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Entries since April 2013Page Previous 1 • 2 • 3 Next
April 16, 2013 · By Miriam Pemberton
Obama administration’s budget included a promissory note. It will take them a few more weeks to tell us what they plan to spend next year on the Afghan War. Their intention to bring that war to an end, though, is clear.
Nobel Prize winning economist Joseph Stiglitz and his Harvard colleague Linda Bilmes are predicting that this will produce “little in the way of a peace dividend for the U.S. economy once the fighting stops.” They base this bleak assessment on the kinds of meticulous calculations that anchored their 2008 book The Three Trillion Dollar War: on the huge sums we will and must be spending to care for wounded veterans, for example, and the money squandered when war support functions were massively and unnecessarily shifted to private contractors.
They are surely and unfortunately right that what we will save by ending these wars has already been “spent” on the future, baked-in costs of misguided decisions made during those wars. But that doesn’t mean that the prospect of a “peace dividend” is gone.
That’s because the ending of the wars is coinciding with a broader defense downsizing, propelled by the battle over the budget deficit. And the effects of automatic budget cuts known as “sequestration” on the Pentagon budget will actually produce a smaller downsizing than any of the previous postwar periods: smaller than after the Cold War, or the Vietnam War, or the Korean War.
There is more downsizing to do, therefore, on a military budget that, adjusted for inflation, climbed higher during the post-9-11 period than any budget since World War II. During this period the idea of making choices among military priorities was simply shelved. And this budget grew on top of the separate budget that has funded the post-9-11 wars. With an economy starved from lack of public investment, we need that peace dividend. Will we get one? You wouldn’t think so, from the looks of the administration’s Pentagon budget request this year, which fails even to stay within the limits set by sequestration.
But there’s better news in what the new Defense secretary has been saying. Chuck Hagel’s first major speech April 3 at the National Defense University referred to the “inevitable downturn in defense budgets.” He criticized past weapons spending programs that produced “systems that are vastly more expensive and technologically risky than what was promised or budgeted for.” Hagel has committed to a serious reexamination of his Department’s spending practices, a “Strategic Choices and Management Review,” that will actually tie our national security strategy to the budget available to pay for it.
It will identify actual priorities from among the long list of missions the Pentagon has claimed for itself in recent years. The last major Pentagon reorganization, he noted, came during the height of the Cold War, when “[c]ost and efficiency were not major considerations.” He promises that the new review will take seriously the proposition that “DoD is incentivized to ask for more and do more,” and work to change this budget-busting combination.
Will he succeed? No telling, as yet. The first Obama administration (and last Bush administration) Defense Secretary, Robert Gates, had some of the same intentions, most of them unrealized. But the post-sequester world is different. In this world we know it really is possible to shrink the Pentagon’s budget, despite the best efforts of the defense industry, its congressional allies, and much of the Pentagon staff itself to keep it climbing ever higher.
To get to a Pentagon budget that is sized for our new postwar world, the downsizing momentum needs to keep going. While the war budget declines, we need to make sure that the “regular” Pentagon budget comes down with it. This is where a peace dividend can be found. We can’t give up on that goal so easily.
Pemberton is a research fellow at the Institute for Policy Studies and co-author, with Lawrence Korb of the Center for American Progress, of the Unified Security Budget for the United States.
IPS joined other members of the U.S. Robin Hood Tax campaign in Washington DC, where officials from the finance and climate ministries of select developed countries met to discuss how to mobilize private sector investment in developing countries to address climate change. Chanting, "Human need, not corporate greed! Robin Hood Tax now!" protesters dressed as polar bears, farmers, and bankers engaged with officials entering the meeting to urge them to support a Robin Hood Tax.
This demonstration drew attention to the fact that trillions of dollars of public money have been spent to bail out Wall Street while government officials pay short shrift to untapped and extremely promising innovative sources of public money like a Robin Hood Tax. In doing so, officials risk putting corporate profits over the needs of climate-impacted people.
Both the financial crisis and the recession have left a massive hole in public finances, threatening job creation, community services, and the ability to address climate change. While Wall Street has already bounced back, ordinary people are still trying to recover from problems caused by corporate abuse in the financial sector. The Robin Hood Tax calls for the institution of a small tax of less than half of one percent on Wall Street transactions in order to generate many billions of dollars each year toward crucial public goods and services, like healthcare, education, and helping the world’s poor confront the climate crisis.
VIEW RECENT ARTICLE ON CLIMATE FINANCE BY JANET REDMAN: http://www.fpif.org/articles/wall_streets_climate_finance_bonanza
April 10, 2013 · By Janet Redman and Antonio Tricarico
Government officials from an elite group of developed countries meeting in Washington, D.C. at the invitation of U.S. climate envoy Todd Stern appear to be on the brink of instigating yet another corporate handout and big bank giveaway—this time in the name of fighting climate change.
If it follows a recently leaked agenda, the meeting will focus on using capital markets to raise money for climate finance. The goal is to fill the void left by the United States and other developed nations that have failed to meet their legal obligations to deliver funding to poorer countries for climate programs.
In this corporate-oriented approach, countries would provide generous loan guarantees and export subsidies that sweeten investments for private firms and give them the chance to net big profits while leaving governments (and the taxpayers they represent) to cover the losses if investors’ bets don’t pay off. Wealthy countries would then be able to claim that they had moved billions of dollars of new climate investments.
Unfortunately, the projects best placed to benefit from large-scale private investment and market mechanisms—like mega-infrastructure projects and fossil fuel-powered ventures that hide behind a “low-carbon” label—are likely to be those that have fewest sustainable development benefits. In many cases, the funding will channel windfall profits to corporations that would have invested profitably even without these new channels of support.
The sad fact is that this has happened before. Nations spent five years negotiating the Kyoto Protocol—the only multilateral treaty to regulate emissions of greenhouse gasses and spell out binding targets for reducing climate pollution. But before the treaty was finalized in 1997, the United States led a push to replace the enforcement mechanism—a fine for missing reduction targets paid into a clean development fund—with a market mechanism meant to lower the cost of compliance for polluting companies. The accompanying clean development mechanism (CDM) was born so that companies in the industrialized world could purchase ultra-cheap carbon pollution credits from developing nations to offset their continued pollution at home.
In the end the United States pulled out of the Kyoto treaty. But by shifting a global regulatory regime into a market-based regime centered on enticing private-sector investment with promises of profitability, Washington left its mark.
A decade and half later, carbon markets have collapsed, developing countries are awash with carbon credits for which there is no demand, and the planet keeps getting warmer.
Meanwhile, the clean development mechanism has led to private sector investment in spurious projects like mega-hydropower dams and coal-fired power plants that have delivered little in the way of sustainable development outcomes—and in some cases have further harmed the environment and human health.
Passing the Buck
And now Washington is at it again, hijacking the debate about how to support the global transition to a low-carbon, climate-resilient economy—and keeping the public, the press, and even developing countries out of the conversation. They’re repeating the same tired story that rich governments are broke and thus have to call in the private sector to finance climate change solutions.
In today’s economy, mobilizing private finance means going to the capital markets to raise money. But relying on financial markets for funding to support renewable, clean energy or to resettle climate refugees would subordinate climate action to the speculative whims of bankers.
Americans have visceral reminders of the consequences of leaving decisions about critical needs to the market—the more than 1.6 million families locked out of their homes and the $2.5 trillion in taxpayer dollars handed over to bail out Wall Street and U.S. car companies are just two. Europeans can point to the recent bailout after the carbon bubble burst. If a global climate finance bubble were to burst, we wouldn’t just lose our houses; we might have lost our chance at averting catastrophic global warming.
Governments in the developed world shouldn’t pass the buck to the private sector. They must act now. They can start by cutting subsidies for fossil fuels, including for natural gas “fracking” in the United States, and set binding regulation for reducing climate change pollution. Then governments can adopt innovative ways to raise public money, like taxing pollution from shipping or financial transactions. Indeed, even a very low financial transactions tax would generate substantial revenue and deleverage capital markets.
And of course, if there is any hope of creating a new paradigm of climate-sound development, there will have to be a role for the private sector. But the micro, small, and medium enterprises of the developing world would be preferable partners to the multinational firms that have been responsible for sucking wealth and resources out of countries for decades, leaving pollution and poverty in their wake.
At some point—and for the sake of the future generations who will bear the results of our decisions, we hope it’s sooner rather than later—the government officials who place their bets on private finance will have to learn that putting corporate profits over the needs of climate-impacted people is a risk the rest of us are not willing to take.
Antonio Tricarico is director of the New Public Finance program of the Italian organization Re:Common based in Rome and a former economic correspondent at the Italian newspaper Il Manifesto.
Janet Redman is the co-director of the Sustainable Energy and Economy Network at the Institute for Policy Studies in Washington, DC.
Editorial support by Peter Certo and Oscar Reyes of the Institute for Policy Studies.
** This piece originally appeared in Foreign Policy In Focus
April 10, 2013 · By Emily Schwartz Greco
This week in OtherWords, David Elliot highlights some of the hidden costs of the nation's supersized military might and Raul A. Reyes applauds the Associated Press style book update that may herald the end of "illegal" people in the mainstream media. If you're an editor still seeking Tax Day pieces to run over the weekend or next Monday, be sure to take another look at last week's special edition and to check out Sam Pizzigati's latest column.
OtherWords intern Alana Baum is nearing the end of her spring term with us. She has done an outstanding job from the moment she arrived. We are now seeking new interns who can join our team in 2013. Ideal candidates are progressive news junkies and wordsmiths who are either based in the Washington, D.C. region or close enough to commute once or twice a week for their first month. Information about what's involved and how to apply can be found at the bottom our About page. Please help spread the word.
Here’s a clickable summary of our latest commentaries and a link to our new cartoon. If you haven't already subscribed to our weekly newsletter, please do.
- On Tax Day, Consider the Hidden Costs of War / David Elliot
The benefits Uncle Sam pays out to Vietnam veterans continue to rise.
- Nixing the I-Word / Raul A. Reyes
The AP is improving the immigration debate by declaring that its reports will no longer refer to any human being as "illegal."
- The Left and Right Agree: It’s Time to Break Up the Banks / Amy Dean
It's not a fringe idea anymore.
- Supremely Confused about Marriage Equality / Donald Kaul
Expanding the franchise would make the institution stronger, not weaker.
- Shouldn’t We Base Our Tax Policy on More than Hunches? / Sam Pizzigati
The latest economic evidence supports raising taxes on the richest Americans.
- Big Ag’s Legal Engineering / Jill Richardson
Just because Monsanto has patents and lobbyists doesn't mean that it should be allowed to wriggle out of our system's checks and balances.
- Texan Turf War / Jim Hightower
In the land of prickly pears and scrappy people, Dallas authorities are demanding that all homeowners plant "traditional" grass in their yards.
- Our Empire Addiction / William A. Collins
Maintaining steady access to a bounty of natural resources is the major goal of this global control.
- Illegal Immigration / Khalil Bendib cartoon
April 4, 2013 · By Ajamu Baraka
April 4th is an anniversary that I suspect many people in the U.S., including those in government, would prefer that people ignored. On that date 45 years ago, James Earl Ray, supposedly acting alone, murdered Martin Luther King Jr. on a balcony of the Lorraine Hotel in Memphis, Tennessee — silencing one of the great oppositional voices in U.S. politics.
Unlike the celebrations organized around the birthday of Dr. King, with which the U.S. government severs Dr. King from the black movement for social justice that produced him and transforms his oppositional stances into a de-radicalized, liberal, integrationist dream narrative, the anniversary of the murder of Dr. King creates a challenge for the government and its attempt to manage the memory and meaning of Dr. King. The assassination of Dr. King raises uncomfortable questions — not only due to the evidence that his murder was a “hit” carried out by elements of the U.S. government, but also because of what Dr. King was saying before he was killed about issues like poverty and U.S. militarism .
Read the rest of this post at http://www.ajamubaraka.com/
Ajamu Baraka is an IPS associate fellow.