Adam Tooze's Blog, page 34

How Radical Is President Joe Biden On Climate? With Aaron Bastani on Downstream

For some Joe Biden has already exceeded expectations. For others his economic program is nowhere near enough to address the climate crisis and American decline. While his Covid relief package has seen billions dispensed immediately, the Jobs Plan proposes to invest $35 billion in green R&D over eight years – less than Americans spend annually on pet food.

So how radical is President Biden? Is there such a thing as ‘Bidenomics’? And does the new President represent a break with the orthodoxy of Democrat predecessors such as Bill Clinton and Barack Obama?

Shades of Green with The Active Share podcast

Green can be a moral color, a political color, or an economic color. Join William Blair’s Hugo Scott-Gall for a conversation with Adam Tooze, history professor at Columbia University and author of “Crashed: How a Decade of Financial Crises Changed the World,” for a multidisciplinary discussion of how the decade is shaping up from an economic historian’s perspective—including climate change, inequality, geopolitics, and fragile financial markets.

For more ways to listen, visit the podcast website here.

Transformation and Financial Crises with RECET

This lecture was presented in the framework of the RECET Opening Week on 22.04.2021 at the Research Center for the History of Transformations (RECET) / University of Vienna, online via Zoom.

America’s race to net zero

Does Joe Biden’s climate plan go far enough?

On 22-23 April the Biden administration is hosting a global climate summit to mark Earth Day, named after the largest ever environmental demonstration, staged in the United States 51 years ago. As Joe Biden nears the end of his first 100 days in office, the summit celebrates the re-entry of the US into global climate politics and is a key test for a government that has defined the environmental crisis as central to its programme.

It is also an important shift in focus. So far, the Biden administration’s agenda has been dominated by disaster management. Efforts have been devoted to rolling out the vaccine bequeathed by Donald Trump’s Operation Warp Speed and delivering a third, huge round of fiscal relief to American firms and households. Ahead of the climate talks, the president has to deliver something more long term: a credible commitment to cutting at least 50 per cent of emissions by 2030 and to achieving net zero by 2050.

The crisis-fighting has worked. After a slow start, the vaccine roll-out has been impressive, transforming America’s outlook on the virus. The $1.9trn Covid relief bill was forced through Congress on 11 March against unified Republican opposition. On top of the previous rounds of economic relief, it adds up to the largest fiscal package in history – sized at more than 25 per cent of GDP. Provoking fierce criticism from Clinton-era veterans such as Larry Summers, it represents a sharp break with the fiscal orthodoxy defined by the Clinton and Obama administrations.

Read the full article at The New Statesman

The Gatekeeper

Arguing with Zombies: Economics, Politics and the Fight for a Better Future 
by Paul Krugman.

Norton, 444 pp., £13.99, February, 978 0 393 54132 8

Paul​ Krugman’s latest collection of essays, Arguing with Zombies, first appeared in January 2020. Not only was it quickly buried by Covid, but he missed out on a thing all too rare for a pundit: the opportunity to declare victory. A year later, in Joe Biden’s Washington, Krugmanism rules. The gigantic scale of the $1.9 trillion Biden rescue plan, and now the proposed $2 trillion infrastructure investment programme, are testament to a rearrangement of the relationship between economic expertise and politics in the Democratic Party, a rearrangement which Krugman anticipated and for which Arguing with Zombies makes a powerful case.

In the 1990s the lines were clearly drawn. The Democrats were a party of fiscal rectitude and trade globalisation. They had the weight of academic economic opinion behind them. Krugman was one of the cheerleaders and enforcers of that dispensation: the job of brilliant economists with a quick pen was to guard the true knowledge against deviations to the left and the right. It isn’t by accident that Jed Bartlet – the fictional president in The West Wing, the TV fantasy that sustained liberal America during the dark Bush years – was a genial economics professor and Nobel laureate. It was a fantasy. The synthesis of brains, wisdom and power embodied in Bartlet didn’t stand up to 21st-century realities. Today, Krugman tells us, ‘everything is political.’ He has come to accept that ‘the technocratic dream – the idea of being a politically neutral analyst helping policymakers govern more effectively – is, for now at least, dead.’

Read the full article at London Review of Books

How the Pandemic Changed Europe

An interview with Isaac Chotiner on the the vaccine rollout and shifting politics in the E.U.

Isaac Chotiner: Europe has faced a number of challenges in the last dozen or so years, from the financial crisis, to Brexit, to the rise of right-wing populism. Do you see the stumbles around the vaccine rollout as stemming from the same causes as of those earlier problems?

Adam Tooze: It’s definitely a new challenge, as it is for everyone. If one takes, holistically, the COVID-19 crisis, then one would have to say all of the major states around the world have faced this crisis, and there aren’t very many states other than the handful of familiar East Asian success stories that have done well. But you’re absolutely right that, in Europe, it comes as part of the bubble of complacency that burst in 2008, and they’ve been struggling ever since to reëstablish a more positive narrative. You could argue, in fact, that the bubble of complacency burst in Europe in 2005, when the European constitutional proposals were shot down by the Dutch and the French electorates, and they’ve been struggling ever since to really get on track. Peak complacency in Europe was the early two-thousands, when they had put the euro into effect; they had a constitutional program going; and, on the other side of the Atlantic, you had all the liberal world in indignant outrage about the Bush Administration and the disastrous war in Iraq. So that was peak European complacency, and it’s been downhill ever since.

Read the full interview at The New Yorker

Janet Yellen and Mario Draghi Have One Last Job

The U.S. treasury secretary and the Italian prime minister have spent decades shaping this economy. But can they control what comes next?

In recent years, the world has been regaled with stories about the crisis of expertise. The era of the liberal technocrat was over, we were told, killed off by the financial crisis and populism. But if democracies find it hard to live with expertise, it seems they can’t live without it either.

At the start of 2021, two of the most contentious capitalist democracies in the world, Italy and the United States, turned to familiar experts to chart a way out of novel political situations. If there is such a thing as a technocrat, Janet Yellen, the new U.S. treasury secretary, and Mario Draghi, Italy’s new prime minister, are it.

For the last 30 years, both Yellen and Draghi have held positions of high authority, culminating in the period between 2014 and 2018 when they overlapped as the heads of the U.S. Federal Reserve and the European Central Bank (ECB), respectively, the two most powerful central banks in the world. They were chosen to wield power based on their expertise and judgment but also because they aligned with the prevailing brand of centrist politics—Yellen more on the left, Draghi more on the center-right. They have now been called back to the ramparts, at an age that would normally suggest retirement, to take on roles that are more political than ever.

Yellen, the first woman to lead the U.S. Treasury Department, is set to preside over the most audacious round of stimulus of any democracy in peacetime. Draghi, as prime minister, faces the challenge of returning Italy to growth with the help of an unprecedented allocation of 209 billion euros ($254 billion) from the European Union’s new Next Generation EU fund that was bargained at the outset of the pandemic.

Read the full article at Foreign Policy.

The Fragility of Europe’s China Strategy

In its dealings with Beijing, the United States has turned to classic grand strategy with the aim of safeguarding its primacy. In contrast, the EU has been pursuing a less consistent, but much more suitable multi-track approach. China’s latest actions may push the Europeans to full alignments with the US—which would be both momentous and dangerous.

In the spring of 2021, the triangle of EU-US-China relations has taken on a kaleidoscopic dynamic.

Think back to the way the world looked as recently as December 2020. China was emerging strengthened from the virus shock. The United States was embroiled in unprecedented post-election chaos. The Trump administration had let the epidemic run out of control. The European Union, by contrast, was concerting itself around the NextGenerationEU (NGEU) recovery package. As her last hurrah as the de facto leader of Europe, German Chancellor Angela Merkel, backed by her allies in the European Commission, pushed through the EU-China Comprehensive Agreement on Investment.

The configuration seemed clear. America was adrift. The EU and China were forging an axis of pragmatic cooperation on trade, investment, and climate policy. Now, only a few months later, the kaleidoscope has shifted abruptly.

Read the full article at Internationale Politik Quarterly.

Where is Britain in its economic history?

A conversation with Ben Judah with the Atlantic Council on Britain since 1990, the megatrends framing Brexit and the historical role played by the Bank of England shaping the present.

View the recording here: https://www.pscp.tv/b_judah/1zqKVXrQZWpJB

Europe’s decarbonisation challenge? ‘Wir schaffen das’

In the 18th century, Europe was the cradle of the fossil-fuel revolution. Now, we are calling time on the energy sources which have hitherto defined modern history. If we achieve net-zero carbon-dioxide emissions by 2050, it will be a remarkable achievement. If we do not, we have reason to believe that the basic conditions of our existence will be in question. Even in the best case, stabilising with 1.5-2C degrees of warming, the world will be a much more dangerous and unpredictable place.

The stakes are huge. But how big is the transition required? In hard times, realism all too easily shades into pessimism. Reasonable evaluation of worst-case scenarios gives rise to gothic imagining of catastrophe. We are, after all, setting ourselves to defy the laws of thermodynamics—converting a civilisation based on concentrated energy to rely instead on the power of the wind and the sun.

In the midst of such a transformation, how do we decide what is realistic and what not? Clearly the energy transition is fundamental and far-reaching, but how much will it cost? How much change will it require in the way Europeans live and work? How large is the challenge of managing a just transition?

Read the full article at Social Europe.