Do not let internal battles slow the fight against climate change: The Green New Deal is a long-term aspiration
By Rana Foroohar, Financial Times, 10 March 2019
Recently, I had brunch with a group of lefty economists and political staffers that culminated in an argument over the particulars of the Green New Deal put forward by Rep. Alexandria Ocasio-Cortez. As proposals go, they don’t get much more ambitious than the GND, which aims to do everything from making America carbon neutral by 2050 to guaranteeing decent paying jobs, healthcare and higher education for all. But, as with all big plans, the devil is in the details. And around those, there is little consensus, at least at my brunch.
Each of the liberals in the room was riding a particular technocratic hobby horse. One focused on the way the plan should be funded; another worried about the particular constituent groups it should focus on; and a third drew attention to the way monetary policy might be reshaped to pay for it. My first thought was that if Democrats cannot get more agreement around the table, the Green New Deal is in trouble.
My second thought was that the debate is rapidly coming to resemble the Democratic infighting around healthcare leading up to the 2010 passing of the Affordable Care Act, known as Obamacare. Back then, liberals were nearly unable to agree on a plan thanks to an internecine policy battle. It sapped time, energy and political clout away from a president who had a few other things on his plate, including a couple of ill-advised wars inherited from his predecessors and the economic and political fallout from the 2008 financial crisis.
The Green New Deal has brought a welcome gust of fresh ideas and energy to the Democratic party. But at this stage, it is more a call to action than a workable piece of legislation. As Democrats hash out the details, they must be careful not to become enmeshed in old, unproductive turf wars. The first battle has already started between idealistic young environmentalists and world-weary labour leaders who represent workers in fossil fuel and power industries.
Many in the labour movement who were disappointed that they were not consulted in the crafting of a plan that, as one union leader put it to me, “aims to make people stop using coal in, like, the next five minutes”. Cornell academic Robert Hockett, who advised Ms Ocasio-Cortez on the GND, counters that it would have been premature to start talking in depth about policy details to labour and other interest groups beforehand.
“We see this as the opening gavel strike in a decade-long national deliberation. We didn’t want to start the conversation before the gavel fell,” he said. But the result is that unions, which should support a plan that could put their members to work upgrading and retrofitting the nation’s housing stock and commercial buildings for the green era, are now complaining that the GND will be a job killer. Properly structured, the GND would be just the opposite — mining jobs are ultimately going away, with or without the proposal, whereas employment in clean tech is growing. The debate also highlights the fact that some in the US labour movement have been captured by the extractive industries. They are less focused on conversations about timing and transition to a lower carbon economy than in painting the proponents of GND as climate extremists. Still, Ms Ocasio-Cortez would have done well to tap more thoughtful labour leaders for more advice in advance of her announcement. At the very least, union training centres could play a vital role in retraining workers for the new green economy.
The second big Democratic battle is over how to fund the Green New Deal. Ms Ocasio-Cortez is a proponent of “modern monetary theory”, the edgy idea that Congress can simply pass legislation to fund big infrastructure plans and the Treasury can print money to pay for them, without any negative impact such as runaway inflation and soaring interest rates. We used loose monetary policy to save the financial system after the 2008 crisis, the argument goes, so why not do it to move the US economy into high-growth industries of the future while creating better paying jobs and saving the planet? But liberal economists, including former Treasury secretary Larry Summers and Paul Krugman, have knocked the plan, arguing that debts do matter. I sympathise with Ms Ocasio-Cortez’s argument that a decade of easy money has benefited Wall Street more than Main Street. It also created a housing bubble that makes it harder for millennials to buy homes. And some of her critics were the authors of policies that contributed to the financial crisis. We should have used synchronised monetary and fiscal policy to build massive amounts of productive infrastructure back in 2009. But given the high levels of US government and corporate debt out there right now, I don’t think this is the moment to try it via MMT.
Ms Ocasio-Cortez has laid out the big idea — what’s needed now are some smaller ones. Rather than trying to do everything at once, the left should take a slice of the GND and craft a piece of passable legislation around it. Get the ball rolling and show the scope and scale of what is possible. This change can be made, and paid for without monetary tricks. The Democrats should start with housing, but that is for another column. rana.foroohar@ft.com
