Dear Citizens and Elected Officials:
Introduction:
I sent out the letter which I have reproduced below to business and civic leaders in the Frostburg, Western Maryland region, regretting that I could not attend tonight’s regular monthly meeting, and further regretting that I could not deliver a rebuttal to a talk being given on the urgency of addressing the national debt.
Although the Democratic Party, and most of the policy elites of our nation, want to avoid the topic, the answer of how we could pay for a Green New Deal must eventually turn to the merits of Modern Money/Monetary Theory. That’s a huge topic, and I won’t go into all the details now just before the debates, but please listen carefully tonight to see whether the crucial question — and the answer I talk about in the letter, based on L. Randall Wray’s Working Paper — are ever broached, much less discussed. Yes I know: too much to ask for with the number of candidates and the time limits. But eventually, we have to face them. To whet your interest, here is a selection from Wray’s Working Paper, followed by my letter:
At least part of the justification for half measures is that the GND is just too expensive. Our government is already broke. We simply cannot afford survival. But MMT teaches that financial affordability is not the question; we can afford the real MEOW. (Moral Equivalent of War) We already have the financial wherewithal needed to afford whatever is technologically possible. We do not need to go hat-in-hand to rich folks to get them to pay for it. We do not have to beggar our grandkids to pay for it. We do not have to borrow from China to pay for it. We do not have to get the Fed to “print money” to pay for it. All we need to do is to remove the self-imposed constraints, the myths, and the misplaced morality; then budget for it, approve the budget, and spend. No new spending process is required. Follow the normal procedures that the Fed and Treasury have developed. That is how you pay for it.
And now my letter:
Dear Citizens and Business Leaders:
I regret to say that I will be unable to attend tonight, due to
longstanding commitments to some other pressing civic matters, but I wish
you a good and productive meeting, and I will miss the hospitality which
you have so generously extended to me in past meetings.I especially feel a pang of regret at having to miss Jesse's talk about "A Nation in Debt."
Were the time slot open for me, I would ask for rebuttal time, to argue not
that the national debt does not exist, but it does not mean what
conventional Neoliberal economics, of the Right, the Center (mostly
Democrats) and Libertarians believe it means. This is no small matter and
I will not attempt too long an explanation now, but suffice it to say that
the rebuttal to worries about the level of debt, and federal deficits, now
centers around the findings and recommendations of Modern Money/Monetary
Theory (MMT). I am including, here, a link to one of the theory's chief
"theoreticians," L. Randall Wray of the Levy Institute of Economics of
Bard College (New York) http://www.levyinstitute.org/pubs/wp_931.pdf
- relevant for current discussion of whether we can afford a Green New Deal.
I am familiar with a decent part of Professor Wray's work, and we exchange
views from time to time, and I believe this paper, on* how we could/would
pay for the Green New Deal* is an important one. Professor Wray and theother leaders of MMT have developed their theories by watching what
Central Banks all over the Western World have been doing since the Bretton
Woods Conference and Agreement of 1944. Almost needless to say, the way
these key institutions operate is at odds with the public explanations, as
William Greider early hinted at in the 1980's in his famous book "Secrets
of the Temple."
If you find the essay difficult going, it is because there is a Sea Change
in understanding going on here, which I have likened to other major
intellectual revolutions famous in the West: the Copernican, the Newtonian,
Einstein's work. It is as controversial as Martin Luther's theses nailed
to the cathedral door on October 31, 1517, and it may stir up some of the
same emotions, because established political economic assumptions in the
West, and especially in the US, have a near religious fervor, and I mean
that respectfully to both religious and secular camps.
Essentially Wray's essay/"working paper" argues that the obstacles to
paying for the ambitious programs of the Green New Deal, which he feels can
be met, do not come from our government's inability to pay for it. The
magic keystrokes of the Federal Reserve after the Great Recession in
2007-2008 - the ones that created the trillions not authorized by our
Congress - prove that ability exists, without generating inflation, the
great fear which lies behind current discussions and which has haunted the
West since the 1920's in Germany and the 1970's more recently. The magic
keystroking was admitted to publicly by Chairman Bernanke in later
Congressional testimony; the limitations and bottlenecks come from the
physical constraints of both natural resources and human resources as they
are shifted from the old uses under fossil fuel arrangements and our
crippling, expensive medical system to the new programs. These are not
minor obstacles, but they are not insurmountable, as Wray argues that the
handling of them in WWII shows, both in the USA and in the much poorer
Britain, which had still not fully recovered from the economic traumas of
World War I.
His argument also rests in part on the fact that there are millions of
hidden under and unemployed citizens that can be added to the workforceunder the Green New Deal's *Job Guarantee* (I prefer to call part of
it a *Climate
Conservation Corps* in honor of the extensive and popular *CCC which was so activein Western Maryland, as was the WPA, during the 1930’s).
Conclusion:
Wray also points out that the “Secular Stagnation”— as Larry Summers calls it — that we have been suffering from for decades, not just the U.S., but Western Europe even worse — meaning a vastly under-performing economy with low growth/productivity and millions of under-underemployed citizens not showing up in statistics (or misleadingly so) is still present, despite the two good numbers so bragged about, the low unemployment and low inflation. The hidden story of these numbers means that the economy is still performing well below its projected performance from before the Great Recession, and that means that the bogeyman of inflation will be slower in showing up than we might otherwise expect. Still, as Wray’s essay/Working Paper shows, it must be anticipated and countered where the material bottlenecks are likely to appear.
Wray has not covered all the potential programs suggested in the 14 page Green New Deal Resolution, but he does tackle the major ones: a Single Payer/Medicare for All proposal, the Jobs Guarantee, the Energy and Grid Transformation (including the transformation/upgrade of all existing buildings) to alternative sources...and deals with most of the major controversies that have so far surfaced in the rather truncated debate.
Well, that’s a start, with much more to follow. For those who feel that he has underestimated the transformations necessary to change, in an ecological sense, the way we handle the full cycle of economic production, from resource extraction to production to “recycling” (sic)...please consider these two additional sources, and compare: www.paecon.net/… (from Richard Smith, author of “Green Capitalism: The God that Failed.”) and the Victory Plan from the group Climate Mobilization, written by Ezra Silk back in 2016: www.theclimatemobilization.org/… and revised this March by Kaela Bamberger. These two additional works add the needed perspective that all our ecological troubles are not do to just climate chaos, but more broadly, and equally urgently, to the impact of the economic system itself, its pressures at all points of interaction with nature: atmosphere, land, ocean...
My closing thoughts, when you put all three of these worthy essays/small books together, is that James Galbraith’s insistence in his book The Predator State in 2007, that we don’t contain, much less reverse climate chaos without a revitalized public planning process, rings truer than ever. If Congress in the House, under Speaker Pelosi, won’t give us that Select Standing Committee on the Green New Deal, then the national and regional conservation groups and local citizen groups must begin a “shadow government/Select Committee” process on their own. We have to focus, sequence and come to grips with what Wray, Smith, Silk and Bamberger are grappling with. What is the relationship between the terms and movements behind the calls for a “climate emergency, a climate mobilization, A Green New Deal & it’s missing Select Standing Committee and a national planning process?”
No final resolution from me, just a recognition that the hard work has to get started. We don’t have a year to waste. It’s out there in bits and pieces and fragments in motion; how will we pull them together — before the election?
Best,
Bill of Rights
Frostburg, MD
