The Green Economy Reconstruction Program and Budget
By Jon Rynn
On November 13, 2018, Alexandria Ocasio-Cortez and the youth group Sunrise Movement staged a protest in soon-to-be Speaker Nancy Pelosi’s office, demanding that Congress create a Green New Deal. Soon, the phrase ‘Green New Deal’ became the next bright new policy idea, with dozens of articles explaining that the Green New Deal (GND) would both tackle climate change in such a way as to actually solve the problem, and also would create jobs, reverse inequality, and give the Federal government a big hand in the economy.
The Green Economy Reconstruction Program, heretofore hereafter referred to as ‘the Program’, with budget figures and details available at Howie Hawkin's website, is the only public plan which specifically lays out a budget and a set of large-scale Federal public works programs that both eliminate the greenhouse gas emissions that cause global warming, and also brings about a more equal, just, fully employed society. The spate of Green New Deal proposals that have come out since November 13th have, for the most part, been ‘design requirements’ for what a Green New Deal should be, or have put forward policies that are inadequate to fulfill both goals. None of the current proposals seek to use the Federal government to construct vast public works that will guarantee that climate change will be minimized and equality will be maximized, with the partial exception now of Bernie Sanders’ plan.
The importance of being guaranteed…
By specifying how much money will be spent – about 3 trillion dollars per year, generating about 30 million jobs – and by doing so with direct government planning, at about 15% of the economy – the Program can easily refute most of the critiques directed against the Green New Deal. For instance, the plight of fossil fuel workers in a renewable world is the frequent focus of articles about the GND. Only the Program adequately deals with this problem. With trillions of dollars worth of infrastructure to be built, there will be millions of manufacturing and construction jobs that will be at least as good as the jobs fossil fuel workers have now, and critically, the Federal government can plan to fill those jobs with the people who now have fossil fuel jobs – down to specifying the factory and particular position, so, for example, an oil refinery worker could literally walk from the current job across the street to a wind turbine factory job. There is no other way to reassure those in fossil fuel, or other greenhouse gas emitting jobs, that they will thrive in a sustainable world. Bold words about retraining and the general opportunities of renewable energy will fall on deaf ears, and justifiably so, because there is no guarantee. Only a planned Green New Deal can guarantee the kinds of consequences that will appeal to the bulk of the population.
Similarly, in most current proposals, there is no guarantee that emissions will be eliminated. For instance, Washington Governor Jay Inslee’s proposal takes care of the transition of renewable energy by requiring the utilities to take care of the problem. In fact, the various states that have set ‘standards’ as part of their ‘Green New Deal’ plans do the same thing.
There are three main problems with passing the buck to the state utilities, which only the Program solves. First, the most efficient way to construct an economy which uses only renewable electricity is to create an electrical system that encompasses the entire country, not just one state or city. That way, the system can take advantage of the variability of wind and solar across the country, and guarantee that enough electricity will be generated at all times of the year by renewable sources only. Second, utilities are in the business of generating the highest possible return to their investors; they will delay, claim that they cannot make their targets for various technical reasons (and since they will be restricted to one state, they may very well be correct), they will lie, cheat and steal in order to delay spending vast sums of money on renewable energy instead of shoveling that money to their investors. It would be much more efficient to simply buy out most utilities, and put together a state-of-the-art national grid, replete with strategically placed wind and solar farms, in places like farms and ranches in the Plains states where people actually want them.
The third main problem with a state-utility approach is that, for many if not most states, fulfilling zero emissions requirements for electricity will involve placing solar and wind somewhere that requires destroying another part of the ecosystem, like a forest. This will lead to the tragedy of local environmentalists fighting the establishment of a renewable electricity system. Instead, the Program would mainly site wind farms, for instance, on farms and ranches in the middle of the country where people want the extra income and the wind farms do no harm to ecosystems, or solar farms in the Southwest in arid regions.
…and of being Interstate
The Program contains a proposal for an Interstate Renewable Electricity System (IRES). We are using the word ‘Interstate’ in order to emphasize its similarity to the Interstate Highway System. Americans use the Interstate almost every day, and it is the single largest public works project in human history. It was initiated by a Republican president, although it was planned during FDR and Truman’s terms. It is a shining example of what the Federal government can do (notwithstanding some negative consequences, like contributing to sprawl). By using the word ‘Interstate’, the Green New Deal can build on a positive aspect of the nation’s history.
Another new Interstate that the Program advocates is for an Interstate High-Speed Rail System. This Interstate could even follow much of the current highway system and would use renewable electricity for long-range travel. Eventually, the Interstate High-Speed Rail System could replace almost all air travel, and thus remove one of the main contributors to climate change (air travel is predicted to greatly expand). Judging by the complaining and number of comedy bits directed at the air travel system, the public would probably consider a truly comfortable, fast and affordable rail system to be an upgrade to their current standard of living.
New and Improved
In fact, advocates should loudly proclaim that in every way, the implementation of a Green New Deal would be an improvement to the current way of doing things. It will lead to higher income, and cheaper and better goods and services, all of which will constantly improve technologically. A Green New Deal should clearly not be just an environmental program; the original appeal of the November protest was that it can be an economic program as well. Yet in most articles and discussions of the Green New Deal since that time, the environmental aspects dominate, and the costs are put front and center – costs in terms of jobs, things we can’t have anymore, sacrifices, and other predictions of suffering that are more befitting of sermons of Puritan ministers than the vision of a better world.
Nobody in the private sector talks about costs and problems before they pitch the benefits of their good or service. An Interstate for renewable electricity could create a more reliable, cheaper way to get electricity, and it would also prevent tens of thousands of deaths and illnesses now caused by pollution from coal plants. People would be healthier as well. Manufacturing the parts for this system, and putting it all together, would provide millions of good jobs. The same applies to the Interstate for rail. Part of the rail system would involve eventually replacing long-distance trucking with high-speed freight rail, which is a dozen times more efficient than trucking. This would not only reduce the need for oil, it would lead to an improvement in the lives of the people now involved in long-distance trucking, who are more and more being brutally exploited. They would be much better off working in the millions of other jobs a Green New Deal would offer, and those transitioned, equivalent jobs can be guaranteed.
Jobs, jobs, and more jobs
One of the biggest advantages of the Program is that it is big enough to eliminate whole classes of problems, in particular, 1) using electricity in a way that will not generate greenhouse gases – the role of the Interstate Renewable Electricity System – as well as 2), a healthier population because of no pollution, better food, and more walking, and 3) generating so many jobs that, in conjunction with planning, nobody has to worry about being without a good income and meaningful work. One of the main arguments that Republicans such as Trump use to scare everyone about the Green New Deal is to say that people will lose their good jobs. With a piecemeal approach, which is favored by most Green New Deal proposals, this could indeed happen, because there is no comprehensive, national planning. Instead, the assumption is that somehow the market will come to the rescue – and maybe only after a period of retraining for workers. That is one reason why a Job Guarantee is part of the current Congressional Resolution, although the idea of a Federal Job Guarantee goes back at least as far as the proposed Full Employment Bill of 1946, the original version of the Humphrey-Hawkins Full Employment Act in the 1970s, up to the currently proposed Jobs for All Act and recent academic studies by Philip Harvey, Darrick Hamilton, William Darrity Jr., and others.
By contrast, the Program creates about 30 million jobs directly, and many more than that indirectly. The directly created jobs will soak up all unemployment, underemployment, and even lift the working poor into the middle class. A job guarantee, in effect, emerges in an organic way from the design of the system. A more formal job guarantee program should could be added as a smaller program that to provide jobs in public services for unemployed people who for various reasons are not able to do the construction or manufacturing jobs that the Program creates. would handle a million people or so for relatively short periods of time. Politicians always talk about creating more jobs, only the Program can actually use the government to create them.
This massive increase in employment has other, far reaching effects that can provide Green New Deal advocates with a way to explain how the Green New Deal will create more widely shared economic growth than the current system, or more jobs than the neofascist plan of stopping immigration. An economy in which anyone can have a job would finally give labor the power to get their fair share of economic growth that they have been denied since the early 1970s, when the top 1% and multinational corporations started to take almost all of the productivity increases that technology creates. In a fairer economy, as existed from the end of WWII to the 1970s, when technological innovation takes place and businesses can create more output with the same number of people and resources, wages and income go up because labor can demand a piece of the productivity increase, but only because labor markets are tight and unions are strong. When manufacturing declined, union membership went down at the same rate, and employers could threaten workers because workers could not be sure that they could get an equivalent job if they quit or lost their current one.
With a Green New Deal, and the government offering a job guarantee, employees will have much more choice, and employers will have to offer them better working conditions and better pay in order to retain them. In addition, the Green New Deal will radically increase the size of the manufacturing sector, which will again serve as an anchor for the middle class and unions. As Seymour Melman explained, more worker power actually leads to higher levels of technological innovation and therefore more widely shared economic growth.
Armed with a reasonable explanation of how the economy works, the Green New Deal can serve as a counter argument to the racist characterization of immigration as an ‘invasion’ and threat to the working class. With real full employment, only the most extreme nationalists will care about the moderate levels of immigration that we have today. Immigration will be taken off the table as an important issue. ‘Free’ trade, deregulation and lower taxes will also lose much of their power as alleged sources of economic growth, when it becomes clear that pumping trillions of dollars into the economy in order to build cutting edge public works does far more for widely shared economic growth than any other policy.
The history of the United States shows that bursts of infrastructure building lead to widely shared prosperity, because the infrastructure systems both create wealth themselves and also help the critical manufacturing sector to thrive by providing a stable market for manufactured goods. No other cause has this same power to explain long-term economic growth – not restrictions on immigration, ‘freeing’ trade, deregulating, or cutting taxes on the rich.
How manufacturing helps the environment
A central aspect of the Program is to replace most of the machinery that factories use, so that manufacturing stops generating greenhouse gas emissions, stops polluting and making people unhealthy, and stops using the output of ecosystem-destroying mining by instead creating products that are recyclable and reusable. Most current Green New Deal proposals want to achieve these goals by simply requiring manufacturers to ‘retool’ themselves. But this runs into the same problem that we observed when requiring utilities to shoulder the expense of converting to renewable electricity. The Federal government actually bought much of the equipment that manufacturers used to produce war equipment during WWII, and then sold it to them at the end of the war on pennies to the dollar, thus helping to propel 30 years of economic growth. By paying for most of the new equipment, the Federal government would speed up the adoption of new equipment, provide a market for more American machinery factories and thus more manufacturing employment, and provide a way to create cheaper products that can easily outcompete imports, even from China. In addition, if products can be reused, consumers can even get money back when they finish using the product that was cheaper to buy in the first place – increasing the standard of living of the vast majority of the public.
The Federal government could also get something in return: Companies could be required to give employees a percentage of seats on the boards of directors, thus helping to push the economy in a more democratic direction; companies could even agree to spin off factories to their employees after a certain number of years; the Federal government could simply create worker-owned companies; and the companies could provide a small rate of return to the government. The public could see that their power and well-being on the job would be improved by the Green New Deal. The Federal government could also replicate the success of the Mondragon Coop system in the Basque region of Spain, and set up local co-op banks whose goal would be to create factories and businesses that were employee-owned and controlled.
Note that we don’t have to explore whether manufacturing that replaces fossil fuel use with electricity will ultimately be as carbon-generating, because we can assume that the electricity will be coming from the Interstate Renewable Electricity System. Currently, discussions of converting to all-electricity, as with electric cars, get bogged down with comparisons of the greenhouse gases generated by electricity. A huge advantage of the Program is that the various pieces of the Green New Deal fit together into a holistic system, where the system as a whole is greater than the sum of the parts.
The importance of being walkable
The decarbonization of transportation is another example of how the very size of the Green New Deal gives us an opportunity to solve many problems at once. We have seen that an Interstate Rail system could decarbonize long-distance travel, but we still have the problem of gasoline powered cars and smaller trucks. There are two ways to solve this problem. The one that most proposals attempt to deal with is to encourage electric cars. Some don’t even go that far, simply mandating – that is, passing the buck to the car companies – to increase miles per gallon. But this is not a long-term solution, because any car-based system using gasoline will lead to carbon emissions. Even proposals that look at electric cars do not acknowledge the size of the problem. How do you convert the 280 million vehicles in the United States?
The best way is to provide a solution that does not require the use of an automobile – living in a walkable neighborhood. In Manhattan, only 22% of residents even own a car. That is because it is easier to walk, use transit, or bike. But how do you construct walkable neighborhoods, or expand the ones that already exist? One answer, part of the Progam, is to build the equivalent of 100,000 250 unit apartments, thereby allowing 25% of the population to move into walkable neighborhoods, and thus not need a car (the numbers are flexible). So now we ‘only’ need about 200 million electric cars, still considerable, but with a $10,000 subsidy perhaps most people would prefer electric vehicles, since they are cheaper to operate. The electricity, in fact, could come from their own buildings, because part of the Program for the Interstate is to put solar panels and battery storage in every building that can use it, and those solar panels would provide enough electricity for electric cars for the equivalent of one dollar per gallon.
Another huge advantage of walkable neighborhoods is that they make possible electricity-based regional transit, such as light rail, subways, commuter rail and buses that can all be electrified. The Program calls for building extensive transit throughout the country in order to take advantage of walkable neighborhoods
There is yet another advantage to constructing all those apartment buildings – making housing affordable. This is one of the goals of the Congressional resolution, and yet it seems detached from the rest of the Green New Deal. Thus the GND is attacked as being full of unrelated wish list items. On the contrary, if walkable neighborhoods are a key part of a way to decarbonize transportation, then affordable housing is a result of the design of the overall system, not an ad hoc item thrown on the list. There are multiple reasons for the inclusion of each of the items in the Program, just as a guaranteed job emerges organically from the rest of the Program.
There are currently no other GND proposals that explore the potential that walkable neighborhoods have to make transportation decarbonization easier. There have been proposals to increase public housing, but they are not tied into the problem of transportation. Instead, there is usually one part of one sentence making a reference to ‘encouraging transit-oriented development’, and that’s it – with the exception that Sanders’ proposal calls for building 7 million units, although he doesn’t seem to tie that into walkability.
Creating apartment buildings has a fourth function – it makes it easier to heat and cool residential units, because there is generally only one side wall to cool or heat, instead of five as in a single family home (including the roof). The Program allows for geothermal heat pumps under buildings and some retrofitting if makes sense. There is even a fifth function of apartment buildings – making recycling much easier, as there can be central areas to bring recyclable/reusable goods to. A national Recycling Corps is part of the Program, because it is so important, and it should not be all left to residences or even industry to do.
Thus the Green New Deal is a coherent system architecture, in which the Interstate Renewable Electricity System, which includes solar panels and battery storage in buildings, forms the foundation for decarbonizing the transportation, building, and industrial sectors of the society. Manufacturing in turn provides the goods and equipment for reconstructing the electrical, transportation, building and industrial sectors. The transformation of the building sector depends on being part of the IRES, and the construction of buildings in walkable neighborhoods is a crucial part of decarbonizing transportation. An electric transportation system of high-speed rail, transit, and electric cars allows us to grow by moving things around and not destroying the climate in the process.
Regenerating the Earth
That leaves one more sector to decarbonize – agriculture, and ecosystems in general. Instead of banning everyone’s cows, as Trump in his mental haze suggested, a transformation to a regenerative agriculture from a fossil-fuel based one will have many benefits for the average consumer. In particular, growing organic, healthy fruits, vegetables, grains and livestock will lead to much better health for much of the population, and that is something everyone can agree to – unless they want to only eat fast food, a la Trump.
The food can be cheaper too, because as in the manufacturing system, the conversion to equipment and supplies needed for regenerative agriculture can be paid for by the Federal government, with a small rate of return going back to the government. A critical part of this process would be to adopt soil techniques, and planting of food and trees, in a manner that draws down a significant amount of carbon, as studies now show these techniques can do. Therefore, a new Civilian Conservation Corps can do what the original did in the 1930s, restore ecosystems and plant trees, but this time with carbon drawdown in mind, since drawdown will be a critical part of any climate disaster prevention strategy.
Making a green economy democratic and popular
Note that so far, we have not advocated banning anything (like cows, or ice cream, or even anything more serious like internal combustion engines). Banning or severely restricting the production of goods that most people use everyday, before clean alternatives are available, would be political suicide. A GND needs to have the enthusiastic support of at least 60% of the population if it is to last the 10 to 20 years needed to become a clean and just society. As the yellow vest movement in France showed when the carbon tax had the misfortune of actually being enacted, penalizing the population makes no political or economic sense. Instead, the Program uses the Federal government to provide goods and services that are cheaper and higher quality than those offered by the private firms on the market. The Program uses the government to create goods and services, offered on the market, to bring the society to the point where it would be possible to ban or heavily tax, say, gasoline, without inconvenience except to a very few who choose to pay much more. Healthy food would be cheaper than unhealthy food, walkable housing would be cheaper than unwalkable, electric cars would be cheaper than gasoline powered ones, renewable electricity would be cheaper than coal-powered, high-speed rail would be cheaper than planes, cleanly produced manufactured goods would be cheaper than current throwaway ones. Within the 10 or 20 years that this transformation would take place, there would be plenty of time to create the workplaces that would be needed to transition employees from declining industries into rising industries. The existence of a detailed plan and budget would make it possible to relatively easily engage in the one form of ban that is needed now, the banning of new fracking and oil pipelines, because we would know that we don’t need to expand fossil fuel production, and that new renewable energy will replace it (and since we know we will be constructing a reliable system, we can judiciously retire nuclear power plants and avoid the time, expense and danger of constructing new ones).
This is all possible because of Federal planning of 15% or so of the economy. Some warned in the 1950s that the Interstate Highway System would lead to socialism, much less Reagan making the same prediction about the passage of Medicare. Governments have always laid the foundation for civilization by creating public works and infrastructure, as in the first societies in Sumer and Egypt. In a democratic country, infrastructure is one economic activity that is democratically controlled by the population, because officials who control infrastructure are elected. Therefore infrastructure is an important part of economic democracy, as is the concept of employee-owned and controlled firms. The Program extends this democratization of the economy by bringing participation in the planning process down to the local level, and by doing so, ensuring that the communities that were ignored in the original New Deal, such as communities of color, are guaranteed participation this time.
According to our calculations, about 6 million manufacturing jobs could be created by the Program, which if somewhat equally distributed among congressional districts, would yield more than 10 1,000 worker factories per district. On top of that, 100,000 apartment buildings would yield about 200 new buildings per district. If each district’s congressperson, along with state and local officials, represented the district, along with a rational plan of encouraging grassroots participation, then local areas and the Federal government could have a constructive back-and-forth process in formulating where to put the factories and apartment buildings, in addition to upgrading the infrastructure in general – most importantly, for water – for the community. This would be a concrete way to bring ‘frontline communities’, as the Congressional Resolution puts this, into the decision-making process. Because the Program is the only one that has such a strong planning aspect, the Program is the only one that can actually operationalize this noble goal. Because the Program includes so many different elements – for instance, the agricultural transformation could include communities deciding how to encourage urban gardens – it is possible to show all communities, of whatever ethnicity, that their concerns and needs will be addressed.
A brain is a terrible thing to waste, fossil fuels aren’t
A critical part of gaining the support of local communities, as well as successfully implementing the Program, will be to upgrade the skill level of a large percentage of the population. All of this new, high-tech manufacturing and construction of cutting-edge infrastructure and production will require an expansion of higher education, particularly technical schools and engineering programs, as well as for other fields. The United States is currently set up to operate with a substantial majority of workers in low skill jobs. Much of manufacturing is high-skill or at least medium-skill, and when it declined, most of the workers were forced into low skill jobs, one of the factors, both here and in Europe, leading to the rise of new forms of fascism. Having an economy were retail and ‘precariat’ jobs are a major employer is no longer possible if we want to make the economy sustainable. Everybody will need to contribute their potential to the cause of preventing the collapse of civilization. This doesn’t mean Soviet style mass compulsion, it simply means that everyone should have a chance to learn high-tech skills that can be applied to all of the sectors we have been discussing, whether it is manufacturing, agriculture, ecosystem restoration, infrastructure renewal, transportation or building construction. Thus, the requirement of free public college and expanded education, like affordable housing, does not appear as just another progressive cause tacked onto the Green New Deal, it organically emerges out of the needs of the Green New Deal as a whole.
In fact, another Interstate could be built, an Interstate High-Speed Internet System, which would create a state-of-the-art national internet system that would be much faster than the current one. This Interstate could also include cloud services for individuals, schools, and governments. This means lots of data storage and processing power on public internet sites. Providing faster, cheaper internet would be a big plus for most Americans.
Thus, the Program is ready-made for creating a political realignment in the United States. To the objection, mainly of centrists, that the political environment would not allow for a Green New Deal and therefore we need smaller, incremental action, the response should be that the Green New Deal will transform the political environment so that large-scale changes will be seen as beneficial and necessary. As we have seen, the working class could finally see their incomes capture the fruits of productivity increase, they could see their expenses go down, and they could be freed from the terror of losing their job. The professional classes would see their expenses, particularly for housing, health, and education in the cities go down, and they would have more opportunities to use their talents as well. The rural areas would see growth that they haven’t seen in decades, as their ecosystems are restored, regenerative agriculture is introduced, factories return, and they are again hooked up to the national transportation grid with stops on the high-speed rail lines. Suburbs would have their crumbling infrastructure restored, as would cities. Communities of color would finally have a realistic chance of getting everyone a good job, which will lead to political power, better policing, and breaking the cycle of poverty. White communities devastated by opioids and joblessness would likewise have the opportunity to dig out of their hopelessness and despair.
A Global Green New Deal
Even if the United States adopts and implements a Green New Deal, that would only take care of 15% of the world’s greenhouse gas emissions. There is no reason that this Program can not be applied to all the other regions of the world as well. In Europe, as Yanis Varoufakis has pointed out, a Green New Deal could provide a lift to a fast disappearing Left. But as in the United States, he does not have a well-formulated plan. The Program assumes a continental or subcontinental scale, because economically and ecologically, it makes more sense. Europe has that scale as well, so it simply means adapting the various parts of the Program to a European context. The same could be achieved in Japan and Korea.
For the rest of the world, which is poorer, it becomes more difficult to simply reorient much of their productive power to producing sustainable industrial society, and so the advanced industrial countries would have to help. The best way to help is to provide all other countries with exactly the same industrial machinery and equipment that the rich countries are using to create a Green New Deal. This benefits the rich countries because it creates millions of good industrial jobs making the equipment, as the United States benefitted by exporting machinery to Europe and Japan as part of the Marshall Plan after World War II. But in return, the developing countries would have to agree to stop destroying their critical ecosystems, for example the Amazon in Brazil, the island of Borneo in Indonesia, or the rainforests of the Congo. A significant percentage of greenhouse gases are created by the destruction of these ecosystems, and again probably the easiest way to encourage constructive behavior is to make it pay to preserve them.
Oh yeah, how you gonna pay for it?
The favorite ideological counterattack of the Right and some in the Center is the question, So how are you going to pay for it? The answer is to frame the GND as an investment. The Program will yield an incredible long-term return on investment, the standard measure of what the investment will give back to the investor, after the original investment is paid off. Almost everything in the Program can generate revenue back to the government. People would pay for electricity from the IRES, for rides on high-speed rail and transit, for apartments (either owned or rented), and the government would receive a return on investment for equipment for manufacturing and agriculture.
There is a fundamental, long-term crisis in global capitalism: many, if not most, good long-term, systemic investments are not being made because they don’t make a high enough return for private investors. Solar, wind, even manufacturing in the United States, which almost always is profitable but not as profitable as in China, is not being invested in, even though they are profitable. For society as a whole, since to not invest in green technologies will mean collapse of the whole system, there is nothing else that could possibly yield such high returns; therefore, the government has to step up and make investments, that it can even generate a profit from, in order to make up for the failure of markets.
It is relatively easy, logically, to find the money for investment, even if politically it would be very difficult. Private banks create about $500 billion per year, out of thin air, to use for investments. Since the economy is not at full capacity, this does not cause inflation, and since the economy is probably at least one trillion dollars under full capacity, there is plenty of room for the Federal government to create at least $500 billion for the purposes of the Program.
Another source of income is to stop letting the very rich and large corporations get away with not paying their fair share of taxes. Taxes on the very rich and huge corporations could be increased by $1.6 trillion per year, without a single new cent coming from the middle class. The money thus collected would be better invested than anything the very rich or corporations are investing in. When we know the best place to invest a society’s resources, we don’t need the market to allocate that investment money. Therefore, logically, when the superwealthy and large corporations have taken a large percentage of a country’s savings, then we should tax those savings as much as possible. Obviously this is something the superwealthy and large corporations would not agree with, so the amount available from their coffers will depend on how much the political environment can be transformed to not follow their dictates.
Depending on how well taxing the rich goes, we could also simply use deficit spending to pay for much of the Green New Deal, and then pay for the interest using created money. This is similar to the stance of Modern Monetary Theory advocates. It would be better to tax the rich, thereby getting back money for the economy which they have withdrawn, thus avoiding the recession-creating risks that Keynes identified long ago.
Besides creating investment money and taxing the very wealthy, the other major source of funds should come from the Department of Defense. There could be up to $500 billion available -- simply getting the military budget back to the bloated state of the year 2000 would save $325 billion. Much of the scientific and engineering talent that is being used in the military could be very useful to the Green New Deal effort.
While cutting the military budget might evoke howls of how the GND would weaken the nation, in fact the Program would increase the long-term national security of the country much more decisively than trillions wasted on unnecessary military spending. In the long-run, the causes of the rise or decline of a country depend on the country’s capability to produce goods and services, including military equipment, than on whatever military forces exist at the moment. In addition, the way those goods and services are being provided is also changing the climate, which will cause much more destruction than any military threat in the foreseeable future.
Just do it
We don’t have much time. We don’t have time to experiment with ways to encourage the market to do the right thing, by providing tax incentives when the money could be better spent simply building what needs to be built (as Trade Unions for Energy Democracy has shown). Because of the hesitation on the part of progressives to propose something that could honestly be called a ‘New Deal’ by spending trillions directly on public works, it is quite possible that a Green New Deal plan will be presented in the near future that will be opaque to the public, thus leading Green New Dealers to try to convince the public to trust the ‘experts’ – exactly the strategy that has not worked for the Left for the past several decades.
A Green New Deal has to have a national design, with local decision-making as much as possible. It can’t be built analytically, from small pieces from several issue areas, the way most legislation is built up. It cannot be simply a rebranding of other progressive goals – many articles can be boiled down to “here’s my policy of interest that I’ve been working on for a long time, now I’ll explain it and add that it should be part of the Green New Deal”. While the myriad environmental and economic movements are almost invariably good causes, the aggregation of all of them does not a Green New Deal make. All of those causes can attach themselves to a comprehensive, holistic Green New Deal that exists outside of those issues. This gives the non Green New Deal issues an organizing principle that will make them more compelling, instead of just hanging out there as an isolated issue.
Some may think that a proposal that can be understood in 2 pages is not sophisticated. Quite the opposite. In policy as in science, a simpler idea is often closer to reality than a myriad of complicated ones; when Copernicus put the Sun at the center of the solar system understanding the movements of the planets became much easier. You can be sophisticated even if you are understandable. Football is actually quite complicated, not to mention whole other domains of popular culture, but the public can grasp them because the basic outlines are clear. Policy must be created so that public clearly sees the links from policy to benefits.
Anything associated with mainstream economics tends to be opaque because much of economics is counterintuitive, the structure of it is hard to understand, and they are usually just plain wrong. If the GND is based on the market, the explanation becomes opaque, and the grassroots support of 60% of the population will never materialize. A government-centered plan that stresses guarantees and Interstates, on the other hand, is much easier to explain. What are we going to build, and where? What will be the consequences of building, for employment, the economy, and the broader ecosystems? What elected officials support the program, and which don’t?
Arguing that unseen economic forces will lead to a particular result, or leaving public decisions up to private firms and expecting a good result, simply won’t be believable to most of the public. A budget that shows exactly what will be built makes the whole project so concrete that supporters of a Green New Deal can know what they are working towards, and would help organizations such as the Sunrise Movement, Extinction Rebellion, and Fridays for the Future explain what they are protesting for. Unless these movements and activists in general put forward a concrete program, they are in effect asking the people in power, who have led us towards the global warming debacle, to fix the problem that they have created. Movements should not demand that someone else come up with a solution; we should present a solution and demand, by protest and elections, that our solution be implemented.
Now that we have explained the Program at some level of detail, we shall summarize the holistic solution.
Describing the ecosystem of the Green New Deal
The Green New Deal is made up of several parts that synergistically fit together and help each other thrive, as in a healthy ecosystem. The GND will create national and local public works systems that will eliminate greenhouse gas emissions and increase the income of the bottom 90%+ of the population, in an ecological and economically sustainable way. It will create environmentally benign, widely shared economic growth.
The Federal government, in conjunction with state and local governments and using the productive capacity of private firms, will create jobs and build a green infrastructure by both constructing the actual structures, and by manufacturing the goods and machinery needed for construction. It will do this in seven sectors: 1) an Interstate Renewable Electricity System will provide the energy for the rest of the systems; 2) a program to replace most manufacturing machinery will provide clean machinery and goods for the rest of the systems; 3) the Interstate high-speed rail system, regional transit, and electric cars will use the electricity and goods and equipment to transform the transportation system; 4) the construction of walkable neighborhoods will make a green transportation system possible, and a market for the manufacturing sector; 5) the installation of solar, geothermal and storage in buildings will contribute to the electrical network and make buildings energy self-sufficient; 6) creating a regenerative agriculture, with a Recycling program and a Civilian Conservation corps, will assure that the ecosystems on which all else depends, can thrive, and will draw down greenhouse gases; and 7) exporting green machinery to poorer nations in exchange for protecting critical ecosystems will globalize the Green New Deal.
Several results emerge from this design. 30 million people can be directly employed, eliminating unemployment, underemployment and the category of the working poor. In conjunction with a Job Guarantee program and an expansion of social security, we can eliminate poverty. With more employee power, employees will receive all of the benefits of productivity improvements, that is, technological change, and their incomes will rise in the future. Millions will have to be retrained and have their skills upgraded, necessitating a new role for public education. The health of the public as a whole will greatly improve because of the elimination of pollution from coal plants, manufacturing plants, and cars and trucks, from the healthier food produced by the agricultural system, and by the increased walking and decreased car driving. This in turn will make it much easier to implement a Medicare for All system. Urban living will become affordable because of the increase in apartment buildings as walkable neighborhoods are created. The entire infrastructure of the country will be fixed and upgraded.
Communities of color will see their neighborhoods radically improve, as will those rural areas that have seen lives ruined by the opioid crisis. These frontline communities will be able to participate in the decision making of the Green New Deal because concrete government plans can be discussed by various actors in various communities. Planning makes democratic decision-making possible.
This is all possible because the GND is big enough, spends enough money, and affects enough of the economy for virtuous circles of self-reinforcing cause and effect to be ignited. The most important virtuous circle involves the interaction between manufacturing and the infrastructure. On the one hand, more advanced machinery allows for constructing better infrastructure, like the internet, and better consumer goods and services; on the other hand, better infrastructure leads to better machinery and a more efficient economy. Renewable electricity plus goods recycled and reused plus no pollution from any source leads to economic growth that does not destroy the planet; economic growth becomes sustainable, not a recipe for disaster.
Thus, the Green New Deal can: prevent catastrophic global warming; save critical ecosystems; eliminate poverty and joblessness; increase working peoples’ power and that of frontline communities; improve health, food, education and housing; and generally bring global civilization to a higher level and create what Paul Goodman called ‘The Good Life’ for all of humanity. What other agenda can do what is necessary to live in a sustainable and just world?
Jon Rynn worked closely with the late Professor Seymour Melman, a global leader in anti-war and pro-worker movements for many decades. He has a Ph.D. in political science from the City University of New York, and wrote the book, "Manufacturing Green Prosperity: The power to rebuild the American middle class". Since 2008 he has written numerous articles, blog posts and book chapters on the Green New Deal and economics.
twitter: @jonathanrynn