Rana Foroohar writes an excellent piece in Time Magazine about investing in jobs at home. Here's some key points from the article.
As finance fades into the backdrop, manufacturing takes center stage, and each hometown accomplishment brings crucial carryover effects for the surrounding economy.
It's not being overly dramatic to say that the world is on the verge of a new industrial revolution as manufacturing regains its traditional role as a global growth driver. Manufacturing's share of global output is 17.4%, the highest it's been in over a decade. The growth has been driven not only by China but also by the U.S. (the second-biggest factory nation by output), which got a boost from the government's Detroit bailouts. Indeed, if the U.S. manufacturing economy were a nation, it would be the ninth largest in the world.
Government support is certainly one of the reasons for the boom. Manufacturing is politically very important because it's one of the few areas of the economy that is creating solid middle-income jobs. (See Rule No. 3. Export-oriented jobs pay 9% more on average.) The reason the latest U.S. jobs numbers aren't worse than they are is that Detroit has been holding its own. A weaker dollar and more-competitive global wage rates have also helped U.S. manufacturing, as have two other key trends: the rise of emerging markets, which buy a growing chunk of American exports, and a homegrown energy boom in shale gas and oil, which is goosing other parts of the economy like commercial construction and agriculture. This underscores manufacturing's important spillover effect for the rest of the economy. The Bureau of Economic Analysis calculates that every $1 of manufacturing GDP drives an incremental $1.42 of activity in the nonmanufacturing economy.
Local Leaders Must Step Up
Localnomics has great potential. But how much can governments do to nurture local economies? And how much should they do?
Economists on both sides of the political spectrum have begun to argue that we need to rethink laissez-faire trade policies when we are up against state-run capitalist systems in places like China, which openly gives preference to homegrown firms and limits foreign capital even as it exports massive amounts of cheap goods. Groups like the Council on Foreign Relations and the Information Technology and Innovation Foundation agree that the U.S. needs to get more aggressive about pursuing trade violations and punishing violators. Some economists call for sanctions or temporary tariffs.
There's even a push in some quarters for the U.S. to shed its Alan Greenspan--era taboo on economic planning. "Manufacturing is thriving in China, Germany, Sweden and Singapore only because their governments set up specific vocational institutes to prepare workers for new industries," wrote Kishore Mahbubani, head of the Lee Kuan Yew School of Public Policy in Singapore, in a Financial Times op-ed. "China has rapidly overtaken the U.S. in green technology because of a coordinated national response, not because Chinese businesses alone invested in green technology."
In the U.S., industrial policy remains a third-rail notion. (See what happens if you mention Solyndra.) And developing policies to support localnomics is tricky, as many factors that support it--currency, oil prices and even labor rates--can change quickly. In just the past couple of months, manufacturing in the U.S. has begun to soften a bit as Europe and emerging markets slow down.
There's a risk of pitting state against state and city against city in a battle for short-term gains that can easily become a race to the bottom. Caterpillar decided to put a new factory in Texas because of, according to a spokesman, "port access, proximity to supply base and a more positive business climate." A good chunk of that last factor has to do with superlow tax rates and nonunion labor. But states that try to outdo one another on tax cuts may eventually undermine infrastructure and services needed to fuel longer-term growth. And localnomics doesn't mean the pressure on labor ends.
Caterpillar creates lots of jobs, but even as profits and revenue rise, the company is seeking worker concessions and is embroiled in union skirmishes.
Yet many economists continue to believe that localnomics is America's best hope for a real recovery. The McKinsey Global Institute recently published research noting that a large portion of the difference in economic growth between the U.S. and Europe is due to America's more vibrant cities and regional centers of growth, rather than just a few large capitals that generate most of the nation's wealth.
So count on cities to become more aggressive about protecting their economic future. Witness how Californian communities like San Bernardino and Stockton, driven to bankruptcy by mass foreclosures and frustrated by banks' reluctance to renegotiate mortgages, have announced plans to seize loans on underwater homes and forcibly restructure them. Or how Ohio and Tennessee are making sizable commitments to attract high-tech research institutions. Or how Seattle and Philadelphia are cementing niches in the global clean-tech arena. All these initiatives represent a bracing response to gridlocked politics as usual in Washington. And they also add up to local-centric approaches that may someday take us beyond the slow growth of a 2% economy.
While I'm working on the climate catastrophe "solutions" posts, I want to offer this. Many believe that we can "tech our way out" of global warming. That somehow technology is the answer.And just as soon as we (people of earth) decide to actually make a change, voilà ? our smarts will give us the equivalent of google glasses. Call it, "google instant carbon scrubber." Aren't Our Betters...
[CHRYSOTHEMIS rushes in through the courtyard gate, howling loudly like a wounded animal.]
CHYRSOTHEMIS: Orest! Orest is dead!
ELEKTRA: Be quiet!
CHYRSOTHEMIS: Orest is dead!
I came out -- they knew it there already. They were all
standing around and they all knew it already.
Only we didn't.
ELEKTRA: No one knows it.
CHYRSOTHEMIS: They all knew it!
ELEKTRA: No one can know it, for it is not true.
It is not true! It is not true! I tell you, however,
it is not true!
CHYRSOTHEMIS: The strangers stood by the wall. The strangers
who were sent here to announce it: two --
an old one and a young one. They had
already told everyone. They were all standing
in a circle around them and they all,
all knew it already.
ELEKTRA: It is not true!
CHYRSOTHEMIS: No one thinks of us. Dead! Elektra, dead!
Died in a foreign land! Dead!
Died there in a foreign land,
by his own horses killed and dragged along.
[She sinks down on the doorstep beside ELEKTRA. A YOUNG SERVING MAN hurries out of the house and stumbles over the sisters.]
The same Republicans who criticized President Obama for lacking foreign policy experience in 2008 are now stepping in to defend the dismal international relations record of Romney-Ryan ticket.
Former House Speaker New Gingrich (R) and former Minnesota Gov. Tim Pawlenty (R) on Sunday argued that Romney and Ryan are actually better equipped to lead on international relations than Obama and Biden:
GINGRICH: I think it’s an advantage that they’re not part of the current mess….Mitt Romney has the same amount of foreign policy experience as Ronald Reagan. Ronald Reagan defeated the Soviet empire decisively in 8 years. I would rather have Romney and Ryan rethinking everything than have the current team continue.
PAWLENTY: Romney and Ryan have a terrific national security policy team around them…Governor Romney spent his entire career in global business arrangements, transactions and traveling and understanding different countries, cultures and geography.
But both Gingrich and Pawlenty were happy, in 2008, to appear on the Sunday morning talk shows at do the opposit — attack Obama and Biden for not having the foreign policy chops they deemed necessary.
In the fall of 2008, Gingrich asked Fox News host Greta Van Susteren, “Who do you trust more to deal with the dangerous world … somebody who has read about it and sort of vaguely thought about it but hasn’t really collided head-on with it?”
Pawlenty echoed a similar line. “He basically graduated from law school, went on to be a community organizer and a law professor; went to the U.S. Senate and began running for president essentially the day he arrived,” he said of Obama on Meet The Press in 2008, “So what is it in his background, Tom, that would give him that same type of requisite wisdom and judgment and insight on national security matters or foreign affairs matters or anything else?”
Paul Ryan is the mastermind behind the extreme GOP budget plan. It's a plan Mitt Romney endorses.
But what does that budget mean for America? The GOP budget plan hurts seniors, it hurts middle-class families, and it hurts students. All to pay for tax cuts for those at the top..
Mitt Romney and Paul Ryan: back to the failed top-down policies that crashed our economy.
Paul Ryan?s top-down budget plan is a sham
Paul Ryan and Mitt Romney both support trillions in budget-busting tax cuts for millionaires that will result in tax hikes on the middle class and deep cuts in education and other investments we need to grow. Ryan?s extreme budget plan, which Mitt Romney has embraced, would make deep spending cuts now to pay for tax cuts for the wealthy, which would weaken the recovery and cost the economy jobs.
According to Harvard economist Jeffrey Liebman, based on Mitt Romney?s own projections on the impact of deep spending cuts on the economy, Paul Ryan?s budget plan could cost the U.S. more than 1 million jobs.
Paul Ryan?s plan would raise taxes on the middle class and cut taxes for the wealthy
Ryan?s extreme budget plan would benefit the wealthy while raising taxes on middle-class families, slowing our economic recovery and hurting seniors and the middle class.
Deep tax giveaways for the wealthy:
Paul Ryan?s extreme budget includes a tax ?reform? plan that would make the Bush tax cuts for the wealthy permanent, and give millionaires an additional tax cut worth over $250,000 a year. Paying for these tax cuts for the most fortunate families would require higher taxes on the middle class, gutting investments in our future, and ending Medicare as we know it.
Raise taxes on the middle class:
Just like Mitt Romney?s tax plan, middle-class families could pay thousands of dollars more a year in taxes to help fund tax cuts for millionaires. Ryan would cut or eliminate middle-class tax deductions like mortgage interest, charitable contributions, and health premiums.
Paul Ryan?s plan would gut middle-class investments
To pay for tax cuts for the wealthiest, Paul Ryan would gut investments critical to middle-class security.
This includes cutting Pell Grant scholarships for nearly 10 million students, cutting clean energy investments by 19%, and slowing scientific and medical research by eliminating tens of thousands of grants.
Paul Ryan?s plan would end Medicare as we know it
Paul Ryan?s extreme budget would end Medicare as we know it, turning it into a voucher program which would increase seniors? health costs by $6,350 a year. Ryan has also proposed a plan that would have privatized Social Security, subjecting seniors? retirement security to the whims of the stock market.
Paul Ryan is severely conservative
Like Mitt Romney, Ryan?s severely conservative positions are out of touch with most Americans? values. He would take us backward on women?s health and equal rights.
Paul Ryan would take us backward on women?s health:
Ryan cosponsored a bill that could ban in-vitro fertilization, as well as many common forms of birth control, including the pill. It could also ban all abortions, even in cases of rape or incest. He supported letting states prosecute women who have abortions and doctors who perform them.
Paul Ryan would take us backward on equal rights:
Ryan voted against the Lilly Ledbetter Fair Pay Act, which helps women fight for equal pay for equal work. He voted against repealing the discriminatory policy of ?Don?t Ask, Don?t Tell,? and supports writing discrimination into the Constitution by amending it to ban gay marriage.
If this isn't enough information on Paul Ryan, and what Romney & Ryan would mean for America, let me sum it up briefly:
Note: No senior citizens were harmed in the making of this video.
Appearing on Meet The Press on Sunday, Republican Party Chairman Reince Priebus admitted that Romney would only be ready to lead “on day one” with Vice Presidential candidate Paul Ryan (R-WI) by his side. “Combined, these guys are ready on day one,” he said, suggesting that without Ryan, Romney would not be prepared to assume the responsibilities of the office on day one. Watch the remark:
JR: Mitt Romney has turbo-charged his support for Big Oil by selecting Paul Ryan as his running mate. The House-passed Ryan budget would retain $40 billion in tax breaks over a decade for Big Oil while demanding huge cuts in the budget for innovation and clean energy. In addition, the Romney-Ryan budget would provide $2.3 billion in new tax breaks for the five largest oil companies. This 2011 post ran after Ryan first introduced his radical plan.
By CAPAF’s Daniel J. Weiss and Richard W. Caperton
House Budget Committee Chair Paul Ryan’s (R-WI) proposed FY 2012 budget resolution is a backward-looking plan that would benefit big oil companies at the expense of middle-class Americans. It retains $40 billion in Big Oil tax loopholes while completely eliminating investments in the clean energy technologies of the future that are essential for long-term economic growth.
This budget would lock Americans into paying high, volatile energy prices. It would ensure that millions of clean energy jobs are created oversees–not here in the United States. It is a path backward to Bush-Cheney Big Oil energy policies that cost jobs and harm American competitiveness. In short, the Ryan plan ensures that we lose the high-stakes competition for the $2 trillion worldwide clean tech market.
Ryan claimed in a Wall Street Journal op-ed that his plan “rolls back expensive handouts for uncompetitive sources of energy, calling instead for a free and open marketplace for energy development, innovation and exploration.” This is false. Ryan’s proposal actually violates his assertion in two ways. It maintains wasteful subsidies for Big Oil, while cutting valuable investments in the clean energy technologies of the future.
Let’s consider each of these in turn. First, Ryan’s plan would continue “welfare” for big oil companies.
Ryan was asked several times in a recent interview whether his plan would “eliminate tax breaks for Big Oil,” but he refused to answer. Evading an uncomfortable question was his acknowledgment that his budget hatchet leaves Big Oil tax breaks untouched . This is consistent with his recent vote to keep Big Oil tax loopholes as part of the FY 2011 spending bill, while cutting education, medical research, and clean-tech investments.
In addition to receiving $40 billion of unnecessary tax breaks, Big Oil does not pay its fair share of royalties for oil and gas produced from publicly owned waters. The Government Accountability Office estimates that a loophole in a 1990s oil-and-gas law could deprive the treasury of $53 billion in lost royalties. In February, the House Republicans overwhelmingly voted against recovering these royalties. Although Ryan’s budget claims that it “stops spending money the government doesn’t have,” it does nothing to recoup these forgone funds. This is another gift for Big Oil, paid for by middle-class taxpayers who must suffer the consequences of other steep spending cuts.
The proposed budget resolution doesn’t just contain billions of dollars of welfare for Big Oil. It would also slash investments in the research, development, and deployment of the clean energy technologies of the future. It would cut clean energy investments  by more than half for FY 2011, by two-thirds for FY 2013, and by 90 percent in 2014 to just $1 billion. This will take us back to the miserly clean energy budgets of President Bush.
The proposed budget would weaken the economy and increase the deficit by disinvesting in long-term economic growth the clean-tech sector fosters. For instance, the electric vehicles of the future will require advanced batteries, and the American economy will benefit if those batteries are made here. The federal government invested seed money beginning in 2009 to launch such an industry here. Former Governor Jennifer Granholm (D-MI) observed that “Just as a result of federal policy on batteries alone…have attracted 17 [battery] companies who are projected to create 63,000 jobs.”
But Ryan’s budget will nearly eliminate funding for this and other R&D programs that can lead to advances to battery technology. It also eliminates loan guarantees that can help manufacturing plants get built in the United States, and ignores investments to build a battery-charging infrastructure essential to expand the market for electric vehicles and reduce oil use.
Much of DOE’s spending on clean energy programs leverages significant private investment. This varies by program, of course, and is roughly linked to the product development cycle.
For example, the Advanced Research Project Administration-Energy, or ARPA-E, program gives relatively small grants to companies doing early research into advanced technologies. This leverages a small amount of private investment in the short term, but sets the companies up to attract larger private investments later on. ARPA-E tries to link companies that have received grants with private venture capital investors. Yet funding for this program was eliminated by the House passed budget for the remainder of FY 2011, and will likely be excluded by the Ryan budget as well.
At the other end of the spectrum, the Department of Energy loan guarantee program leverages significant private investment. It provides financing to help companies grow new technologies to commercial scale. Since borrowers are very likely to pay back loans, this generates significant private investment from both banks and equity investors. The amount varies by project, but on average, $1 in government spending yields $13 in private investment , which helps generate economic growth. The House-passed spending bill eliminated this vital program for the remainder of FY 2011, and it will likely be eliminated when the details of Ryan’s proposal are made public. Only in a Big Oil budget would spending $1 to generate $13 more in economic activity be called an “expensive handout.”
These investments spark economic growth, including more jobs and local development. The Boston Globe reported that Massachusetts clean-tech companies received $20 million in federal funds that “raised nearly five times as much”?$95 million”?from private investors. The money has helped create several dozen jobs, expand offices, and lay the groundwork for new manufacturing as the companies begin testing technologies on ever-larger scales.”
Rep. Ryan’s proposed budget also disregards the economic benefits of a clean energy future to middle-class families. In addition to creating new industries and jobs, clean energy sources that rely on homegrown wind, solar, geothermal energy, or efficiency will insulate Americans from rising and volatile energy prices.
An innovation-based economy requires government support for scientific research, development, and deployment. Such investments create domestic manufacturing jobs producing new clean-tech products. Without federal investments in innovation and clean-tech start up companies, it is very difficult to create a supply chain of related jobs that provide essential goods and services for these new technologies. Meanwhile our competitors invest heavily in the development of their clean-tech industries. China, for instance, invests $12 billion monthly in its wind, solar, and other renewable clean energy projects. The Ryan budget’s cutbacks in innovation investments condemn Americans to a future where new job creation happens overseas rather than at home.
The Ryan budget undermines our economy in another way. It goes backward by continuing to allow harmful, costly pollution. Its attacks on “environmental regulations” ignore their economic benefit. The Environmental Protection Agency, for instance, determined that the Clean Air Act has generated $20 in benefits for every $1 in cleanup costs”?a return on investment that would make Warren Buffet proud.
Paul Ryan’s proposed budget resolution would keep Big Oil fat and happy while condemning the rest of us to high energy prices, job losses to other nations, and air pollution. Rather than foster innovation and economic growth like President Obama’s proposed budget, it is a path to perdition.
 Table 5.1 for past spending.
HomeIt's been an interesting couple of weeks for both the science and politics of climate change, with both the science and the politics again underscoring the necessity of reelecting President Obama and ensuring he has a Democratic Congress with which to work. The science culminated with the National Climatic Data Center (NCDC) of the National Oceanic and Atmospheric Administration reporting:
The average temperature for the contiguous U.S. during July was 77.6°F, 3.3°F above the 20th century average, marking the hottest July and the hottest month on record for the nation.Which would not, in itself, necessarily be that important if it weren't part of the continuing trend that last week led James Hansen, the director of NASA's Goddard Institute for Space Studies to write:
In a new analysis of the past six decades of global temperatures, which will be published Monday, my colleagues and I have revealed a stunning increase in the frequency of extremely hot summers, with deeply troubling ramifications for not only our future but also for our present.The study itself can be downloaded here, and it confirmed the early July joint report by the NCDC and Britain's Met Office that tied extreme weather to climate change. And if Hansen is right about the data soon tying this summer's extreme heat to climate change, that would have to include the June drought that enveloped an unprecedented 56 percent of the contiguous United States, putting at risk the national food supply. But then the scientific consensus on climate change long has been widely and well established. Indeed, when the Koch-funded climate change skeptic Richard Muller recently reversed course, concluding that human-caused emissions of greenhouse gases are indeed causing global warming, leading climate scientist Michael Mann sardonically noted:
This is not a climate model or a prediction but actual observations of weather events and temperatures that have happened. Our analysis shows that it is no longer enough to say that global warming will increase the likelihood of extreme weather and to repeat the caveat that no individual weather event can be directly linked to climate change. To the contrary, our analysis shows that, for the extreme hot weather of the recent past, there is virtually no explanation other than climate change.
The deadly European heat wave of 2003, the fiery Russian heat wave of 2010 and catastrophic droughts in Texas and Oklahoma last year can each be attributed to climate change. And once the data are gathered in a few weeks? time, it?s likely that the same will be true for the extremely hot summer the United States is suffering through right now.
Muller's announcement last year that the Earth is indeed warming brought him up to date w/ where the scientific community was in the the 1980s. His announcement this week that the warming can only be explained by human influences, brings him up to date with where the science was in the mid 1990s. At this rate, Muller should be caught up to the current state of climate science within a matter of a few years!As I wrote over a year ago:
Is it hyperbole to call climate change the most important issue humanity has ever faced? Do other issues even compare when climate change itself encompasses almost all of them? How important are the issues of war and mass violence and human rights? The geopolitical consequences of climate change are almost unimaginable. There will be droughts and losses of vegetation, and the Food and Agriculture Organization of the United Nations has warned of potentially catastrophic impacts on food production. Imagine 200 million people displaced, worldwide. Where will they go? How will they survive? How will the less endangered people and governments cope with such an unprecedented torrent of refugees? Think of the reactionary xenophobia already resulting from immigration in the United States. Consider that the wonder of Europe's open internal travel is about to end, as nations there prepare to close their borders, as their own reactionary response to the increasing numbers of refugees fleeing the violence in revolutionary North Africa and the Middle East.And this is why the politics is so desperately important. Because in the face of such overwhelming science about such an unprecedented global threat, the Republicans continue to deny reality, and their 2012 standard-bearer Mitt Romney has done his usual flip-flop, here into the standard climate change denial that plays so well with his anti-science Republican base. On this most critical of issues, there is a profoundly substantive difference between Romney and President Obama, and between Republicans and Democrats.
Does health care matter? How will nations cope as climate change expands the territories of everything from dangerous diseases to deadly insects? One need only consider the effects of record tornados and increasingly severe hurricanes to begin to realize the human costs of climate disasters. And then there are the impacts on forests and ocean acidification, the latter threatening the base of the marine food chain, and all whose livlihoods or lives depend upon it. Back on land, the disruptions to agriculture could undermine the food supplies for billions.
If all this isn't enough, and for those that care only about money, the economy often is an excuse for doing little or nothing about climate change. The presumption is that what's good for the environment is bad for the economy. It's another of the fundamental lies used by the narrow special interests whose riches do indeed depend on harming not helping. But however politically dominant the fossil fuels industries may be, their business strength does not translate into wider economic strength or even stability. Climate change is an economic crisis.
(Continue reading below the fold.)
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