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Who Will Get This Economy Going? No One

by Dave Gardner

“We’ve got to get this economy going again!” Unless your cave lacks wifi, cable or satellite, you’ve heard this once or twice in the last four seconds.

Job creation and economic growth dominate the November election in the U.S. — perhaps more than any election in history. Campaign ads for local, state and national candidates all promise jobs. The presidential election this year has become a referendum on who can breathe new life into our economy.

News Flash: Neither presidential candidate will succeed.

What if our unexamined assumptions about the need and possibility of perpetual economic growth are wrong? What if robust economic growth is our civilization’s way of driving off a cliff? What if the planet is incapable of supporting continued increase in global economic throughput?

We’ll excuse almost anything if it happens in the name of jobs. At last count the U.S. Congress had passed 247 anti-environmental measures in its current term. The Republican Party wants to throw environmental regulations overboard because they throttle back the unfettered growth we must have. Across the aisle, many who normally exhibit a stronger environmental ethic are joining the massacre, so strong is the mandate to grow the economy and create jobs. Few, if any, are apologizing for sacrificing environmental protection on the altar of economic growth.

Our Democratic president, who four years ago promised to stop the rise of the oceans and heal the planet, is now approving drilling in the Arctic, promoting hydraulic fracturing, and bragging about his support for fossil fuel exploration in national debates. Climate change has not even been on the table this election year.

Social critic Noam Chomsky observes: “The two major parties both propose that the colossal machine of everyday life in America can not only run indefinitely, but continue expanding, and include ever more member people who trade ever more schwag. All that is required, they say, is twiddling the settings of the machine, to get it back to running smoothly as it did in the good old days before the mystifying crash of 2008. They disagree slightly on which dials to twiddle.”

Politicians are ignoring the cascade of environmental crises, all tied to the huge scale of the human enterprise (population and economy) on the planet:

  • Climate disruption;
  • Species extinctions;
  • Depletion of soil fertility;
  • Collapsing fisheries;
  • Air and water toxification;
  • Fresh water supply crises;
  • Deforestation and desertification.

No question many people are struggling and feeling true pain from this “great recession.” Everyone needs meaningful work, a roof overhead, and a chicken in the pot. Yet throwing our natural world under the bus in an attempt to restore the robust economic growth we knew during the last century is not an intelligent way to secure these things. We ought not burn down the house to keep warm. We must leave for the next generation a world worth inheriting.

What is the business case for destroying the planet?
–Ray Anderson, founder and chair of Interface, Inc.

It’s time to examine the unexamined assumptions, time to re-evaluate our goals, our metrics, and our definitions of success — including what we mean by “progress” and the “American Dream.” They don’t have to mean more stuff. We’ve reached a point where our quest for MORE is detracting from the quality of our lives. It’s time to acknowledge that quality is more important than quantity.

The definition of the American Dream got hijacked.

In my film, GrowthBusters: Hooked on Growth, Raj Patel, author of Stuffed and Starved, calls our society’s infatuation with economic growth a “fetish.” He has many allies in suggesting that GDP growth is a poor measure of life satisfaction. Former World Bank economist Herman Daly tells us growth has become “uneconomic,” meaning its costs outweigh its benefits.

In an empty world, it was a safe bet that growth was making us richer, but we no longer live in an empty world. We live in a full world.
–Herman Daly, Former World Bank Economist

The evidence is compelling enough to convert smart people who spent much of their professional lives in pursuit of growth. Commentaries are appearing in major financial and global affairs publications questioning the possibility of perpetual growth. Financial gurus — Jeremy Grantham, Paul B. Farrell, Jeff Rubin, and John Fullerton, to name a few — are warning us we are hitting the wall of resource scarcity.

We are experiencing The End of Growth, as energy expert Richard Heinberg describes in his thought-provoking book. It’s a brutal truth we must face. We have hit peak oil, peak food, peak biodiversity and peak water. We had a good run, but the party’s over. The days of 3% annual GDP growth and ever-increasing material wealth are behind us. Stimulus packages, tax cuts, deficit spending, austerity — it doesn’t matter what we try, we cannot repeal the laws of physics.

 Yet the political climate demands that our representatives and candidates avoid telling us the truth. We don’t want to hear the truth. Recent history tells us we can have it all; that is all we’ve known for the past 300 years. Ronald Reagan swept into office telling us we could and would have more.

There are no limits to growth, because there are no limits of human intelligence, imaginations, and wonder.
–Ronald Reagan

Chomsky offers: “Reality knows we have entered a long-term compressive economic contraction; that there is no way we can persist in the current living arrangement; and that the necessary outcome to avoid immense human suffering can be described as the downscaling and re-localizing of everything we do.”

We need a modern-day Martin Luther King, Jr., a true leader with the integrity and courage to tell us the truth, and the charisma to inspire us to follow. We hold these truths to be self-evident:

  • The pie isn’t getting bigger, and over 7 billion of us want a slice.
  • We do not get to be materially richer next year than we are this year.
  • Our children don’t get to have more money and more stuff than we had.
  • That’s okay, because money and stuff are not what really matter in life.

Not one of the candidates on the ballot for U.S. President is telling us this. The most hopeful sign in the political landscape is a write-in campaign for two steady-state economics candidates, Rob Dietz (editor of the Daly News) and Bill Ryerson (CEO of The Population Institute and President of Population Media Center). The centerpiece of their platform is to transition the U.S. to a steady-state economy. Of course, this ticket is a few hundred million dollars shy of being a contender. And it’s a cold political reality that today no candidate can win election on a platform that respects the laws of physics on a finite planet.

Regardless of whom we elect as the next U.S. President, in four years we’ll still be in the great recession. The only difference between the two major candidates is how much damage we’ll have wreaked on the environment in our futile efforts to restore growth, and how much the rich will profit while we waste precious time.

We can live sustainably, practicing the intergenerational golden rule, and — in so doing — live good and happy lives. But this requires us to recognize growth is no longer delivering the goods, and it can’t continue anyway. It requires that we seek not a growing economy, but a healthy economy — one that is not liquidating the planet’s resources. The sooner we do this, the sooner we can enter the next phase of true human progress.

Dave Gardner’s documentary, GrowthBusters: Hooked on Growth, includes interviews with Brian Czech, Herman Daly, and Peter Victor. The film is being rereleased this week in a special edition. The “Final Cut” is a lean 54 minutes and includes new bonus features, some previously unseen. For more information, visit www.growthbusters.org.

Opportunities for a Different Economy in 2011

by Brent Blackwelder

With last November’s election there are new governors, state legislatures, and a very different U.S. House of Representatives. The issues of budget cuts, tax reform, corruption, the global financial collapse and the rise in unemployment are high on the agenda. We have an opportunity to shape the debate on these issues and bring the steady state economy into the discussion.

Here are some of my ideas for 2011.

Public Education

We need to conduct a series of seminars or teach-ins across the country to challenge conventional economic thinking, to expose people to the concept of a steady state economy, and to find workable solutions to all the economic problems we face. If you would like a seminar or teach-in for your community or your college, please contact me. Such sessions would involve audience interactions with leading advocates of new economic approaches and would feature dynamic discussions of what a steady state economy would look like, how to accomplish a transition to such an economy, and opportunities for financial and economic reform this year.

Financial Corruption and Tax Evasion

Financial corruption is undermining all aspects of governance. Tax dodgers are depriving governments around the world of essential revenues. The result is less money for enforcement of health, safety, and environmental standards and reduction of many vital social services. It doesn’t take long under such conditions for citizens to lose faith in the ability of the government to provide security and other meaningful services.

We can work on two tasks in 2011 to address these problems. First, we can solidify important legislative gains made last year to curtail corruption, by making sure new regulations have strong provisions to prevent tax dodging (note: the Administration will be writing regulations to put new agencies like the Office of Financial Research into action). Second, we can demand new laws to force disclosure of clandestine owners of offshore tax havens. Those who want to be part of grassroots efforts on these issues should contact me.

Tax Reform and Budget Cuts

The last election featured headlines about growing deficits, massive cuts in federal spending, and the influence of Tea Party activists. Republicans are demanding spending cuts on the order of $100 billion but are short on specifics. At the same time, Democrats are angling to avoid big reductions in domestic spending.

The win-win solution to the pending impasse on budget cuts is to go after offshore tax havens and other tax dodges that are costing our country $100 billion a year. More and more people and corporations are moving money they earn in the U.S. to offshore havens where taxes are inconsequential. Goldman Sachs used this technique to reduce the percentage of its income going to taxes from 34% in 2007 to less than 1% for 2009. Exxon avoided paying U.S. taxes in 2009 even though it had billions in profits. The Task Force on Financial Integrity and Economic Development reports that 83 of the top 100 U.S. corporations have subsidiaries in tax havens. Such tax avoidance by multinational corporations not only hurts taxpayers, but also costs the governments of developing countries an estimated $160 billion per year, according to a new report by ActionAid. Tax avoidance by corporations is a major factor in keeping poor people poor around the world. For example, in Ghana, SABMiller’s subsidiary Accra Brewery is the second biggest in the country with over $40 million in yearly sales, but through clever accounting, it has paid no taxes the past two years. At the same time Marta Luttgrodt, who sells this beer at her small food and beverage stall near the brewery, must pay a number of taxes to the Ghana Revenue Authority or she will be closed down. ActionAid estimates that the taxes SAB Miller has avoided paying could have put 250,000 children in school in the countries where the company operates.  Click here for more on this story.

Great Educational Movie

For a captivating picture of the global financial collapse of 2008, the bailouts, and the behavior of big bankers and Wall Street firms, the movie Inside Job is a must-see. Inside Job provides a comprehensible and dynamic overview of the collapse in the U.S. and around the world. If you are not already infused with a sense of outrage over the criminal behavior of so many involved in the scandals, you will be after seeing this movie. Help spread the word.

Key Changes in the Tax Code

Tax reform will be a major topic for action this year. Progressives need to be on the offensive and demand a better taxation framework. It is our civic duty to see that our tax structure is fair, that people live up to their responsibility to pay taxes, and that tax incentives do not encourage undesirable activities. For example, the tax code should impose fees on pollution and on products that harm public health. Often the reverse is true. The government has subsidized the purchase of gas-guzzling hummers and delivery of junk food into public schools. We should push both political parties to eliminate all government subsidies for the fossil fuel industry. If you want to be part of the subsidy debate on energy, please visit Friends of the Earth.

We have lot of work to do to build a sustainable and fair economy. But we also have a lot of opportunities to minimize perverse subsidies, eliminate tax dodging, create meaningful employment opportunities, and put the brakes on the financial roller coaster that is being driven by speculators. Contact Dr. Brent Blackwelder to follow up.