During this miserable lame-duck period, we must trust in a better future
We are stuck in this interregnum, between a maladroit trying to burn down the Republic and a Normal Joe, wondering what sort of rabbit someone might pull out of a hat, waiting on a vaccine, trusting it will pass.
Control of the US Senate hangs in the balance, as Georgia voters head to the polls this Tuesday. It took 10 days to get presidential results out of the Peach State. Now we are again awaiting word, this time of whether Chuck Schumer or Mitch McConnell will control the 2021 calendar. In the meantime, the economy teeters alongside our constitutional order.
On Wednesday, Congress is set to consider certifying election results. A dirty dozen of Republican senators – plus 140 members of the House of Representatives – have said they will contest the results from certain swing states, despite Mitch McConnell’s urgings not to do so. They called this sedition in Abe Lincoln’s day.
You could ignore it all by immersing your head in football games you don’t care about any more. Some drink – these are the holidays, after all, and there is nothing else to do, hasn’t really been anything to do since March, so why not?
All the experts say we should remain calm and stay safe. But Normal Joe doesn’t raise his right hand and pledge on the Bible until January 20. A lot of weirdness gets sucked into the vacuum in the interim. On Saturday,
Trump threatened to criminally charge the Georgia secretary of state, a Republican, for not cooking up the 11,780 ballots that the loser needs to win. Even Rudy Giuliani couldn’t dream up this kind of scheme.
The good folks at the nursing homes are in the dark about when they might get vaccine doses. We old folks at home are in the dark with them. We have no idea how to find out when or where we will get the jab. The state is working on it, we are told. So we sit here and drink anxiety with our morning toast.
During more ordinary times, these quadrennial weeks leading up to the inauguration are supposed to be a celebration of the world’s longest-running experiment in democracy. Instead, the president has called assorted wingnuts to Washington to protest what they believe is the Big Steal. “It’s going to be wild!” the tweeter in chief tweeted. Wild is not what democracy needs right now.
Then there’s Congress’s so-called Covid relief. The out-of-work bartender currently forced to choose between paying rent and paying for medical prescriptions probably needs a lot more than $600. Maybe Biden can wrangle some more, depending on how that Georgia vote count goes, followed by recounts and court filings. Maybe the bar owner can get a second swing at a payroll protection grant, but maybe not. It all seems out of our hands.
The Iowa legislature says its priorities are tax cuts, not supplementing unemployment benefits. You don’t know what will happen in one-party government. How far will Republicans go? There appear to be no limits when our congressman is calling to repudiate our electoral process.
Everything should clear up by 20 January if it all doesn’t blow up in the next week or two. The vaccines will show up sooner or later. Local budgets and property tax rates will get nailed down, not without pain. The Fox propaganda machine is cracking under pressure from the rest of the rightwing looneysphere. The Republican party is morphing by the day. Senator Ben Sasse of Nebraska says Senator Josh Hawley of Missouri is playing with fire, one young Republican Ivy League midwesterner to another.
Are these the death rattles of a discredited movement of narcissism and fear, or the birth of something worse that endures? The November election suggests the former but we are going to play hell getting there.
Until the Bidens are sleeping in the White House and not in a Delaware bunker, we sit in this helpless tumult of between. It’s about to turn. I believe this will pass. Let’s pray that hope will prevail.
Art Cullen is editor of the Storm Lake Times in north-west Iowa, where he won the Pulitzer prize for editorial writing. He is a Guardian US columnist and author of the book Storm Lake: Change, Resilience, and Hope in America’s Heartland
and ease of collection, carbon taxes are best imposed at the earliest point you can: the wellhead or the mine mouth, the refinery output gate, or the port of entry for imports. That way, the incentive to reduce emissions spreads down through the economy. For example, a US tax of $50 per metric tonne of CO2 would raise the price of oil leaving the Texas oil patch by about $21 a barrel, and increase prices throughout the country for motor fuel and products made using oil-based energy. This would percolate down to your local store: environmentally friendly goods would become relatively less expensive, and carbon-intensive ones would be pricier.
So, if taxes on carbon are so effective, why aren’t they more widely used? Well, perhaps it’s because of the associations we all have with the “T” word. Tax is when you take money away – from businesses, and once that feeds through into prices, from individuals. No one likes the idea of having less money. Then there are those who argue that adding taxes hurts the economy as a whole. Yes, this ignores the fact that any tax would be less damaging to GDP than the effects of climate change, which is having devastating impacts. But the short-termism built into the economic status quo makes that hard to appreciate.
Yes – no one really likes taxes. They’re unpleasant to contemplate, and a hard sell, politically. But what if there was a way all of that could be neutralised? A small but imaginative policy tweak that rendered raising the price of CO2 pollution not a tax, but a gift?
There are many ways to manage the proceeds from a carbon tax. It doesn’t have to simply disappear into government coffers. And that’s the secret: it’s possible to design systems that achieve what is called revenue neutrality – where every dollar taken in tax is returned to people’s pockets. One version of this idea would send the revenue to the public as a per-capita carbon dividend, in an annual check.
For example,in 2020 a $50 per metric tonne CO2 tax would return each US household an annual dividend somewhere between $1,500 and $2,000. That’s more than the pandemic stimulus checks distributed to most US taxpayers in light of the extreme economic situation. And yet it would come every year.
But what’s the point of collecting a tax if you just give the proceeds back? It all comes down to incentives. The tax part of this arrangement would make carbon-intensive goods less attractive, and green ones more so. Environmentally friendly businesses would thrive. Polluting businesses would be incentivised to make their operations less damaging, driving green innovation in the process. Gradually, via the millions of consumer choices made every day, the economy would shift on to a more sustainable footing.
The dividend part would not only make millions of people happy – who doesn’t like receiving a check in the mail? – it would have a social impact. Even when you factor in the increased cost of energy and other goods, all but the highest income groups – those who consume the most carbon-intense goods and services – would come out ahead, with the lowest income group benefiting most of all. This result should be especially welcome in the wake of the Covid-19 pandemic, which has imposed the harshest penalties on the least advantaged communities and cast a harsh light on underlying disparities in income and wealth.
There are other revenue-neutral designs, but they’re not as good – one proposal, for example, involves a tax swap. Carbon tax revenue could be used to lower a tax on labor, like the payroll tax. But this would be less favorable than a direct rebate to lower-income households. Cutting a corporate tax as part of a tax swap on the other hand, would favor wealthier income groups.
A carbon dividend feels like a novel, unusual idea. There certainly aren’t many directly comparable fiscal mechanisms in place. But if now isn’t the time to try bold new solutions – when we’ve seen that governments can move mountains in the right circumstances – then when is? And though it looks radical, the dividend really is just a rather elegant solution to a major problem, which neatly circumvents many of the usual political objections to increased taxation. It might even be the first highly popular tax.
Moving market-oriented economies off fossil energy is going to be a long and difficult struggle. Funds will also have to be found to ease the burden of the energy transition in fossil-dependent parts of the economy, helping displaced workers and supporting the communities where they live. But marshaling the power of the price system to rebalance the whole economy away from carbon-intensive industries – while supporting those on lower incomes – seems like a wonderful place to start.
• Henry D Jacoby is emeritus professor of management at MIT and former codirector of the MIT joint program on the science and policy of global change
Gary Yohe and Richard Richels contributed to the preparation of this article