Sunday, December 13, 2015

Well, I was wrong about $100 trillion . . .

I just posted this at DailyKos,, where there are a lot of so-called liberals and progressives who get a bad case of vapors when someone mentions that realistic policy proposals no longer come in billion dollar sizes. So, the edginess of my writing is directed more towards them. I thought readers here at Real Economics would enjoy it nonetheless. 

Oh, and a big THANKS! to Jon for catching and posting about the IEA report early last week. 

Well, I was wrong about $100 trillion . . .

but I am not apologizing.

Because, a $100 trillion price tag to stop and even reverse climate change is too low.

The International Energy Agency estimated in a recent report that the world needs to spend $359 trillion between now and 2050 to avoid catastrophic climate change.

All you jerks that contend mentioning such numbers just scares people away, please stfu, and read this instead: Nothing is possible so don't even try.

We, really, really need to break through these psychological and ideological barriers that are preventing us from doing what needs to be done to save this planet. We have the technology. In hand. Ready to go.

All we need is the money — and it’s not that much if you keep your wits about you. World GDP in 2014 was US$78.28 trillion. And the growth rate of world GDP has been around 3.4 percent annually for a number of years. Project the growth of world GDP out to 2050, add it all up, and you get US$ 5,630.5 trillion.

$359 trillion is only 6.4 percent of world GDP over the next 35 years.

So if you’re not mature enough to think straight when a number like $359 trillion comes at you, please focus on the 6.4 percent number before you start hyperventilating and embarrass yourself.

And it will probably be less than 6.4 percent, because once we get serious about doing this, world GDP is going to boom! We’re more likely to see growth rates of five or six percent a year. Maybe even double digit growth rates, like China achieved for much of the 1990s and twenty-naughts. We’re going to replace every vehicle with an internal combustion engine. Every vehicle on the planet. We’re going to build a whole new distribution, wholesale, and retail system to support electric vehicles. We’re going to build tens of thousands of kilometers of urban rail lines, in every major city on earth. We’re going to build hundreds of thousands of wind power turbines, and two or three billion small, independent solar power systems, all over the world. We’re going to tear down and replace, or remodel and insulate almost every single building and dwelling on the planet.

There is so much work that we must do, there will be massive shortages of labor and skills. There will be plenty of work for everybody, from the people in the funny clean suits in the big chip plants churning out photovoltaics, to the carpenters and plumbers and electricians doing all the replacing and remodeling.

It’s a bright future! It’s a glorious future! It’s a good future!

All you have to do is realize that the only obstacle is in your own mind. For example, you’re thinking, Where’s the money going to come from?  Well, we just create the money, just like money has always been created. Was there $4 trillion in U.S. dollars in 1787? No? Then where did it all come from? Did it fall to earth on an asteroid?

It was created. And we can create more. A few rich pricks have somehow convinced you that they, and only they—because they run a bank—can create money. Well, so can governments! In fact, that’s how we won the Civil War. That’s the plain historical fact: the United States won the Civil War with money created by the government, instead of private banks.

Still not convinced that the only obstacle is in your own mind? Let me lay this on you. This has been bothering me for weeks now, since the bombing in Paris. How do we defeat ISIS? How do we defeat radicalized Islamic militants? For that matter, how do we defeat radicalized Christianist militants? You defeat them by giving people hope for a better future. If people don’t have that, lots of times a gun-waving radical is going to sound like a sensible person to them.

Now, here’s the particular point that bothers me: in all the discussion about ISIS and what to do about it, it is now common wisdom that the United States lost the wars in Afghanistan and Iraq.

The fact is, the we won those wars. Both of them. Yes, we won both wars. What we lost was the peace.

Nation building failed. That’s what I read. And it was on a liberal, progressive site, too: Hullaballo. They used that exact phrase: “nation building.” According to them, we tried it. We tried “nation building,” and it failed.

I want to scream: WE NEVER EVEN TRIED NATION BUILDING in Afghanistan and Iraq. Oh, we tried to build some schools, and a few hospitals, and repair some bombed-out power plants and water plants, and pave the roads better.

That was all part of our counter-insurgency strategy. That was not “nation building.” If we were doing nation-building in Afghanistan and Iraq, then point out the cross-country rail lines that were built. Point out the four- and six-lane highways poured along new routes that tied together one end of those countries to another. Point out the thousands of wind turbines and new electric power distribution grids that were built. Point out the millions of new solar panels that were installed and connected to the new grids.

No, we didn’t even try to do any of that, did we? Why? Because those ideologues in the Dubya administration were all “free market” zealots. Governments aren’t supposed to build rail lines and erect wind turbines and install solar panels. “Free enterprise” is supposed to do that. No, sirree, what the dickheads in the Bush regime did: they built stock markets. Because, how can you possibly have “free enterprise” without a bunch of speculators providing liquidity while they strive to corner and rig the market?

We have the science and the technology and the knowledge needed to provide a decent, dignified and sustainable life for every single person on this planet. And don’t hide behind the “there’s too many people” excuse. That’s not the problem. The problem is we allow a small bunch of sociopaths to control the financial and monetary systems of this planet.
We thus have here, first, a system that is unsound and unnatural, and second, a theory invented for the purpose of accounting for the poverty and wretchedness which are its necessary results. The miseries of Ireland are charged to over-population, although millions of acres of the richest soils of the kingdom are waiting drainage to take their place among the most productive in the world, and although the Irish are compelled to waste more labour than would pay, many times over, for all the cloth and iron they consume. The wretchedness of Scotland is charged to over-population when a large portion of the land is so tied up by entails as to forbid improvement, and almost forbid cultivation. The difficulty of obtaining food in England is ascribed to over-population, when throughout the kingdom a large portion of the land is occupied as pleasure grounds, by men whose fortunes are due to the system which has ruined Ireland and India. Over-population is the ready excuse for all the evils of a vicious system, and so will it continue to be until that system shall see its end…  --Henry C. Carey, The Harmony of Interests: Agricultural, Manufacturing & Commercial (1851)


  1. Unfortunately, not enough people truly understand finance, never mind an economy.

    I went searching for some numbers once because the "kitchen table" discussion seemed to be ending with only cutting as a solution. Somehow, and I blame the dems/progressives/liberal (of which I consider myself) for letting the argument end there. The idea of leveraging one's equity for a better tomorrow just never gets brought up. Yet people borrow all the time for good reason. There is not a business alive that does not leverage it's equity.

    Thus, the question is: How much is the US worth? I found 2 answers. Straight up, total of everything...about $186 trillion dollars. If, using an accounting that takes in earning potential...$235 trillion. When I point out to people that our debt is about $14 to $16 trillion they start to see things more clearly. I ask, what would a bank do if you went in with a plan to earn more money and only had used about 6.5 to 8.7% of your equity and wanted to borrow some money?

    People really have no clue just how little we are doing with the wealth we have. I tell them we should leverage up to at least 25% of our equity now. Only, we have to make sure we spend it on stuff that will actually make living on this planet easier and healthier.

    I also let them know that in todays dollars we spent about $4 trillion way back when developing our rail system that we then promptly let go to hell. What a waste of money.

    I laughed when I read about the $100 billion.

  2. The left gave up it's political power when it decided finance was beneath them and chose to ignore it.

  3. > We’re going to replace every vehicle with an internal combustion engine.

    With any luck, we will _not_ need to replace _every_ vehicle. For urban mobility, we only need one vehicle for every 20-50 people. Instead of leaving our cars warehoused all day in parking lots and structures, we will be sharing vehicles going all the time, with S.A.N.E. mobility: S=Solar, A=Automated, N=Nonstop (origin to destination), E=Elevated.

    Join the solarevolution!

    1. Yes indeed. I am pretty certain we do not need to replace all 200+million personal vehicles with an electric equivalent. But I am certain that we must retire the IC ones.

      And I am pretty certain that is what Tony meant as well because he is a big train guy who would be thrilled if half the car trips were replaced by light rail etc.

      As for SANE. Count me in. PRT was the big subject when I was studying city planning in the 1970s. Many of the patents had been assigned to my university. But it never flew so I see SANE is a much-improved version of the same idea. Bravo!