. Tier 1 warnings will slip into Tier 2 warnings in the blink of an eye because we want to keep writing IOUs against a future we’ve already used up. It is simply paying the minimum balance on the environmental credit card while the interest mounts.

Moreover, not changing our patterns assumes—and again the fallacy that the environment is simply there for the taking—that it is somehow the right of the United States to protect its economy regardless of the damage to the rest of the world. The US contributes 15% of all carbon emissions. China contributes almost twice as much, but has more than four times the population of the US.

                 Source: Union of Concerned Scientists                   Source: Our World in Data

In the short term we might be able to mitigate the worst effects in America, but failure to recognize there are global impacts from what we in the US do cannot be justified by any standard—either the immediate standards of manifest fairness or the longer standard of self-interest, because sooner or later this will come to haunt us. There is a limit to which the rest of the world will allow us to disproportionately pollute the planet on which we all live.

And while the most egregious enemies of the environment are Republicans, we are kidding ourselves if we don’t recognize that very few of us really want to face up to the implications. Let’s face it: we all enjoy being the world’s biggest consumer. Indeed, we’ve come to assume it as our birthright.

But maybe we have to listen to one of the prophets of the Cree nation:

Only when the last tree has died and the last river has been poisoned and the last fish been caught will we realize we cannot eat money.

****

Obesity Afternotes

My last post was on how the overall American food environment is feeding American obesity. Two developments since merit attention.

The day after that post, The Milbank Quarterly published a review of the efforts that led to the virtual removal of artificial trans fat from the food chain. It summarized its results thusly:

…challenges were addressed (through communications, leveraging an expanding research base and expert reports, showing that a national policy was feasible through voluntary corporate changes and state and local policy, and litigation against companies and government agencies) providing a model for scientists, students, advocates, and policymakers.

While this article stressed this change was achieved “without the need for individual behavior change,” I am not sure we can solve the obesity problem without also helping individual behavior change. Still, this is a great, concrete example of how to win on one essential front in the struggle.

Also, in the week after I posted, the Biden Administration announced an increase in SNAP benefits (what used to be food stamps) of up to 25%. It is instructive that this increase was given not simply to offset inflation, but reflected rethinking how the benefit should be calculated to improve eating habits, taking into account realistic time and taste parameters. Again, I think without some additional efforts (more education, specific cooperation from medical community, ensuring availability of healthy food to purchase, etc.), it will be hard to achieve the full benefits of this increase. But they can be done later and this is a great start.

Finally, if any of you wanted an explanation of why America has a calorie problem in one picture, this photo from my most recent shopping might be it.

Obesity and Public Policy

By Mike Koetting August 8, 2021

I think it is obvious that one of the duties of a nation is to protect its citizens. But to what extent should this go? And when does it become overreach—either philosophically or practically?

I have been thinking a lot about these issues in recent weeks because I have been thinking about obesity in America. Simply looking at people on the streets suggests that, despite decades of official concern, American obesity continues to rise. The data bear this out. Research published in the New England Journal of Medicine predicts no state will have an obesity prevalence rate below 35% by 2030. In 2000, no state had an obesity rate above 35%.

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Promoting the Wrong Discussion–Socialism vs Capitalism

By Mike Koetting July 18, 2021

The Republican Party has gone full-out on equating Democrats with Socialism. That, of course, is absurd.  It is absurd not simply because it is so far from accurate but also because the entire distinction between “capitalism” and “socialism” is so dated as to have questionable relevance in today’s world. No serious analysis could call China a purely socialist country or the United States a purely capitalist country.

Two examples of the latter are worth some exploration.

Covid Vaccine

The Wall Street Journal ran an article crowing that it was private corporations that created the vaccine. This is true and important, but it is only part of the story.

I think the ability of private corporations to move quickly and minimize distractions from their focus is a serious advantage. I really don’t believe we would have gotten the vaccines this fast without the work carried on by the private corporations. Dismissing that would be a mistake.

On the other hand, we need to be cognizant of the role that government played in making this possible. For openers, Operation Warp Speed provided $12 billion even before there were vaccines. This was an important risk mitigation strategy for the private corporations, as the Wall Street Journal acknowledges. (Pfizer did not take Operation Warp Speed money for research and development, but it’s partner, BioNTech received $450M from the German government and the venture signed $2B in contracts with the US Government before there was a working vaccine.)

Moreover, the work on vaccines is supported by the government in many other ways. Years ago, Barney Graham, the deputy director of the NIH Institute of Allergy and Infectious Disease, was working with Jason McLellan at the University of Texas to develop a vaccine to protect against Middle East respiratory syndrome (MERS). As their work progressed, Graham and McLellan realized that by making slight changes in the genetic sequence that they could create vaccines against multiple viruses. Their modification is a key element of all the COVID vaccines used in America.

This is only one of the ways long term investments by government, with no need to hit quarterly targets, creates an environment where private companies can apply their imagination in a very focused way, and, incidentally, make their quarterly targets. For instance, in 2017 the NIH funded Moderna to develop techniques for accelerated vaccine development before COVID was on the scene.

There is no need to argue about whether this is “capitalism” or “socialism.” It’s neither. But it does seem like a reasonable way to run an economy in a very complex world with ever accelerating technological and scientific realities. It leaves unanswered some very real questions about how to distribute the rewards of this fruitful partnership. The fact that private corporations are a critical part of the economy does not justify any particular distribution of rewards. That is an important topic, but a different one that will be left for another day. For now, it is enough to simply recognize that both private enterprise and government intervention are essential parts of the economy as we have developed it.

Fossil Fuel

Fossil fuel is another collaboration of government with private enterprise, but a much less happy story.

Federal tax policy provides up to $20B in subsidies to fossil fuel providers annually. These incentives were designed to reduce the cost of using fossil fuels, but most were put in place in era when there were no viable alternative energy sources and before the full weight of environmental damage became clear.

Republicans have generally worked hard to maintain supports for the fossil fuel industry. This is true not only in Congress, but throughout the country. Ten Republican states have already adopted legislation making it harder to shift away from fossil fuels. They have adopted versions of a model bill authored by the American Gas Association. State treasurers from 15 Republican states complained in a letter to the Biden administration that it was “picking economic winners and losers” by supporting alternative energy sources over fossil fuels and that the administration was guilty of pressuring financial institutions to “discriminate” against fossil fuels.

There are understandable reasons for Republicans to be concerned about the decline of fossil fuels. Republican states will be disproportionately impacted—both in drastic declines in revenue from fossil fuel sources and indirectly through the loss of jobs. It is going to be a rocky transition away from fossil fuel and more so in Red states. We can see how difficult this is going to be, for instance, in Florida, where, ignoring the extent to which his state is at risk from rising sea levels due to global warming, Ron Desantis self-righteously supported a measure to make it difficult for local municipalities to demand alternative fuels. Apparently he guesses that high gas prices and bad short term economic impacts will impact his political career well before any of the longer-term benefits of adopting alternative energies kick in. As David Axelrod is fond of saying, “There’s a reason Profiles in Courage is such a thin book.”

Regardless, this is no longer capitalism by the textbook. Shi-Ling Hsu, a professor at Florida State University, argues if this were in fact a capitalist economy, the fossil fuel industries, particularly coal, would be experiencing a much greater impact from the array of market forces lining up against them. Costs of alternative energies are falling rapidly and financial institutions are getting worried not because of anything Democrats have done, but because they read the longer-term economic tea leaves.

In this context, the argument by some Republicans that Biden is a “socialist” who “wants to pick economic winners and losers” shows how absurdly confused they are as to what we mean when we use the term “socialist”. Or, for that matter, ”capitalist”. In real capitalism, when companies lose market advantage or the public becomes too concerned about the costs imposed on it by the process (e.g. the cost of pollution from a manufacturing process or product), the companies are forced to change or go out of business.

And so…

To bludgeon the painfully obvious, what we have in our daily life is neither “capitalism” or “socialism” and we should stop muddying our conversations about policy with labels that create artificial obstacles. We need to be able to discuss the role of the private sector in the stunning development of medical advances and the actual costs and benefits of fossil fuels and their alternatives without dynamiting the conversation before it begins. These are complicated, nuanced issues of huge importance. Restricting the argument to cavemen’s clubs doesn’t help.

I think there is another issue here. When people use these labels, they are most often not even talking about economics. They are talking about their perception of how government relates to the mediation between individual freedom and collective welfare. But this code further muddies the conversation. One group wraps itself around freedom and their definition of “socialism” is government willing to stomp on individual freedoms. (Understandably, China is the most evil empire in this view of the galaxy, a view abetted by China’s continued insistence it is a socialist country, when it’s simply an oligarchical, fascist society that understands it keeps power by sharing material wealth to a degree.) To the other group, more concerned about the suffering following from the unequal distribution of power and money, “capitalism” is individuals willing to stomp all over collective welfare as long as it suits their purpose.

It’s little wonder these two groups don’t have a productive conversation.

The current divides in this country are caused by a variety of factors. Confusion on these terms is a minor contributor in terms of causality. But I suspect it is a larger contributor in terms of making it hard to talk ourselves out the mess we have created. We are using words to talk past each other.

We need to get beyond the labels. We are enjoying the benefits and suffering the problems of a mixed economy. A mixed economy is a tangible reminder that neither individual rights nor collective welfare are absolute goods. We all want a country where both individual rights and the welfare of all people are generally protected. We have a much better chance of getting somewhere near there if we talk about the specific issues. Trying to communicate using these broad labels is like trying to do brain surgery while wearing oven mitts. Neither is likely to be good for the patient’s health.

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What Does the Flag Stand For?

By Mike Koetting July 4, 2021

Just before the 2016 election, I was taking my then five-year old grandson home from swimming. As we drove through a residential neighborhood, he asked what was that sign in someone’s front yard. Then, before I could answer, he announced: “It has a flag on it. It must be for that bad man.” (Trump was, of course, the “bad man.”)

On the way home, I got a chance to look closer. It did indeed have an American flag motif, but it was hardly a Trump poster.

What struck me was that a five-year old had picked up the idea that American flags were emblems of the right. Although this sharpened my appreciation for how much five-year olds pick up, it left me feeling something had gone very awry in the country where, growing up, I started every school day pledging allegiance to the flag of a country that promised “liberty and justice for all”.

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Can This Marriage Be Saved?

By Mike Koetting June 20, 2021

In today’s political environment, there is a lot of discussion about thwarting the will of the majority or attempting to establish minority rule. This way of taking about it presumes a majority-minority scale where it is possible to determine particular spots on the spectrum. But the actual structure of American government, for better and worse, includes no such yardstick at the national level. There are a series of independent electoral processes which, historically, come enough together to form a national will in service of a shared national story. In that respect, it is more like a marriage—where two people decide to marry their way through life. Counting votes doesn’t really matter; the issue is whether there is will to proceed and flexibility to accommodate each other’s particular issues.

When the differences over the issues become too large, when every discussion turns into rancor, the will to continue wains and suitcases are packed.

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Can We Make Government Work Better?

By Mike Koetting June 7, 2021

In my last post, I suggested that government will always have difficulties being efficient because it is trying to serve many ends, not of all of which are easily compatible. I then, rashly, as it turns out, suggested this post would include some suggestions that could mitigate the difficulties of implementation in government.

It’s not that there couldn’t be improvements. The problem is that it is hard to imagine how to implement the things that would improve implementation.

Continue reading “Can We Make Government Work Better?”