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It's the New Economy, Stupid

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To secure a safe and prosperous future for subsequent generations, efforts to reduce unemployment and curb inequality must be considered alongside urgent threats to the environment and democracy. These crises present a compelling argument for systemic->

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Kit B (276)
Tuesday December 4, 2012, 3:45 pm
(Photo Credit: Reuters/Kevin Lamarque)

Most progressives have long embraced a clear alternative to the conservative story that prosperity flows best from a “free market” unfettered by government regulation and taxes. The standard progressive response: government incentives and spending are essential to spur the creation of jobs, and unions and regulations can make them “good jobs.”

President Obama’s re-election by a surprisingly healthy margin (he won by 3.5 million in the popular vote and by 126 in the Electoral College) confirmed substantial support for this overall approach to the economy. Despite deep economic suffering throughout Obama’s first term, the public validated his advocacy for more progressive taxes, his ideas about the positive role that government must play in regulation, and his call for public investment in training, education and research. All of this adds up to a significant defeat for the free-market ideologues who lined up behind Mitt Romney.

But here’s the catch: while Obama’s policies have the short-term potential to improve the lives of many Americans beleaguered by the economic slump, the approach he champions is insufficient to tackle the long-term problems we face. To secure a safe and prosperous future for subsequent generations, efforts to reduce unemployment and curb inequality must be considered alongside urgent threats to the environment and democracy. These crises present a compelling argument for systemic change.

Just a week before an election in which both candidates largely ignored the environment, Hurricane Sandy devastated the East Coast and put climate change at center stage. Who would have imagined Bloomberg Businessweek with a cover trumpeting “It’s Global Warming, Stupid,” as the magazine did just days after the storm? Climate chaos is at the core of our environmental crisis, but the problem also includes dwindling supplies of potable water, the destruction of forests and oceans, and the depletion of the planet’s biodiversity. Simply put, jobs that threaten the environment cannot be considered good jobs.

The assault on democracy by growing corporate control of our workplaces, our politics and our economy presents another deepening crisis. Roughly $6 billion was spent to influence and distort the political process in the 2012 elections, with a huge portion of this staggering sum coming from Wall Street and the wealthy. This dire situation demands that we put a premium on alternative forms of collective ownership and a shift from giant corporations and banks to smaller enterprises rooted in communities.

To address these multiple crises, we need broader metrics to measure progress and new paths to get there. What many progressive advocates are calling a “new economy” framework emphasizes not just new jobs but also new policies that simultaneously create a fair economy, a clean environment and a strong democracy. As a movement begins to coalesce around these issues, one of its toughest challenges will be to persuade more political and business leaders, mainstream journalists and economists locked in an outdated Keynesian worldview to take its ideas seriously.

What would a new economy look like? When it comes to promoting fairness, environmental sustainability and democracy, Walmart jobs, for instance, are triple offenders: they are nonunion poverty-wage positions, they support a corporation with a climate footprint half the size of France and they undermine community jobs on Main Streets all over the world.

For a positive example, consider what could be done to transform the waste management industry. Most of our trash goes into landfills that leach toxins into the soil and water, or into incinerators (often in inner-city neighborhoods) that belch toxic fumes. Rising asthma rates in urban communities of color and increasing greenhouse gas emissions are among the results. Yet according to a Tellus Institute study, the United States could create more than 2 million jobs by 2030 by transforming our waste management from incinerators and landfills to recycling and composting. Many of the jobs could shift from large private corporations to municipal unions. As groups like the Global Alliance for Incinerator Alternatives and the Institute for Local Self-Reliance stress, this shift would tackle the environment, equity and racial justice all in one shot.

Or consider the holistic approach articulated by Ai-jen Poo of the National Domestic Workers Alliance: a “caring economy” that emphasizes caring for the planet, a fairer distribution of resources and dignified jobs, as well as caring for our elders and those the market leaves behind. Poo and Sarita Gupta of Jobs With Justice have helped build the Caring Across Generations campaign with more than 200 allied groups. The campaign has constructed a bold policy platform to create 2 million eldercare jobs, enhance job quality with wage and overtime protections, give workers proper training, provide a road map to citizenship for those who need it, and make care affordable for seniors and their families. The campaign is building the power to win such initiatives and pay for them through cuts in defense spending and a series of fair tax initiatives.

Another dynamic example where a new-economy transformation is already happening in dozens of countries, including the United States, is farming. For the half-century after 1960, most governments promoted agribusiness farming, which is dependent on giant tracts of land and on chemical fertilizers and pesticides. But as fossil fuel prices jumped in recent years and yields from nutrient-depleted soils fell, some countries began looking to small-scale farmers who are abandoning synthetic chemicals in favor of natural inputs. Via Campesina, a 200 million–member coalition of small farmers, has promoted this approach as a way to cut farming costs, reduce greenhouse gas emissions, grow healthier food and give farmers more control over their future. In US cities like Detroit and Oakland, a younger generation is turning to small-scale urban agriculture of this type.

In other words, these initiatives are not pie in the sky or viable only in areas where the old economy is collapsing. In fact, new-economy jobs are expanding at the local level in other realms, and they could spread even further to meet our growing needs. There are new jobs in weatherizing and retrofitting buildings to make them energy-efficient. There are new jobs in credit unions and community-development financial institutions as people move their money from the Wall Street banks. And there are small businesses opening every week that are building what some of their leaders call “local, living economies.”

Academics and advocates at the forefront of the emerging new-economy movement are constructing an infrastructure of ideas and activism to promote their programs and help bring them to scale. On the ideas front, these include the New Economics Institute, the New Economy Working Group, On the Commons, the US Solidarity Economy Network, George Soros’s Institute for New Economic Thinking, the Capital Institute, the New Economy Network and publications like YES! magazine, to name but a few. (Indeed, the New Economics Foundation in England has a staff of close to fifty.)

New Economy Working Group co-chair David Korten, author of Agenda for a New Economy, and top environmental scholar and practitioner Gus Speth, author of America the Possible, have laid out comprehensive agendas to speed the transformation from a speculative and militarized Wall Street economy to a vibrant, green and caring Main Street economy. Korten’s agenda includes steps to break up the “too big to fail” banks as well as incentives to expand state and community banks and other locally rooted institutions. Both authors pinpoint strategies to speed the transition, such as shifting our measurements of economic success from sheer output to the things we value as individuals and communities. Again, this is not pie in the sky: Maryland has created an Office for a Sustainable Future that measures twenty-six economic, environmental and social indicators as an alternative standard of well-being. Vermont and other state governments have begun to follow suit.

There is also momentum on the activism side—some of it building on the Occupy movement’s compelling case that the entire system needs to be changed. In addition to local actions all over the country, several national progressive groups—including Jobs With Justice, National People’s Action, Grassroots Global Justice Alliance, the National Domestic Workers Alliance and Van Jones’s Rebuild the Dream movement—are helping to create a transformational economic agenda. An increasing number of “blue/green” alliances are forming to hammer out “just transition” job programs that would support clean energy. A group called Kentuckians for the Commonwealth has convened union members, environmentalists and others to spell out a “new power” agenda designed to move the state beyond coal to sustainable livelihoods. Last spring, the 99 Percent Power network pulled together labor, environmental and grassroots groups to take on corporations and banks. And the Labor Network for Sustainability is bringing the climate issue into union halls across the country and challenging leaders to address the crisis.

And to help sell the story, we also need fresh voices in the economics profession. For close to a century, most economists have been taught to embrace either free-market neoclassical economics or Keynesian growth economics, and their doctrinaire thinking has had a huge influence on the media, the broader public debate and government officials’ sense of what is possible. Thankfully, there is a core group of iconoclasts in the field—including the progressive economists at the Political Economy Research Institute at the University of Massachusetts and the great Herman Daly—who have trained a small but dogged set of “ecological economists.” This year, economist Juliet Schor teamed up with environmentalist Betsy Taylor to hold the first new-economy graduate institute; there are plans for another next year.

How should new-economy activists ground their efforts in local action? The Institute for Policy Studies is convening hundreds of neighbors in the urban Boston neighborhood of Jamaica Plain to build a “new-economy transition,” and it is facilitating the exchange of “community resilience” initiatives among activists from dozens of New England cities. By supporting local experiments, the movement can gain strength even if the national debate remains relatively narrow in the short term.

But new-economy advocates should also place a high priority on influencing the mainstream debate and policies over the long term. Clearly, organizations can’t change all the rules that have been rigged in favor of corporations and the old economy overnight, but they can build unified action behind a few winnable campaigns.

We see two particularly promising areas: fossil fuel subsidies and taxes. The group, which has led the fight against the Keystone pipeline, is working with Oil Change International and other groups to ramp up pressure on Congress to end fossil fuel subsidies; is also collaborating with the New Economics Institute on a campaign to press universities to divest from fossil fuels and invest in new-economy measures instead.

Likewise, broad coalitions have come together to make our tax system fairer, including coordinated efforts to raise taxes on the wealthy (led by Americans for Tax Fairness), on Wall Street (led by a new Robin Hood Tax campaign and Americans for Financial Reform) and on corporate tax havens (led by the Financial Accountability and Corporate Transparency coalition).

Wins on these fronts could make it possible to put the entire system of old-economy rules on the table. In the wake of Hurricane Sandy and the national elections, a clearer road map to the new economy is beginning to take shape.

By John Cavanagh and Robin Broad | The Nation |

JL A (281)
Tuesday December 4, 2012, 8:43 pm
Much cause for hope here and all of the approaches and recommendations are consistent with available data and research on what actually works rather than what some hope might work without facts that actually support. In CA the areas which have embraced the greening of buildings and alternative energy have altered their employment statistics more than areas that have not and those where city and country leadership are showing this vision are doing the best of all.

Past Member (0)
Tuesday December 4, 2012, 8:50 pm
Thank you.

Giana P (398)
Wednesday December 5, 2012, 2:30 am
Noted. Thanks Kit.

Past Member (0)
Wednesday December 5, 2012, 3:27 am
Noted. I frequently find you post interesting, but as they say, the devils in the details.

Lois Jordan (63)
Wednesday December 5, 2012, 4:18 pm
The Occupy movement brought up many of these wonderful ideas. The Robin Hood Tax has also been spotlighted by a national group of nurses....I've signed many petitions and sent letters to my Congress critters regarding this. I love the idea of recycling landfills, but this is probably going to be a big fight with private companies.

Joanne Dixon (38)
Wednesday December 5, 2012, 5:35 pm
Everyone, go for it in your home states to the maximum extent of your abilities. Which I realize is not the same for everyone. We can only do what we can do.

Lois, I love your expression Congress critters.

Wilde Thange (10)
Wednesday December 5, 2012, 5:57 pm
I think the decsion has been made, create a military police state in anticipation of climate change chaos and little way currently to predict where the mass migrations will be too or what infrastructure to rebuild, where and how. Build a militery elite job preferences career path to protect the first responders who protect the rich and multi-national coporate countries as well as finance multi-nationalr religious dogmnatists for social welfare and preying on the vulnerable who can't pay their own way, maybe some will be less predatory tha others if you can distingquish who is who. Everyone else better be self sufficient. Communism on a small scale and perhaps group marriages for collective security amidst the environment of entitled classes and those attempting to profit excessively on the rest.
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