Scotland can have a job guarantee or the Fiscal Commission plan, but not both Richard Murphy

First, of course I welcome this.

Second, a job guarantee is a logical part of a Green New Deal, which offers work in every constituency by ensuring jobs are available everywhere to transform our green infrastructure, and most especially our housing.

Third, it has to then be noted that this policy is linked to modern monetary theory, which is the only current school of economic thought that makes full employment for those who want work its core objective.

And fourth, and inevitably, this policy is in opposition to the SNP’s commitment to Andrew Wilson’s Growth Commission plan for Scotland....

Tax Research UK
Scotland can have a job guarantee or the Fiscal Commission plan, but not both
Richard Murphy | Professor of Practice in International Political Economy at City University, London; Director of Tax Research UK; non-executive director of Cambridge Econometrics, and a member of the Progressive Economy Forum

Nicola Sturgeon indicates a Job Guarantee would be part of a Scottish Green New Deal — Sean Bell

The GND proposed in the US already includes a JG. Now it looks like Scotland is in play, too.

• Asked if a Job Guarantee would be part of her vision for a Scottish Green New Deal, [First Minister] Nicola Sturgeon says: “‘Yes’ is the short answer.”

• A Job Guarantee would involve the state acting as an ‘employer of last resort’ to the unemployed, and was last year proposed in the United States by Senator Bernie Sanders

• Finance Secretary Derek Mackay warns that more powers over employment law would need to be devolved

Common Space ((Scotland)
Nicola Sturgeon indicates a Job Guarantee would be part of a Scottish Green New Deal

Sean Bell

Bill Mitchell — The Green New Deal must wipe out precarious work and underemployment

In mapping out what I think are the essential aspects of a social transformation that we might call a Green New Deal, eliminating precarious work is one of the priorities – it is intrinsic to creating a more equitable society in harmony with nature. This aspect also calls in question the role of a Job Guarantee. Note the capitals – there is only one Job Guarantee but many jobs guarantees. I will explain today why the Job Guarantee will be an intrinsic part of the Green New Deal but by far a minor player in terms of the job opportunities that will be created by the socio-economic shift. Many commentators seem to think the Job Guarantee is sufficient for a Green New Deal. It is not and we need to understand its role in a monetary system to understand why....

Bill Mitchell – billy blog
The Green New Deal must wipe out precarious work and underemployment
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Modest (insipid) Green New Deal proposals miss the point – Part 2

This is the second and final part of my recent discussion on the what a Green New Deal requires. All manner of proposals seem to have become part of the GND. The problem is that many of these proposals sell the idea short and will fail to achieve what is really required – a massive transformation of society and the role the government plays within it. The imprecision is exacerbated by progressives who are afraid to go too far outside the neoliberal mould for fear of being shut out of the debate. So we get ‘modest’ proposals, hunkered down in neoliberal framing as if to step up to the plate confidently is a step too far. In Part 1, I argued that the progressive side of the climate debate became entrapped, early on, by ‘free market’ framing, in the sense that the political response to climate action has typically emphasised using the ‘price system’ to create disincentives for polluting activities. In Part 2, I argue that we have to abandon our notion that the role of government in meeting the climate challenge is to make capitalism work better via price incentives. Rather, we have to accept and promote the imperative that governments take a central role in infrastructure provision, rules-based regulation (telling carbon producers to cease operation) and introducing new technologies....

Bill Mitchell – billy blog
Modest (insipid) Green New Deal proposals miss the point – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — Modest (insipid) Green New Deal proposals miss the point

All over the globe now there are cries for a Green New Deal. What constitutes the GND is another matter. Like the concept of the Job Guarantee, there are now countless versions springing out of various groups, some that only seem to offer a short-term, short-week job or other arrangements that fall short of the way Modern Monetary Theory (MMT) constructs the concept. There is only one Job Guarantee in the modern parlance and that is the MMT concept. Other job creation programs are fine but they should stop using the term Job Guarantee, which is a comprehensive macroeconomic stability framework rather than a job creation program per se. In the same vein, all manner of proposals seem to have become part of the GND. The problem is that many of these proposals sell the idea short and will fail to achieve what is really required – a massive transformation of society and the role the government plays within it. The imprecision is exacerbated by progressives who are afraid to go too far outside the neoliberal mould for fear of being shut out of the debate. So we get ‘modest’ proposals, hunkered down in neoliberal framing as if to step up to the plate confidently is a step too far. This is Part 1 of a two-part blog post series on my thoughts on the failure of the environmental Left and climate action activists to frame their ambitions adequately....

Bill Mitchell – billy blog
Modest (insipid) Green New Deal proposals miss the point
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also

Bond Economics
Some Comments On Economic Climate Change Models
Brian Romanchuk

Richard Murphy — Growth, MMT and the Green New Deal

Richard Murphy has been working on the New Green Deal over the last decade. In the second half of this post he provides an outline that is very useful in thinking about it.

Tax Research
Growth, MMT and the Green New Deal

Richard Murphy

Yasmin Tayag — How Do You Pay for the Green New Deal? Ask Andrés Bernal

The House of Representatives didn’t know what hit it.

The Green New Deal, introduced by Representative Alexandria Ocasio-Cortez in February, energized politicians on both sides of the political spectrum with its twin goals of carbon neutrality by 2030 and the promise of jobs for every American. It also polarized them. Critics have one main question: How the hell are we going to pay for it?
As the guy responsible for the plan’s “jobs guarantee,” Andrés Bernal, 32, has a lot to answer for. And he’s more than happy to. The Colombia-born, Texas-raised advisor to Ocasio-Cortez spends most of his time thinking about the people who need that kind of job security and how to pay their salaries. In fact, he’s one of them.

When he’s not advising the most galvanizing congresswoman on the planet on progressive economics, he’s a Ph.D. candidate and lecturer of urban studies at Queens College in New York City, making him part of one of America’s most notoriously underprotected workers’ groups....

The next generation is rising up and they are energized.

Inverse
How Do You Pay for the Green New Deal? Ask Andrés Bernal
Yasmin Tayag

Randy Wray — How To Pay For The War

Remarks by L. Randall Wray at “The Treaty of Versailles at 100: The Consequences of the Peace”, a conference at the Levy Economics Institute, Bard College, May 3, 2019.

I’m going to talk about war, not peace, in relation to our work on the Green New Deal—which I argue is the big MEOW—moral equivalent of war—and how we are going to pay for it. So I’m going to focus on Keynes’s 1940 book— How To Pay for the War—the war that followed the Economic Consequences of the Peace.

Our analysis (and the MMT approach in general) is in line with JM Keynes’s approach. Keynes rightly believed that war planning is not a financial challenge, but a real resource problem....

Excellent post — with a qualifier.

Economists are not qualified to material systems scientists. The latter alone can determine the real requirements for vast undertakings such as war and now a response to climate change that will involve restructuring energy use and energy resources.

History shows that after wars the situation returns to "normal," at least for some. However, there is no good reason to expect that the current environmental crisis will play out that way. Nothing like this has happened on such a vast scale in human history.

Randy says he is optimistic about this. Other say they are not.

As far as I can tell, the material systems folks are not, at least for the most part. Moreover, climate change is not just a domestic issue but an international one and the solution, to the degree that one is available, must be international. If it is not, it militaries warn that it likely to become a causal factor in rising conflict.

Of course, Randy is correct about affordability being a canard. The actual issue is availability of real resource and the knowledge and skill to deploy them at scale — and the scale is global. A daunting challenge.

Humanity needs to get busy on this and that won't happen until the crisis develops to the critical point. That may occur only after the tipping point was passed, as it turns out in hindsight for those to look back and reflect on history.

Randy's forecast may be a bit rosy.

In another important contribution—Economic Possibilities for our Grandchildren— written in 1930, Keynes speculated about our future– a time when “for the first time since his creation man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.”
By Keynes’s timeline, this should have been reached by 2030. We’ve timed our GND to be completed by 2030. We have 10 years to make Keynes’s vision become reality. The alternative is annihilation.

My view is that the US is facing political turmoil until at least after the 2032 general election as an "interregnum" (A. Gramsci) during which a realignment unfolds. It is as yet very uncertain what the future will look like and what political forces will prevail. It is by no means a foregone conclusion that the the outcome will be positive for either the US or the world. It looks to me like there may be a major culling in store.

New Economic Perspectives
HOW TO PAY FOR THE WAR
L. Randall Wray | Professor of Economics, Bard College

Paul Jay — The MMT Debate With Dean Baker & Randall Wray

Good "debate." Lays important issues on the table. Short read.

TRNN
The MMT Debate With Dean Baker & Randall Wray

Climate Change, the New Green Deal, and the Resurrection of Social Democracy and the Welfare State (links)

We did this before (New Deal). We can do it again (Green New Deal). The article shows why the ND and GND are similar as responses to environmental degradation. Most have forgotten what a paroblem this became in the US in the 30s. Kevin Baker refreshes our memory. The present threat is potentially much graver and presents a greater challenge than the Great Depression did, as bad as it was.

Harpers
Where Our New World Begins
Kevin Baker
ht Yves Smith at Naked Capitalism

Several leading Democratic candidates in the 2020 US presidential race favor introducing elements of a modern welfare state in health care, childcare, and education. Whether a Democrat wins or loses in 2020, social democracy has re-emerged in American politics for the first time since the 1930s.

Castañeda is curiously quiet about Bernie Sanders, AOC, and the Green New Deal. No mention of MMT either. Focuses most on Elizabeth Warren.

Project Syndicate
Is America Ready for a Welfare State?
Jorge G. Castañeda

Human beings are more prosperous and numerous than we’ve ever been, while the Earth’s other species are dying off faster than at any time in human history.
These two conditions are related. But if the second one persists long enough, we will be following our fellow organisms into the dustbin of geological history.
This is the primary takeaway from a new United Nations report on our planet’s rapidly diminishing biodiversity.

It's pretty easy to see the way this is going. First, people think that everything is going so well that the brouhaha over climate change is unnecessary alarmism. No need to react. Then, things start to go downhill. People think that if they cut back, they will lose their lifestyle. Heaven help that. Finally, the vise closes and it is too late to escape its jaws.

New Yorker Magazine — Intelligencer
Humanity Is About to Kill 1 Million Species in a Globe-Spanning Murder-Suicide
Eric Levitz

• 'Big' government is here to stay - we must make sure it contributes to freedom and dynamism
• Some of the most open and freest markets also have some of the largest welfare states
• Social insurance helps the essential free market process of creative destruction remain a positive-sum game

May not be as simple as that, but it would be a step in the right direction anyway. What we are doing now is not working for a large swath of the population, and impending climate change is putting all at risk. That is to say, challenges are emergent and require a fresh approach to addressing them.

CAPX

The free market or a welfare state – why not both?
Samuel Hammond

Mark W. Anderson — Right Wing or Left Wing – There Are Still No Free Lunches

This analysis is basically right about the economics, but very wrong about the finance.

The problem we face with human contributions to climate change and the levels of pollution that are unhealthy for a vast majority of people is basically economic in the sense that negative externality is being socialized. This means that in markets, goods that generate negative externality through use or in the course of their production are sold at below true cost.

The result is mispricing of negative externality in markets. The economic answer is imposing true cost rather than using cost of goods sold and mark up with respect to pricing. This can be addressed by preventing socialization through tax imposition that approximates true cost.

The solution lies in tackling economic rent politically, that is, preempting financial rents, lands rents, natural resource rents, and monopoly and monopsony rents, along with crime, including legalized crime, as well as socializing negative externality.

Why aren't we doing this? Because it would destroy "capitalism" as we know it.

Why is he wrong about solution when he proposes a carbon tax, which would address socializing negative externality? This is not an argument against using MMT analysis, which, after all, is based on a correct institutional description. MMT simply argues that taxation is not needed to "pay for" a GND, since taxation doesn't pay for anything the government spends on.

MMT does NOT argue that imposing taxes to address economic rent and negative externality is a bad idea even though it is unnecessary for funding, although at least some would argue that it preferable to preempt economic rent anti rather than tax it away post. Better to keep the petroleum in the ground.

MMT argues that taxation is needed for two reasons: to create demand for a currency and to control inflation. Moreover, taxes can also be used functional for public purpose by discouraging behavior that is taxed.

Stirring the Pot
Right Wing or Left Wing – There Are Still No Free Lunches

Mark W. Anderson

Richard Murphy — The Washington Post is leading the right wing backlash to the Green New Deal, and have got almost everything wrong

I haven't linked to the WaPo in some time since it is seriously compromised. Now it is paywalled, too. The New York Times and the Wall Street Journal are also on this list.

The one aspect I think worth debate, which Noah Smith has previously brought up, is the issue of whether to craft a comprehensive bill that addresses all issues or to create a comprehensive proposal and craft many separate bills to address the complexity involved.

This is a political issue that involves strategy. Thus, it will depend on vote counting, both in the legislature and the next election.

I that the most democratic way to proceed is to craft separate bills to address separate issues. But this needs to be based on a comprehensive proposal recognizing that the design problem is systemic and a viable solution cannot be addressed piecemeal either, since there are overlapping issues.

For example, if it is possible to crafted a good bill on taxing carbon that can pass quickly, by all means do it. But don't conclude that therefore the job is done, as the WaPo argument seems to suggest. Taxing carbon alone won't do it, although taxing negative externality is need to arrive at true price based on true cost in order to preempt socialization of externality through market prices that don't reflect true cost. This is a form of preempting extraction of economic rent.

Tax Research UK
The Washington Post is leading the right wing backlash to the Green New Deal, and have got almost everything wrong

Richard Murphy

Robert Hockett — Green New Deal Funding: Remember Finance is a Public-Private Franchise, Not a Big Broker in the Sky

Not MMT but worth reading. Robert Hockett is an advisor to AOC.

Forbes
Green New Deal Funding: Remember Finance is a Public-Private Franchise, Not a Big Broker in the Sky
Robert Hockett | Edward Cornell Professor of Law, Cornell University

See also

Bloomberg Opinion
How to Design a Green New Deal That Isn’t Over the Top

Noah Smith

David Roberts — This is an emergency, damn it

Must-read.

The GND proposal that is on the table doesn't scratch the surface of what needs to be done. Global resources must be reconfigured and deployed internationally to meet this emergent challenge. The scope and scale of a design solution is mind-boggling. Tweaking around the edges is simply a foolish delay.

The alternative is massive culling.

VOX
This is an emergency, damn it
David Roberts

See also at VOX

It is absolutely time to panic about climate change

Sean Illing

See also

World in Transition: Climate Change as a Security Risk - WBGU (2007)Members of the German Advisory Council on Global Change (WBGU) 

Foreign Policy (9 Jan 2018)
The Only Force That Can Beat Climate Change Is the U.S. Army

Anatol Lieven

Institute for Energy Research — MMT and the Green New Deal

I hate to break it to the MMTers, but fuddy-duddy economists already knew this. Indeed, among free-market economists it is a standard pedagogical device to tell the audience that the government has three ways of financing its spending, namely (1) taxes, (2) borrowing, or (3) inflation. So this notion that only the MMTers perceive the possibility of the printing press as a means of “paying for” government programs is silly. 

For proof, consider the following excerpt from Austrian economist Murray Rothbard’s economics treatise, Man, Economy, and State, published in 1962:

You get the idea. Claims that MMT economists are cranks by citing a crank.

Canadian Free Press
MMT and the Green New Deal

Institute for Energy Research

Jeffrey Sachs — Green New Deal is feasible and affordable

Jeffrey Sachs becomes the first major conventional economist and public figure to advocate the Green New Deal as necessary and affordable. No qualifiers. This is a huge step forward.

Jeffrey Sachs doesn't mention MMT in his justification for the affordability of the GND and associated progressive programs because he sees this policy proposal as being cost-saving rather than "budget-busting." It "pays for" itself and actually "saves" money. No need for a "socialist" government to pony up.

While I haven't seen this stated in terms of rent yet, the GND entails using true price based on true costs, which eliminates the extraction of economic rent through socializing negative externality, the bill for which is now coming due on global society and the global economy. The system is becoming increasingly dysfunctional, while the fat cats become fatter on rent extraction. Actually, they are not only predators but also parasites on the system as free riders.

Take away the rents and "capitalism" works all by itself through actual market price by preempting rent-seeking and rent extraction (as many Austrian, economists have been saying from the right and Marxist and Marxian economists from the left.

CNN
Green New Deal is feasible and affordable

Jeffrey D. Sachs | Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, Director of Columbia’s Center for Sustainable Development, and Director of the UN Sustainable Development Solutions Network

Zach Carter and Alexander C. Kaufman — The War On Climate Change Won’t Be Won Quibbling Over The Green New Deal’s Costs

The Green New Deal unveiled last week by Sen. Ed Markey (D-Mass.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.) is a powerful and ambitious statement. It’s more than just a delineation of the enormous changes that will be required to stave off the most cataclysmic impacts of climate warming. It offers a portrait of the better world we can create by doing so.

It also has no chance of becoming law, not while Republicans control the Senate and climate change denier Donald Trump resides in the White House.

Markey and Ocasio-Cortez know this. That’s why the Green New Deal is framed as a joint resolution, not a formal law, meaning even if it passed, the measure wouldn’t bind the government to any new policies. This distinction is key to understanding what the Green New Deal is — and is not — and how to usefully talk about it now. It is a major statement of the Democratic Party’s political priorities. It is not a detailed blueprint of how to get there — or how to pay for it.

The Green New Deal’s agenda, however, is clear: Dramatic action must be taken to avert a climate disaster that will otherwise render much of the world uninhabitable. This is an emergency that deserves immediate attention. Millions of lives are quite literally at stake....

HuffPost

The War On Climate Change Won’t Be Won Quibbling Over The Green New Deal’s Costs: The mounting damage of global warming is a crisis far greater than the deficit.
Zach Carter and Alexander C. Kaufman

Alex Baca — The Green New Deal’s Huge Flaw

Sprawl.

China is already tackling this with urbanization, which is the reason for the build out of "ghost cities."

Unsprawling America isn’t as hard as it sounds, because America is suffering from a critical, once-in-a-lifetime housing shortage. The National Low Income Housing Coalition reported last year that the U.S. has a national deficit of more than 7.2 million affordable and available rental homes for families most in need. Of course, if we build those homes in transit-accessible places, we can save their occupants time and money. But the scale of housing demand at this moment is such that we could build them in car-centric suburbs, too, and provide a human density that would not just support transit but also reduce the need to travel as shops, jobs, and schools crop up within walking distance. 

Naked Capitalism
The Green New Deal’s Huge Flaw

Alex Baca

Cross-posted from Grist

Brian Romanchuk — Comments On The Green New Deal And MMT

There is considerable interest in the Green New Deal (GND) proposal by U.S. Representative Alexandria Ocasio-Cortez, and its relationship with Modern Monetary Theory (MMT). Although my preference is to focus on my business cycle book, since I am one of the many MMT bloggers, I should at least comment on the Green New Deal. The natural question arises: what does the Green New Deal mean, and is it feasible? Based on my very limited understanding of the American legislative process, I would guess that it is way to early to say anything definitive. That said, that has not really stopped anyone else from making wild claims about the proposal...

It should be noted that the concept of a Green New Deal has attracted a good deal of attention elsewhere, such as in Europe. However, since the programme itself is uncertain, the suggested mode of implementation will vary. As a result, we can see calls for a "Green New Deal" from people who are otherwise critical of MMT. In other words, the concept is not synonymous with MMT.

MMT makes two major contributions to the debate on the GND.

 1. There is no financial constraint on a currency sovereign in deploying real resources that are available.

2. If the government competes with nongovernment for scarce real resources, then the price of those resources will rise in markets, exerting inflationary pressure.

The GND is a special case, since it is represented as an existential threat. This could involve government both commandeering real resources for emergency use and also taking some real resources off the table, e.g., to quickly shrink the carbon footprint.

This could necessitate considerable public investment or incentives to draw forth private investment. The same goes for investment in developing and scaling green resources.

In the emergencies of the past, the real constraint of #2 has been overridden by necessity, e.g, during WWII, price controls and rationing were imposed, and savings bonds introduced. John Kenneth Galbraith was deputy head of the OPA.

Thus, a question of urgency arises with respect to implementing the GND. What resources will be required and how to deploy them is an engineering problem.

This has all to be integrated in terms of a comprehensive policy proposal and then fleshed out into specific legislation. Input from economists will be needed in model construction and fiscal recommendations.

In fact, it is a global challenge that requires concerted effort internationally, and lot of conflicting national interests will have to be taken into account to arrive at something workable that can get agreement.

Bond Economics
Comments On The Green New Deal And MMT
Brian Romanchuk

Bill Mitchell – billy blog A progressive European superstate will never come to pass

The increasing uprising against Modern Monetary Theory (MMT) in the media is salutory because it means our ideas are now considered to be a threat to the mainstream economics (for example, Paul Krugman now buying into the carping) and to the heterodox tradition (for example, the British economists who self-identify with that tradition). The high profile debate around the Green New Deal has been associated with MMT and this has brought all sort of crazy attacks on MMT from those who think they are ‘green’ but haven’t traversed out of ‘Monetarist-type’ economics thinking. And then I note that apparently the Green New Deal is being expropriated by Europhiles to wedge those who consider Lexit and Brexit to be the only way to re-establish progressive society and politics. 

Apparently, the Europhiles are arguing that you cannot be both Lexit/Brexit and support the Green New Deal. Curious logic. And, of course, a desperate attempt by the Europhiles to grasp at anything to discredit both Brexit and MMT, given that there is a high proportion of MMTers who prefer Britain leave the EU and that the EU disappears in its current form. And so it goes. Wolfgang Streek recently published an interesting academic article that bears on this discussion. That is what this blog post is about....

Well, never is a long, long time. Who knows what will happen in the future, but it fairly certain it won't be anytime soon and even more sure that it won't be the outcome of the present arrangements that are supposedly designed to make it happen. More liberal utopianism that disregards realities involving traditional values and national patriotism, for example, and social, political and economic asymmetry. Moreover, since liberalism is about freedom, it follows that attempts to impose it on the unwilling is illiberal.

Bill Mitchell – billy blog
A progressive European superstate will never come to pass
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia