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Trump the environmentalist? The president’s 2020 campaign might start touting climate victories

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In case you haven’t heard, there’s a big election coming up in a little over a year. President Trump is preparing to do battle with a crowded field of qualified Democrats. When it comes to hot button topics like jobs and immigration, Trump has got those stump speeches down pat. But a lot has changed since 2016. Climate change has become a top priority for voters and his biggest 2020 challengers have made climate action a cornerstone of their respective campaigns.

Perhaps that’s why Trump’s campaign team might be on the hunt for a list of climate-related victories to champion as the reelection fight draws nearer. Yes, you read that correctly: According to recent reporting from McClatchy, Trump’s 2020 strategy has a climate component.

McClatchy’s Michael Wilner spoke to two people close to Trump’s campaign and got confirmation from a Trump campaign spokesperson that the campaign is “gathering research for an aggressive defense of the president’s climate change record.” Of course, the Trump campaign did its standard about-face in response to the reporting that it had seemingly confirmed earlier, calling it “100 percent fake news.”

Is Trump warming up the idea of climate action? Not quite.

The White House is still mulling over a plan to establish a national security panel tasked with countering the Fourth National Climate assessment, a climate change report published in November by Trump’s own administration. If Trump decides to approve the panel, it is set to include William Happer, a physicist who once argued that CO2 is good for the planet. When a cold snap descended over parts of the U.S. this winter, Trump took to Twitter to call for some of that “good old fashioned global warming.”

Trump’s two-faced approach to climate change aside, are there any environmental victories his team can legitimately point to?

Here’s one possibility: Trump will tout his alternative to former President Obama’s Clean Power Plan, the Affordable Clean Energy Rule. His plan rolls back regulations on the coal sector, but that likely won’t stop Trump from using it to boost his green credentials.

Or perhaps he’ll emphasize a 2017 EPA report that showed emissions fell 3 percent during his first year in office. But even those numbers don’t tell the full story. “Due to the lag in data collection, that decline occurred during President Barack Obama’s final year in office, 2016, not under Trump,” Politifact said in a fact-check of the EPA’s report. Plus, emissions are on the rise again as of last year.

To his credit, Trump did sign a massive public lands package into law just this year. It had broad bipartisan support in both legislative chambers, though, and not signing it might have been politically damaging.

There could have been hints of a new environmental strategy at the president’s speech at a recent rally in Michigan. “I support the Great Lakes,” he said, and promised to fully fund the Great Lakes Restoration Initiative, funding that his own administration has tried to slash by 90 percent the past two years.

Regardless of how the president decides to portray his record on the campaign trail, here’s what we know for sure: Trump has rolled back, gutted, and slashed environmental protections and climate regulations pretty much every chance he got during his time in office thus far. His penchant for deregulation has touched everything from national monuments, to pristine Arctic wildlife refuges, to the habitat of a particularly snazzy looking bird called the sage grouse. He appointed oil, gas, and coal-loving former lobbyists to run his administration’s biggest environment agencies, and when some of those corrupt officials resigned in disgrace, he appointed equally oily men to replace them.

But don’t worry, y’all. Trump said he has a “natural instinct for science” that will guide him through this whole climate change thing. Phew.

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Trump the environmentalist? The president’s 2020 campaign might start touting climate victories

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U.N. climate report shows civilization is at stake if we don’t act now

Absent heroic efforts, the world has locked in dangerous climate change. That’s according to a much-anticipated report released on Monday in South Korea by the Intergovernmental Panel on Climate Change, a U.N.-sponsored collection of the world’s top scientists.

That stark, blunt assessment comes after years of deliberation at the request of the world’s most vulnerable nations to assemble pathways that could limit global warming to no more than 1.5 degrees C, now believed to be the upper limit that would preserve the stability of the world’s interconnected ecological and societal systems.

Some key conclusions: The world has already warmed by about 1 degree C and without a global coordinated effort, the world will reach 1.5 degrees in as little as 12 years. “Several hundred million” lives are at stake, according to the IPCC, and the actions that are required to ensure a just transition to a fossil-fuel free world have significant overlap with the actions that would be needed to reduce global poverty.

Existential risks greatly escalate if the world lets the 1.5 degree Celsius goal slip to 2 degrees, much less the 3.4 degrees we’re currently on pace for — the difference between The Hunger Games and Mad Max, as one climate reporter put it. Still, the benefit to society of completing this transition (roughly equal to the size of the entire global economy, about $60 trillion) greatly outweighs the costs of the massive scale of action the report describes.

In short, nothing like what is happening — and what needs to happen — has ever occurred in history.

“If action is not taken, it will take the planet into an unprecedented climate future if we compare to what has happen in all of human evolutionary history. Climate change is shaping the future of our civilization,” German climate scientist Hans-Otto Pörtner, one of the report’s lead authors, said in a response to a question from Grist. “This report is a milestone in conveying that message to human society.”

As daunting as all this seems, the alternative — ignoring this report, continuing about our lives as if it didn’t happen — is madness. This isn’t just a science report. This is a few hundred of the world’s best scientists screaming (in terrifyingly politely worded specificity) for the world to step up. By every available measure, this is something we simply must do.

Some of the initial coverage frames the IPCC’s stark conclusions in the too-familiar phrase of a time limit for action. “The world has just over a decade to get climate change under control” reads the Washington Post’s headline. That’s absolutely the wrong way to frame this. We only have a decade left to finish our initial coordinated retooling of society to tackle this challenge. The scientists were quite clear about this. By 2030, we’ll need to have already cut global emissions in half (45 percent below 2010 levels, according to the report), which (again, according to the IPCC) would require “rapid and far-reaching transitions” in “all aspects of society.”

Imagining a world that sets aside climate denial and gets to work is perhaps too much for some to consider, but there simply is no choice left. We have already waited too long.

And the IPCC gives cause for courage here: There is no time left to wait for the perfect solution or the perfect moment to enact a grand, top-down strategy. “All options need to be exercised,” said Scottish climate scientist Jim Skea, one of the report’s lead authors, at the report’s press conference. “We can make choices about how much of each option we use … but the idea you can leave anything out is impossible.” Carbon taxes alone aren’t enough, for example. They’d need to be combined with a suite of regulations and behavioral changes in every industry in every country.

In the words of the report itself, although “there is no documented historic precedent” for the scale of changes that would be necessary, the world has briefly achieved such rapid change at regional levels during previous times of great crisis — like, during World War II or in the midst of the energy crisis of the 1970s. In this new era of climate consequences, quite simply, every idea matters; every individual action has meaning.

In short, we need to remake society — now. Absent this, the new report says “transformational adaptation” would be necessary — with communities and whole countries reinventing themselves in order to survive.

Diana Liverman, a climate scientist at the University of Arizona and another author of the report, told Grist that the process brought her to tears. “I am overwhelmed by challenge we face. I had a good cry on plane home from exhaustion and thinking about implications of report.” Liverman also authored the “hothouse Earth” paper that drew similar conclusions earlier this year — namely that a dead world is not our destiny.

This report is a rallying cry to save the basic functioning of human civilization, shouted into the din of a news cycle dominated by a media that pretends not to understand, in a world led by anti-democratic politicians that pretend to be doing enough, aimed at a populace that pretends not to care.

If nothing else, my hope is that this report will help to take the lid off of climate (read: civilization) advocates calling for radical changes to the status quo. They now have the full weight of the world’s top scientists behind them.

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U.N. climate report shows civilization is at stake if we don’t act now

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Antarctic melt holds coastal cities hostage. Here’s the way out.

After a quarter-century of intense study, we now know the unequivocal truth: Antarctica is losing ice to the oceans, and that ice loss is picking up speed.

Forty percent of sea level rise since 1992 has happened in just the past five years — a three-fold increase in the pace at which icebergs are breaking away from land, according to a comprehensive new study based on satellite data, ground measurements, and models. In West Antarctica, where the ice sheet is inherently unstable, the last five years saw an average net outflow of 159 billion tons of ice. In total, the frozen continent has lost 3 trillion tons of ice since 1992.

“As we observe the system for longer, we see more and more changes of the type we feared could happen as the climate warms,” says Helen Fricker, a scientist at Scripps Institution of Oceanography at University of California-San Diego who worked on the study, in an email to Grist.

The collective work, published in this week’s special edition of the journal Nature, assembles a half-dozen papers written by the world’s top experts on Antarctica. It serves as a major update to our understanding of how human activity affects the Earth’s largest store of ice — and what it would take to prevent a worst-case scenario.

Antarctica’s glaciers are massive enough to flood every coastal city on Earth. So it’s no exaggeration to say that what happens in Antarctica over the next few decades will determine the fate of not just Miami and Mumbai, but also the course of human history. If we’re lucky and quickly start cutting emissions, Antarctica’s glaciers might mostly remain in place. The alternative is unthinkable.

There’s still so much we don’t know about Antarctica. But a series of major breakthroughs in recent years have raised the urgency and scale of scientists’ efforts. This week’s papers put that information into context. The clear takeaway: There is no sign of a slowdown in Antarctica’s melt rate.

After five major Antarctic ice shelf collapses in the past 25 years, there is now enough data for an emerging science of ice shelf “damage mechanics.” Ice shelves — floating extensions of glaciers grounded on solid bedrock — are vulnerable to melt from both warm air above and warm water below. Their health is increasingly at risk as climate change intensifies. In recent years, scientists have learned that ice shelf collapses are probably a precursor for major glaciers to accelerate toward the ocean — and therefore a requirement for worst-case scenarios of sea level rise in our lifetimes.

The biggest of these shelf collapses so far, Larsen B back in 2002, raised alarms throughout the research community. In a matter of weeks, a 10,000-year old mass of ice the size of Rhode Island was gone. Last year, a smaller and partial collapse of the nearby Larsen C ice shelf produced one of the largest icebergs ever seen.

Thanks to all the science that’s taken place since, we have the ability to project forward what could happen over the next 50 years. It’s the same story we know, but with more certainty: We are at a make-or-break moment when it comes to climate change. The ice shelf collapses that humanity has already kickstarted can’t be rolled back, so the goal now is to prevent more of them.

More than any other region on Earth, Antarctica holds humanity hostage — but humanity also has a way out.

“The next few years will be a pivotal period for decision making with regard to Antarctica,” Fricker says. “Depending on what is decided, we could be looking at significant and irreversible changes over the next 50 years.”

Believe it or not, there’s a clear bright side here. Quickly slash emissions, and the ice shelves should still remain stable across most of the continent. Doing so would require an unprecedented era of global cooperation, but the collaborative research taking place right now in Antarctica — an effort shared by dozens of scientists from 17 countries in this week’s update alone — could serve as inspiration. It’s a symbol of what’s possible when people work together for a common cause.

“If you are optimistic, you can find good news here,” says Christina Hulbe, a polar expert at the University of Otago in New Zealand. “Some amount of future change has been locked in by our past decisions, but there is still time to avoid the worst thatcan happen.”

Hulbe, whose first trip to Antarctica was in 1991 but was not directly involved with this week’s report, sees it partly as the culmination of what she’s been working for her entire life. In her view, the way the report is framed — as a stark choice presented to humanity — “accomplishes something that charts and graphs never will.”

In narrative prose unusual for a formal scientific study, the researchers imagine what Antarctica might be like in 2070 — with and without rapid cuts to emissions. Given the incredible size of the Antarctic ice sheets, actions taken in the next decade, the researchers conclude, will reverberate for millennia.

“I’ve never been at an Antarctic or climate conference where people said, ‘That happened slower than I thought it would,’” Hulbe says. “There is nothing here to be complacent about.”

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Antarctic melt holds coastal cities hostage. Here’s the way out.

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Puerto Rico Files for Bankruptcy the Day After Trump Admin Brags About Blocking Funds

Mother Jones

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After a day of sometimes violent demonstrations in San Juan protesting austerity measures and government handling of the debt crisis, Puerto Rico governor Ricardo Rosselló, announced Wednesday morning that he would move the island’s crushing debts into the bankruptcy-like process created under federal legislation to deal with the crisis. Unlike public entities and cities in the states, Puerto Rico, essentially a colony of the US, is prohibited from filing for bankruptcy under federal law. This legislation created a different option that allows a federal court to restructure more than $70 billion—the largest such restructuring in the history of the US municipal bond market.

The announcement comes after a flurry of lawsuits filed against the island’s government by creditors Tuesday morning, the first to land after local officials’ proposal for partial repayment of the debt was rejected by lenders last weekend. Under legislation passed last summer, known as the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), the island had until May 1 to negotiate a plan to address the debts while also providing basic services for the island’s 3.5 million residents. The deal from the local government last Friday offered as much as 77 cents on the dollar to some lenders while offering 58 cents on the dollar to others, according to Bloomberg, but the lenders called the deal unworkable. Hedge funds such as Aurelius Capital Management and Monarch Alternative Captial, and Ambac Financial Group, Inc., an insurer that owned Puerto Rican bonds, had been prevented from filing suit until May 1 under PROMESA.

The suits came a day after thousands took the streets in a national strike throughout Puerto Rico protesting cuts proposed by the board that was created under PROMESA, which increased water rates, while cutting funds to schools, public-sector jobs and pensions, health care spending, and the island’s university system totaling roughly $450 million over three years. After a day of largely peaceful protests, police used tear gas and pepper spray to disperse some protesters, according to local reports, and at least 17 people were arrested. Students and other protesters have demanded an independent audit of the debt, among other things, as the island grapples with the issue.

“As time goes by and austerity measures start to strike on more and more people, people are going to stand up and respond to what is the government violence against the people who are left in very difficult conditions,” Mariana Nogales Molinelli, an attorney in Puerto Rico and former candidate for the island’s non-voting representative to the US Congress, tells Mother Jones.

Nogales Molinelli says that the cuts by both the government and the control board to public sector workers and collective bargaining rights have made a lot of people angry—and not just university students. On April 18, the Puerto Rican Senate approved a bill that eliminated the publicly-funded audit commission responsible for insuring the debts were issued lawfully and were not in violation of island’s constitution. Some of the protesters at the capital were retired police, according to Joel Cintrón Arbasetti, a journalist with the Center for Investigative Reporting in Puerto Rico. Nogales thinks more police will join the protests.

“My guess is that part of the police force will be joining the people because they are going to be affected also,” Nogales Molinelli says. “Their kids’ schools will be closed, and they will not have enough medical insurance. The situation could explode because of all the austerity measures and they are going to have to work under much more pressure and in conditions that are going to be very difficult for them.”

Nogales says there have also been reports of some violent responses by police towards protesters and those perceived to be organizing protests. During a protest at the capital, she saw a police officer take a protester’s sign and hit her over the head with it. The Puerto Rico Police Department is currently under a consent decree with the US Department of Justice in an effort to become more professional and accountable after years of documented corruption and violence against the population.

Back on the mainland, Puerto Rico has been a political football for Trump and Congress during negotiations for a federal spending bill, with the president implying that Puerto Ricans, who have been US citizens for 100 years, were not.

When the budget deal was announced Monday morning, Democrats managed to get “an emergency injection of $295 million” to help shore up the island’s Medicaid program through the end of the year, according to Reuters. On Tuesday, Office of Budget and Management Director Mick Mulvaney bragged during a White House Press briefing that Republicans and the president had actually prevented any money from going to Puerto Rico, and that the $295 million had come from funds not previously allocated.

“You had the Democrats crying out that they got $295 million for Puerto Rico,” Mulvaney told reporters, “Did not cost the taxpayer a penny. They wanted new money, they wanted a bailout. We wouldn’t give it to them.”

It’s unclear how the restructuring will proceed as the provision in PROMESA has never been used, but the New York Times reports that Chief Justice John Roberts of the US Supreme Court will now appoint a bankruptcy judge to handle the case.

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Puerto Rico Files for Bankruptcy the Day After Trump Admin Brags About Blocking Funds

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Trump Talked Big About NAFTA, But Can He Deliver?

Mother Jones

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Killing the TPP was easy—though I suspect it will make a comeback after Donald Trump renegotiates a few bits and pieces and then loudly announces that he’s made it into the greatest trade deal in the history of the republic. But what about NAFTA? What exactly does Trump want to do? Zeeshan Aleem writes that a transition team memo makes it clear that NAFTA is at the top of Trump’s to-do list:

Suppose Trump wants to keep the US in the pact but put his self-professed negotiating skills to work in crafting what he insists would be a better version of the deal….There are a number of ways to pursue that end goal, but Trump’s rhetoric suggests he wants to do it by raising tariffs on imports from Mexico. That’s something he’d have difficulty getting Mexico to agree to, so he’d have more latitude to do it if he were to actually withdraw from NAFTA. But withdrawal is a tricky business, given how deeply the countries’ economies rely on each other.

….It would require loads of American businesses bringing existing components of their supply chains and outsourced services back onshore to avoid tariffs or other penalties — a process that takes time and money. It would also potentially increase costs for those businesses going forward.

If that’s not enough, the move could set off a trade war by prompting Mexico to raise tariffs on American goods in response. That could cause a downturn in the US economy and a spike in the unemployment employment rate that would undermine the very reason Trump is considering withdrawing from NAFTA.

….The upshot? Trump’s departure from the decades-long bipartisan consensus was politically brilliant….But following through on his promise is going to be difficult. The murky future of NAFTA may be one of the first places where Trump disappoints his followers; it won’t be the last.

Well, we’ll see. Trump almost has to do something, considering how central NAFTA was to his campaign. But in the real world, there’s not much upside. The OECD estimates that NAFTA had essentially no effect on employment, and the International Trade Commission estimates that it had essentially no effect on wages. So withdrawing wouldn’t do any good for all those working-class folks Trump appealed to, but it would cause plenty of upheaval for businesses that are tightly integrated with their Mexican supply chains.1

Of course, NAFTA’s impact hasn’t been the same everywhere. There are a few industries where employment has been negatively affected. So Trump could focus on those and boast about how he’s bringing jobs back to America. Prices of Mexican imports would go up too, but that’s a pretty diffuse effect and most people probably wouldn’t notice it.

So…who knows? As with many other things, I suspect that Trump will get agreement on a few smallish things and then take to his Twitter account to declare that he’s just done more for the American worker than any president ever. At least, I’m kind of hoping that’s what he does. The alternative is almost certainly worse.

1Needless to say, there are lots of estimates of the impact of NAFTA, and some of them suggest large employment effects—like this one from EPI. The general consensus, however, seems to be that it’s had a pretty small impact.

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Trump Talked Big About NAFTA, But Can He Deliver?

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Here’s Why It’s Fair—and Necessary—to Call Trump’s Chief Strategist a White Nationalist Champion

Mother Jones

After Donald Trump announced he was appointing Stephen Bannon to a top job in the White House as chief strategist, I sent out a tweet referring to a Mother Jones story that reported on how Bannon, when he was head of Breitbart News, the far-right conservative site, provided a haven for white nationalists. In response, Roger Stone, a longtime Trump adviser and conspiracy theory advocate (he wrote a book claiming Lyndon B. Johnson killed John F. Kennedy), tweeted at me: “‘White Nationalist’ my ass. Stop with the childish name calling….we don’t call you a communist.”

There was a major problem with his tweet: I am not a communist, and Bannon is indeed a champion of white nationalists and white supremacists. And this is according to an expert on this matter: Stephen Bannon.

In July, Bannon, who soon would leave Breitbart to become a top campaign aide to Trump, was interviewed by journalist Sarah Posner. He proudly declared of Breitbart, “We’re the platform for the alt-right.” The alt-right is an extreme but not well-defined wing of the conservative movement that rants against immigrants, Muslims, the globalist agenda, and multiculturalism and that generally advocates white nationalism (if not white supremacism—in this world, there is a difference). The alt-right also generates a hefty amount of anti-Semitism. (For more on the alt-right, see here and here.)

In that interview, Bannon did claim that not all alt-righters were racists and anti-Semites. “Look, are there some people that are white nationalists that are attracted to some of the philosophies of the alt-right?” he said. “Maybe. Are there some people that are anti-Semitic that are attracted? Maybe. Right? Maybe some people are attracted to the alt-right that are homophobes, right? But that’s just like, there are certain elements of the progressive left and the hard left that attract certain elements.” But that was whitewashing. How do we know? Because of Breitbart‘s own coverage.

In March, the website published an article headlined “An Establishment Conservative’s Guide to the Alt-Right,” which was co-written by Milo Yiannopoulos, a prominent figure in the movement. It noted that the alt-right opposed “full ‘integration'” of racial groups: “The alt-right believe that some degree of separation between peoples is necessary for a culture to be preserved.” This piece cited Richard Spencer, a 30-something Duke Ph.D. dropout, and his AlternativeRight.com website as “a center of alt-right thought.”

What does Spencer, the intellectual guru of the movement, advocate? He is quite explicit: an all-white United States. This is not a secret. In a recent interview with Mother Jones, Spencer explained his belief that America’s white population is endangered, due to multiculturalism and immigration, and he advocated “a renewed Roman Empire,” a dictatorship where only white people could be citizens. “You cannot view another white person as your enemy,” he remarked. His goal is a white ethnostate. How to get there may be unclear. He added that he hoped America’s nonwhites can be convinced to leave the country on their accord: “It’s like presenting to an African that this hasn’t worked out. We haven’t made each other happier. We are going to have to take part in this paradigmatic shift together.” During the campaign, Spencer declared, Trump “loves white people.”

Race is central to the alt-right. Ben Shapiro, a former Breitbart editor, notes, “The alt-right, in a nutshell, believes that Western culture is inseparable from European ethnicity.” That is, being white. Whether its activists prefer white nationalism (saying that different races can’t get along so nonwhites should somehow be separated from white America) or white supremacism (saying that whites are inherently superior to others), this is a racist movement. And its activists have also traded in anti-Semitism, often hurling anti-Semitic jabs at journalists who write about the alt-right or Trump. By the way, Bannon’s ex-wife did once accuse him of making anti-Semitic remarks. (Bannon denied making the comments.)

There are not many dots to connect in this picture, and the lines between them are clear. Whatever he might believe, Bannon is a self-proclaimed ally of the alt-right. (Shapiro notes that Bannon may not buy all its guff, but “he’s happy to pander to those people and make common cause with them.” And regarding Bannon, Lisa De Pasquale, a Breitbart contributor, on Monday said on the To the Point radio show that promoting the alt-right at Breitbart was “good for his business model.”) And the alt-right promotes white nationalism (if not white supremacism). So journalists who do not report that Trump has selected for a top spot in the White House an enabler of white nationalists—which certainly could qualify Bannon as a white nationalist himself—are doing the public and the truth a disservice. Thanks to Trump, a comrade of racists—many of whom are now cheering his appointment—is slated to help run the US government. This fact should be front and center, as the nation heads toward the Trump era.

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Here’s Why It’s Fair—and Necessary—to Call Trump’s Chief Strategist a White Nationalist Champion

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The crazy true story of how George W. Bush secretly tried to raise the gas tax

The crazy true story of how George W. Bush secretly tried to raise the gas tax

By on Jul 5, 2016Share

Remember that time the George W. Bush administration tried to sneak a new gas tax onto the books and sort of succeeded?

You probably don’t, because not even those fighting over this measure in Congress understood what was going on. As far as I can tell, the only person who knows the full story is Hanna Breetz, a political scientist at Arizona State University who wrote a dissertation on U.S. alternative fuel policy back in 2012. It’s a dissertation that — mirabile dictu — broke news. But, because it’s a dissertation, no one noticed.

Breetz’s research provides a rare glimpse inside the political sausage factory that churns policy proposals into laws for the good old US of A. In this episode, nobody saw the full picture, and nobody was pushing for the thing that emerged in the end. It’s a story that shows how sometimes there is no guiding plan behind this country’s policy. The politicians weren’t rational planners — they were more like ants tugging a leaf in haphazard directions until they reached a destination.

Back in January 2006, Bush held a one-man intervention with the United States, telling the country that it was “addicted to oil.” To help wean us off our addiction, he called for us to increase our alternative fuel consumption to 35 billion gallons by 2017. Where did this number come from? Conventional wisdom held that Bush pulled it from thin air.

“Tellingly, not one of the industry lobbyists, environmental advocates, Department of Energy analysts, or Congressional staff that I interviewed seemed to know where the 35 billion gallon goal came from,” Breetz writes. “Many of them derided it as a number made up for political purposes.” The people she interviewed described the target as “arbitrary,” “mythical,” and “mind-boggling.”

It’s tempting to believe that some young speechwriter suggested this number after Bush initially wrote “62 squigilliam gallons!”

In fact, the number had a purpose, and it wasn’t plucked from a hat. But the Bush administration seems to have kept silent about its rationale so that no one would figure out what it was actually proposing: doubling the federal gas tax.

Before the speech, Bush had asked his advisors for a proposal that could make dramatic change without dramatic government intrusion. Bush wanted to work with the market, not pick winners and losers. His advisors suggested a gas tax. Make gas a lot more expensive and people will start choosing other fuels. Of course, this would never fly because most members of Bush’s political party had sworn not to raise taxes of any kind. I imagine someone in the Council of Economic Advisors standing up to say, “Clearly, the best solution would be to tax oil but … we’re Republicans.”

Then, one of these advisors, Benjamin Ho, “reached into the economics literature for an almost subversively clever alternative,” Breetz writes. That alternative: Tell oil companies that they must use an unrealistically high quantity of alternative fuels or pay a penalty — in this case $1 per gallon. It’s functionally equivalent to a gas tax, but it doesn’t look like one. If that doesn’t make sense, you can read how it works here, but remember this is incomprehensible by design. The Bush administration didn’t expect the alternative fuels to emerge out of thin air — it chose a number so big that it would force companies to pay a penalty and push gas prices up. Setting a mandate for 35 billion gallons of alternative fuels would add about 20 cents to the price of gas, on top of the existing 18.6 cent federal gas tax.

When the Senate took up this proposal, however, it morphed into something different. Instead of allowing the market to choose the alternative fuels, senators picked the winner: biofuel — ethanol and biodiesel grown in the Midwest. Instead of creating a mandate for a wide variety of alternative fuels, senators expanded a mandate exclusively for biofuels — gas from plant juice — they had passed two years before. Environmentalists, concerned about the amount of land that we’d need to grow all these biofuels, successfully lobbied to get a mandate for cellulosic ethanol — which can, in theory, be produced without any additional land — into the law.

Along the way, lawmakers eliminated the $1-per-gallon penalty, the key feature required to make this policy an incognito gas tax. They replaced it with fines for companies that failed to meet the impossibly high oil displacement goals. These fines have driven up the price of gas, Breetz told me, but the entire process is inefficient and punitive. In the past, the companies have paid fines for failing to buy cellulosic ethanol that didn’t exist. The courts struck down that practice in 2013, but the EPA still requires oil companies to buy biofuels or pay a fee. Now the fees and volumes are much lower than Bush advisors envisioned, and probably too low to significantly budge the price of gas.

The bill President Bush signed into law on Dec. 19, 2007, Breetz writes, bore little resemblance to what most analysts thought was achievable, or what anyone had wanted to begin with (including the industry it purportedly helped).

The Bush administration deserves more credit than greens generally give it for passing an incognito gas tax. Of course, it didn’t exactly work, but it’s still interesting to see how factions with shared interests pulled this proposal in opposite directions. This case study challenges the notion that democratic governments make deliberate, rational choices. Perhaps we should think of public policy as emergent phenomena, like the formation of geometric patterns in snowflakes and the movement of schools of fish. Maybe democracies plan their political fate only to the same degree that termites plan the architecture of their mounds. For this termite, spending his days scribbling away about what ought to be done, that idea is at once terrifying and liberating.


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The crazy true story of how George W. Bush secretly tried to raise the gas tax

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BinC Watch: Donald Trump Still Has No Idea How Government Debt Works

Mother Jones

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Donald Trump last week:

I’ve borrowed knowing that you can pay back with discounts. I’ve done very well with debt….Now we’re in a different situation with the country, but I would borrow knowing that if the economy crashed, you could make a deal. And if the economy was good it was good, so therefore, you can’t lose.

Donald Trump today:

It was reported in the failing New York Times and other places that I want to default on debt. You know, I’m the king of debt. I understand debt better probably than anybody….But let me just tell you, if there is a chance to buy back debt at a discount, in other words, interest rates up, and the bonds down, and you can buy debt, that’s what I’m talking about.

….But in the United States, with bonds that won’t happen because in theory the market doesn’t go down so that you default on debt and that’s what happened. So here’s the story, just to have it corrected. If we have an opportunity where interest rates go up and you can buy debt back at a discount, I always like to be able to do that, if you can do it. But that’s all I was talking about. They have it like I’m going to go back to creditors, and I am going to renegotiate and restructure debt, it’s ridiculous and they know it’s ridiculous.

I’ll give Trump this much: it was ridiculous and everyone knew it was ridiculous. It was pure Trump bullshittery. But here’s the thing: even if you accept that this was what Trump was talking about, it’s still ridiculous. The US government isn’t a third party trading Treasury bonds. It’s the issuer of the bonds. If interest rates go up, should the Treasury refinance? No: it should keep paying the lower interest rates on its outstanding bonds. But what if interest rates go down? The answer is still no. Let’s hand the mic over to the Economist:

The interest rate on Treasury bonds is fixed. If the government issues debt during a low-rate period, that’s good news. To refinance that debt in a period of higher bond yields i.e., lower bond prices, the government would have to borrow from the market at much higher rates….Currently, most of the US’s longer-term debt trades above par value because it was issued at a time when bond yields were higher. For example there is a bond with a 2030 maturity and a 6.25% coupon; it trades at 152 cents on the dollar. Would it be worth offering 155 cents on the dollar upfront, and refinancing the debt at today’s lower rates? The dollar value of US debt would rise, not fall, in such circumstances.

In short, any voluntary deal with the market would require the government to pay fair value. And unless you think the Treasury bond market is mispriced (and it is the most liquid market on the planet), the government is unlikely to profit. It might be sensible for the government to alter the patterns of new Treasury issuance; borrowing long-term to lock in low rates for a generation. The Treasury has discussed the idea of refinancing illiquid bonds to improve market liquidity. But that is quite a different idea from Mr Trump’s proposal; the interest savings would be trivial.

Here’s the scary thing: debt really is one of the few things that Trump probably knows a bit about. It’s certainly bitten him in the ass often enough. And yet he still has no idea how it works. He continues to think that the federal government is basically the same thing as a trader on the Goldman Sachs trading desk.

It’s not. Whatever Trump is talking about, it won’t work. Sovereign debt is sovereign debt, and it gets paid off at 100 cents on the dollar. Trump may think everyone except Trump is an idiot, but I’m pretty sure the folks at the Fed and the Treasury are already keenly aware of how to handle open market operations to maximize value for the US government. Someone at the Trump Organization needs to clue him in about how all this stuff works.

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BinC Watch: Donald Trump Still Has No Idea How Government Debt Works

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Obamacare Continues to Not Be Doomed

Mother Jones

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Veronique de Rugy predicts disaster for Obamacare once again:

The bottom line is that after slow start, insurance companies find themselves having to increase premiums a fair amount. It seems that while for now subsidies may cover the pain for individuals, they probably won’t be able to after this year, at which point insurance companies will have to stomach the full cost of their losses due to the expiration of the reinsurance and risk-corridor programs. There soon won’t be enough subsidies to offset the premium hikes.

We’ve heard this pretty much every year: insurers are requesting huge premium increases! We’re doomed! Perhaps a bit of perspective would be helpful:

Insurers lowballed their Obamacare prices initially, coming in with premiums that were less costly than CBO projections. Higher prices were always inevitable.
Every year, insurers request big increases. They don’t get them. They get moderate increases.
Whatever happens, this is the free market at work, not some defect in Obamacare. If high premiums are truly what conservatives care about, we can fix that any time we want. Just ask Canada how to do it—or Sweden or Germany or Spain or Japan or pretty much any other advanced country on the planet.

Life isn’t perfect. Obamacare isn’t perfect. Health care is an expensive service, and health care insurance is expensive too. But so far Obamacare has done a pretty good job of keeping costs reasonably well contained. I’d wait until the end of the year before yet again declaring that it’s a failure and yet again being wrong.

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Obamacare Continues to Not Be Doomed

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Pro-Business Reforms Have Very Little Effect on Economic Growth

Mother Jones

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Are pro-business reforms good for economic growth? You’d think so, but the evidence is actually unclear. So Evan Soltas tried a different approach to the question: taking a look at countries that had big, sustained jumps in the World Bank’s Doing Business Index:

This is, I think, a reasonable way of doing things: Even if you are distrustful of the index, as am I, if the World Bank says that your country is in the top 5 percent of reformers in some year, there’s probably something to that. In my sample, it took at least a 10-point increase in the ease of starting a business to qualify as a “reform” year. That is like going from India to China.

A bit of Greek-letter math later, he has an equation that links per-capita GDP growth with the World Bank index:

What I find is that neither term has a significant coefficient. In fact, I can bound the effect of pro-business reforms quite precisely around zero, with a 95-percent confidence interval for the effect of a 10-point reform on the level of per-capita output of -1.4 percent to 3.5 percent. That is far away from the claim that such a reform could double per-capita output.

Now, this isn’t nothing. The reforms led to an increase in economic growth of about 1 percent. And especially in poor countries, there may be other compelling reasons to adopt pro-business reforms. But if Soltas is right, the economic benefits are modest.

Sadly, Soltas did not put this in colorful chart format, which he needs to do if he expects to meet the expectations of his fans. But the bottom line is simple: the United States is already one of top performers in business friendliness. Incremental improvements are all that’s left to us, and the impact of improvements plateau at high levels anyway. More than likely, pro-business reforms in the US would have little to no effect on economic growth. Here’s Soltas:

Maybe the lesson here is to beware the TED-talk version of development economics. Shortening the time it takes to incorporate a small business is not a substitute for deeper institutional reforms, such as those that support investment in human and physical capital, remove economic barriers that hold back women and ethnic or religious minorities, or improve transportation, power, and sanitation infrastructure. Easy pro-business reforms should not distract countries from pursuing changes that, while harder to make, we know to be richly rewarding in the long run.

Roger that.

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Pro-Business Reforms Have Very Little Effect on Economic Growth

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