Will Governments Provide The Leadership Than Corporations Are Looking For On Climate Policy

The press has been filled with reports on the latest report from the IPCC on the risks that we face from climate change.  This article by Nicholas Stern who wrote the influential report on climate change that increased our awareness of climate science, and the threat of climate change, summarizes the IPCC's latest report.  We are reaching a tipping point that will lead to irreversible and disastrous changes unless we act quickly to cut carbon emissions.  Stern believes that, with few exceptions, most corporations understand the issues and that they are looking for governments to provide the signals that they need to move more aggressively in the direction of more sustainable industrial policies.  The UK has put a stake in the ground by adopting policies which will be helpful.  Political leadership from the US and China, which are the largest emitters of carbon, is essential for the development of  policies that will point our large corporations in the right directions.  President Obama understands the risks that we face, and he has been making efforts in the US to provide the right set of signals to our corporations.  The risks from climate change in Asia are so serious that they cannot be ignored by leaders in China. Stern ends his article with a glimmer of hope for the development of a more sustainable industrial policy.

I don't know much about the politics in China but I am deeply concerned about politics in the US.  It is understandable that corporations most directly affected by policies that limit carbon emissions will resist government efforts to push the US economy in a more sustainable direction.  What bothers me most about the ability of the US government to work successfully with our large corporations to develop sustainable policies is political resistance.  A large segment of the US population has adopted beliefs , influenced of course by those able to shape public opinion, that are almost religious in nature.  They are not subject to change by the kind of data provided by the IPCC.  They associate efforts to reduce carbon emissions with a more general liberal conspiracy that threatens their way of life. Those conspiracy theories have been carefully nurtured by politicians who benefit from them. It will be difficult for politicians dependent upon a distrust of any policy tainted by an association with liberalism to reverse course on climate policy.

The Risks Of A Government Shutdown And A Paucity of Solutions

Paul Krugman describes the risks that we face if the radicals in the GOP are allowed to continue the game of "chicken" that they seem to be enjoying.  For many of them, no government at all is better than an elected government that does not share their ideology.  The GOP is a coalition of plutocrats, that benefit from its economic policies, and members of the Tea Party who are primarily inflamed by hatred of the President that we elected. One possibility is that the plutocrats, who are more aware of the implications of government shutdown,  will be able to influence GOP representatives that are dependent upon the Tea Party element in their districts.  It would appear, at present, that the schizophrenia in the GOP is not amenable to any form of therapy.  We may be in for a long period of craziness. Hatred is powerful emotion that many GOP politicians hope to harness for their benefit. 

A Contrast Between Politics In Germany And The US

They erosion of consensual politics in the US has been made tragically apparent by the GOP's willingness to risk economic disaster in an effort to achieve ideological objectives that are supported by a radical segment of its political base.  While its always dangerous for foreigners to interpret events outside of their country, the recent elections in Germany are interpreted as evidence for the strength of consensual politics in Germany. There are ideological differences in Germany that are similar to those in the US, but they do not affect the ability of the elected government to govern as they do in the US.  The radicalization of the GOP has produced a level of government dysfunction in the US that is unprecedented in our recent history. 

The Rising Level Of The Wealth to Income Ratio And its Implications

A lot of attention has been being paid to rising income income inequality.  This has led many to argue for improving and expanding education opportunity.  That might have a limited effect on wage dispersion but most of the growth in income within the top 10% has gone to the top 1% despite the fact that the top 1% is not better educated than the remainder of the top 10%.  Out policy issues in the future will directed toward the concentration of wealth.

The ratio of wealth to income has been growing rapidly in the developed world.  It is driven mainly by a slowdown in economic growth.  For example if we assume a 10% saving rate and a 3% growth rate, the ratio of wealth to income is 300%.  If the growth rate falls to 1.5% the ratio is 600%.  Slow population and productivity growth will continue to drive down the economic growth rate in most developed countries.

Automation is also a factor in changing the ratio of wealth to income.  As automation is substituted for wage labor, the share of income going to capital will rise relative to wage income.

The wealth to income ratio has grown fastest in Spain.  It has been even faster than the change in Japan during its boom period.  It is not surprising that the economic and political consequences in Spain have been severe during its recession and the bursting of the real estate bubble.

The social and political fallout from growth in the wealth to income ratio will require atypical policies in the future.  There may be a need to have higher taxes and wealth and inheritance.  It will require international cooperation to limit the ability of the very wealthy to hide their wealth in tax havens.

Budget Deficits are Primarily the Result Of the Business Cycle in The US

If the GOP had any use for data the graph in this article would end the debate about budget deficits.  They have little to do with federal spending.  They are highly correlated with the business cycle.

What Do GOP Representatives In The House Really Value?

When a kidnapper demands ransom his values are very clear.  The kidnapper wants money as ransom.  The GOP House just sent its ransom note to the White House.  They are willing to lift the debt ceiling in order to allow the Treasury to keep from defaulting if the White House will agree to the following demands as ransom:

* Drop regulations on greenhouse gases
* Build Keystone XL oil pipeline
* Stop paying the Consumer Financial Protection Bureau
* Halt healthcare reform for one year
* Make it more difficult to sue for medical malpractice

We elected a president who took a different position in the last election on each of the demands made by the House.  The ransom note from the GOP House demands that we reverse the outcome of the presidential election or it will not allow the US Treasury to pay the government's bills or meet its financial obligations in the bond market.  In other words, the House Republicans don't really believe in democracy and they are financial terrorists.

We also learn what Republican's in the House really value, or at least who their paymasters are.  They love the fossil fuel industry; they love Wall Street despite their protestations about the bailout of the financial industry; the want to stop the roll out of healthcare reform because they fear that a positive response the reform will demonstrate to the electorate that they were wrong about the reform, and they are still trying to win support from those who believe that medical malpractice is responsible for the rising cost of healthcare (research shows that has about a 1% effect on the cost).

Now the House Republicans are not stupid.  The values that they espouse are shared by the voters in their districts that have been gerrymandered to increase their chances of being reelected. They can also be assured of a continuing stream of campaign contributions from the industrialists who they support.  The same industrialists have also used their friends in the media and in think tanks to "educate" the electorate on these issues.  Their ransom threat will not hurt them in the next election.  It will, however, make it more difficult to govern our nation and it will deepen the chasm within the GOP between those who have to win state or national elections and the radicals in the House.

The Fight To Put Climate Science Into The Curriculum Of Public Schools

There has been a long term battle to keep evolutionary theory in the curriculum of our public schools.  Many Americans prefer to believe that the earth is not billions of years old and they prefer the concept of intelligence design, which is not backed by the scientific community, to evolutionary theory which they view as a theory that has not been substantiated by evidence.  The new battle over the science curriculum is over climate science.  Many Americans, which includes many who reject the teaching of evolutionary theory, have been taught that the burning of fossil fuels is not connected to the warming of our planet.  More than half of our states are going to include climate science in the curriculum.  This is a welcome change in the science curriculum but it run into lots of resistance from those who have invested millions in maintaining ignorance about climate science.