The Crisis of our State of the Union

Trump’s State of the Union deserves a full response.

It was bad enough to sit through the deceptions and lies in the description of the national economy—where very small actual gains (smallest annual reduction in unemployment in any three-year period since the 2008 crash; worst real wage growth at low unemployment in at least 40 years) were bought at enormously high cost (1.4T tax cut that went directly to Wall Street through artificial earnings and stock buybacks; nothing for infrastructure, education, opioid epidemic, etc.).

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However, all of that is just the beginning.  Many commentators have made that point (although many talking-head economists have done the country a disservice by exaggerating the benefits and ignoring the costs).

The real issue is that you would never guess that we live in crucial times for this country and the world.  You might expect that now I’m going to talk about climate change.   But even that is only a piece of it.  Only in the “I don’t have to care” world of today’s Republican Party is the State of the Union grounds for applause.

We are presiding over the demise of America’s promise in irresponsibility, incompetence, and simple vanity.  Let’s go down a list.

  1. Climate change

On climate change there can be no question of the urgency and magnitude of the challenge.  Science has given us a carbon budget we have to meet. The administration denies all of it and works systematically to undermine world progress.  As we’ve noted before, if we act today we have the elements of victory—but we also have ample evidence it’s a near thing.

Inaction on this subject is a grave risk to ourselves, our children, and the rest of humanity.

  1. World economic order

The elephant hiding in plain sight is the growth of the Chinese economy.  We are in the process of being supplanted as the world’s largest economy, and the room for growth there is enormous—China is already our equal by some measures, but their per-capita income still ranks only as 108th!  The world is preparing a new international order, and we’re in danger of missing the boat.

We have a chance to define notions of trade that open markets everywhere and embrace standards for wages and working conditions, environmental concerns (including climate change), and human rights.  In some sense this is a necessary complement to what’s needed for climate change.  However we are losing leverage for that enterprise every day.

We’ve taken the position (without exaggeration) that God has chosen us to rule, so we should abolish all international norms that might constrain our behavior.  With the growth of China that’s a losing game.  Even today we were unable to dictate to China in our trade war, and it’s China—not us—that’s the biggest foreign market for European cars.  We’re not going to be calling the shots forever, and without rules it’s their game.  In this Trump is not defending the US interest against the Chinese, he’s defending his personal dictatorial power against the interest of the country.  We have a very limited window to take back the promise.

  1. Technology

There will always be changes in technology, but the pace of change has reached the point where we have to keep up or lose.  This affects all aspects of our success as a country:  our national income, the jobs of our workers, the strength of our military.

Instead of recognizing that reality we’ve got our head in the sand.  Some examples:

– We’ve done everything possible to discredit scientists and science generally for climate change and environment protection.

– We’ve disbanded scientific advisory councils in government.

– We’ve had multiple State of the Union addresses where the only mention of education was vocational.

– We’ve killed net neutrality, thereby sacrificing new enterprises to the interests of the phone companies.

– On 5G and AI the government has come late to the party, without real plans.  For 5G in particular we’re actually asking our allies just to wait until we’ve figured out some alternative to Huawei.  This is worse than a failure of planning—5G applications are what’s most important, and waiting is punting that stage of technology back to the Chinese.

– More generally there’s simply no understanding of the importance of government in funding exploratory research—for technologies before the stage where private companies can run with them.  The tax cuts included a targeted punishment for major research universities.

– Finally the current rampant xenophobia flies in the face of the past and current contributions of foreigners to our technological strength.  We must continue to be the destination of choice for entrepreneurs looking to realize their visions.

We are simply ignoring the technological challenges and what has made us successful.  God only helps those who help themselves.

  1. Nuclear proliferation

This may seem a more limited issue, but that’s only because it hasn’t hit yet.  There are still only a limited number of players, largely under control.  But we’re doing everything possible to change that.

We’ve not only presented the world with the contrast in our treatments of North Korea and Iran, we’ve argued specifically for nations to do what it takes for their own defense.  We’ve eschewed the sort of international cooperation necessary to prevent new entrants.  And we’ve given Saudi Arabia nuclear material and technology without asking any questions at all.

The only reason we were less worried about this in the past was that world leaders had all recognized the nature of the threat.   We’re no longer keeping our eyes on the ball.  Nuclear technology gets ever easier.  As more entrants join the nuclear club, it gets harder to control their behavior and prevent the further sale of nuclear technology to third-parties of whatever ilk.  The North Koreans have done it before.

The clock is ticking.

  1. National ideals

It’s shocking how shallow the support for democracy has turned out to be.  In Sinclair Lewis’ “It Can’t Happen Here” many people had to die for the dictators to take over.  The reality was much easier.

Democracy is not a luxury.  It is key to what made this country what it is.  We were never perfect, but we were much more a country “of the people, by the people, for the people” than had ever existed before.

We’re losing all of that right down the line:

– We’ve reversed our progress in expanding suffrage, and are now looking for reasons to block people from voting.  The Citizens United ruling put rich people and corporations in control of elections.  Deliberate voter suppression by state governments is stated Republican policy.

– Support for public education is declining, and funding is still below 2008 levels.

– Upward mobility is now below that of most other developed countries.

– The religious right is in charge of what happens to women’s bodies.

– We’ve lost the social cohesion needed for big national efforts.  The President no longer even pretends to represent the nation—he’s a warlord who delivers spoils for his supporters.

There are plenty of historical examples of how hard it is to reclaim democracy once it’s gone.  If we’re going to have the strength of a country by and for the people, things had better change fast.

 

We live in a crucial time.  On one hand we could even see massive destruction of humanity; on the other we could see an unprecedented level of international cooperation as a precursor to a very prosperous and peaceful world.

One thing we can’t do is ignore the reality of our time.  We can’t afford the “I don’t have to care” puffery of this criminally fictitious State of the Union.

We Just Lost the Trade War with China

With all the carefully-hedged language around Trump’s Phase 1 deal with China, it’s not surprising people are unclear about what it means.  Even in this blog we haven’t been explicit enough.  It’s time to remedy that.  There is no ambiguity about what happened.  We just lost the trade war with China.

We start with the agreement itself.   There are two parts:

  1.  The $200 B plan to buy US products is the more publicized but murkier part.  The purchases are spread over two years and are allowed only in specific, politically-advantageous sectors.  Since there is no notion of market reform, it is unclear who is doing the buying, or how the sector targets can work.  What’s more, given the arbitrary level of the targets and the fact that either party to the agreement can just opt out, there is little actual skin in the game.  In fact, as has been noted, it gives the Chinese new leverage over the US in that they can threaten to terminate the now-vaunted purchases any time they want.  Nothing will be known about real progress until after the election. Overall the $200B figure is highly inflated at best; at worst this is an electoral stunt for Trump voters in the designated sectors.
  2. The rest is a collection of statements of principle with no language for enforcement. Whether the Chinese will or won’t comply will be on their terms not ours.  This is entirely parallel to what we got on denuclearization from the North Koreans.  There is no substantive progress on any of the issues targeted by the trade war.

These conclusions have appeared in the press, but they tend to get drowned out in the general relief that accompanies a truce.  So it’s easy to think something important has happened.  In fact Trump needed a deal for the election, so he declared victory—by dialing down his own hostilities.  And the Chinese were happy to punt all substantive trade questions at least a year or two down the road (more on that in a minute).  That’s all that has happened with Phase 1.

But the main scam is the term “Phase 1” itself.

“Phase 1” implies we’re in a continuing process to get to our objectives in the trade wars.   That is out-and-out false.  We took a shot at winning a trade war, and we didn’t win it.  Our leverage is diminishing with each passing day.

The premise of the trade war, as Trump himself said, was that we had the power to destroy the Chinese economy, so we could dictate the terms of the peace.  That’s why the trade war was going to be “easy”.  In fact we represented 18% of Chinese exports, and exports represented 20% of Chinese GDP (see chart below).  We don’t own them.  This is just one more example of the danger in our blind belief in overwhelming US power.  It didn’t work.

What’s more both of those percentage numbers are going the wrong way.  Chinese exports are recovering overall since the hit at the start of our tariffs—but with the US now a smaller part.

china_balance

Further the Chinese have been working systematically to increase domestic consumption and thereby reduce the dependence on exports.  Here is the picture (2019 figures are down further but not finalized yet):

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The Phase 1 deal demonstrates that we don’t have the leverage to win today.  For the future we’ve just seen the decreasing financial leverage.  To that gets added the decreased dependence on US technology, fueled in part by the threats to deny it. (It’s hard to imagine anything less productive than making them mistrust our operating systems.)  The trade war has ended constraints on what it takes to fight back.  Chinese hardliners have taken control of the relationship, and the uptick in intellectual property theft is one result.  Despite the rhetoric, prospects will not be better next year.  There’s no Phase 2 triumph coming for this trade war.

 

When you start a war there are consequences, even if you quit.  Your opponent is going to continue to treat you as an enemy unless something pretty dramatic changes.  The Chinese have made it clear that they want to be as insulated from the US as possible. Since they are rapidly becoming both the world’s largest market and the world’s largest proving ground for new ideas, that’s not a great situation.  There are other possible consequences as well:  a new cold war, lower world economic growth, an uncontrolled and expensive arms race, no leverage on Chinese behavior, even increased chance of war.

The rejoinder to all this is of course “We have to do it.  We have to get tough.  We can’t just cave in as in the past.”  On that subject the press has done us all a great disservice.  There are several points:

  1. We didn’t get tough, we got weak. We abandoned our allies to get ourselves an exclusive deal. We lost half our leverage, and suffered the consequences.  That’s what happens when you just assume overwhelming power.
  2. We didn’t cave in before, we got results instead of pain and bluster. Under Obama both the balance of payments deficit and intellectual property theft were reduced significantly—instead of the opposite. We also made important progress (some since reversed) with climate change.  The job wasn’t finished, but for all the chest-beating, we’ve gone backward since.   It should also be noted that essentially 100% of the job loss from Chinese competition occurred under George Bush or as a direct result of his 2008 crash.   Nothing prevented action on currency manipulation other than the distraction of our then-current war.

mfg_job_loss

  1. The rise of China is not something in our power to stop. They’re not just cheating; they’re doing a number of things right, some of which we’ve forgotten how to do. It is counterproductive to think we can make it all go away.  You can’t win just by being a bully; you have to play the game.
  2. Finally, we had every opportunity to make real progress with the Chinese. They expected to renegotiate China’s status as a developing country for the WTO, and they certainly expected to face a unified front in the West. There is actually a common interest in intellectual property—especially when it’s not used as a weapon against them.  It’s also worth noting that government subsidies to private companies aren’t so black and white here either.  There was an agreement to be had for labor, environment, and world-wide prosperity.  We lost it by going gung-ho for our very own holy war.

There may still be opportunities for full leverage and common interest, but considerable damage has already been done.

The result of the trade war can be summarized in very few words:  we botched it, got nothing, and hurt ourselves badly in the process.

Trump the Firebug in China Phase 1

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A year and a half ago I had a piece about Trump’s firebug behavior, where he whips up a crisis which he then resolves by dialing down what he did himself.   Such behavior is not only deceptive, but frequently also damaging—stopping the fire doesn’t necessary bring everything back to zero.  North Korea was the prime example in that earlier piece.  In that case, even after we turned down the fire we had legitimized the regime, encouraged nuclear proliferation, and basically stopped caring about the dangers they represent.  It remains shockingly easy to get the press to fall for these firebug scenarios.

At the time I worried that the same was going to happen with China:  “there should be no problem getting the kind of PR-oriented agreement we got from Kim.  Market access can be as murky as denuclearization.”

It took longer than I expected (he didn’t do it for the midterms, he did it for the presidential election), but that’s what we’ve got.  The Phase 1 Agreement dials down Trump’s own trade war with a declaration of victory that lets everyone celebrate the peace.  In exchange for Trump’s toning down the trade war, the agreement combines one-shot questionable purchases with a number unenforced statements of principle (think denuclearization).  There is no substantive progress on any of the issues that started the trade war.  And for subsequent phases, as noted before, our leverage is diminishing every day.

We’ve been sold another firebug triumph—and in this case the damage is serious.  The trade war delivered nothing and fractured the world in the process.  This is a failure of policy with real consequences.  It is horrifying that the press coverage can’t get beyond speculation about what might be good or bad in the vacuous agreement itself.  China is too important for this.  The issue is not the fire-ending nonsense; it is the damage done.

On that subject I summarized my feelings this morning in a comment to David Leonhardt’s article in today’s NY Times: “What Americans Don’t Understand About China’s Power”:

This is a good piece, but it understates the problems with our China policy.

We have issues with China, but a unilateral trade war is not going to resolve any of them. Our recent phase one agreement is a case in point—like our agreement with the North Koreans it does little more than tone down the belligerence we created:  questionable one-shot purchases and unenforceable statements of principle.

The trade war itself, however, has lasting consequences. Trump’s threats to destroy the Chinese economy legitimized Chinese hardliners’ position that the West was still colonialist and not to be trusted. Complete independence and self sufficiency were imperative.  Intellectual property theft went way up.

Our current Chinese policy is nothing more than unproductive grandstanding.  It is not “finally getting tough with the cheats”. Obama actually reduced intellectual property theft and the balance of payments deficit, rather than the opposite. Same for Chinese behavior on climate change.

If we actually want to make progress, it needs to be together with our allies (to double leverage) and in the context of international rules of fair trade—rather than what we think we can shove down their throats to maintain our dominance.  [Rules of trade have more credibility when we’re willing to apply them to ourselves!]

The trade war does not resolve issues, does lead to a fracturing of the world (with reduced security, prosperity, and US influence), and—as Leonhardt says—distracts us from the things we really need to do.

Irrelevance

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“P1040738” by frederique.baggio is licensed under CC BY-NC-SA 2.0

I find I can’t watch British TV series anymore without a post-Brexit shudder.

Those programs are no longer studies in quirkiness from a historically-great country that is almost us.  That country is gone.   It can’t even keep its own pieces together.  The solid core of the country has evaporated.  All that’s left are the quirks, and many of those are rather sordid.

Britain is a land possessed by dreams of lost empire, unwilling to accept either the now-visible reality of that imperial past or the self-evident fact that it is gone.  Ready to slap the face of anyone who reminds them of either.  What could be more preposterous?

We’re in the running.

We had our own years of empire.  By virtue of geography we were the last country left standing at the end of World War II, so we put together the world afterward.  And we ran it.  And we got comfortable with the idea that was the only way the world could be.  God chose the United States of America to rule the world.  The Brits had the same idea.

Those were the good old days.  Not only did America rule the world, but American products reigned supreme.  And notions of common effort left from the war drove broad-based prosperity through measures like the GI Bill.

Things aren’t quite the same anymore.  The rest of the world grew up.  We can’t just order everyone else around, and our products don’t automatically win everywhere.  And we seem to have forgotten those notions of common effort, with sad consequences for the spread of wealth in the population.

Unfortunately, like Britain, we haven’t forgotten empire.  That’s what we have to get back.  Rule the world.  Same population.  Blacks under control.  Winning everything.  Pot of gold for everyone.  God said so.

We have even more to lose than the Brits.

The United States is a prosperous country, in many respects the richest in the world.  We’ve messed up our social contract, but that’s ours to fix.  In the same way, there are no insurmountable problems in making worldwide growth good for everyone.  Even climate change, a monumental problem, has the technological basis for a solution.

We stand ready to sacrifice all of that to a fantasy of empire as vaporous as the British one.  It’s scary as hell that we seem ready to repeat history.  Their Brexit vote presaged Trump—what does the Boris Johnson vote say now?

Symbolism to the contrary, we have a better chance.  In Britain the vagaries of their electoral system prevented a legitimate revote on Brexit.  Regardless of who gets the Democratic nomination, we will get a chance a to vote on the future of the country and the planet.  History doesn’t repeat, people do.

But history will certainly judge.

Random Thoughts to Start the Year

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“Happy New Year” by nigelhowe is licensed under CC BY-NC 2.0

The True History of Trickle Down

As many have pointed out, it’s hard to understand how trickle-down economics continues to persist in the absence of any demonstrable success.  Money is of course an answer, but actually there’s a genealogy to it.

I recently came across a book that helped make the point.  It wasn’t an economics book, it was a novel—The Wooden Shepherdess by Richard Hughes.   Hughes was a comfortably upper-class Oxford graduate who spent much of his life in his castle in Wales.   The Wooden Shepherdess is a fictionalized account of the Prohibition era in the US and of England and Germany as Nazism was growing in the thirties.  Interesting times.

What’s most striking about the book, though, is its attitude toward class.  The author is perfectly clear about the grotesque inequality of the time and even sympathetic to the poor.  But he has an out:  that’s just the way it has to be.  It’s either this or chaos, so you’ve got to have this.  The speaking voice has no crisis of conscience, no concern about moral issues, no need to think much about it at all.  It just has to be.

At first that attitude seems strange—until you realize that trickle-down is only a repackaging of the same thing.  Sure there’s inequality, sure it’s growing, sure the minimum wage is ridiculous, sure 44% of the work force is in low-wage, dead-end jobs.  It all doesn’t matter. We need the Gods at the top, or it all collapses. It just has to be.

I once wrote a piece called “Sacrifices to the Gods of Jobs”.  There’s something in humans that wants to solve all problems by placating the heavenly or earthly powers that be.  That’s why it’s so tough to fight trickle-down.  And those Gods will ride it for all they can get.

 

Policy Issues for Iran Apply Also to China

Paul Krugman had a well-expressed comment about how we as a country often misunderstand the effects of foreign policy.  As he put it, we frequently don’t want to acknowledge that “we’re not the only country whose citizens would rather pay a heavy price, in money and even in blood, than make what they see as humiliating concessions.”  His piece was largely about Iran, but the blindness is even greater for China.

After Trump declared he was going to destroy their economy and there was nothing they could do about it, their behavior got worse. It was not surprising that hard liners advocating complete self-sufficiency were proven right, and that intellectual property theft became a national imperative.  It’s precisely the blindness Krugman mentions to expect anything else.

Nonetheless, both the left-wing and the right-wing have signed onto the economic war with fervor.  The press doesn’t dare talk about anything else.  A weird aspect of it is that we seem to believe we’re defending the Chinese population against the totalitarian government—whereas the population has in fact reacted as Krugman described.  That’s one reason we’ve lost essentially all leverage on Hong Kong and the Uighurs.

We are correct in defending our interests with China, but the point here is that an economic war is a poor way to do it.  In actual results (IP theft and trade imbalance) we’re doing much worse than before Trump. What’s more, both countries need to be able to work together on areas of common interest—such as climate change, where things have gone badly backwards.  Our economic crusade is about as useful as the Medieval ones.

This isn’t a question of being nice.  It’s just sense.

 

Squandering the Future

Now that Iraqis have decided they’ve had enough of the American presence, it’s a good time to look at the legacy of the Iraq war and other ways we’ve squandered our national wealth.  We’re not the first country to impoverish ourselves through war and other profligacy, but—by the silence of the press—we seem to be among the most thoroughly unaware.

In Iraq we fought a $3T war whose primary beneficiary was Iran.  The war was financed off-budget, without any real supervision of financial consequences.  Looking at the current state of the Middle East, it’s hard to see any US benefit but easy to find costs in bad will.  For the Iraqis it was an ongoing disaster from which they are still trying to recover.  For Iran it solidified, even institutionalized, their influence in Iraq.

Because of that war we ran huge deficits in good times.   That, combined with the later Republican “balanced budget” hypocrisy, has left the country in a persistent state of public-sector poverty.  Education and infrastructure funding are inadequate at all levels, and we just can’t come up with the money to fix it.  Nonetheless, after delivering both the war and the 2008 crash, George W. Bush has been rehabilitated to the point of canonization, and the Republican party has succeeded in removing all trace of his failures from public memory.

That’s convenient, because they went and did it again.  Trump’s tax cuts were a $1.5T ongoing present to businesses, who have chosen not to invest it in our future.  Instead they effectively passed it through to their rich investors via stock buybacks.  No investment in the businesses, and no money available for public infrastructure of any kind.  The money is gone.  And, as far as press coverage is concerned, without a trace.

That’s $4.5T in lost opportunities. It has consequences we see every day.  The American Society of Civil Engineers keeps a web site with a breakdown of national infrastructure requirements.   We currently rate a D+.  We’ve got parents desperate to get their kids in top private colleges, because we won’t support enough first-class public institutions.  And that’s not even talking about what’s necessary to combat climate change—which of course can’t be mentioned.

We don’t actually have a great economy.   We’re living on credit off the achievements of the past—with more than a little help from the hated immigrants.   We can talk about the evil Chinese all we want, but if we fall behind in that contest, it will be because we refuse to invest in the country and continue to give away the store.

What Matters for Climate Change

Last year this blog had an overview of the major factors involved in fighting climate change.  Most of that is still current, but it has also become clear that there is a lot of confusion—even in the climate movement—about consequences.  So this piece is not about the basics; it’s about the reality of what it takes to combat climate change.

To start with, Here is a list (off the top of my head) of widely-believed nonsense.  There is probably something to annoy everyone.  You can see if I’ve made a case for it by the end.

– Conservation is a primary issue

– It’s important to get solar cells on rooftops everywhere

– Recycling is important

– Local initiatives are important

– State initiatives are important

– The main game is getting our house in order

– We don’t need to do anything, since technologists will solve it by themselves

– We’re ready for electric cars to take over the transportation sector

– Current solar and wind are ready to take over everything

– Winning is simple, we just have to stop the oil companies and start deploying the good stuff.

– For climate change employment, we need local communities to decide what they really need

– The private sector is doing it all by itself

– Carbon pricing is optional

– Carbon pricing is all it takes

– We need to get a better deal than the Paris Agreement

– We’re in control of our own destiny

– We all need to change our lifestyles

– Fighting climate change will tank the economy

– Economic dislocation means taking care of miners

– Since poor people get hurt worse, climate action is a matter of charity—for social justice

– Same thing for racial justice

– Same thing for regional justice

– Internationally, this is a matter of everyone taking care of their own

– With China and India, the important thing is to stand tough to get what we want

– We have to insist that any new technology developed here gets manufactured here

 

Let’s start this off with item #1—conservation.  From within the US it’s easy to believe the fight against climate change is all about conservation.  After all, we’re up against a hard limit on tolerable levels of carbon dioxide in the atmosphere, so we’ve just got to cut down on burning in all ways.  And we’ve got to learn to behave differently in the future.

However that logic breaks down quickly.  What about all the people in China and India?  Our conservation is a blip compared with them, but we share the same atmosphere.  Do they just have to get used to the idea that cars and air conditioning aren’t for them?  They should accept permanent sacrifice for the good of mankind?  Even in the US, no amount of conservation will move people to electric cars or eliminate the CO2 production from heavy industry.

So even for the near-term we have to recognize that the fight against climate change is not primarily about conservation but about alternative energy sources.  Worldwide, we need to evolve energy sources, so that there will be enough to take care of people everywhere.  As noted in the prior piece, there is in fact no reason to fear we will ultimately lack for power.  This isn’t about learning to live with energy scarcity—it’s about creating a future for all people, all countries, and all life styles.

For that reason we need to focus on the transition to alternative sources of power.  There are two quite different types of problems to be solved:

– Generating and distributing power

The first thing to recognize is that (despite some obfuscation from the oil companies) the future is electric.  That’s the common currency for the energy to be used everywhere, in factories, in homes, in cars.  It’s what all the renewables produce today, and what will be produced by all future candidate technologies.  Electricity is easily transmitted over long distances, and can be stored for later use (although there is much still to be done for high-volume, in-network storage).

So this work includes the electrical network, the sources of energy, and the means to store it.  Since everything will move to the electrical grid, its capacity will need to grow significantly and fast.  This is a huge project, but this is ultimately just a matter of national will.  That makes it the easier part.

– Adapting applications to use it

For that you need to work through the major sectors of energy usage.  Here is the chart for the United States.

consumption-by-source-and-sector

This is a larger and more complex undertaking, requiring careful planning for each sector.  Carbon pricing is one of the few actions that can be done across the board.   As we noted previously, assuming the atmosphere is free amounts to an annual subsidy of $1 T to the US fossil fuel industry.  Even low-level initial pricing (as with CCL) sends a message for corporate planning.  However, it is naïve to believe that carbon pricing will just take care of all sectors in time to avert disaster.  Note also, for priorities, that the residential and commercial sector is the smallest by far.

We also have to think about this problem not just for the US but for the rest of the world as well.  The US Energy Information Agency has released a document that helps in thinking about that task.  (A short summary of conclusions is available here.)  It has projections of energy use throughout the world going out to 2050.  With that it includes variants of the US energy use chart (just given) for other countries.  A significant fact is that many developing countries have a proportionally much larger industrial segment than we do, as high as 70%.

The report shows some influence of climate concerns, particularly in the US and China, but overall it describes the dimensions of a disaster.  The following chart taken from the report shows a continuing growth of CO2 emissions for the entire period.   While the report itself doesn’t explicitly call out the bottom line, the numbers from the report imply that the world will hit a point of no return already by 2035—with a CO2 concentration of 482 ppm and a temperature rise of 1.6 degrees C.

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In the EIA scenarios, the world does a pretty good job of migrating electric grids to renewables (or to some extent gas)—but a terrible job of moving applications to electricity.  In developed countries this translates to business as usual, but in the developing world it’s much worse.  India, for example, is seen as growing exponentially with much of the increase powered by coal.  This isn’t just a question of forcing them to meet our standards.  Heavy industry is a particular problem everywhere.

So the application area is a big job with many industry-specific issues.  The world desperately needs focused research efforts with results that can be applied large-scale worldwide.  This can’t be a matter of everyone guarding discoveries for national advantage.  Cooperative international arrangements will be key to meaningful progress.

 

Even at this high level there are a number of conclusions to be drawn:

– There is no do-nothing alternative.

Technology will deliver a viable future, but we’ll have to work to get there.  There’s no silver bullet that makes it all go away.

– Technology development is important and has to be figured into any planning, but technology concerns are not the barrier to success.

It is perfectly possible to put together a plan to get the US where it needs to be by 2030.  That’s not saying all technology problems have been solved (after all electric cars are still much too expensive), but we can see a path to success.  We shouldn’t trivialize the effort and sophistication required, but based on where we are, and given financing, it appears that the technical side can get done.  The next point is less clear.

– Changes are huge and have to be dealt-with politically.

This isn’t just a matter of coal-miners losing their jobs.  Electric cars alone will have pervasive consequences.  We have to understand that worries about change are rational, so an important part of domestic climate policy has to be an assurance everyone will be made whole.  Otherwise we will continue to face the push back seen most recently in the Australian election.

In the US there is every reason for the less advantaged to distrust the political powers that be.  In the developing world it’s even worse—you’re talking about giving up on the benefits of development for some unknown duration.  The situation is necessarily difficult.   It’s only going to work if wealthy people and wealthy countries realize it’s in their own interest to come up with the goods.  No one will escape the consequences otherwise.

– The international side is unavoidable.

There is only one atmosphere.   Every country in the world has to cooperate, or we all lose.  When the US opts out, everyone loses faith in the future—as was evident in the recent Madrid meeting.  We have to restore international unity in order to make progress.  And that will only come when every country sees a just role for itself individually.  As for the terms of the Paris Agreement—it is only a first step and actually better for rich countries than will ultimately be workable.

We cannot go into this with the attitude that the objective is to come out a winner at the expense of everyone else.  If everyone doesn’t win, we all lose.

– This is not a matter for incrementalism.

We’re not going to get there with well-meaning people insulating their houses or businesses putting solar cells on the roof.

It’s worth putting some numbers on this.  With current technology, the power output of a solar cell is 20 watts per square foot.  From that you can calculate how many solar cells would be needed to meet current US electrical demand.  The answer is about 2500 square miles, assuming they’re all in brilliantly-lit, weather-free Arizona.  (And there are serious problems in managing that too.)  All of it gets an order of magnitude worse if we decide to go piecemeal in random, less promising locations–and that’s just for today’s electrical grid, not where we have to get to.

That’s not to say that Arizona is necessarily the solution.  The point is that there has to be a rational national policy that will actually get the job done.

 

Greta Thunberg is right—there is no substitute for major political action.  Anything less is delusion, regardless of who says it.  The 2020 election is the single, deciding climate issue today.

Perhaps we need the right metaphor.  The fight against climate change is a war.  We’re all in it together—losing is losing for everyone.  The countries of the world are allies in the sense that each of them is necessary for success.  National economies will be affected, but through national climate efforts with no shortage of jobs.

Right now we’re like the US in mid 1941.  We can see and understand the enemy, but we’re not convinced we really have to be involved.  That situation only got resolved when the Japanese attacked Pearl Harbor, and it was clear there was no other choice.  You can make a case we were lucky that it wasn’t too late.  Without the Nazi’s disdain for “Jewish physics”, they might even have gotten the bomb.

For climate, if we act today we have the elements of victory.   We also have ample evidence it’s a near thing.  A climate Pearl Harbor may well be too late—and beyond anything we want to live to see.

American Fascism in the World

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“President Trump, MAGA rally, Wilkes-Barre, Penn – 1” by The Epoch Times is licensed under CC BY 2.0

As a country we normally don’t care much about foreign affairs.  We’ve had five Democratic debates with almost no questions about it.  International issues always come out low on the lists of what people care about.

However, the time has come to care.  It’s nothing new to identify the rise of fascism in this country as a problem.  But for some of the worst consequences you need to look outside the borders.

Fascism is many things but it is above all a world view.  The mother country is God-certified superior, under assault, and fully-equipped to teach everyone else a lesson.  That feels great; life is good when you’re on top of the world, and you don’t have to care.  But it is by definition blinding in its assessment of reality.

Our current foreign policy is predicated on the idea that we’re running things and can dictate to the rest of the world.   We don’t need allies or international institutions, because we can simply tell everyone else what to do.  Allies are people you shake down because they need you, and adversaries are just waiting to get defeated by irresistible national power.

That world view might have had some reality at the end of World War II (when we were sensible enough not to pursue it), but it has little to do with reality today.  The longer we resist reality, the worse for us.

First of all our military power is strictly bounded.  Nuclear weapons are such that for now no major power can be defeated.  We can’t even do anything about North Korea.  So we shouldn’t believe that counting bombs says anything meaningful.

Our economic power is also limited.  Our declared economic war on China has thus far been anything but “easy”.  There is no sign that China is ready to capitulate, and their resulting push for national self-sufficiency has many negatives for us—in particular reduced access to the markets we think we’re opening.  That’s in addition to an overall slow-down of international growth and much of the recent intellectual property theft.  The blindness of the belief in our power is such that we systematically ignore consequences.  It is truly dangerous to believe—as a principle—that we don’t have to care.

Why do we have allies?  If you believe what’s coming out of Washington, the answer is that we have allies because, out of the goodness of our hearts, we choose to defend our friends.  Since this is pure beneficence, they had better pay up and to hell with them if they don’t.

In fact (of course) we have allies to increase our strength.  NATO came into existence, so that a next world war with Russia would be fought in Europe and not here. That role may have diminished, but it’s not gone, and Europe allies are also assets in dealing with middle-eastern terrorism and with the economic strength of China.  South Korea and Japan are similarly counterweights to the rising power of China.   Again, they are the ones on the front lines.  Shaking them down increases China’s dominance in the East.

Why do we have international institutions?  Those were created by the US as a means of increasing stability (to the benefit of our economy) and of exercising power.  The UN is imperfect institution, but its role as an international forum is essential.  The WTO is the best means that exists to push for labor and environmental standards in international trade.  Make no mistake that world trade has been good for the US economy.  If it hasn’t done as much for the population as a whole, that’s because—as in many other areas—rich donors have controlled our own objectives.  That’s our problem to fix.  International institutions are the way we, together with our allies, can exert decisive power without conflict.

Fascism is a major impediment to the exercise of US power.  Relations with China are a case in point.   Nothing says this is easy, but we certainly should be playing with a full deck.  As it is, we’ve already strengthened the hands of hard-liners, and it will be work to walk that back.  That’s still worth the effort, because conflict is a good option only in fascist fantasy.  A defined “victory” is highly unlikely, and at the very least we’re talking about:  a new cold war, lower economic growth, no access to the Chinese market, an uncontrolled and expensive arms race, no leverage on Chinese behavior, a real chance of war.  Rational national interest says forget the fascist dreams, strengthen our hand, and work on a real future.

There are other aspects to this as well.  Fascism has many other destructive tendencies, we’re promoting them worldwide, and they come back to bite us.  Racial intolerance is built-in to the world view.  We’re excusing it domestically and normalizing it elsewhere.  Modi’s anti-Muslim policies would probably have happened anyway, but our influence has damped down international outrage.  Similarly we may decry China’s treatment of Uighurs, but the impact of our outrage is weakened by our own actions.

Even more important, our fascist disdain for international cooperation has seriously hobbled the worldwide effort to combat climate change.  The US-led unanimity of the Paris Agreement was the basis for the world to make progress.  Once we broke that and encouraged others to follow, it has been more than difficult to assemble the global good-will necessary to make progress.

After World War II it was easy to believe fascism was something special with roots in German or Italian culture.  We now know better.  It is a tendency than needs to be fought everywhere.  It is a mindset that takes over from rationality and hurts most severely those who fall prey to the disease.

We’ve had more than enough of it already.  For our own sake we’d better learn to fight back.

Waiting is Losing in China and North Korea

Foreign policy these days has been drifting along.  Negotiations with China have gone up and down for many months.  Nothing is happening with North Korea.  (Kim has given some kind of threat for the end of the year, and we’re wondering if we care.)   It’s easy to assume all is sort of okay while we’re working on it.

That’s false.  With trade wars as with other wars, if you’re not winning you’re losing.  That’s true in spades today.

Let’s start with China.

As we (and Nancy Pelosi) have pointed out for some time, we began the trade war by giving up a good chunk of our leverage.  We and the EU each represent 18% of Chinese exports, so we gave up half the leverage for a Trump-style exclusive deal.

That was bad enough.  What’s worse is that the leverage goes down every day.  That involves both Chinese imports from the US and Chinese exports overall.

On the import side, China has been forced by the trade war to develop new sources for strategic products, since the US can no longer be considered a reliable supplier.  The last Huawei phone, for example, has replaced all US components.  Additionally, China has developed alternate sources for products that it restricted in retaliation for the US tariffs.   It’s now sourcing soybeans from Brazil and Argentina, relationships that are expected to survive any US trade agreement with China.  In other words our leverage as a strategic supplier to China is decreasing dramatically.  What’s more, this gives a pessimistic picture of what is to be expected of US exports to China even after a deal!

For Chinese exports, there’s no question that the Chinese economy took a hit from the  US tariffs.  However they have looked to beef-up exports elsewhere and also to stimulate their own domestic market.  After the initial hit their balance of payments has shown resilience:

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Another round of US tariffs would hurt again (at the expense to us of a very visible and regressive tariff tax), but there is no sign that the Chinese are going away.  As they continue to work on replacing the US market, time is on their side.

With North Korea, even with the continued sanctions, production of nuclear weapons and missiles is continuing unabated.  The threat posed to the US by those weapons should not be taken lightly.  The destructive power of nuclear weapons is such that only a few are necessary to assure victory.  Japan was defeated by two, small-grade weapons and a faked threat of more.  In theory a successful cyber attack combined with a nuclear threat could defeat anyone.  North Korea is a world leader in cyber attacks.

What’s more, the strategic value of those weapons is going up all the time.  As we threaten to withdraw support from Japan and South Korea, the regional status of North Korea grows.  Do we really think Kim will give it all up?  (And can we deny that other countries will want to follow his example?)   It’s not what Kim might or might not announce in December that’s the issue, it’s what has been going on all along—while he’s been Trump’s buddy.

So in neither case are we working quietly toward a solution.  We’re just plain losing.