I will say the "green jobs" paradigm was a tremendous improvement over the Jimmy Carter / Al Gore message which tied the eco movement to personal sacrifice and a responsibility. We cannot solve the climate crisis by recycling and putting on sweaters, nor can be solve the climate crisis just by issuing personal tax credits. Tackling climate change requires big changes to our industrial processes, and the higher up the income ladder you are the more responsible you are for that system. We need to transition is such a way to avoid as much as possible creating regressive cost burdens in green transition.
(The original "green new deal" branding was a lot more abundance-coded and a lot less degrowth-coded.)
> "One of Keynes’s most famous points is that if the economy is sufficiently depressed, paying people to dig holes and then fill them back up again would have economic benefits. The hole-digging itself is pointless. But the hole-diggers would have extra money in their pockets to spend..."
Using fiscal policy to stimulate demand is always much, much, much worse than engaging in monetary stimulus. You should NEVER follow Keynes's advice. He was of course right to consider indirect benefits as well as the obvious direct benefits; that's the perspective of an economist that most laypeople overlook and don't understand.
But we're a century past Keynes now. Using Keynes's observation to justify bad cost-benefit programs is TERRIBLE policy. There is absolutely no need, EVER, to engage in fiscal stimulus during times of insufficient aggregate demand. If your central bank is messing up, go yell at your central bank. But don't proudly advocate a useless hole-digging program, and try to falsely justify it in terms of boosting demand!
Something I wanted to share: a Ted Chiang essay on the social harms of AI. As he sees it, the problem with AI in the context of today's society is that, like so many other things, it contributes to the concentration of wealth and power in the hands of elites and managers, at the expense of rank-and-file workers (either by being an excuse to lay them off, or by providing the service of letting management blame "the algorithm" for their more antisocial decisions).
Chiang also resists the argument that AI would be useful in a utopia (how do we get there?) or would inevitably accelerate crises, on the other side of which is utopia (accelerationism doesn't exactly have a great track record.)
Get rid of subsidies that could bring in marginal customers and help kickstart the EV market so it can reach takeoff speed and replace them with rules that allow installation of solar panels on historically significant buildings.
When will climate activists realize EVs should not be part of a climate solution? While they have no tailpipe emissions, they maintain the status quo of land use and infrastructure policy, which is far more devastating to the environment. Energy costs for suburban homes are much greater than a townhouse. Communities designed around the car will require a car for every errand, exacerbating energy use. EVs still produce the same if not more localized pollutants in the form of tire and brake pad particles, which are terrible for our health and disproportionately effect the communities forced to live with the expressway in their backyard.
EVs are not some magic climate pill, the same way solar panels on suburban roofs are usually pointless. They allow people to maintain their current environmentally destructive lifestyles while feeling morally righteous. Urbanist movements would have far more climate impact without the need to give out expensive subsidies that have dubious macroeconomic merits, as the article says. Even in a recession, GND-types should not include EVs in their toolkit.
Green Metropolis by David Owen, while an older book, has timeless lessons on this subject.
That is not the point. EVs are not some “good” that we have to settle for.
“Perfect” in a climate focused world would be everyone lives in skyscrapers in cities like manhattan and walks to work or to the grocery. Obviously not everyone wants an apartment, nor does everyone want a dense city like NYC.
Smaller towns and cities can embrace simple regulatory reforms that allow for neighborhoods to encourage all forms of transportation, not just the car. When all a bank is able to finance are single family homes and 5 over 1 apartment buildings because there is a secondary market for those products, thats all you get. Suburbanites can be resistant to change, sure. But suburbs themselves are not fiscally solvent, and will meet their judgement day when the financial mechanisms that enabled their creation dry up.
My argument is that EV subsidies pack way less of a punch than other methods of reducing environmental impact that are much cheaper.
The big difference is that vehicles are replaced on a 20 year cycle, while buildings are replaced on more like a 50-100 year cycle. Obviously we should densify, and Matt strongly encourages everything that helps that happen. But replacing single family homes with denser construction is *not* cheaper than ensuring that the next new car everyone gets is an EV.
Kenny, thats not the point. The federal government need not and should not subsidize "densification" efforts. Ensuring people get EVs doesn't reduce emissions substantially and it entrenches existing indulgent residential energy use patterns.
Changing regulations and providing educational resources or providing a secondary market for things like condos or three story garden apartments costs little money. And much of this is a local issue. The federal government need not get involved in the local housing market in various cities, small and large. Thus, the money thats wasted on EV subsidies could be better spent on the other progressive agenda items, like expanding healthcare, the child tax credits, increased transit funding, and the like.
Have a like for recommending Green Metropolis, a great book!
Parts of it are dated; "living in the suburbs, we have to drive two 20-mile round trips every time we want a video from Blockbuster" is charmingly quaint. But overall it holds up very well.
Beyond the keynesian technical analysis of whether stimulative government spending is good at certain points of the business cycle, I think there's a lot of nostalgia for the new deal era in the sense that liberals/leftists perceive that as a time when society was able to take on large projects with some level of solidarity.
I actually think this is somewhat of a misreading of the history. The actual New Deal itself was too small by keynesian standards (the government nearly balanced the budget in 1937 with a 15% unemployment rate) but still incredibly controversial. Democrats won and maintained large congressional majorities but many of the Democrats were southern conservatives who were at best skeptical and sometimes outright hostile to new deal policies.
Support for the New Deal was majority support but not like a 95% consensus. And the New Deal was way too small to solve the problem.
So the New Deal itself is not a story of social solidarity, it's more about a woefully insufficient stimulus, leading directly into a war which created massive overstimulus.
A lot of the Bernie stuff is leaning on this history that government/societal projects can and should provide a source of meaning in people's lives. Moreso than any specific technical agreements, this is the biggest break with the Sanders/"Leftist" wing of the Democrats from the Carter/Clinton/Obama era. Clinton and Carter specifically talked about how government cannot build communities or take the place of private industry in the economy.
From a political perspective I think this has been a giant mistake and as a society gets wealthier less of its economy and life should be structured around the government, and political rhetoric should reflect that. But in an effort to break from the Obama legacy and also due to his kind of older school political instinct, Biden kind of leaned back into this tendency of pushing the role of the government to the forefront of the structure of life at least in his narrative, rather than the long running trend of trying to clearly define government's lanes as dealing with infrastructure, assistance for poor people, and dealing with negative externalities.
Ok, @A.D. asked a lot of valid questions about my calculations before showing that Wind Energy is a CO2 emitter (due to the backup generation when the wind is not blowing. I've used the specification from Siemen's state of the art gas turbines.
This has to be known by people in the industry yet it is not mentioned. So we have this "green energy" approach that is counterproductive. We have the left blindly supporting it. We have lots of people upset over it as they don't want windmills in their back yard. And the only people gaining from all this are the wind turbine manufacturers.
This has to be worth a bit of notice.
I'm using links to what I wrote because this would otherwise be an incredibly long comment.
I think across all of the above I've provided comprehensive facts to back this up.
And I want to stress I get no enjoyment pointing this out. Two months ago I was happily supporting wind energy believing it would reduce our CO2 impact. But reducing our CO2 output means we have to follow the numbers.
Any energy program is going to be long term. It will apply in times we need more aggregate demand and in times we don't. In fact, given the pace of the government by the time we put a program in place the recession will probably be over. So I don't see that we want to use a long term solution to fight a short term problem such as a depressed economy. Instead, just use automatic stabilizers and tax rebates.
There is non-zero value in leaving artifacts from the first landing on the moon untouched as a historical site. The value is finite, but present, right?
One fairly straightforward thing DOGE could do is make recommendations to the Republican Congress on modifications to existing laws that are being interpreted by bureaucrats in ways that are not useful. This could be as simple as more clearly defining words to limit overreach. When someone decides any structure that is over 50 years old is de facto historical that’s nuts! It then subjects it to process that any sane person should be able to say instantly is not necessary. Every year we have lousy buildings that are graduating to historical status. More and more….
“One fairly straightforward thing DOGE could do is make recommendations to the Republican Congress on modifications to existing laws that are being interpreted by bureaucrats in ways that are not useful.”
Elon Musk got bored seven words into that sentence.
While your points about Keynesianism is well-taken you kind of seem to be coming at this from an angle that government spending is intrinsically bad, and should be avoided if possible in the absence of a recession. That's really only true if that spending leads to inflation, high interest rates and high borrowing costs.
But - we don't REALLY know how the demand side affects pricing since the Great Financial Crisis - but there is good evidence that it is different. The only inflationary episode we had, despite consistent giant deficits, was the result of a very clearly identifiable global logistical crisis - and even THAT inflation subsided more quickly than ANY economist predicted, despite high levels of government spending and, probably, slower action to raise rates by the Fed than was best.
Many economists believe we are, in fact, at secular stagnation (where demand never fully meets supply, and interest rates stay near zero), as was hypothesized by many economists in the early 10s, and that it was only disrupted by Covid, not disproven or ended. And in that environment the government's number one priority should be that everybody can eat, even if money is spent inefficiently sometimes.
Wouldn't it be something if those MMT weirdos ended up being right? Stranger things have happened. The disinflation of 2023-2024 is arguably one of them.
OK, I offered some pointed criticism of Matt in my previous comment, so let me add: I agree with most of the article, especially the "let's build more transmission lines/solar panels/dense housing" part.
DEREGULATION FOR THE DEREGULATION GOD
CONSTRUCTION FOR THE CONSTRUCTION THRONE!!!
Now, I know better than to question the "more growth/GDP = always good" line. But (a point I made recently on Noah Smith's Substack), I do wish Matt Y would address the question of why Americans seem to do such a piss-poor job of converting our high GDP into actual wellbeing and happiness.
I mean, Matt sometimes presents these eye-popping statistics, like, "Mississippi has higher GDP per capita than France, even adjusted for purchasing power parity!" And I think, yay, good for Mississippi, but what are we *getting* for all this GDP? Americans are generally miserable, most of us think the country is on the wrong track, there's loneliness, alienation, distrust, people bitch about the cost of everything, a lot of our spending is frankly counterproductive in terms of long-term happiness (the video game that keeps us at home instead of socializing, the sugary processed foods that make us fat and sickly). What the heck are we doing?
If we are going to destroy the environment with our consumption and CO2 emissions, shouldn't we at least be happy while doing it?
The root problem is that reducing US carbon emissions doesn’t have much of an impact on global warming because our emissions are only a small fraction of global emissions. The politics is stuck in this zone of “people feel like we should do something, however there are no effective actions available”. So there are never any successes to build on.
Being an advanced, high-tech economy that is also low-carbon sets an example for other countries to follow. Also, we should simultaneously work to decarbonize our economy *and* help poorer countries develop clean energy infrastructure. More of our foreign aid should go to that.
And being an advanced, high-tech, energy efficient economy that is also low-carbon improves OUR quality of life, even if other countries don't follow. Certainly, things will be better for everyone if everyone contributes, and some of the worst negative effects of climate change will be unavoidable everywhere, but there are local benefits of reducing our emissions, and doing so will also give us more flexibility to make local mitigations and to take advantage of localized benefits that climate change will also bring, like longer growing seasons in more northerly regions.
Matt Y, this is a great article, thank you for writing it, but this part was a real head-scratcher: After telling us at length why the Green New Deal was unpopular, you try to convince us to go with a tax.
"So even if you fully rebated the carbon tax revenue, swapping subsidy for tax would still lower the budget deficit... a tax-and-rebate scheme leaves the bottom 60 percent of the population with more money."
My dear sir, as you yourself keep pointing out, the median voter is a non-college-educated middle-aged guy in the suburbs. And I guaran-freaking-tee you, that guy does NOT want to listen to your wonky-ass explanation of why a new tax is good for him ackshully. "Lower deficit! More money for the bottom 60%!" Your median voter doesn't give a mutant fruit fly's fart. Your median voter hears "tax" and says "f**king Democrats, f**k you and the eco-friendly bicycle you rode in on!"
"It’s still true, of course, that making this kind of swap would be politically difficult."
Ya think?
At least you acknowledge the difficulty, but man, talk about the understatement of the week. "Politically difficult" = you misspelled "the road to a 1988-style electoral college wipeout." Americans hate new taxes more than they hate Haitian immigrants who eat pets.
Sad but probably true. The main slogan of Canada’s Conservatives who are on the cusp of a landslide win in the next election is “ax the tax” — in reference to the fully refunded consumer price on carbon.
My takeaway is that there is growing recognition that new taxes are going be required to cover spending as we continue to exit the low interest rate period of the last 30 years. If the choice is not between no tax and tax, but instead between different taxes, then a carbon tax becomes a more feasible political solution.
The reason to prefer a tax over other ways of reducing emissions is that that, (setting aside pro-growth policies like building out solar and EVs to only consider pure emissions reduction) those alternatives are strictly worse. They all increase the costs of carbon to the consumer. And the answer isn’t to do something like restrict the supply of fossil fuels and hope voters don’t notice; it’s to do a smaller carbon tax.
I agree with you on the merits, but I don't run the world and I'm not the person you/Matt Y has to convince. The Median American Voter(TM) is the person who needs convincing, and you are not convincing them of the advisability of a new tax unless you have the rhetorical skills of a Barack Obama, and maybe not even then.
Kirby: Here is my very logical, thoughtful case for a carbon tax!
catturd2024: LIBRULS want HIGHER TAXES they can KISS MY A$$ F-IN COMMIES
Who is more persuasive to The Median American Voter(TM)?
"Left-of-center elites really want to address the problem of climate change"
And
"Democratic party elites do believe that decarbonization is worthwhile"
I wish you had phrased it differently, Matt. This makes it sound like wanting to fight climate change is a personal quirk, a matter of taste, like painting your living room pink or having a kale smoothie for breakfast. Something like "Democratic/left-of-center elites acknowledge that climate change is a big f**king deal that requires strong action, but that realization must be tempered by the fact that the median American voter doesn't give a damn" is closer to the truth.
If you'll forgive the culture-war-esque analogy,
"Democratic elites care about climate change" : "sex assigned at birth" :: "Democratic elites recognize climate change as the huge effing problem it is" : "sex recognized/noted at birth"
"One of Keynes’s most famous points is that if the economy is sufficiently depressed, paying people to dig holes and then fill them back up again would have economic benefits."
This relies on the central bank actually alloying the demand created by paying the workers to add to total demand. But if the central bank can do that, it can create additional demand without the hole-digging project.
The real point for fiscal policy is that if an activity has an NPV> 0 it should go ahead even if it creates a deficit.
That study that Andrew Ahern linked is so braindead dumb.
Asking people if they want to work fewer hours...almost everyone wants to! But what they won't want is to earn less money as a consequence of working less.
Universal healthcare...yeah, anyone would want that for free if they could get it! But in addition to how it's going to be paid for, who's going to do the labor, especially if you cut down work hours? Only way that's sustainable is if bunch of people all of tbe sudden are going to find their way in the healthcare sector that aren't suited for it.
A ban on ads...everyone finds ads annoying! But people will find ways to get information about products they want. And if not enough other ads can fill in, then people will have to pay money to get what was previously ad supported, which they won't like. Not to mention the First Amendment problems that arise.
That was such a great example of everything bagel nonsense that would never hold up once people's full incentives are accounted for.
Nationalizing Facebook, Google, YouTube, and the streaming services could be a rounding error depending on how you did it. Of course, the lawyers would find a way to make it more expensive.
Yeah, it would probably be interpreted that way by our current justices to punish a liberal government for taking over the platforms. I don’t think there’s anything in 1A intrinsically that gives you a right to a platform, you just have the right to not be prosecuted for speaking or self-publishing your views. But like everything these days it would be subject to interpretation by a political SC
No one has a right to a platform provided by the government, but once the government does provide such a platform, it has to be content neutral and speaker neutral over who's allowed to use it. And because online platforms lack rivalrousness, time, place, and manner restrictions become less viable. Spam is annoying, but it's also very clearly a form of expressive speech. About the only restrictions I could see on it on a public venue would be if it engages in fraudulent behavior.
I dunno, it isn’t a bad thing for healthcare to take up a huge chunk of a rich country. It would be good for America if 90% of Silicon Valley and 90% of Wall Street instead were doctors, nurses, medical researchers, or worked in manufacturing or construction doing *useful* things.
You would have to measure the value of the other goods and services created/provided instead. It’s hard to measure the hypothetical value of a lot more healthcare goods and services compared to the real measured value of software and financial goods and services.
But there’s a second point too, which is that the measured value of revenue from software and financial services may not measure the actual quality of life they provide. GDP and wealth are meant to be real measures of quality of life, but they are approximated with the dollar value people pay for them. This means that things like the transition from CDs to streaming music were vastly undercounted in the amount of wealth they created, because consumers were able to bargain the price way down, despite getting more total benefit of music consumption. There are arguments that the value of financial services and software are overestimated by looking at the dollar values they cost (though I’m not sure how strongly to agree with those arguments).
Which basically would hurt whom, Silicon Valley landlords? It’s hard to say that the concentration of wealth in SV really helps, say, the barista in Cupertino that has to live all the way out in Stockton. Thus the traditional arguments for growth are kind of upended by the housing theory of everything.
And many of the products SV sells are largely harmful just anyway by being addictive or disruptive. Same with Wall Street. The best you can say about it is that it probably helps the arts because the money in NYC keeps a thing like Broadway viable in a way that might not be possible elsewhere.
Say what you will about Big Pharma and the explosive growth in healthcare costs, it at least develops products that help people!
What you are proposing is turning Silicon Valley and New York into Detroit, a city where a preeminent American industry that caused numerous negative externalities has contracted, leaving housing stock that is affordable for service workers. This may be a tradeoff that you are comfortable with, but I can bet that it would be a hard sell to the rest of the country.
It would probably be easier to build more housing in Cupertino and better transit to Stockton so that more people can participate in the growth.
I was wondering the other day how much ad spending is actually effective or is it just something that companies think they need to do? Maybe it’s a lottery mentality where you buy a lot of tickets and hope for a big payday — you gotta pay to play kind of thing.
All of those CEOs out there would make a ton more money if they could get away with cutting the marketing budget without hurting sales. So I think the baseline assumption has to be that it works, at least as well as things work in general.
John Wanamaker is reputed to have said over a hundred years ago that he knew that half of the money he spent on advertising was wasted; the trouble was that he didn't know which half. Unlike so many mysteries of the late 19th Century that have yielded up their secrets to inspired study, we don't seem any closer to solving this one, and not for lack of trying.
I'm guessing it depends on the industry--some are very dependent on mass advertising to get the word out to customers as a whole, others are able to run on word of mouth or very targeted campaigns at a narrower, more discrete group of people that are going to be their customers.
I’d love to know if any larger companies have run controlled experiments where they deploy advertising in one geographic market and compare it to another.
Like you say, there are different goals and contexts for advertising which along with the challenge of establishing a control must make it difficult to study in the wild.
Very likely some of the big companies have! But research in these sorts of fields is very much *not* published, because they don’t want competitors to know.
If meaningful results existed, it's hard to believe that they've never been leaked, anywhere. If they had been, they'd be in the curriculum of every MBA program.
I will say the "green jobs" paradigm was a tremendous improvement over the Jimmy Carter / Al Gore message which tied the eco movement to personal sacrifice and a responsibility. We cannot solve the climate crisis by recycling and putting on sweaters, nor can be solve the climate crisis just by issuing personal tax credits. Tackling climate change requires big changes to our industrial processes, and the higher up the income ladder you are the more responsible you are for that system. We need to transition is such a way to avoid as much as possible creating regressive cost burdens in green transition.
(The original "green new deal" branding was a lot more abundance-coded and a lot less degrowth-coded.)
> "One of Keynes’s most famous points is that if the economy is sufficiently depressed, paying people to dig holes and then fill them back up again would have economic benefits. The hole-digging itself is pointless. But the hole-diggers would have extra money in their pockets to spend..."
Using fiscal policy to stimulate demand is always much, much, much worse than engaging in monetary stimulus. You should NEVER follow Keynes's advice. He was of course right to consider indirect benefits as well as the obvious direct benefits; that's the perspective of an economist that most laypeople overlook and don't understand.
But we're a century past Keynes now. Using Keynes's observation to justify bad cost-benefit programs is TERRIBLE policy. There is absolutely no need, EVER, to engage in fiscal stimulus during times of insufficient aggregate demand. If your central bank is messing up, go yell at your central bank. But don't proudly advocate a useless hole-digging program, and try to falsely justify it in terms of boosting demand!
Something I wanted to share: a Ted Chiang essay on the social harms of AI. As he sees it, the problem with AI in the context of today's society is that, like so many other things, it contributes to the concentration of wealth and power in the hands of elites and managers, at the expense of rank-and-file workers (either by being an excuse to lay them off, or by providing the service of letting management blame "the algorithm" for their more antisocial decisions).
Chiang also resists the argument that AI would be useful in a utopia (how do we get there?) or would inevitably accelerate crises, on the other side of which is utopia (accelerationism doesn't exactly have a great track record.)
https://www.newyorker.com/science/annals-of-artificial-intelligence/will-ai-become-the-new-mckinsey
Get rid of subsidies that could bring in marginal customers and help kickstart the EV market so it can reach takeoff speed and replace them with rules that allow installation of solar panels on historically significant buildings.
Got it.
When will climate activists realize EVs should not be part of a climate solution? While they have no tailpipe emissions, they maintain the status quo of land use and infrastructure policy, which is far more devastating to the environment. Energy costs for suburban homes are much greater than a townhouse. Communities designed around the car will require a car for every errand, exacerbating energy use. EVs still produce the same if not more localized pollutants in the form of tire and brake pad particles, which are terrible for our health and disproportionately effect the communities forced to live with the expressway in their backyard.
EVs are not some magic climate pill, the same way solar panels on suburban roofs are usually pointless. They allow people to maintain their current environmentally destructive lifestyles while feeling morally righteous. Urbanist movements would have far more climate impact without the need to give out expensive subsidies that have dubious macroeconomic merits, as the article says. Even in a recession, GND-types should not include EVs in their toolkit.
Green Metropolis by David Owen, while an older book, has timeless lessons on this subject.
That is not the point. EVs are not some “good” that we have to settle for.
“Perfect” in a climate focused world would be everyone lives in skyscrapers in cities like manhattan and walks to work or to the grocery. Obviously not everyone wants an apartment, nor does everyone want a dense city like NYC.
Smaller towns and cities can embrace simple regulatory reforms that allow for neighborhoods to encourage all forms of transportation, not just the car. When all a bank is able to finance are single family homes and 5 over 1 apartment buildings because there is a secondary market for those products, thats all you get. Suburbanites can be resistant to change, sure. But suburbs themselves are not fiscally solvent, and will meet their judgement day when the financial mechanisms that enabled their creation dry up.
My argument is that EV subsidies pack way less of a punch than other methods of reducing environmental impact that are much cheaper.
The big difference is that vehicles are replaced on a 20 year cycle, while buildings are replaced on more like a 50-100 year cycle. Obviously we should densify, and Matt strongly encourages everything that helps that happen. But replacing single family homes with denser construction is *not* cheaper than ensuring that the next new car everyone gets is an EV.
Kenny, thats not the point. The federal government need not and should not subsidize "densification" efforts. Ensuring people get EVs doesn't reduce emissions substantially and it entrenches existing indulgent residential energy use patterns.
Changing regulations and providing educational resources or providing a secondary market for things like condos or three story garden apartments costs little money. And much of this is a local issue. The federal government need not get involved in the local housing market in various cities, small and large. Thus, the money thats wasted on EV subsidies could be better spent on the other progressive agenda items, like expanding healthcare, the child tax credits, increased transit funding, and the like.
Have a like for recommending Green Metropolis, a great book!
Parts of it are dated; "living in the suburbs, we have to drive two 20-mile round trips every time we want a video from Blockbuster" is charmingly quaint. But overall it holds up very well.
You’re making the perfect the enemy of the good. Voters aren’t going to give up their suburban houses - end of discussion.
Beyond the keynesian technical analysis of whether stimulative government spending is good at certain points of the business cycle, I think there's a lot of nostalgia for the new deal era in the sense that liberals/leftists perceive that as a time when society was able to take on large projects with some level of solidarity.
I actually think this is somewhat of a misreading of the history. The actual New Deal itself was too small by keynesian standards (the government nearly balanced the budget in 1937 with a 15% unemployment rate) but still incredibly controversial. Democrats won and maintained large congressional majorities but many of the Democrats were southern conservatives who were at best skeptical and sometimes outright hostile to new deal policies.
Support for the New Deal was majority support but not like a 95% consensus. And the New Deal was way too small to solve the problem.
So the New Deal itself is not a story of social solidarity, it's more about a woefully insufficient stimulus, leading directly into a war which created massive overstimulus.
A lot of the Bernie stuff is leaning on this history that government/societal projects can and should provide a source of meaning in people's lives. Moreso than any specific technical agreements, this is the biggest break with the Sanders/"Leftist" wing of the Democrats from the Carter/Clinton/Obama era. Clinton and Carter specifically talked about how government cannot build communities or take the place of private industry in the economy.
From a political perspective I think this has been a giant mistake and as a society gets wealthier less of its economy and life should be structured around the government, and political rhetoric should reflect that. But in an effort to break from the Obama legacy and also due to his kind of older school political instinct, Biden kind of leaned back into this tendency of pushing the role of the government to the forefront of the structure of life at least in his narrative, rather than the long running trend of trying to clearly define government's lanes as dealing with infrastructure, assistance for poor people, and dealing with negative externalities.
Ok, @A.D. asked a lot of valid questions about my calculations before showing that Wind Energy is a CO2 emitter (due to the backup generation when the wind is not blowing. I've used the specification from Siemen's state of the art gas turbines.
This has to be known by people in the industry yet it is not mentioned. So we have this "green energy" approach that is counterproductive. We have the left blindly supporting it. We have lots of people upset over it as they don't want windmills in their back yard. And the only people gaining from all this are the wind turbine manufacturers.
This has to be worth a bit of notice.
I'm using links to what I wrote because this would otherwise be an incredibly long comment.
* The math using the Siemen's spec - https://liberalandlovingit.substack.com/p/the-math-wind-energy-is-a-false-solution
* Original two articles https://liberalandlovingit.substack.com/p/is-wind-energy-a-chimera & https://liberalandlovingit.substack.com/p/wind-energy-is-a-carbon-emitter-indirectly
* For background https://liberalandlovingit.substack.com/p/our-electrified-life , https://liberalandlovingit.substack.com/p/electricity-101 & https://liberalandlovingit.substack.com/p/load-balancing-the-grid
I think across all of the above I've provided comprehensive facts to back this up.
And I want to stress I get no enjoyment pointing this out. Two months ago I was happily supporting wind energy believing it would reduce our CO2 impact. But reducing our CO2 output means we have to follow the numbers.
Any energy program is going to be long term. It will apply in times we need more aggregate demand and in times we don't. In fact, given the pace of the government by the time we put a program in place the recession will probably be over. So I don't see that we want to use a long term solution to fight a short term problem such as a depressed economy. Instead, just use automatic stabilizers and tax rebates.
Are we at peak NIMBY?
https://www.theguardian.com/culture/2025/jan/16/moon-list-threatened-cultural-sites
There is non-zero value in leaving artifacts from the first landing on the moon untouched as a historical site. The value is finite, but present, right?
Is that wrong?
One fairly straightforward thing DOGE could do is make recommendations to the Republican Congress on modifications to existing laws that are being interpreted by bureaucrats in ways that are not useful. This could be as simple as more clearly defining words to limit overreach. When someone decides any structure that is over 50 years old is de facto historical that’s nuts! It then subjects it to process that any sane person should be able to say instantly is not necessary. Every year we have lousy buildings that are graduating to historical status. More and more….
“One fairly straightforward thing DOGE could do is make recommendations to the Republican Congress on modifications to existing laws that are being interpreted by bureaucrats in ways that are not useful.”
Elon Musk got bored seven words into that sentence.
A significant expansion of “my back yard”. The cultural stuff is just crazy.
While your points about Keynesianism is well-taken you kind of seem to be coming at this from an angle that government spending is intrinsically bad, and should be avoided if possible in the absence of a recession. That's really only true if that spending leads to inflation, high interest rates and high borrowing costs.
But - we don't REALLY know how the demand side affects pricing since the Great Financial Crisis - but there is good evidence that it is different. The only inflationary episode we had, despite consistent giant deficits, was the result of a very clearly identifiable global logistical crisis - and even THAT inflation subsided more quickly than ANY economist predicted, despite high levels of government spending and, probably, slower action to raise rates by the Fed than was best.
Many economists believe we are, in fact, at secular stagnation (where demand never fully meets supply, and interest rates stay near zero), as was hypothesized by many economists in the early 10s, and that it was only disrupted by Covid, not disproven or ended. And in that environment the government's number one priority should be that everybody can eat, even if money is spent inefficiently sometimes.
Wouldn't it be something if those MMT weirdos ended up being right? Stranger things have happened. The disinflation of 2023-2024 is arguably one of them.
OK, I offered some pointed criticism of Matt in my previous comment, so let me add: I agree with most of the article, especially the "let's build more transmission lines/solar panels/dense housing" part.
DEREGULATION FOR THE DEREGULATION GOD
CONSTRUCTION FOR THE CONSTRUCTION THRONE!!!
Now, I know better than to question the "more growth/GDP = always good" line. But (a point I made recently on Noah Smith's Substack), I do wish Matt Y would address the question of why Americans seem to do such a piss-poor job of converting our high GDP into actual wellbeing and happiness.
I mean, Matt sometimes presents these eye-popping statistics, like, "Mississippi has higher GDP per capita than France, even adjusted for purchasing power parity!" And I think, yay, good for Mississippi, but what are we *getting* for all this GDP? Americans are generally miserable, most of us think the country is on the wrong track, there's loneliness, alienation, distrust, people bitch about the cost of everything, a lot of our spending is frankly counterproductive in terms of long-term happiness (the video game that keeps us at home instead of socializing, the sugary processed foods that make us fat and sickly). What the heck are we doing?
If we are going to destroy the environment with our consumption and CO2 emissions, shouldn't we at least be happy while doing it?
It's funny that you mention France since, per current polling, Americans are happier than the French. https://worldhappiness.report/ed/2024/happiness-of-the-younger-the-older-and-those-in-between/#ranking-of-happiness-2021-2023
The root problem is that reducing US carbon emissions doesn’t have much of an impact on global warming because our emissions are only a small fraction of global emissions. The politics is stuck in this zone of “people feel like we should do something, however there are no effective actions available”. So there are never any successes to build on.
Being an advanced, high-tech economy that is also low-carbon sets an example for other countries to follow. Also, we should simultaneously work to decarbonize our economy *and* help poorer countries develop clean energy infrastructure. More of our foreign aid should go to that.
And being an advanced, high-tech, energy efficient economy that is also low-carbon improves OUR quality of life, even if other countries don't follow. Certainly, things will be better for everyone if everyone contributes, and some of the worst negative effects of climate change will be unavoidable everywhere, but there are local benefits of reducing our emissions, and doing so will also give us more flexibility to make local mitigations and to take advantage of localized benefits that climate change will also bring, like longer growing seasons in more northerly regions.
Also most tech we develop on this front helps lower the cost for future tech uptake.
As we get the costs down on solar + battery that makes it easier for poorer and poorer countries to adopt it.
Matt Y, this is a great article, thank you for writing it, but this part was a real head-scratcher: After telling us at length why the Green New Deal was unpopular, you try to convince us to go with a tax.
"So even if you fully rebated the carbon tax revenue, swapping subsidy for tax would still lower the budget deficit... a tax-and-rebate scheme leaves the bottom 60 percent of the population with more money."
My dear sir, as you yourself keep pointing out, the median voter is a non-college-educated middle-aged guy in the suburbs. And I guaran-freaking-tee you, that guy does NOT want to listen to your wonky-ass explanation of why a new tax is good for him ackshully. "Lower deficit! More money for the bottom 60%!" Your median voter doesn't give a mutant fruit fly's fart. Your median voter hears "tax" and says "f**king Democrats, f**k you and the eco-friendly bicycle you rode in on!"
"It’s still true, of course, that making this kind of swap would be politically difficult."
Ya think?
At least you acknowledge the difficulty, but man, talk about the understatement of the week. "Politically difficult" = you misspelled "the road to a 1988-style electoral college wipeout." Americans hate new taxes more than they hate Haitian immigrants who eat pets.
Sad but probably true. The main slogan of Canada’s Conservatives who are on the cusp of a landslide win in the next election is “ax the tax” — in reference to the fully refunded consumer price on carbon.
My takeaway is that there is growing recognition that new taxes are going be required to cover spending as we continue to exit the low interest rate period of the last 30 years. If the choice is not between no tax and tax, but instead between different taxes, then a carbon tax becomes a more feasible political solution.
From your mouth to God's ears!
The reason to prefer a tax over other ways of reducing emissions is that that, (setting aside pro-growth policies like building out solar and EVs to only consider pure emissions reduction) those alternatives are strictly worse. They all increase the costs of carbon to the consumer. And the answer isn’t to do something like restrict the supply of fossil fuels and hope voters don’t notice; it’s to do a smaller carbon tax.
I agree with you on the merits, but I don't run the world and I'm not the person you/Matt Y has to convince. The Median American Voter(TM) is the person who needs convincing, and you are not convincing them of the advisability of a new tax unless you have the rhetorical skills of a Barack Obama, and maybe not even then.
Kirby: Here is my very logical, thoughtful case for a carbon tax!
catturd2024: LIBRULS want HIGHER TAXES they can KISS MY A$$ F-IN COMMIES
Who is more persuasive to The Median American Voter(TM)?
"Left-of-center elites really want to address the problem of climate change"
And
"Democratic party elites do believe that decarbonization is worthwhile"
I wish you had phrased it differently, Matt. This makes it sound like wanting to fight climate change is a personal quirk, a matter of taste, like painting your living room pink or having a kale smoothie for breakfast. Something like "Democratic/left-of-center elites acknowledge that climate change is a big f**king deal that requires strong action, but that realization must be tempered by the fact that the median American voter doesn't give a damn" is closer to the truth.
If you'll forgive the culture-war-esque analogy,
"Democratic elites care about climate change" : "sex assigned at birth" :: "Democratic elites recognize climate change as the huge effing problem it is" : "sex recognized/noted at birth"
"One of Keynes’s most famous points is that if the economy is sufficiently depressed, paying people to dig holes and then fill them back up again would have economic benefits."
This relies on the central bank actually alloying the demand created by paying the workers to add to total demand. But if the central bank can do that, it can create additional demand without the hole-digging project.
The real point for fiscal policy is that if an activity has an NPV> 0 it should go ahead even if it creates a deficit.
That study that Andrew Ahern linked is so braindead dumb.
Asking people if they want to work fewer hours...almost everyone wants to! But what they won't want is to earn less money as a consequence of working less.
Universal healthcare...yeah, anyone would want that for free if they could get it! But in addition to how it's going to be paid for, who's going to do the labor, especially if you cut down work hours? Only way that's sustainable is if bunch of people all of tbe sudden are going to find their way in the healthcare sector that aren't suited for it.
A ban on ads...everyone finds ads annoying! But people will find ways to get information about products they want. And if not enough other ads can fill in, then people will have to pay money to get what was previously ad supported, which they won't like. Not to mention the First Amendment problems that arise.
That was such a great example of everything bagel nonsense that would never hold up once people's full incentives are accounted for.
Banning ads —> paid services —> people protest —> government steps in and subsidizes or nationalizes services = winning
You forgot the "—> higher taxes to subsidize/nationalize those services" that gets in the way of making it able to be winning.
Nationalizing Facebook, Google, YouTube, and the streaming services could be a rounding error depending on how you did it. Of course, the lawyers would find a way to make it more expensive.
Bigger problem with doing that is not the cost but that the First Amendment would apply, which would turn the places into massive spamfests.
Yeah, it would probably be interpreted that way by our current justices to punish a liberal government for taking over the platforms. I don’t think there’s anything in 1A intrinsically that gives you a right to a platform, you just have the right to not be prosecuted for speaking or self-publishing your views. But like everything these days it would be subject to interpretation by a political SC
No one has a right to a platform provided by the government, but once the government does provide such a platform, it has to be content neutral and speaker neutral over who's allowed to use it. And because online platforms lack rivalrousness, time, place, and manner restrictions become less viable. Spam is annoying, but it's also very clearly a form of expressive speech. About the only restrictions I could see on it on a public venue would be if it engages in fraudulent behavior.
I dunno, it isn’t a bad thing for healthcare to take up a huge chunk of a rich country. It would be good for America if 90% of Silicon Valley and 90% of Wall Street instead were doctors, nurses, medical researchers, or worked in manufacturing or construction doing *useful* things.
That's a fair argument to make--I just don't know if the public at large would want it.
That wouldn’t make everyone more poor
You would have to measure the value of the other goods and services created/provided instead. It’s hard to measure the hypothetical value of a lot more healthcare goods and services compared to the real measured value of software and financial goods and services.
But there’s a second point too, which is that the measured value of revenue from software and financial services may not measure the actual quality of life they provide. GDP and wealth are meant to be real measures of quality of life, but they are approximated with the dollar value people pay for them. This means that things like the transition from CDs to streaming music were vastly undercounted in the amount of wealth they created, because consumers were able to bargain the price way down, despite getting more total benefit of music consumption. There are arguments that the value of financial services and software are overestimated by looking at the dollar values they cost (though I’m not sure how strongly to agree with those arguments).
Which basically would hurt whom, Silicon Valley landlords? It’s hard to say that the concentration of wealth in SV really helps, say, the barista in Cupertino that has to live all the way out in Stockton. Thus the traditional arguments for growth are kind of upended by the housing theory of everything.
And many of the products SV sells are largely harmful just anyway by being addictive or disruptive. Same with Wall Street. The best you can say about it is that it probably helps the arts because the money in NYC keeps a thing like Broadway viable in a way that might not be possible elsewhere.
Say what you will about Big Pharma and the explosive growth in healthcare costs, it at least develops products that help people!
What you are proposing is turning Silicon Valley and New York into Detroit, a city where a preeminent American industry that caused numerous negative externalities has contracted, leaving housing stock that is affordable for service workers. This may be a tradeoff that you are comfortable with, but I can bet that it would be a hard sell to the rest of the country.
It would probably be easier to build more housing in Cupertino and better transit to Stockton so that more people can participate in the growth.
I was wondering the other day how much ad spending is actually effective or is it just something that companies think they need to do? Maybe it’s a lottery mentality where you buy a lot of tickets and hope for a big payday — you gotta pay to play kind of thing.
All of those CEOs out there would make a ton more money if they could get away with cutting the marketing budget without hurting sales. So I think the baseline assumption has to be that it works, at least as well as things work in general.
This is my baseline assumption but it cuts against Mercier’s view that people are rarely persuaded by mass communication…
https://www.persuasion.community/p/propaganda-almost-never-works?triedRedirect=true
That piece includes a link to this paper that finds a very little positive ROI for television advertising https://onlinelibrary.wiley.com/doi/abs/10.3982/ECTA17674
I wonder if there’s an Odd Lots episode on this…
There is a two part Freakonomics episode
https://freakonomics.com/podcast/does-advertising-actually-work-part-1-tv-ep-440/
John Wanamaker is reputed to have said over a hundred years ago that he knew that half of the money he spent on advertising was wasted; the trouble was that he didn't know which half. Unlike so many mysteries of the late 19th Century that have yielded up their secrets to inspired study, we don't seem any closer to solving this one, and not for lack of trying.
I'm guessing it depends on the industry--some are very dependent on mass advertising to get the word out to customers as a whole, others are able to run on word of mouth or very targeted campaigns at a narrower, more discrete group of people that are going to be their customers.
I’d love to know if any larger companies have run controlled experiments where they deploy advertising in one geographic market and compare it to another.
Like you say, there are different goals and contexts for advertising which along with the challenge of establishing a control must make it difficult to study in the wild.
Very likely some of the big companies have! But research in these sorts of fields is very much *not* published, because they don’t want competitors to know.
If meaningful results existed, it's hard to believe that they've never been leaked, anywhere. If they had been, they'd be in the curriculum of every MBA program.
I'm guessing they have, but I'm not an ad expert on that kind of level so I can't say for sure.
“People want all the benefits with none of the costs; also, water is wet and the bear defecates in the woods, full story at 11”
Everybody gets a pony and a blowjob!
Option C: Magic Rainbow-Farting Unicorn Ponies.
What we really need is the opposite. Magic Carbon Capture Unicorns where the direction of the rainbow is reversed.
Brilliant! Have a Nobel Prize!