End of the year observations

End of the year observations   Greg Gerritt  12/27/18

It would be very easy to be depressed about the state of the world as we move from 2018 to 2019 with racism, authoritarianism, growing inequality, an increase in refugees from war and climate change, rising carbon emissions, ever faster deforestation, empty seas, loss of biodiversity, more nuclear weapons in the pipeline, the trampling of communities in pursuit of profit, democracy in retreat, and the hottest La Nina year in history, but it has to be balanced with the UN laughing at Trump, a repudiation in the mid term elections, the growing resistance to fossil fuels everywhere, a reawakening in agriculture, growing movements to clean up the various aspects of the waste stream including plastics and organics, and the amazing growth of windpower along the east coast of the US. The elites are doing a lousy job, but the people are doing amazing things in every community on the planet. Let’s start with a look at some elite stupidity. 

A typical American headline. President Toxic Dump decides to pull all American troops out of Syria. As a long time advocate for the complete withdrawal of American troops from conflicts that we are creating around the world, one might think I would celebrate. But when you dig deeper you find the president of Turkey talked him into it so he could safely attack the Kurds. It is an action by the US without planning, notice to allies, or any thoughts as to what will happen next. Just Trump being conned and played. And only thinking about how it effects him and his campaign lies, Like so many of Trump’s actions it has one tiny sliver of something good, done for all the wrong reasons and in the most ridiculous and dangerous way possible. 

Maybe Trump really does want to start bringing American troops home and putting an end to wars. I doubt it, but stranger things have happened in the US, and he has been talking about how badly those wars have been going for all these years. If Trump wants to save money and downsize the military, then an abrupt withdrawal from Syria and Afghanistan is not the best way to start. The smart thing to do is start closing the more than 800 overseas bases, beginning with those no where near conflict zones, followed by well thought out withdrawal from conflict zones and an end to the drone strikes, though doing it in orderly fashion might be beyond his capabilities. We have no good reason to have military bases anywhere in the world. The world is a more dangerous place when the US, or any country, tries to keep an empire or be the world’s policeman. 

Another headline. Putin Says US has made world more dangerous by pulling out of nuclear treaties. Putin is a complete thug. But he is also right. Pulling out of treaties like those reducing nuclear weapons is truly insane. But Trump wants to build more nuclear weapons. (So did Obama, Bush, Clinton, and Bush, so it is nothing new for American Presidents) We have to be careful about how we deal with large and powerful countries. But peace, actual peace based on justice and nonviolence actually works to everyone’s advantage, except maybe the thugs and the arms manufacturers. Selling to refugees is not really profitable most of the time, but a riled up world always wants more guns. And refugees and guns are what we seem to get when we have unhinged autocrats in charge working to protect the perks of the rich. 

Yet despite Trump’s psychotic and bizarre approach to foreign affairs (pulling out of every treaty he did not originate) and issues of world peace (peace is not a profitable path for Senator Inhofe’s investments in Raytheon) he is much more likely to lead to the burning of the planet through his alignment with fossil fuel and climate denying powered autocrats like the Saudis, Putin, and the new wack job in Brazil who is ready to make war on the forest people of the Amazon in the pursuit of more soybeans for China and McDonalds. It is rather strange that Trump mostly wants to align with autocrats rather than the people who actually believe in democracy, justice, freedom and the right of communities to self determination. Or rather I wish it was strange that an American president was more comfortable and friendly with thugs than with countries that actually practice democracy.

The obsession with Iran is incredibly numb, but it is not just Trump,. It is a whole clique in the US. People who hate that Iran threw off a dictator imposed by the Americans and captured the embassy as statement of disgust with American meddling. In the name of democracy the US overthrew elected leaders to put in a Shah. If someone did that to us, we would be pretty mad. But what drives the stupidity even more is that the Saudis hate the Iranians because of the old story of Shia versus Sunni dating back to relatives of Mohammed as well as a more modern rivalry. Our allies, the Saudis, support and export a radical brand of Sunni Islam that has been responsible for many wars, deaths, and refugees, including the attack on the World Trade Center on 9/11/01 We pick our friends badly, then compound our errors and arm the folks turning the weapons on us. To make it even wackier, most of what Trump has proposes to do in the Middle East will benefit Iran. Iran is clearly a place in which if we left them alone to forge their own way in the world, they would move towards peace and openness. The Mullahs will not hold on forever in face of the youth movement and consumerism. We have become friends with the Vietnamese, you would think we could do the same with Iran, and reap the commercial benefits. But if you hate Iran, why do you hand them a huge victory at the expense of the Saudi’s, our supposed ally? And at the expense of the most reliable and democratic ally in the region, the Kurds.   

It is probably inevitable that as autocrats push forward with violent and lethal attacks on the media and the truth, demonstrably false stories get the headlines and dominate the discussion. Climate change is not a hoax helping China. It is a threat to civilization. And is totally preventable. Cutting taxes primarily shovels money to the richest people, while everyone else is falling behind. It does not create growth. And in fact 90% of what is called growth ends up in the hands of 1% of the population while everyone else in the developed world falls further behind. Many states in the USA tanked their economies by cutting taxes for the rich. And no community is better off for exacerbating climate change.

Interestingly both lies, the two most pernicious on the planet, are partially the work of the same family, the Koch’s of Chesapeake Oil and the many think tanks that they fund. Making it easier to pollute does not help communities or economies, it actually makes people sick and costs us money, while the innovations to keep our communities healthier and our air and water cleaner create huge economic benefits. You can not have infinite growth on a finite planet no matter what the economists say and the politicians promise. And climate change will kill people and tank the economy. I think my readers can tell which of those is calling out the lies and which are actual truths. 

The Trump tax cut did spur growth, for about 2 quarters, and spurred nowhere near the investment in infrastructure or manufacturing that was touted. It was consumption based and is unsustainable, mostly based on debt and borrowing rather than actual production gains. Inequality and debt are again reaching epic proportions, even if unemployment is temporarily low. 

One of the myths used to perpetuate the power of the wealthy is the myth that a good business climate helps the economy. This is an article of faith everywhere you go except in those places where people have come to realize that all economic growth is doing is making the economy work less well, and depleting the resource base that will be necessary to keep future generations healthy and prosperous. As Jared Diamond of “Guns, Germs, and Steel” fame noted in a recent National Geographic, per capita income in the western nations will slowly dip towards the global mean as low income countries move up towards it. And it will be much lower than the mean of western countries today due to resource depletion, climate change, and ever more people. Planning for this makes much more sense than pushing for ever more growth. 

The myth of the efficacy of the business climate is relatively easily testable using statistical methods. Either there is a statistically significant correlation between a good business climate ranking or at least some versions or some sliver of the business climate agenda and the growth rate of the GDP in the place receiving the high or low rankings or there is not. If there is no correlation then one has to assume that there can not be causation, though if there is correlation you can not assume there is causation, but must demonstrate it. If business climate rankings truly correlated with growth rates the economic development professionals and the politicians, as well as the billionaires that fund the think tanks that tout the business climate agenda would broadcast the results everywhere. The Providence Journal would make it front page news. I regularly look for such results to no avail. I have repeatedly challenged the media to find such a study. I have asked eminent business professors at URI, in fact right after they testified extensively on the importance of business climates as a reason to build the Fane 46 story debacle on the river. No one has come up with a single study legitimate demonstrating the correlation. Google it. Most of what you get says there is no correlation. The other studies were paid for by partisans and offer the results that were paid for. I include a few links, titles and quotes for your edification.


The Economic Outlook Ranking Fails to Predict Growth


Why Business Climate RankingsSeldom Make Sense … This leaves little doubt that the EconomicOutlook Ranking(EOR) is intended as a guide toand … The lack of relationis depicted in the chart below; the growth ratein state Gross … but location offamily, climate, and housing costs are also important factors, and taxes …


Economic Growth Defies Tax Foundation Ranking

Sven Larsen Oct 26 2017
There is no macroeconomic data to show that a “good” business-tax index score is associated with a strong state economy. On the contrary, a review of state GDP data indicates that the opposite might actually be true. Contrary to conventional wisdom, the relationship between taxes and economic growth is not very straightforward
The same data for 2017 tells an even more compelling story. A concentration on private-sector GDP, which rules out growth driven by government spending, actually hints at a negative correlation between the business-tax index and economic growth. The 10 states that have the highest tax-index scores had an average of 1.3 percent annual private-sector growth in the first quarter of 2017 (see list of states below figure). By contrast, the 10 states that score the lowest on the tax index averaged 1.9 percent private-sector GDP growth:
In January, the Center on Budget and Policy Priorities and the National Conference of State Legislaturesco-produced a presentation where they firmly suggested that tax cuts could be bad for states’ economies. While not stating outright that high taxes are good for economic growth, the CBPP and NCSL challenged the notion that lower taxes would help.

California’s Economic Performance Is Hardly a Vindication of the ‘Blue State’ Model


January 6, 2016 10:48 P
 No serious person would suggest that state fiscal and regulatory policies are the most important factors affecting state economies, or even that they are large enough to swamp other factors when seeking to explain state-by-state differences in economic performance. Natural resources, geography, climate, and international trading patterns are clearly important.

To be fair, I did see a few studies from Africa that did find a slight correlation between GDP growth rates in African counties and the lack of corruption, which is a component of business climate rankings, but no serious academic or government sponsored research studies that clearly demonstrate that following the business climate agenda: deregulation, very low taxes, stop providing public services, while subsidizing the wealthiest with enticements to move to the neighborhood on the taxpayers dime, actually helps one bit, or that you could predict the rate of GDP growth in an American state based on its ranking. The best recent example is North Dakota with booms and busts around fracking determining whether ND had the fastest growth rate in the country or the worst recession despite rather constant tax and regulatory conditions. 

As John Hood notes above the rate of economic growth in a neighborhood is much more related to history and geography than anything the government is or is not doing except for providing infrastructure and public services. One final note. Rapid immigration is a leading factor in generating economic growth, but that is exactly what Trump and the Republicans are trying to stop. 

In Rhode Island the actual climate is much more important to our economic future than the business climate

Time to bring the review back to Earth, in this case ground it in what is happening in Rhode Island. 

Rhode Island political and business elites continue to insist on a construction and real estate driven growth economy layered with Meds, Eds, and software, and expect that as these industries take advantage of subsidies, reduced regulation, and ever lower taxes that Rhode Island will move up the growth rate curve. Exactly the same strategy everyone else is touting and trying despite that we can find no statistical evidence that it works. Rhode Island year in and year out continues to average about 70% of the growth rate of the US even when taxes are cut. The reason for this is that there are only a few places in the USA that have the quirks of history and geography that allow for rapid economic growth in the old industrial world.The places with rapidly growing GDPs are either megacities with rapid immigration or places with resources to be exploited, primarily metals and fuels, that catch a short lived wave in the ever moving mineral boom town. In other words taking natural capital, using it up, depleting the resource, and leaving devastated communities and ecosystems, is called growth and income despite that it is mostly the depletion of capital. With the growth rate distorted by the booms in planet destroying exploitation, Rhode Island always going to look bad, even when we are right up there with our peers in old industrial mid sized cities, even those with “ good” business climates. The expectations that we can increase the growth rate and the thought that it is necessary when the population is stable, means that the state continually shorts the people of resources for infrastructure, housing that is affordable, healthcare, and schools that prepare children for the world as it is today, as well as exposing them to more dirty water, bad air and and every chemical that can pass muster in a depauperate regulatory system. 

Making this worse for Rhode Islanders, the elites are mostly seeking to create jobs for themselves, and education, healthcare, and housing are becoming ever more Unaffordable as the strategy plays out. Enough real estate gets churned to increase the tax base so the city and state say:SEE, but more people struggle to pay the rent, and healthcare costs will skyrocket until we are forced into a single payer system to avoid epidemics in the streets. And the climate gets worse. 

Three elite driven big money projects have dominated the headlines in RI this year. The struggle to stop the LNG facility along the southern end of the Providence waterfront may be the struggle most in danger of getting final permits thrust upon them. A classic case of environmental racism and dumping on the poor and people of color for profit. The Governor has sold the people of Washington Park out, and it showed in all of her machinations with CRMC. When do the communities hosting the most toxic stuff, with the highest rates of childhood pollution induced diseases, get to say no more? Equalizing the load is not the right answer either because no child should be exposed, and therefore any industry that can not be run cleanly should not be allowed to pollute anywhere. And when do we say no to more fossil fuel facilities? All the new studies say we have maybe 15 years to really be on the road to zero emissions, and if we keep building more facilities that last 50 years, we shall never get there. 

The Fane 600 foot tower along the Providence River seems to have passed a big hurdle recently with the city council selling out every neighborhood organization in the city for their misguided strategy of helping the rich and hoping for trickle down. It is a classic example of the short sightedness of elite based economic development in the United States and Rhode Island. Economies and communities work better when everyone is involved in helping the community choose the right path, and when there is less economic inequality. But as the United States was basically invented by the real estate dealers, owning land has been the foundation of the economy, capitalizing the banks and channeling all development and infrastructure expenditures. But in an age in which communities benefit more from parks than skyscrapers, and the biggest shortages of housing are for those with less money, a strategy that includes luxury housing overshadowing parks and riverfronts for those working in industries driving most folks to the poor house (meds, eds, and software) is simply a way of promoting ever greater inequality, and the struggles by individuals and loss of democracy that accompany it. An economic development strategy that would benefit a much greater part of the community would look something like the Green New Deal. Unfortunately the version that has been adopted by liberal Democrats after serious watering down of the Green Party’s Green New Deal will do much less good than it could by not greening enough. 

The fight about the Fane Tower and its Meds and Eds and real estate economic development strategy is not quite over, I am sure lawsuits await. But this is the kind of thing that mostly gets built until we change the rules and tilt economic development towards the needs of the people. I could think of much worse things to build there, but this one is just a classic of a failed strategy and anti democratic process. I hope they crack down on Fane and make him build a LEED Super Platinum, and make sure it generates more green energy than the entire energy budget of the building over the course of a year and hosts a large community garden and green water management systems. But even then it is a waste of space and resources.

The Invenergy fracked gas power plant in Burrillville is the one big project most likely to be stopped. All thanks to the united stand of the people in Burrillville and the Conservation Law Foundation for its exemplary work, but the reality is that just about everyone in Rhode Island except the Providence Journal, the ruling elite, the construction unions, and power brokers on Smith Hill have figured out this is a dinosaur, and it is an impediment to our moving forward to a clean energy future and a different kind of decentralized shared prosperity. Even the ISO, the folks who run the NE energy grid, have figured out that these kinds of plants are not going to be needed and it makes no sense to build new ones. Fossil fuels are dinosaurs, we just need to starve the last of the beasts. And they are no longer cost competitive with large scale oceanic wind and well sited solar. The shouting and lawsuits are not over, but every day of delay is one more day the plant becomes less useful or economical. 

Our problem now is to figure out how fast our energy budget will shrink over time as we move away from destructive consumerism and the fetish for growth and green our communities and economy. We have to make sure we do not just assume continued economic growth as 90+% of what is called growth is stealing from the planet and from the poor. People are still falling further behind. It is phony growth. I have seen all the arguments that we can green growth, but the amount of stuff used each year keeps going up (50 billion tons a year and counting) and more and more resources are in danger of shortages and disappearances, especially biological resources that in theory could help support us forever.. Our need to keep healthy oceans, forests, and soils is at least as great as our need to generate more clean energy over the next generation. Soil and forest carbon storage can draw more carbon out of the atmosphere today than any carbon capture machine they will commercialize in the next 10 years, and will provide more livelihoods and healthier children across the globe, as well as healthier food. 
I can not say if we shall enter a recession between now and 2020, but we are choking on fossil fuels, injustice, and inequality. The movement to stop the construction of any new fossil fuel facilities will pick up steam, in harmony with the movement to have banks stop investing in fossil fuels and in deforestation. The struggle to figure out the best ways to site solar and wind facilities will heat up in Rhode Island. The long term integration of the need to sequester carbon in soils and forests and to grow more food in the neighborhood as a part of our energy strategy will move forward and become a stronger voice in the development discussion. 
I am looking for the climate and climate justice movements to become more powerful as the immediacy of the crisis becomes ever stronger, and the cracks in the empire become more apparent, The movement to dismantle militarism and the empire and the climate justice movement will become more intertwined and intertwined with our better understanding of the imbalances in the economy and current economic development strategies that expand the chasm of inequality and destroy the climate in the name of profit for the few. 
I seriously doubt that the struggle against the patriarchy, the war machine, the fossil fuel industry, and the dominance of the business climate agenda will be won in 2019. But I expect to continue to make progress.  Clearly none of the crap we are being offered by the wealthy or the political leadership actually works or passes muster in a democracy. It is only by bypassing the people and catering to the desires of the rich that the politicians have been able to reap financial rewards and hold back progress, but change is coming. The pressures of the failed policies are building up in our communities. The storms get weirder, the fires more deadly. We get economic booms that produce nothing of value in our communities, based on policies that are designed to simply put more money in the hands of fewer and fewer people. More people beg on street corners. It is never an easy struggle, but while the arc of the universe is long, it bends towards justice. We shall overcome.