Stop Free Pollution: Going Beyond Cap and Trade

James K. Boyce

Some of the best things in life are free. Unfortunately, so are some of the worst.

When polluters dump poisons into our air and water, they do it for free. This means they have no incentive to curb emissions. It also means that our air and water effectively belong to them, not to those who breathe the air and drink the water.

Regulation

Environmental regulations limit what polluters can lawfully discharge into our air and water. The damage control they provide is of great value. The U.S. Environmental Protection Agency estimates that from 1970 to 1990 alone the Clean Air Act saved more than three million lives. Critics can argue about whether the regulations should be tighter or lighter, but no sensible person would advocate jettisoning them altogether.

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Austerity Economics: Tax Cuts, Jobs and Deficits

Jeff Madrick

Triple Crisis blogger Jeff Madrick was the lead author on a report issued last week by the Citizens’ Commission on Jobs, Deficits and America’s Economic Future, which takes issue with many of the recommendations from President Obama’s deficit commission.

It seems now that all of Washington is focused on the likely level of unemployment in 2012. As well they should be. The White House, according to the all-knowing Washington press corps, says they always had it in focus. Sure. The press corps believe what they are told.

But, despite austerity economics, at least we have a bit of stimulus out of the new tax compromise engineered by the President and Republicans. The surprise is the payroll tax cut. A rough guess is that over two years, the stimulus on balance will add half a million jobs. Figure a cut in the unemployment rate of 0.3 to 0.4 percent. The estimates that already included the extension of the tax cuts, except for those earning above $250 k, had the unemployment rate in 2012 on average around 8.25 to 8.5 percent.

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Irish Bailout: Governments and Banks “Bait-and-Switch” Taxpayers Yet Again

Mark Blyth

Triple Crisis blogger Mark Blyth was interviewed by Radio Open Source about the Irish debt crisis and the resulting EU and IMF bailout package, noting that taxpayers pay twice for the crisis: first to bailout the banks and then with cuts to social services like education and health care.

From, “Mark Blyth on Ireland: The Circle will not be Squared”:

“The just thing is that the banks should pay. No question. You made the mess. Clean it up. It’s a pretty simple rule. But the basic line is this: if you let the banks fail, there’s nothing coming back. So if you’re Ireland, the Celtic Tiger, and over 10 percent of your GDP is in the financial sector, that’s where you make a lot of money, bankers’ salaries and all that. So let’s say you decide to blow up 10 percent of the economy. What’s your next trick? We can try to reflate it. We can hope that it comes back. We can hope to raise the patient from the dead basically. In order to do that you need to have a growing economy. So obviously hacking away at austerity politics is not going to bring back the bankers’ balance sheets. But on the other hand, it’s not clear what else you do with them. They don’t have any money to pay back, unless you bring the corpse back to life. Now the only way you can do that is by having growth-enhancing policies, and that’s why austerity is not one of them…”

Listen to the full interview at Radio Open Source.

Irish Bailout: Governments and Banks "Bait-and-Switch" Taxpayers Yet Again

Mark Blyth

Triple Crisis blogger Mark Blyth was interviewed by Radio Open Source about the Irish debt crisis and the resulting EU and IMF bailout package, noting that taxpayers pay twice for the crisis: first to bailout the banks and then with cuts to social services like education and health care.

From, “Mark Blyth on Ireland: The Circle will not be Squared”:

“The just thing is that the banks should pay. No question. You made the mess. Clean it up. It’s a pretty simple rule. But the basic line is this: if you let the banks fail, there’s nothing coming back. So if you’re Ireland, the Celtic Tiger, and over 10 percent of your GDP is in the financial sector, that’s where you make a lot of money, bankers’ salaries and all that. So let’s say you decide to blow up 10 percent of the economy. What’s your next trick? We can try to reflate it. We can hope that it comes back. We can hope to raise the patient from the dead basically. In order to do that you need to have a growing economy. So obviously hacking away at austerity politics is not going to bring back the bankers’ balance sheets. But on the other hand, it’s not clear what else you do with them. They don’t have any money to pay back, unless you bring the corpse back to life. Now the only way you can do that is by having growth-enhancing policies, and that’s why austerity is not one of them…”

Listen to the full interview at Radio Open Source.

Despite Financial Collapse, Neoliberalism Holds Sway

C.P. Chandrasekhar

The crisis in the eurozone is leading, once again, to the adoption of policies such as bail-outs and austerity that belong to the neoliberal paradigm that partly precipitated the crisis. In fact, a feature of the recent global conjuncture, starting with the 1997 crisis in East Asia and culminating in the financial crisis and Great Recession of more recent date, is that while economic events have discredited neoliberalism as an economic ideology, it continues to dominate policy discourse and practice. One reason is, of course, the continued domination of the global economy by finance capital.

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Who Killed the Euro?

Matías Vernengo

Before the Great Recession it was common to suggest that the international reserve position of the dollar was in jeopardy, and that a crisis could generate a run on the dollar.  Yet, the unexpected casualty of the crisis was the euro.  If there were any doubts about the demise of the euro after the Greek crisis these have been lifted by the Irish crisis.  Who did it?  There is no need for a CSI team to pour over the evidence; the culprit has left its fingerprints all over the bloody scene.  No, not the butler, it was the European Central Bank (ECB).

In the United States the crisis led to an effort by the Fed to maintain the interest rate on long-term government debt at low levels, with the controversial quantitative easing policy.  By buying great quantities of treasuries, the Fed not only keeps stable bond prices and low interest rates, but it also provides assurances that Treasury bonds remain a secure asset.  That allows the US Treasury to maintain high fiscal deficits on a sustainable basis.

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Spotlight Cancún: The Curtain Rises for Climate Negotiations

Miquel Muñoz

The UN Climate Change Conference started today and will be meeting for the next two weeks in the resort city of Cancún, México. The Spotlight Cancún series, a joint series by Triple Crisis and the Real Climate Economics blog, which this post begins, will invite experts to analyze different aspects of the climate change negotiations, and how these, in turn affect the bigger picture of finance, development and the environment. We welcome Miquel Muñoz as a regular contributor to Triple Crisis to begin the discussion.

The Cancún conference runs through December 10 and comprises: six official UNFCCC meetings (COP 16, COP/MOP 6, AWG-LCA 13, AWG-KP 15, SBSTA 33 and SBI 33); side conferences such as the Global Business Day, Agriculture and Rural Development Day, Oceans Day, Development and Climate Days, and Forest Day; hundreds of official and unofficial side events; and all the social and cultural activities that traditionally accompany such meetings, such as the climate village. Cancún, like previous UN Climate Change Conferences, is more than just a negotiation; it’s the yearly gathering of the climate change community.

Over the next two weeks, we may or may not hear about Cancún in the news. Distractions such as sabre-rattling half a world away and leaks of US diplomatic cables will keep the two greatest greenhouse gas emitters, the US and China, the UN Secretary-General, foreign ministries from all over the world, the international press and others occupied. But even without these distractions, the truth is that expectations for any agreement happening in Cancún were already low. So low, in fact, that some analysts have even posted a pre-mortem of the meeting.

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Policy Space at the WTO: Developing Countries Should Reject Demands in Manufacturing Negotiations

Mehdi Shafaeddin

After a failure to initiate a new trade round in Seattle in 1999, the so-called Doha Development Round began before the end of 2001, in the midst of mistrust between developing and developed countries. In the text of the Doha Development Agenda, a lot of lip-service was paid to development issues. Since 2001, there has been one failure after another in reaching an agreement by the two parties.  Will the Round be concluded?  In my view, if developed countries insist on their anti-development stance, it should not.

The crisis in trade negotiation is a crisis of confidence in the intention of developed countries, which are basically concerned with their own interests rather than the mutual interests of both parties. According to Ms. Barshefsky, an ex-US trade representative: “[the] developing world is not hearing what we are saying and we’re not hearing what the developing world is saying. We’re passing like ships in the night”.

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European Debt Crisis and “Currency Wars” Halted G-20 Progress

Martin Khor
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article for the Malaysia Star on the two issues that prevented progress at the G-20 meetings in Seoul: the new financial near-crisis in Europe and the ongoing debate about the competitive devaluation of currencies.

Inconclusive end to G-20 summit

The world economy remains in a web of serious problems with the potential to break out in new crises. The G20 summit last week discussed them but could not agree on the causes or how to resolve them. Even as the G20 leaders were meeting in Seoul, the real drama was taking place half a world away, as Europe stood on the brink of a new financial crisis.

Ireland faced a big jump in the interest cost of its debt, arising from (and giving rise to) fears that it would have to be bailed out, like Greece some months ago, or even face a debt default.

It seems like the crisis of investors losing confidence could also spread to Portugal, Spain and Italy.

Read the full article at the Star.

European Debt Crisis and "Currency Wars" Halted G-20 Progress

Martin Khor
Part of a Triple Crisis series on the Nov. 11-12 G-20 meetings.

Triple Crisis blogger Martin Khor published the following opinion article for the Malaysia Star on the two issues that prevented progress at the G-20 meetings in Seoul: the new financial near-crisis in Europe and the ongoing debate about the competitive devaluation of currencies.

Inconclusive end to G-20 summit

The world economy remains in a web of serious problems with the potential to break out in new crises. The G20 summit last week discussed them but could not agree on the causes or how to resolve them. Even as the G20 leaders were meeting in Seoul, the real drama was taking place half a world away, as Europe stood on the brink of a new financial crisis.

Ireland faced a big jump in the interest cost of its debt, arising from (and giving rise to) fears that it would have to be bailed out, like Greece some months ago, or even face a debt default.

It seems like the crisis of investors losing confidence could also spread to Portugal, Spain and Italy.

Read the full article at the Star.