Fri, Jan 11, 2019 - Page 9 News List

From yellow vests to
the Green New Deal

The movement behind the Green New Deal offers a promising alternative to the wave of populism, nativism and protofascism that is sweeping the globe

By Joseph E. Stiglitz

Illustration: Mountain People

It is old news that large segments of society have become deeply unhappy with what they see as “the establishment,” especially the political class. The “yellow vest” protests in France, triggered by French President Emmanuel Macron’s move to hike fuel taxes in the name of combating climate change, are just the latest example of the scale of this alienation.

There are good reasons for today’s disgruntlement: Four decades of promises by political leaders of the center-left and center-right, espousing the neoliberal faith that globalization, financialization, deregulation, privatization and a host of related reforms would bring unprecedented prosperity, have gone unfulfilled.

While a tiny elite seems to have done very well, large swaths of the population have fallen out of the middle class and plunged into a new world of vulnerability and insecurity. Even leaders in countries with low, but increasing inequality have felt their public’s wrath.

By the numbers, France looks better than most, but it is perceptions, not numbers, that matter; even in France, which avoided some of the extremism of the era of former US president Ronald Reagan and former British prime minister Margaret Thatcher, things are not going well for many.

When taxes on the very wealthy are lowered, but raised for ordinary citizens to meet budgetary demands — whether from far-off Brussels or from well-off financiers — it should come as no surprise that some are angry.

The yellow vests’ refrain speaks to their concerns: “The government talks about the end of the world. We are worried about the end of the month.”

In short, there is a gross mistrust in governments and politicians, which means that asking for sacrifices today in exchange for the promise of a better life tomorrow is unlikely to pass muster. This is especially true of “trickle down” policies: tax cuts for the rich that eventually are supposed to benefit everyone else.

When I was at the World Bank, the first lesson in policy reform was that sequencing and pacing matter. The promise of the Green New Deal that is now being championed by progressives in the US has both of these elements right.

The Green New Deal is premised on three observations.

First, there are unutilized and underutilized resources — especially human talent — that can be used effectively.

Second, if there were more demand for those with low and medium skills, their wages and standards of living would rise.

Third, a good environment is an essential part of human well-being, today and in the future.

If the challenges of climate change are not met today, huge burdens will be imposed on the next generation.

It is just wrong for this generation to pass these costs on to the next. It is better to leave a legacy of financial debts, which future generations can somehow manage, than to hand down a possibly unmanageable environmental disaster.

Almost 90 years ago, then-US president Franklin D. Roosevelt responded to the Great Depression with his New Deal, a bold package of reforms that touched almost every aspect of the US economy.

However, it is more than the symbolism of the New Deal that is being invoked now. It is its animating purpose: putting people back to work, in the way that Roosevelt did for the US, with its crushing unemployment of the time. Back then, that meant investments in rural electrification, roads and dams.

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