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Date: 2022-01-27 Page is: DBtxt003.php L0700-II-GND-2019CR-analysis-issues-01a
INTERESTING IDEAS
THE GREEN NEW DEAL
TVM analysis of the Congressional Resolution of 2019

COMMENTARY ON GND GOALS AND PROJECTS (CR#4)
13. To achieve the Green New Deal goals and mobilization, a Green New Deal will require the following goals and projects.

In the Congressional Resolution it appears that 'Goals and Projects' are set out in two separate sections. For TVM review and analysis these two sections will be merged and then all the elements combined according to the prevailing TVM framework for analysis.

One of goals of the TVM analysis is to highlight the value add that will arise from implementing various elements of the GND initiative. Hopefully it will be possible to compare and contrast the conclusions of the TVM analysis with the analysis of the Congressional Budget Office (CBO).

ISSUES ... THE MATTER OF SOCIAL EQUITY
Issue A. Providing and leveraging, in a way that ensures that the public receives appropriate ownership stakes and returns on investment, adequate capital (including through community grants, public banks, and other public financing), technical expertise, supporting policies, and other forms of assistance to communities, organizations, Federal, State, and local government agencies, and businesses working on the Green New Deal mobilization.

This is not at all clear, and therefore unlikely to be managed effectively. The underlying goal is good, but the manner of implementation needs simplification and clarity.

ISSUES ... SOCIAL COSTS / ENVIRONMENTAL COSTS
Issue B. Ensuring that the Federal Government takes into account the complete environmental and social costs and impacts of emissions through (i) existing laws; (ii) new policies and programs; and (iii) ensuring that frontline and vulnerable communities shall not be adversely affected.

One of the tools used by Congress to assess the likely performance of legislation is 'scoring' by the Congressional Budget Office (CBO). It is not at all clear that the methodology used by the CBO to do this work is fit for purpose. A better methodology should be implemented if not by the CBO by some independent organization that is suitably equiped to do the analysis.

In the context of this issue of scoring by the CBO, there is also the related problem of government accounting and financial reporting. Unlike corporate accounting and financial reporting, most governments including the US Government operates on a cash basis, and does not have any clarity about the difference between investment and operating exenditures. This type of accounting has been banished from the corporate business world well over a century ago, but continues in government. The most likely reason is that it is preferred by the political elite because it makes meaningful accountability almost impossible.

ISSUES ... HUMAN CAPITAL / EDUCATION
Issue C. Providing resources, training, and high-quality education, including higher education, to all people of the United States, with a focus on frontline and vulnerable communities, so that all people of the United States may be full and equal participants in the Green New Deal mobilization;

There is widespread acceptance that education and training is a good thing, and that more post-high school training is needed for economic success in the modern world. In the USA, there is less agreement about how much should be spent on education and who should be paying the bills.

There is widespread concern about the high cost of education and the fact that students have incurred a massive amount of debt so that now in aggregate more than $1.5 trillion is owed in student debt, more than is owed in credit card debt.

There was a time when more education almost always resulted in more income, but this has change significantly over the past 40 years. Simply getting a 4 year college degree in the USA will usually get more income than merely having a high school doploma but many of the available jobs do not pay as well as good union jobs of (say) 30 years ago. Some graduate degrees give access to high paying jobes, but they also have very high price tags and many people start their paid employment careers with student debts in excess of $200,000.

The situation is a complete mess and made worse by the legal set up around these loans and the inability for them to be forgiven no matter what happens.

ISSUES ... RESEARCH AND DEVELOPMENT
Issue D. Making public investments in the research and development of new clean and renewable energy technologies and industries

The US Government has made massive investments in research over time, and especially in support of perceived defense needs. Some of this investment has been done within the Government, but a big part has been done at private research universities and specialized companies. One of the well known programs was the NASA moonshot announced by Presdient Kennedy which resulted in the USA landing astronauts on the moon in 1969. Many of these reserch investments have resulted in a variety of technologies that are now used througout the modern world including in medicine and communications.

Government research moneys have not been used at scale in order to address the issues associated with climate change and the urgent need for improvement in renewable energy technologies and especially those related to energy storage and emission free transportation.

ISSUES ... INVESTMENT
Issue E. Directing investments to spur economic development, deepen and diversify industry and business in local and regional economies, and build wealth and community ownership, while prioritizing high-quality job creation and economic, social, and environmental benefits in frontline and vulnerable communities, and deindustrialized communities, that may otherwise struggle with the transition away from greenhouse gas intensive industries

Many investors are obtaining good returns from their investment in conventional business as usual companies. They are risk averse and do not seem to understand that business as usual has a very high risk because of the unsustainability of the current modus operandi with respect to GHG emissions and climate change.

As long as company valuations are based on profit performance alone without factoring in the negative social impact and negative environmental impact of business as usual, there will be little change. Better metrics are one way in which investment decisions can be guided into building a more sustainable and resilient socio-enviro-economic system.

ISSUES ... COMMUNITY LEVEL DEVELOPMENT
Issue F. Ensuring the use of democratic and participatory processes that are inclusive of and led by frontline and vulnerable communities and workers to plan, implement, and administer the Green New Deal mobilization at the local level

While companies that are both everywhere and also nowhere have been profitable and advantageous to their owners, communities that are fixed in place and where most ordinary people live their lives have declined catastrophically in wealth and all that that implies. While there are record levels of money and wealth in the economy, very little of this is available for communities to improve their infrastructure and their services. This makes no sense, but it is the reality.

One of the processes that should be strengthened is the management and decision making for communities so that they are able to mobilize resources and deploy them better to serve the people of the community both in the present and into the future.

The great old American cities bacame wealthy because of the economic drivers that were located within the city. Most of these economic drivers have disappeared in the last few decades and the quality of life for the residents of these places has declined precipiously. Unless new economic drivers are brought in, the community will continue to be deprived no matter what people say. New economic drivers must be brought into communities everywhere.

In some cases the value add should be value add associated with social capital and natural capital and not merely economic (financial) capital. This requires a change in mindset for those that do analysis and those that provide the investment funding.

ISSUES ... WORKER RIGHTS, EQUITY AND CONDITIONS
Issue G. Ensuring that the Green New Deal mobilization creates high-quality union jobs that pay prevailing wages, hires local workers, offers training and advancement opportunities, and guarantees wage and benefit parity for workers affected by the transition;

There has been a massive upwards redistribution of wealth over the past 40+ years. Productivity and profits have improved in an impressive way, but wages have flatlined or worse for 4 decades.

Part of this has been a systemic reduction in the power of unions and aggressive right to work laws around the USA. Part has been outsourcing of production to low wage countries. Much of this has been enabled by technology that has made long supply chains manageable as well as more and more efficient physical logistics.

The social impact of outsourcing by major US companies has been catastrophic for working people, though quite satisfactory for company managers and their owners.

It should also be noted that companies in the USA were able to sell into a consumer market that had buying power not so much because it was earning good money, but because it was being allowed to access easy credit year after year. When this scheme got out of control in 2007, the banks who had facilitated this were bailed out to the tune of some $4 trillion with virtually no accountability at all ... rather the bankers are pretty proud that they have been able to recover so well.

The idea that the US economy has never been as good as it is at the present moment (December 2019) shows the danger of simplistic statistics that hide more than they show. The American consumer may be doing better than in the immediate aftermath of the 2008 financial crisis, but most people are still struggling from one month to the next.

Issue H. Guaranteeing a job with a family-sustaining wage, adequate family and medical leave, paid vacations, and retirement security to all people of the United States

There is growing support for a Federal minimum wage of at least $15 an hour, but this might not be the best way to increase the income of working people. There are many small businesses in poorer communities that will not be able to pay wages at this rate and will therefore have to close down. These small business are an important part of community and when they disappear, the community will be worse off as will the people they used to employ. A better way to improve quality of life for people who are currently in low wage jobs is to provide a universal basic income (UBI) that supplements their other income. UBI will have a high cost in the sense that many millions of people being paid $1,000 a month is a big number, but the sociel benefit that this will deliver is a very big benefit. Better yet, the benefit becomes income to the other key actors in the economy and there is an important benefit from the multiplier effect. Unlike more complex programs, UBI can be implemented with a low administrative cost ... and it is reasonable that many different specialized programs with high administrative costs can be eliminated.

Issue I. Strengthening and protecting the right of all workers to organize, unionize, and collectively bargain free of coercion, intimidation, and harassment

There has been a concerted attack on collective bargaining in the USA since the 1980s. At the same time there were some inappropriate behaviors on the part of many union leaders. Meanwhile workers lost out and corporate employers have taken advantage of workers in a massive manner.

Issue J. Strengthening and enforcing labor, workplace health and safety, antidiscrimination, and wage and hour standards across all employers, industries, and sectors

Owners have a long history of abusing workers and workplace safety has been achieved not because of the goodwill of owners but because of the force of law. The US continues to have a strong commitment to owners and profits that are reminders of past behavior. Worse, however, is that the US has a very weak social safety net and the economy has got to the stage where relatively few are being economicall successful, and most are struggling month to month and cannot afford even the basics of a decent life.

ISSUES ... TRADE RULES
Issue K. Enacting and enforcing trade rules, procurement standards, and border adjustments with strong labor and environmental protections.

Enforcing rule is important. A lot of laws and regulations have been written, but not many have been effective. Part of this is because a lot of legislation includes a variety of loopholes which make the rules sound good but essentially useless. Much of the political process has been highjacked by those who have money and power without any true legitimacy.

Issue K.i/K.ii. To stop the transfer of jobs and pollution overseas / To grow domestic manufacturing in the United States

Stopping the transfer of jobs and pollution overseas and growing domestic manufacturing may or may not be the best way to improve the progress and performance of the global socio-enviro-economic system. Making the generalized assumption that this is the best way forward is likely to be a big mistake. The goal should be to do whatever is best to improve the quality of life for everyone in society taking everything into consideration. It will be progress when a me-centric analysis is replaced with a broader we-centric computation.

Most of the outsourcing of US production to low wage countries that took place in the 1980s and 1990s was done by American companies seeking to increase their profit performance. At the time much of the manufacturing infrastructure in the USA was old and expensive because of management inefficiency as well as high wage costs. Manufacturting overseas was a low cost, low investment and high profit alternative. Remaining in the USA as a manufacturer made no sense as long as the goal of business was simply to optimize for profit ... a concept promulagated by academics like Milton Friedman and embraced by the business community and many politicians at the highest levels.

ISSUES ... MANAGEMENT OF THE COMMONS
Issue L. Ensuring that public lands, waters, and oceans are protected and that eminent domain is not abused

Land and real estate ... property ... has been an important part of wealth creation in the modern Western world. Because of this, it is also an area subject to abuse by both the government and the public.

Property is also the basis for taxation in some jurisdictions, and this adds another level of complexity and abuse.

Native Americans had a respect for the land that has not been part of the Western economic tradition. In the Western tradition, land has been degraded over and over again in order to enable profit generation ... with no accounting for this damage, and even less understanding of the matter.

Some of the idealisn of President Teddy Rousevelt with regard to nature exists in the ongoing laws of the United States. Some of these deserve upgrading to suit the critical sustainability issues now being faced in the modern world.

There should be no abuse of eminent domain, but it should be used where appropriate to enable the modern world to be more resilient in the face of climate change and the dangers of extreme weather and diminishing biodiversity.

SOCIETY ... INDIGENOUS PEOPLES
Issue M. Obtaining the free, prior, and informed consent of indigenous peoples for all decisions that affect indigenous peoples and their traditional territories, honoring all treaties and agreements with indigenous peoples, and protecting and enforcing the sovereignty and land rights of indigenous peoples.

The idea that indigenous people can be ignored should have been discounted a very long time ago, but in practice, they are ignored almost all the time and everywhere.
In my own experience, the problem is deep. I did not realize how deep, and how broad, and how little of the problem I understood. One of my professional colleagues was writing a book about traditional law in Africa, and he had concluded that this law was better suited to local life than the various colonial laws that had been brought in from the outside. Bottom line, traditional law reaches more of a population than the 'rule of law' as practiced in most rich countries.
Doing 'right' by all people should be the default ... even if it is very difficult.

ECONOMY ... FAIR COMPETITION
Issue N. Ensuring a commercial environment where every businessperson is free from unfair competition and domination by domestic or international monopolies

This is both a good idea and a big idea. It is also a very complex idea that is almost impossible to describe in all its manifestations.

In part, it is about rule of law ... but law that is fair to all the possible parties, and not simply fair for the one party that benefits from the law (or regulation).

An important step to enabling progress in this direction is for the metrics of performance to be enhanced in a way that addresses progress and performance in a comprehensive way along the lines of TrueValueMetrics (TVM).

QUALITY OF LIFE ... HEALTHCARE
Issue O.i. Providing all people of the United States with high-quality health care

The United States has a profitable but dysfunctional healthcare system. The idea promulgated by theoretical economists that a market driven economy will give the optimum results does not work for typical healthcare transactions.
I remember my instructions to the medical staff when I took my then father-in-law to an emergency room at a hospital in Trenton, New Jersey. I told them to do whatever it takes to save his life and bring him home. I was relatively newly married, and gave the medical staff carte-blanche to rip me off as much as they wanted. After a few days, he recovered, and came back to us. And then came the bills.
But my Father in Law was a Canadian citizen and lived in Montreal, Quebec, where there is socialized medicine. All the bills were paid direectly from the Canadian system ... not from our rather modest family resources.
Did the Trenton hospital take advantage of us? I don't think so ... but I gave them the opening to do so, because I was in something of a panic, and did not want my father-in-law to die.
That was in 1969 ... over the years there have been many many examples of money being the driver of what gets delivered by the US health system. The system has been getting worse and worse for half a century and has become one of the biggest drags of the socio-enviro-economic performance of the country.
Bottom line, the US health system has become the most profitable in the world, yet the outcomes from the system are at the low end of the rich countries of the world while the costs to individuals and society are the highest in the world.
In many ways, the US healthcare system is very very good. The science has progressed in many very good and amazing ways. But while the science has progressed the management and structure of the system have not.

From a cost accounting perspective, there are many procedures that have become very low cost, but these same procedures have a high price. It is not easy to get information about the cost of healthcare, nor indeed, the price of healthcare.
QUALITY OF LIFE ... HOUSING
Issue O.ii. Providing all people of the United States with affordable, safe, and adequate housing

The real estate industry has not behaved well, yet it has also been a source of considerable wealth accumulation.

Some of the bad behaviors have been issues like 'red-lining', 'block busting', suburban sprawl, gentrification, and so on.

The real estate industry has done well for itself while at the same time creating a massive mismatch between the sort of housing that is needed and the sort of housing that has been built.

It really does not make sense that there are huge swaths of urban decay at the same time that there is a shortage of affordable housing and a huge amount of homelessness.

QUALITY OF LIFE ... ECONOMIC SECURITY
O.iii. Providing all people of the United States with economic security.

The main driver of economic security is achieved with decent wages and benefits. For most people and their jobs, there has been little per hour wage growth since around 1980 ... a period of some 40 years, and for most households in the USA household wealth has declined significantly during this time.

Consumption ... an important component of the GDP economic measure has not declined even though wages have. Strong consumption is also important in the US economy because it is consumption that enables corporate profits.

The strong level of consumption has not been achieved by people getting better wages but be enabling housholds to increase their debt ... whether is is credit card debt, student debt, or house mortgage debt.


Federal Minimum Wage

Raising the Federal Minimum Wage to $15 an hour is both a good idea and a bad idea.

There are many jobs where workers should be paid a living wage, and a law requiring $15 an hour to be paid is reasonable approximation to a modest living wage. There are many jobs such as elder-care workers, child care workers, domestic workers, agricultural laborers, industrial laborors, and so on that should be able to earn a living wage, a law like this would help them.

There are also many small businesses in communities around the country which cannot remain in business if they pay their staff a $15 minimum wage. On a crude economic analysis, it might be concluded that these businesses should go out of business and be replaced by something more economically efficient. No ... because while these small businesses may be economically inefficient, these businesses are socially valuable and are essential to a stong and vibrant community.

The idea that wages whould be determined within the realities of the system is likely to be more efficient ... especially if it is combined with an idea like the Universal Basic Income below.


Universal Basic Income

A universal basic income (UBI) ... sometimes referred to as a guranteed basic income, and now named by Andrew Yang as a Freedom Dividend ... is, in fact, a great idea, and one that has been proposed over and over again going back to the 16th century in Europe.

In the modern context a UBI has a lot to commend it. It has a huge benefit for those who really need more money month by month to make ends meet. There are perhaps as many as 60% of adults of working age in the USA who are not earning enough working 40 hours a week to pay their essential bills. There are many Americans that are working 2 and 3 jobs to earn enough to stay ahead of the bill collectors. A lot of essentials have gone up in price faster than wages have gone up. Essentials like healthcare are unaffordable for most Americans at the bottom half of the economic ladder. This is outrageous and unacceptable.

The canard that poor people are lazy and free money simply enables them to be more lazy is a convenient excuse promulgated by those who worry that the cost of a program like UBI will somehow make them lose their own wealth. Certainly there is a strong case for mobilizing more financial resources to make American society better in many ways, but the current cost of America's economic dysfunction is already a cost that exists but not talked about very much.

QUALITY OF LIFE ... CLEAN WATER
Issue O.iv.a. Providing all people of the United States with clean water

Without potable water, people die very quickly. Many parts of the USA have water systems that have a dangerously high lead content. The poster child for this is Flint Michigan, but many other communities are faced with similar problems. Many of the systems are old and no longer fit for purpose. The cost of upgrading the infrastructure is high but the human cost of not doing it is astronomical. Unfortunately the human cost is not numbered, and therefore the matter is not effectively managed.

QUALITY OF LIFE ... CLEAN AIR
Issue O.iv.b. Providing all people of the United States with clean air

Everyone needs clean air, but very few urban areas have clean air, especially people living in the poorer neighborhoods downwind of power plants and industrial facilities. Worse, everyone who spends time near traffic, whether urban or on the highway has to ingest polluted air. A very large proportion of the US population has some sort of ailment because of polluted air, and the situation is far worse in many countries around the world.

The US EPA established by Presdient Nixon in the early 1970s helped to improve air quality ... but recent weakening of environmental regulations under the Trump Administration has stopped this in its tracks. California was faced with a crisis of autombile pollution in the 1970s and has led the country in legislation to reduce vehicular emissions since then with good results.

QUALITY OF LIFE ... HEALTHY AND AFFORDABLE FOOD
Issue O.iv.c. Providing all people of the United States with healthy and affordable food

There is a need not only for healthy and affordable food in the USA, but in many other parts of the world as well.

In many cases the problem is not the availability of food, but the availability of money to buy the food. People in poverty simply do not have the money to buy the food that they need. This is systemic economic dysfunction that needs to be better understood in order to address the problem effectively.

There are other reasons why people are hungry. One of these is the disruption caused by war. There are many places (for example Yemen) where food production is fragile in the best of times, and with war, shortage of food very quickly reaches a crisis level.

Another reason for hunger is the food disruption that is being caused by climate change. The routine of rains and planting and harvest have been disrupted and crop failure has become the norm rather than the exception. Also extreme weather events are doing damage to crops, houses and infrastructure.
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One of the other issues with respect to food is the extreme waste that has become the norm in rich countries. Estimates vary, but as much as 40% of what is produced on the farm is thrown away rather than being consumed. This has been caused in part by consumer ignorance and in part by all sorts of misinformation in the supply chain and, of course, the prevailing idea that it is only profit that matters ... other issues can be ignored.

PRESERVING NATURAL CAPITAL
Issue O.iv.d. Providing all people of the United States with access to nature

For the past four hundred years the wealth of the United States of America has been derived in large part from the exploitation of natural capital. At long last it is being appreciated more and more that this exploitation has limits, and many of these limits have alreday been exceeded.

President Teddy Roosevelt had a big role in establishing the National Parks in the USA. National Parks are also important in many other countries around the world.

The valuing of nature, access to nature and the preservation of nature are all important. There is value from nature ... simply to look at it and wonder at it.

There is also value from nature because of all the complex things that nature does to recycle waste and make it useful in the complex cycle of life in all its various forms. One of the big changes that is necessary is to go from a system of linear production to one that has a circular character. This is starting to happen, but it is only at an early stage.


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