Wednesday, December 3, 2014

Dear Dems: Give me $100 trillion and I'll save your sorry ass

So, after the disaster of election 2014, yet more Democrats have come to realize that elections are not won by giving only lip service to middle- and working-class desires for a real economic recovery. If I had a fiver for every time the past three weeks I've read or heard something like, "The Democrats don't stand for anything".....

You want a program? How about this: to stop global climate change and switch the world economy from its dependence on burning fossil fuels, to totally sustainable renewable energies, we need a crash program of $100 trillion in new construction of:
  • 3.8 million 5-Mega-Watt wind turbines;
  • 49,000 300-Mega-Watt concentrated solar plants;
  • 40,000 300-Mega-Watt solar power plants;
  • 1.7 billion 3-kilo-Watt rooftop photvoltaic (PV) systems;
  • 5,350 100-Mega-Watt geothermal power plants;
  • 270 new 1,300-Mega-Watt  hydroelectric power plants;
  • 720,000 0.75-Mega-Watt  wave devices; and
  • 490,000 1-Mega-Watt tidal turbines.
$100 trillion may sound like a lot of money. It really isn't. It's about how much is traded in three weeks in US financial markets: stocks, bonds, futures, options, and other derivatives.

In November 2009, Mark Z. Jacobson, at the Department of Civil and Environmental Engineering, Stanford University, and Mark A. Delucchi, at the Institute of Transportation Studies, University of California at Davis, had an article in Scientific American that surveyed what was required to end the era of burning fossil fuels. In 2011, they posted two pdf files providing heavily footnoted details of their 2009 Scientific American article; the pdfs provide all the details you could want, including discussion of critical material shortages, such as rare earth elements, for a mass, crash program.

Providing all global energy with wind, water, and solar power, Part I: Technologies, energy resources, quantities and areas of infrastructure, and materials

Providing all global energy with wind, water, and solar power, Part II: Reliability, system and transmission costs, and policies.

Here are some excerpts from the Scientific American article:
Today the maximum power consumed worldwide at any given moment is about 12.5 trillion watts (terawatts, or TW), according to the U.S. Energy Information Administration. The agency projects that in 2030 the world will require 16.9 TW of power as global population and living standards rise, with about 2.8 TW in the U.S. The mix of sources is similar to today’s, heavily dependent on fossil fuels. If, however, the planet were powered entirely by WWS [wind, water, solar], with no fossil-fuel or biomass combustion, an intriguing savings would occur. Global power demand would be only 11.5 TW, and U.S. demand would be 1.8 TW. That decline occurs because, in most cases, electrification is a more efficient way to use energy. For example, only 17 to 20 percent of the energy in gasoline is used to move a vehicle (the rest is wasted as heat), whereas 75 to 86 percent of the electricity delivered to an electric vehicle goes into motion.
Even if demand did rise to 16.9 TW, WWS sources could provide far more power. Detailed studies by us and others indicate that energy from the wind, worldwide, is about 1,700 TW. Solar, alone, offers 6,500 TW. Of course, wind and sun out in the open seas, over high mountains and across protected regions would not be available. If we subtract these and low-wind areas not likely to be developed, we are still left with 40 to 85 TW for wind and 580 TW for solar, each far beyond future human demand. Yet currently we generate only 0.02 TW of wind power and 0.008 TW of solar. These sources hold an incredible amount of untapped potential.
Overall construction cost for a WWS system might be on the order of $100 trillion worldwide, over 20 years, not including transmission. But this is not money handed out by governments or consumers. It is investment that is paid back through the sale of electricity and energy. And again, relying on traditional sources would raise output from 12.5 to 16.9 TW, requiring thousands more of those plants, costing roughly $10 trillion, not to mention tens of trillions of dollars more in health, environmental and security costs. The WWS plan gives the world a new, clean, efficient energy system rather than an old, dirty, inefficient one.
This may be hard to wrap your mind around, but this program actually isn't that big. It most definitely is not overwhelming. For example: 3.8 million large wind turbines sounds like a lot, right? But Jacobson and Delucchi counter by noting that the world produces over 70 million cars and trucks each year. Did you even know that's how many cars and trucks are produced each year?

What about the $100 trillion price tag? Sure seems staggering at first. But only because we have internalized the decades of propaganda promoting neo-liberalism by the one percent and the banksters. It is actually well within our capability: the entire world economy produces $71 trillion in goods and services each year (of which the U.S. economy produces around $16 trillion). $100 trillion over 15 years is just under $7 trillion a year. That’s just a ten percent increase in world output, right now! Less than ten percent with a 20 or 35 year program. That would make for the longest sustained world economic boom since the rebuilding of Europe and Japan after World War Two.

But where do we get $100 trillion? Well, the financial markets in the USA alone trade over $5 trillion each and every day in stocks. bonds, options, futures, swaps, and other derivatives. And, there is over $50 trillion sitting around in the world’s offshore hot money centers, which the one percent are hiding from tax authorities. To fund $100 trillion in new infrastructure we can either take that money away from the one percent, or take away their control over the creation and allocation of new money and credit, which they are misusing for speculation and usury. We can just create the money needed out of thin air. That is, in fact, the way money has always been created.

We have the technology. We have the means. We have people desperate for good jobs. What we don't have is a financial and monetary system that will provide financing to do what we have to do. So, the real fight is to destroy the political power of Wall Street and the one percent, so we can get on with the task of financing a real economic recovery. In Britain, according to,
...between 2000 and 2008, the amount of money and debt in the UK economy doubled as a result of money creation by bank lending. This created the debt fueled boom that ultimately led to the financial crisis. From 2011 to 2014 just 8% of new loans were made to businesses. The majority of new loans are directed to financial markets and mortgage lending.
I would be very, very surprised - shocked even - if the statistics in the USA did not also show a similar skewing of lending toward financial markets and real estate speculation.

The need for $100 trillion in investments to totally transform the world economy is why it is so important to back Senator Elizabeth Warren's opposition to Obama's nomination of Antonio Weiss, the head of investment banking for Lazard, for the senior post of Under-Secretary of the Treasury for Domestic Finance. It is very unlikely that anyone who has been a "success" in banking and finance the past few decades has the understanding, willingness, and integrity to help lead the nation in the radical transformation of the financial and monetary system we require. I don't think even Senator Warren is as fully aware of what is at stake as you, dear reader, are, now that you have read about the $100 trillion program to build an entirely sustainable economy. Senator Warren is merely saying there are too many Wall Streeters in positions of power right now. I'm saying even one Wall Streeter is one too many.

That, of course, is a stretch. Of course we need people with experience in the banking and financial system to help achieve the dramatic shift we need. But, if you really are truly concerned about the future, this is the hard core attitude you need to take to anyone with a background in banking and finance at this point. In a post at Hullabaloo, Gaius Publius writes that there are already signs that exactly such a hard core faction is emerging in the Democratic Party. Gaius Publius calls it the "Hell No" caucus. Gaius goes directly to the central issue by posing the question that a lot of rank and file Dems are already pondering: In opposing the President's nomination,
"Has Warren joined the nominal enemy (Republicans), or has she taken the fight to the real enemy that controls both parties — the "billionaire class"?
Gaius Publius posits that what position Democrats in Congress take on the Weiss nomination will be crucial test of the "Hell No" insurgency. Another important test will be "what Harry Reid does." A third test will be the nomination of Loretta Lynch for Attorney General. She may be the first African-American women nominated for the position, but she is entirely cut from the same mold as Eric Holder, so it is extremely doubtful she will abandon "Too Big to Jail" and actually start to go after the criminals at the top of our banking and financial institutions. You really need to go read the entire post because it is the clearest statement yet of the possible paths the Democratic Party can take after the 2014 electoral defeat. There are also a large number of links to important articles and postings throughout. If you are blessed with an extended holiday this weekend, you should spend at least an hour or two reading this material. Please trust me, it's worth it.

"$100 trillion to build a new economy" will be another test, but one that we need to impose over the coming two years. It can completely transform what issues are defined, and how, for the 2016 election. We need to get general public awareness of the need for "$100 trillion to build a new economy" - and how doable it actually is. Once we do that, it will be a relatively simple matter to determine if someone is serious about solving the problems we face. The next time we meet someone who is a leader in the Democratic Party, mention the fact that we need "$100 trillion to build a new economy" and watch carefully how they react. If they are hopeless neo-liberal water carriers for our would-be corporatist overlords, they will recoil in horror, or try to argue that such a huge amount is simply preposterous. Anyone who is stuck talking about programs of a few billion, or even a few hundred billion dollars, is simply completely uninformed about the problems we face - or just not willing to face reality - because reality is that we can no longer afford to let Wall Street play funny money games. We must figure out how to impose new laws and regulations that force banking and finance serve the general welfare, not just private gain.

Remember, $100 trillion really isn't too much to wrap your mind around: it's less than ten percent of world economic activity each year over the next 15 years. And, it's less money than Wall Street and the Chicago futures market shuffle around every month. Wall Street and the Chicago futures market are not doing anything socially useful with all that money. We have much better uses for it. So give me $100 trillion.

Besides, we can create money out of thin air any time we want. That's what the real fight is about: Who controls, and who benefits, from the creation and allocation of new money and credit?

No comments:

Post a Comment