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Who Moved Obama’s Win-Win Cheese?

by Brian Czech

BrianCzechWhether or not you like President Obama or his policy preferences, you have to acknowledge his consistency. Even those with “zero regard” for the president confess, “At least Obama is consistent.”

But not consistently. There is one issue, at least, on which he hasn’t held still, moving in and out like an octopus in a sunken ship. That issue is the relationship between economic growth and environmental protection. Based on his state of the union address, his current tack is a mixture of avoidance and vague allusion.

Yet Obama’s inconsistency on this issue is nothing to be hypercritical of. In fact, given this recent turn, we might even say, “At least Obama is inconsistent.” As odd as that may sound, it’s better to be inconsistent when you were, at one time, dangerously wrong.

Obama’s rhetoric on the issue has basically been through three phases, which can be categorized and paraphrased as:

  • Integrity phase. “Economic growth is ultimately not sustainable, and that’s becoming more apparent. We need a new economic model that protects the environment, like a steady state economy.” This was the pre-presidential, relatively innocent phase, a distinctive feature of the original Obamanomics.
  • Win-win phase. “There is no conflict between growing the economy and protecting the environment.” Obama ventured onto this slippery slope of win-win rhetoric during the run-up to his re-election.
  • Avoidance phase. “Economic growth is my top priority, and let me elaborate on that… (Oh and by the way, we also have to protect the planet.)” In the state of the union address, this notion of protecting the planet was limited to climate change mitigation, and even this was kept in a separate compartment from growing the economy. No more win-win, growth and environmental protection. In fact, Obama used the word “environment” exactly zero times.

The progression from Obamanomics to the win-win rhetoric, while cynical, was predictable, but what happened next? What caused the President to retreat from win-win, nearly all the way back to a position of environmental irrelevance? After all, win-win has held a central spot on the Politician Bingo card for as long as baby boomers and younger can remember. Furthermore, the shining example of win-win since the late 1980s has been the marriage of economic growth to environmental protection. The wedding of these opposites allowed presidential candidates, from left to right, to appeal to pro-growth and pro-environment interests simultaneously. It didn’t matter that it was a scientifically fallacious shotgun wedding. It worked at the political altar.

Bingo Card

So what happened? Did Obama move his own win-win cheese, or did some speechwriter move it for him? It’s not like we have a trail – say a money trail – that’s easy to follow. With a lot of issues it’s easy to backtrack a politician from his or her mouth all the way back to Big Money. It might be big gun money generating rhetoric like “a good guy with a gun in every school,” or big tobacco money puppeteering, “I believe tobacco is not addictive.” No matter how wrong, such well-endowed rhetoric sticks around long after everybody understands how fallacious it is. Eventually, though, it either goes away or becomes an icon of ridicule.

Yet Obama’s dropping of the win-win rhetoric is different, because there is no money to be had from doing so. Big Money, even its better side in the grant-awarding foundations, will have nothing to do with talk about stabilizing the size of the economy or even slowing the rate of growth. In fact, Little Money doesn’t want much to do with it either. This explains the plethora of organizations promoting various notions of a “new” economy or a “green” economy without coming clean on the fundamental conflict between economic growth and environmental protection. They’re all chasing the money to keep their boats afloat.

Will the ironies ever cease?

Yet there are two things – both extremely powerful – that clarify the fundamental conflict between economic growth and environmental protection, loud and clear. One is science; the other is common sense.

The science is sound and sufficient, but it’s not like the libraries are overflowing with it because, again, there’s little money available for such research. Therefore this type of research–ecological macroeconomics we might call it–tends to be swamped out by Big-Monied, “neoclassical” economics with its fallacious theories of perpetual growth. But ecological macroeconomics is there for the reading: theoretical and empirical detail about the trade-off between economic growth and biodiversity conservation, a stable climate, and ecological integrity in general. And we know that Obama’s science advisor, John Holdren, has a background in the environmental impacts of economic growth.

So Obama’s relinquishing of the win-win rhetoric probably stems from a mixture of scientific awareness, plain old common sense, and perhaps a sense of pride. Obama recognizes that, with a short two years of presidency remaining, his legacy is ever more on the line. It would be a shame to end up like President Clinton, for example, who is haunted by the inconvenient irony of his own unmitigated and relentless win-win rhetoric that “there is no conflict between growing the economy and protecting the environment.”

Whatever the explanation may be, let’s hope Obama sticks with phase 3, or even comes full circle to phase 1, the more innocent Obamanomics with its recognition that economic growth is unsustainable and increasingly harmful in a century already slated for extinctions, climate change, water supply shocks and the like, all in proportion to our obsession with increasing production and consumption of goods and services in the aggregate, otherwise known as economic growth.

Let’s also hope he starts using the word “environment” again, prominently and eloquently. This is the 21st century: the environment should be a central feature when assessing and discussing the state of the union. Let’s even hope Obama starts re-connecting the two issues–environment and economy–but this time so publics and policy makers on both sides of the aisle get used to dealing frankly with the trade-off. Only then can we hope for policies that protect the environment, sustain the economy, re-secure the United States, and help to stabilize the international community.

How to Turn the Power of the Wall Street Protests into Real Reforms

by Brent Blackwelder

As the Wall Street protests have spread from New York City to the rest of the country, some media pundits have criticized the protesters for being unfocused — as if there were only one thing wrong with the financial sector of the U.S. economy. The protests have provided a welcome response to Wall Street’s massive takeover of governance, and continued opposition to the status quo could produce opportunities to enact real reforms.

Don’t expect Wall Street to undertake such reforms voluntarily — some of the shady practices are too profitable. It’s going to take new laws, and key legislation is pending in Congress that could provide important remedies. But new legislation won’t pass without the strongest pressure. That’s where the protesters could make a difference, especially with some forceful activity in the districts where the obstructionists, like House Majority Leader Eric Cantor from Virginia, reside. Cantor said to the conservative Values Voter conference: “I, for one, am increasingly concerned about the growing mobs occupying Wall Street” but he backtracked a week later when cautioned by his political finger-in-the-wind testers about the growing popularity of the protests.

Among all the morally bankrupt practices on Wall Street, there’s one in particular that would be easy to abolish. Easy, that is, if we can translate some the energy of the protests into pressure on lawmakers. Pending in Congress are powerful bills such as Senator Levin’s S. 1346 (Stop Tax Haven Abuse Act of 2011) that would strike hard at tax dodgers. But a bill like that has no prayer of passage unless representatives like Cantor feel the pressure.

Instead of reform, Congress is in fact poised to give another “one-time only” tax holiday to companies that stashed profits in tax havens. Huge and wealthy U.S. corporations are actively seeking what is known as a “repatriation holiday” because they say it would create jobs. Such a holiday would allow them to bring home offshore profits at a reduced rate — a nice holiday for the well-to-do CEOs and shareholders, while the rest of us taxpayers suffer the consequences of losing $80 billion of revenue.

The Tax Justice Network and a number of small business associations are trying to right this wrong. They have sent a letter to Congress to dispute this repatriation holiday, noting: “Too many corporations have turned their tax departments into profit centers, using aggressive accounting manipulation to disguise U.S. profits as foreign profits.”

Bloomberg Business Week has pointed out prime examples: Google reduced its income taxes by about $3.1 billion over three years — first by shifting income to Ireland, then to the Netherlands, and finally to Bermuda. Another example is Forest Laboratories, a company that sells over 99% of its drugs in the U.S. but attributes the bulk of its profits to a law office in Bermuda.

Corporate abuses are all the more frustrating in light of how the Congressional “Supercommittee” is discussing the deficit. The Supercommittee is poised to recommend draconian cuts in important programs, but its Republican members are unwilling to address tax havens and tax dodgers that cost the U.S. Treasury an estimated $100 billion per year. The two biggest banks benefiting from taxpayer bailouts are Citigroup with 427 subsidiaries in tax havens and Bank of America with 115.

A recent report  by the Institute for Policy Studies (IPS) adds more grist to the protesters’ mill. The report notes that the salary of chief executives (CEOs) of the S&P 500 soared 27.8% in 2010 to $10.8 million, making the ratio between average CEO pay and average U.S. worker pay now 325 to 1. Back in the good old days of 2009, the ratio was much more equitable at “only” 263 to 1. The IPS study found that 25 of the top 100 CEOs received more pay than their companies paid in federal income tax. Furthermore, 20 of these 25 companies spent more on lobbying than they paid in federal income tax.

One more recent analysis,  published in the journal of the Association for Psychological Science, provides new support for those advocating major reforms in the tax code. The analysis found that those countries with the most progressive tax codes (those that are the exact opposite of a flat tax where everyone regardless of income pays the same rate) had the highest happiness ratings.

Americans want a sustainable and fair economy. But we won’t get one without fundamental financial reforms and a clamp-down on tax dodgers.  And we won’t get that without applying pressure to lawmakers and corporations.  Now that’s a good focus for a protest.

¡Buenas noticias! ¡La recuperación económica se frena!

Publicado por Dave Gardner, director del documental de próximo estreno GrowthBusters

Artículo original traducido del Inglés al Español por Bosco Gámiz.

Las noticias económicas del pasado viernes fueron bastante positivas. El crecimiento anual del PIB de EE.UU. fue inferior al uno por ciento en el primer semestre de 2011.

Sin embargo, me atrevería a decir que …ehmm, un 99,9 por ciento de todo el mundo considera esto una mala noticia. El New York Times [1] lo calificó como “paso de tortuga”. Periodistas y comentaristas de todo el mundo con toda probabilidad están escribiendo palabras como debilidad, anemia, malestar general, sombrío, triste, abatimiento, y el estancamiento.

Entonces ¿qué tiene de bueno? ¿Acaso me produce un placer perverso y morboso ver a mis compañeros humanos desempleados, ahogados en sus hipotecas, o comiendo en comedores de beneficencia? No, no me lo produce. Las consecuencias de la recesión son reales; es doloroso, y es triste. Sin embargo, que el PIB sea constante o que baje un poco, no es una mala noticia. Tampoco es la caída en el gasto de los consumidores [2] que se dio a conocer el martes.

Aunque muchos de los impactos de la recesión son trágicos, son la cara negativa de adaptación a una nueva realidad: el fin del crecimiento. Son una parte necesaria de una fase temporal. Podríamos llamarlo la fase de crisálida, hasta que nos transformamos en algo más bello.

Considere estos titulares de los últimos dos años. ¿Son buenas o malas noticias?

  • La recesión pone a los bebés en espera
  • Movimiento por casas pequeñas prospera en medio de crisis inmobiliaria
  • Se construyen menos casas durante el frenazo de la economía
  • El uso mundial de carbón se estanca a pesar del creciente mercado chino e indio
  • Total Municipal Waste Generation Dropped
  • Caída de la generación residuos en el municipio
  • La contaminación por carbono de la UE cae
  • GM cierra la fábrica donde se producen los Hummer
  • Gasoline Spike Fuels Surge in U.S. Bicycle Sales
  • La subida de gasolina en EE.UU. aumenta las ventas de bicicletas
  • El tamaño medio las casas en EEUU se estanca tras 30 años de continuo crecimiento
  • El gasto en publicidad disminuye
  • Las aerolíneas dejan en tierra más del 11% de sus aviones
  • Los implantes mamarios se desinflan junto con la economía
  • Más de 400 de congresos cancelados en Las Vegas
  • El mercado de segunda vivienda cae un 30%

Si leemos estos titulares a través de una lente arcaica – la visión del mundo propia del siglo pasado en el que el crecimiento es el Santo Grial – estas historias parecen malas noticias. Pero a través de una lente más moderna, del siglo 21, que valora la verdadera sostenibilidad, son el anuncio de un mundo que se ralentiza hacia un nivel responsable de actividad humana.

Piensen en ello. Casas más pequeñas significa menos deforestación, menos hábitat partido en subdivisiones, menos hormigón (cuya producción emite mucho CO2, y menos espacios vitales que calentar o enfriar (una vez más, reducción de emisiones de CO2). Un menor uso del carbón es una buena noticia en el aprtado de gases de efecto invernadero – como lo son los aviones en tierra, no más Hummers y el cambio a favor de las bicicletas. Curiosamente no vemos señales de que los políticos, los expertos y los periodistas estén pensando tan en serio acerca de los temas.

No soy el primero en reconocer la recesión como una oportunidad. Grandes mentes como Gus Speth y David Korten están haciendo todo lo posible para convertir esta recesión en una corrección del rumbo. “¿Por qué esta crisis puede ser nuestra mejor oportunidad para construir una nueva economía” de Korten [3], y “Hacia una nueva economía y una nueva política” de Speth [4] son buenos ejemplos de esto. Incluso Jay Leno se ha apuntado, felicitando al Presidente George W. Bush por frenar la economía en 2008 y por tanto hacer más a favor de la lucha contra el cambio climático que Al Gore. Por supuesto que los impactos del crecimiento económico afectan a mucho más que el clima. Nuestra actividad económica en aumento está causando la destrucción del hábitat, la extinción de especies y contaminación [5], y está liquidando recursos críticos como el suelo fértil.

No conozco a ningún periodista que buscase a Speth, a Korten, a Daly, a Czech, a Victor o a Heinberg para contrastar una visión alternativa de las noticias del viernes. Una historia sobre la fusión de los hielos incluiría comentarios de parte de auténticos científicos del clima y de parte de negacionistas del cambio climático. Pero en la historia que conocemos sobre el PIB no hay discusiones en las redacciones para garantizar todos los puntos de vista – nadie que dijera lo buena noticia que es que el producto interior bruto se pueda estar acercando a un estado estacionario. Se supone que crecimiento del PIB es una buena noticia y la contracción económica es una mala noticia – para todo el mundo. Ni siquiera se les ocurre cuestionar esa suposición. La fe ciega en la antigua visión del mundo todavía tiene un férreo agarre sobre los periodistas y editores. Esto tiene que cambiar.

¡Quiero ver la mariposa!

Dave Gardner es el realizador del documental, GrowthBusters, que se estrena a finales de octubre. La campaña de esta película sin ánimo de lucro en Kickstarter [6] para recaudar fondos se encuentra en su última semana. Para más información sobre la película o para organizar una proyección, visite www.growthbusters.org [7]. David puede ser contactado en dave@growthbusters.org.

Enlaces:

[1] http://www.nytimes.com/2011/07/30/business/economy/us-economy-worse-than-expected-in-second-quarter.html?nl=todaysheadlines&emc=tha2

[2] https://steadystate.orgdrop in consumer spending

[3] http://www.yesmagazine.org/issues/the-new-economy/why-this-crisis-may-be-our-best-chance-to-build-a-new-economy

[4] http://www.thesolutionsjournal.com/node/619

[5] http://www.worldwildlife.org/sites/living-planet-report/

[6] http://tinyurl.com/kickstartGbusters

[7] www.growthbusters.org: http://www.growthbusters.org/

 

Good News: Economic Recovery Stalls!

by Dave Gardner, director of the upcoming documentary GrowthBusters

Economic news last Friday was quite positive. Annualized U.S. GDP growth was less than one percent in the first half of 2011.

However, I would hazard a guess that, oh, some 99.9 percent of the world considered this bad news. It was characterized in the New York Times as a “snail’s pace.” Journalists and commentators around the world are predictably typing out words like weak, anemic, malaise, gloomy, bleak, doldrums and stagnation.

So why would I celebrate? Do I get perverse, morbid pleasure at seeing my fellow humans unemployed, upside down in their mortgages, or dining at soup kitchens? I do not. The fallout of the recession is real, it’s painful, and it’s sad. But steady or declining GDP is not bad news. Nor is the drop in consumer spending reported Tuesday.

While many impacts of the recession are tragic, these are the pains of adjusting to a new reality: the end of growth. They are a necessary part of a temporary phase. We might call it the cocoon phase, as we metamorphose into something more beautiful.

Consider these headlines from the past two years. Are they good news or bad?

  • Recession Puts Babies on Hold
  • Tiny House Movement Thrives Amid Real Estate Bust
  • Home Production Falls as Economy Languishes
  • Global Coal Use Stagnates Despite Growing Chinese and Indian Markets
  • Total Municipal Waste Generation Dropped
  • Home Depot Calls a Halt to Rapid Expansion
  • European Union Carbon Pollution Drops
  • GM to Close Hummer
  • Gasoline Spike Fuels Surge in U.S. Bicycle Sales
  • Bottled Water Consumption Growth Slows
  • 30-Year Growth Spurt Ends for Average American House Size
  • Ad Spending Down
  • Airlines Ground More Than 11% of Their Jets
  • Breast Implants are Deflating Along With the Economy
  • More Than 400 Meetings in Las Vegas Recently Cancelled
  • 2nd Home Market Declined 30%

Looking at these headlines through an archaic lens, last century’s worldview that growth is the Holy Grail, these stories seemed like bad news. But through a more modern, 21st century lens that values true sustainability, they herald a world slowing down toward a responsible level of human activity.

Think about it. Smaller houses mean less deforestation, less habitat converted to subdivisions, less concrete (production of which emits significant CO2), and less living space to heat or cool (again reducing CO2 emissions). Less coal use is also good news in the greenhouse gas department — as are grounded jets, no more Hummers and a switch to bicycles. Strangely we see no signs that politicians, pundits or journalists are thinking this deeply about the subjects.

I’m not the first to recognize this recession as an opportunity. Great minds like Gus Speth and David Korten are doing their best to turn this recession into a course correction. Korten’s Why This Crisis May Be Our Best Chance to Build a New Economy, and Speth’s Towards a New Economy and a New Politics are good examples of this. Even Jay Leno got into the act, congratulating President George W. Bush in 2008 for doing more to fight climate change than Al Gore — by slowing the economy. Of course the impacts of economic growth reach far beyond the climate. Our increasing economic activity is causing habitat destruction, species extinction and pollution; and it is liquidating critical resources like fertile soil.

I’m aware of no journalist who sought out Speth, Korten, Daly, Czech, Victor or Heinberg for an alternative view on Friday’s news. A story about ice melting would include comments from both real climate scientists and climate change deniers. But for this GDP story there was no discussion in the newsrooms about getting the other side — a quote about how terrific it is that gross domestic product may be settling toward a steady state. They assume GDP growth is good news and economic contraction is bad news — for everyone. It doesn’t even occur to them to question that assumption. Blind faith in the old worldview still has a tight grip on the reporters and editors. This needs to change.

I look forward to seeing the butterfly!

Dave Gardner is the filmmaker behind the documentary, GrowthBusters, which premieres in late October. The nonprofit film’s final fundraising campaign on Kickstarter is in its last week. For more information about the film or to organize a screening, visit www.growthbusters.org. Dave can be reached at dave@growthbusters.org.

Show Me the Evidence: Growth and Prosperity

by Eben Fodor

Most cities in the U.S. have operated on the assumption that growth is inherently beneficial and that more and faster growth will benefit local residents economically. Local growth is often cited as the cure for urban ailments, especially the need for local jobs. But where is the empirical evidence that growth is providing these benefits?

I have completed a new study examining the relationship between growth and prosperity in U.S. metro areas. I found that those metro areas with the most growth fared the worst in terms of basic measures of economic well-being.

The study looked at the 100 largest U.S. metro areas (representing 66% of the total U.S. population) using the latest federal data for the 2000-09 period. The average annual population growth rate of each metro area was compared with unemployment rate, per capita income, and poverty rate using graphical and statistical analysis.

Some of the remarkable findings:

  • Faster-growing areas did not have lower unemployment rates.
  • Faster-growing areas tended to have lower per capita income than slower-growing areas. Per capita income in 2009 tended to decline almost $2,500 for each 1% increase in growth rate.
  • Residents of faster-growing areas had greater income declines during the recession.
  • Faster-growing areas tended to have higher poverty rates.

I also compared the 25 slowest-growing and 25 fastest-growing areas. The 25 slowest-growing metro areas outperformed the 25 fastest-growing in every category and averaged $8,455 more in per capita personal income in 2009. They also had lower unemployment and poverty rates.

Another remarkable finding is that stable metro areas (those with little or no growth) did relatively well. Statistically speaking, residents of an area with no growth over the 9-year period tended to have 43% more income gain than an area growing at 3% per year. Undoubtedly these findings offer a ray of hope that stable, sustainable communities may be perfectly viable — even prosperous — within our current economic system.

Click here to download the new study.

Eben Fodor is the founder of Fodor & Associates, a consulting firm that specializes in community planning, land use, and environmental sustainability.  Fodor is also the author of Better, Not Bigger: How to Take Control of Urban Growth and Improve Your Community.