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Subsidies undermine our economy, add to the tax burden, and hinder innovation
Exact numbers relating to Canada’s total fossil fuel subsidy are difficult to come by, a fact exacerbated by a general governmental aversion to transparency. (Larry MacDougal/The Canadian Press)
Given our renewed national interest in pipelines and oil sands mines, consider some strange bedfellows: economists who agree with environmentalists that subsidizing the fossil fuel industry is a bad idea.
Eliminating fossil fuel subsidies would obviously help Canada achieve its emissions-reduction targets. What’s less obvious is how these subsidies undermine our economy, add to the tax burden, and hinder innovation.
In testimony before the U.S. House Committee on Science, Space and Technology’s energy subcommittee in 2015, for example, Mercatus Centre senior research fellow Veronique de Rugy argued all government subsidies to the energy industry — including those that benefit the fossil fuel sector — ought to be abolished.
The Mercatus Centre isn’t an environmental organization, it’s a libertarian think-tank of free-market fundamentalists. De Rugy’s three-part argument is that:
- Government lacks the incentive to manage private investors’ funds.
- Subsidies distort investment and economic activity, as they create an unfair advantage.
- Subsidies increase both the incentive to lobby and the power of special-interest groups.
In Canada, consistent subsidy has failed to either provide stability or kick-start major innovation when it comes to fossil fuels.
Exact numbers relating to Canada’s total fossil fuel subsidy are difficult to come by, a fact exacerbated by a general governmental aversion to transparency. The industry isn’t forthcoming, but the federal and provincial governments aren’t insisting on accountability either. It’s an unfortunate irony that Canadians in need of public assistance often face more exacting demands on their own accountability than the recipients of corporate welfare.
A report by the Overseas Development Institute (ODI) from 2018 was critical both of Canada’s lack of a formal plan to phase out financial support for the oil and gas industries, and the general paucity of published reports detailing the support provided.
The ODI estimates an annual direct subsidy of $4.73 billion US ($6.3 billion Cdn) for 2016, the highest level in the G7 per unit of GDP. Other activities funded by Canadian taxpayers, such as the government purchase of the Trans Mountain Pipeline and work to expand it, add up to billions more.
A post-tax estimate includes direct subsidies, along with what fossil fuels cost in terms of their negative social impact, such as pollution and global warming. An International Monetary Fund (IMF) report places Canada’s post-tax subsidy to the fossil fuel industry from private and public sources at an astounding $43 billion US in 2015-16, an amount that would be equivalent to nearly one-fifth of the current federal budget. (On a global scale the IMF post-tax estimate is astronomical: $5.2 trillion US in 2016, or 6.5 per cent of global GDP.)
Environmental and economic impact
It’s an interesting point of common ground that both progressive environmentalists and economic libertarians oppose subsidies to the fossil fuel industry.
Globally, oil and gas producers are estimated to have lost $400 billion in market value over the past four years, and analysts running the gamut from Goldman Sachs to Jim Cramer are advising investors to put their money elsewhere.
Unfortunately for market purists and environmentalists alike, the fossil fuel industry in Canada has become so thoroughly politicized that ever-more-generous subsidies are being demanded by companies as the cost of doing business.
Consider the baffling pseudo-debate over Teck Resources’ now-withdrawn proposal for the Frontier Mine. Before Teck pulled the plug on the project last week, CEO Don Lindsay had already indicated the cost of a barrel of oil would have to rise by nearly half to make the $20 billion mine profitable. Yet the Trudeau Administration was prepared to green-light the project despite the obvious environmental concerns if it could get Jason Kenney to agree to emissions reductions.
While politicians euphemistically refer to subsidies as “investment” and insist they are facilitating a transition to clean energy, there’s scant evidence this is the case. The entire idea of a ‘transitional fuel’ is absurd: if you burn it for energy, it’s adding to the emissions problem. Worse, according to the International Monetary Fund, subsidies encourage excessive consumption.
In a 2019 report, the International Institute for Sustainable Development minced no words: “fossil fuel subsidies are a key barrier to this transition.”
Energy companies have one responsibility: increasing shareholder value. How this value is created doesn’t fundamentally matter. Energy companies don’t have to limit themselves to fossil fuels, but subsidies that prop up struggling fossil fuels-based businesses create barriers to innovation, and to adaptation as markets change.
Inherently inefficient fossil fuel subsidies impede investment in clean energy technologies, ultimately undermining efforts to fight climate change.
Eliminating subsidies forces energy companies to transition to clean energy more quickly: innovative companies will swim while industry dinosaurs will sink. It’s cold and hard, but that’s the free market for you.
And it’s a false dichotomy that Canada must choose between fighting climate change and supporting jobs in Alberta. Both need to happen simultaneously.
Rather than pouring money down the hole of the fossil fuel sector, it could be used to retrain unemployed oil workers and build solar arrays, wind turbines and hydro-electric generating stations, with an aim to providing new jobs in all the regions adversely affected by over-reliance on non-renewable resource extraction.
Though this could also be considered a subsidy, the crucial difference is that renewable energy sources are a sustainable and growing industry, and don’t carry the expensive social and ecological burdens of fossil fuels — no heightened mortality rates due to air pollution, no orphan wells in need of clean-up.
Given the severity of the climate crisis and the increasingly untenable relationship between the fossil fuel industry and Canadian society, it’s unlikely axing subsidies alone will be enough to bring about fast, meaningful change in the energy sector. After years of fossil fuels subsidies, government intervention is now necessary to quickly build a clean energy production and distribution infrastructure sufficiently large enough to get all of Canada off fossil fuels. SOURCE
New research compares 2 plans as Alberta and Ottawa negotiate agreement on rules for oil and gas industry
A pumpjack works at a wellhead on an oil and gas installation near Cremona, Alta. Both the federal and Alberta governments have proposed regulations that will reduce methane from oil and gas extraction. (Jeff McIntosh/The Canadian Press)
A new study suggests that the federal government’s proposed regulations to reduce methane emissions, a potent greenhouse gas emitted by the oil and gas industry, would be more effective than competing regulations proposed by the Alberta government.
But there’s room for improvement for both, and a question mark over whether either set of regulations would meet Canada’s methane reduction targets.
The goal is to reduce methane emissions from the oil and gas industry by 40-45 per cent from 2012 levels by 2025. The goal stems from a leaders summit in 2016, when Mexico, the U.S. and Canada agreed to these methane reductions. The goal has now been incorporated into Canada’s official climate plan, the Pan-Canadian Framework.
“Absolutely that kind of methane reduction is achievable,” said Matthew Johnson, an engineering professor at Carleton University who is a leading expert on emissions in Canada’s energy sector.
“We would say that the federal government [proposal] will just meet that target. Are there things in here you could do to improve both regulations? Hundred per cent. Neither regulation is perfect.”
Alberta and the federal government are currently in equivalency negotiations to decide which methane regulations will go into effect. Under the law, Alberta’s regulations would apply if they are found to be as or more effective than the federal regulations. The negotiations are meant to determine if the provincial regulations are equivalent to the federal ones.
Both have proposed regulations aimed at reducing leaks of methane from conventional oil and gas facilities, through a swath of new requirements that target everything from how the facilities are run, how often they are inspected, the equipment they use and how methane leaks are detected.
There are leaks of methane throughout the extraction of oil and gas, from the wellheads, through pipelines and pumps to delivery to market.
Johnson’s analysis found that the federal government’s regulations would achieve net reductions of 40 per cent — just reaching the lower end of the goal — while Alberta’s regulations would be behind at 35 per cent reduction.
Methane gas is 25 times more potent than carbon dioxide as a greenhouse gas, and accounts for 15 per cent of Canada’s total greenhouse gas emissions, according to Environment and Climate Change Canada (ECCC). Reducing it is a key part of Canada’s climate change plan, and a major policy directed toward reducing emissions from the oil and gas sector.
But the methane regulations don’t apply to a significant part of that industry — Alberta’s oilsands mines. The oilsands are a completely different mining operation than upstream oil and gas facilities, and account for about 19 per cent of Alberta’s methane emissions. The current regulations are focused on the other sources of emissions, for which a clearer path to reduction exists.
Johnson’s study pointed out that even without any new regulations, methane emissions from sources that are not oilsands mines have fallen from 2012 to 2018.
In contrast, emissions from oilsands mines have gone up. If emissions from the oilsands keep rising, it could cancel out any reductions from the new methane regulations.
“So which trend wins? If that oilsands trend increases faster than any additional non-regulation reductions at the top, then those targets are in jeopardy,” Johnson said.
The Alberta Energy Regulator and the federal ECCC, the departments that crafted the methane regulations, did not comment directly on Johnson’s paper. ECCC said the process of working toward an equivalency agreement requires comparing the “environmental outcomes” between the federal and provincial proposals.
“ECCC is always open to working with interested jurisdictions, including Alberta, toward equivalency agreements,” said an ECCC spokesperson in an emailed statement.
Johnson’s paper suggests several options for Alberta’s regulations to be tweaked to reach, or even exceed, the methane reduction targets. He said he hopes that the analysis in his paper can be used to improve the regulations in the next few years.
“Methane is not a solved problem. Not even close. And these regulations aren’t final, and I think that the regulators will tell you they’re not final,” Johnson said. SOURCE
“To my understanding, there’s an intent for both the federal government and the provincial government to revisit these regulations, and look for opportunities to improve or adjust as things change in the near term.”
Michele Audette says she wonders if Indigenous women feel any safer after commission’s final report
Michele Audette, one of the commissioners of the National Inquiry into Missing and Murdered Indigenous Women and Girls, said she hoped the more than 200 recommendations included in the inquiry’s final report last June would mean a better and safer future for children such as her granddaughter. (Andrew Vaughan/Canadian Press)
Michele Audette feels disappointed when she looks online and sees a barrage of violent threats toward Indigenous women.
“It made me so mad that we tolerate this. There’s no real … reprimand,” says Audette, who was one of the commissioners for the national inquiry into missing and murdered Indigenous women and girls.
As she gently places her eight-month-old grandchild into her vehicle in Quebec City, Audette explains that she understood it would take time for governments and society to work toward the more than 200 recommendations included in the inquiry’s final report last June. The report called violence against First Nations, Metis and Inuit women and girls a form of genocide.
Audette had hoped the work would mean a better and safer future for children such as her granddaughter.
She wonders if Indigenous women feel any safer, especially with threats levelled during recent anti-pipeline protests, rail blockades and demonstrations.
In many of those cases, she feels that women are more often targets than men.
“Here again, status quo. We are not safe,” she says.
“For me, in 2020, it’s unacceptable.”
Bardish Chagger, Canada’s minister of diversity, inclusion and youth, has called racist taunts and threats directed at Indigenous people following recent protests horrible and ignorant. She says many Canadians are unaware of Indigenous history and rights.
Parallels to Idle No More
Erica Violet Lee, a community organizer from Saskatoon, says the treatment of Indigenous people in Canada has always been violent.
When they speak out about issues, “Canadian politeness” crumbles away, she says. It was similar during the Idle No More protest movement, which was started by four women in 2012.
“When Indigenous communities and nations exercise our inherent right to self-determination, we become troublemakers, ‘bad Indians,’ who don’t respect the Canadian rule of law,” Lee said in an email.
“But Cree laws and the laws of our lands say that we have a responsibility to act in situations of injustice and environmental devastation.”
Lee recently attended a demonstration at a Saskatoon rail line in support of Wet’suwet’en hereditary chiefs opposed to a natural gas pipeline on traditional territory in British Columbia. She says some men began yelling at young protesters to jump in front of the trains.
She says she and the youth were called everything from “stupid” to “terrorists.” They also received death threats.
“How do we respond to that? We keep living,” Lee says.
During the pipeline protests, it was common to see online comments encouraging drivers to run over protesters. One photo showed blood on the front of a train with a laughing face emoji.
The SooToday news website in Sault Ste. Marie, Ont., citing a rise in racism, closed its comment section on Indigenous stories in February.
“We have read your ignorant ramblings, your subtle, but hurtful racism,” editor Mike Purvis wrote in an editorial. “We have moderated your thinly (and not-so-thinly) veiled threats of violence.”
Online threats moving offline
Uttering threats is a criminal act. RCMP spokeswoman Catherine Fortin said in an email that a “hate-motivated incident,” such as name-calling or racial insults, may not reach the threshold of a criminal offence, but can still be reported to police.
Nickita Longman, a Saulteaux woman from George Gordon First Nation in Saskatchewan, says it has been inspiring to see Indigenous people across the country come together in protests, but it has come with alarming backlash.
The longtime activist and organizer, who lives in Winnipeg, says the most concerning aspect of online hate and threats toward Indigenous women is how often it goes unchallenged.
The cross-Canada demonstrations have for the most part been peaceful, she says, and women will not be swayed by threats.
“Until our inherent rights are recognized and respected to the fullest capacity, we will continue to resist,” Longman says.
“It is important to continue because our resistance has the capacity to dictate the future for generations to come.”
Her main concern is online rhetoric moving offline.
“The more these comments find space on the internet, the more they embolden people to act on them in person.
“As an Indigenous woman, that is by far the scariest part.” SOURCE
We already have the technology to reach negative emissions by the 2040s, a new report from climate research group Project Drawdown has concluded.
- Report identifies more than 80 areas where we can reduce emissions, highlights energy and food systems as biggest opportunities
- Food waste and education are underestimated areas for emissions reductions
- Long-term atmospheric carbon budget will only reduce over hundreds of thousands of year
Drawdown is the projected point where the concentration of greenhouse gases in the atmosphere stops going up, and begins to reduce.
To achieve drawdown, we need to be producing a net-negative amount of greenhouse gases, meaning we have to be removing CO2 and other greenhouse gases from the atmosphere.
The report, based on an extensive review of the scientific literature, identified around 80 areas where we can reduce and reverse emissions.
When grouped by sector, potential emissions reductions by area were ranked as follows:
- Energy — especially onshore wind turbines and utility-scale solar
- Food waste, agriculture, land rehabilitation — cutting food waste, reducing red meat intake, rehabilitating peatlands, protecting soil carbon, regenerating forests, shifting agricultural practices, restoring degraded ecosystems
- Industry — managing refrigerants, switching to alternative refrigerants, switching to alternative cements, reducing, recycling, bioplastics
- Building efficiency — insulation, clean cookstoves, solar heating
- Transport — improved public transport, electric vehicles, clean shipping, rail
Waiting for new technology to save us from climate change is a dangerous approach, according to report co-author Jonathan Foley.
He said that their report shows we already have the means to combat climate change, but acknowledges that it will take an enormous and united political and social will to achieve drawdown this century.
“To get to climate safety — to avoid really catastrophic climate change in future — we have an expression ‘now, not new‘,” Dr Foley said.
“We found that when we add together the 80-plus solutions to climate change, and these already exist, we have enough to get drawdown by between the 2040s and the 2060s depending on how decisively we act.
Food waste is an opportunity
That is equal to around 1.6 billion tonnes, and about $1.6 trillion worth of food, a Boston Consulting Group (BCG) report states.
This is expected to rise to around 2.1 billion tonnes (66 tonnes per second) by 2030.
All that wasted food is wasted energy, said Bernadette McCabe from the University of Southern Queensland’s Centre for Agricultural Engineering.
In some countries such as the UK, food waste is collected through curb-side rubbish and other programs, and broken down anaerobically to produce methane.
That methane is then captured and used as fuel to power things like buses, or in places like California in the United States it is fed back into the power grid.
The by-product of the food waste is also re-used as a fertilizer, according to Professor McCabe.
“You’re displacing fossil fuels like diesel by replacing diesel in buses with methane. And you can capture carbon dioxide which can be used in greenhouses.”
Australia is doing quite well on some fronts, including capturing soil carbon, Professor McCabe added. However, there needs to be greater investment in infrastructure to convert food waste to energy.
Women’s role in reducing emissions
The report also identified education and empowerment of women as key to emissions reduction.
In what is referred to as a co-benefit, the authors state that giving women greater agency, education and access to better healthcare leads to falling rates of reproduction.
They estimate that providing access to education and self-determination to all women across the world could have as big an impact as the whole planet switching to plant-rich diets.
However, they stress that population is less important than consumption.
“It’s critical to note the vast disparities in emissions between … the wealthiest individuals and those of less financial means,” the report states.
Last summer ‘will be absolutely nothing’ compared to 3-4 degrees warming
The Intergovernmental Panel on Climate Change (IPCC) has predicted that global annual emissions will continue rising beyond 2030, even if all Paris Agreement targets are met.
Getting to net-zero emissions by 2050 at the absolute latest is essential if the world is to avoid catastrophic climate change, according to climate scientist Will Steffen from ANU.
“If you want to keep [warming] well below 2 degrees Celsius then you really need to hit net-zero by 2040, [but] we’re not even close to achieving that,” Professor Steffen said.
However, while it is theoretically possible to get emissions into the negatives, he cautioned against conflating fossil carbon with organic carbon.
The CO2 that we release when we burn fossil fuels has been stored in the earth for hundreds of millions of years.
On the contrary, CO2 that is absorbed by organic sources like trees is only stored for tens to hundreds of years before it is recycled back into the atmosphere.
By burning fossil fuels, we’re adding to the overall carbon budget of the atmosphere, Professor Steffen said.
“As long as we continue to use fossil fuels they cannot be offset by growing trees,” he said. SOURCE
During the Second World War, under the leadership of none other than “minister of everything” C.D. Howe, this country created 28 new crown corporations to manage every aspect of the war effort.
If you’re feeling a mounting sense of apocalyptic unease as you wash your hands and sing “Happy Birthday” for the eighth time this morning, you are not alone.
It is perfectly possible that before 2020 is half over, we will be in a global recession exacerbated by a pandemic and an oil price crash. And it is all playing out against the backdrop of a climate emergency that is proceeding at terrifying speed whether it is on the front pages or not.
But while stock markets veer between fear and greed, some of us find ourselves ricocheting from fear to hope. (And back again.)
Beyond this week’s initial economic package, it is entirely possible that the Trudeau government will soon have to step up with a massive economic stimulus, perhaps one even bigger than a decade ago.
And while U.S. President Donald Trump seizes this crisis moment to bail out his billionaire friends in unsustainable industries, Prime Minister Justin Trudeau – preparing a budget and searching for a unifying second-term mission – could and should bail out people and the planet instead.
In fact, the response to this period of converging crises is a once-in-a-lifetime opportunity for the federal government to initiate a reset of our economy and society, putting Canada on a path toward zero emissions, and bringing immediate material benefits and enhanced, 21st century universal public services to everyone – prioritizing Indigenous, racialized and working class communities – that is, the people who need them most.
In other words, this is the ideal moment for Canada to launch the decade of the Green New Deal, a sweeping vision launched nationally last spring by more than 150 climate and social justice organizations, building on momentum south of the border from U.S. congresswoman Alexandria Ocasio-Cortez and the Sunrise climate movement. Essentially, it recommends an unprecedented public investment in a justice-based transition that creates a vast number of well-paying (preferably unionized) jobs, solves our crises in housing, crumbling infrastructure, health and education, inadequate transit, and deep inequality. This kind of public investment would vastly expand the tax base and stabilize the economy at the same time.
We know this can be done in Canada. During the Second World War, under the leadership of none other than “minister of everything” C.D. Howe, this country created 28 new crown corporations to manage every aspect of the war effort. That’s the level of commitment we need for a rapid shift to a climate-safe and more equal economy.
And we certainly have the resources to do it.
In the midst of all these terrifying and converging disasters, this is perhaps the greatest opportunity – to shatter the shackles of austerity thinking and see the potential for government to do big things, like actually lead a democratic and inclusive response to the climate emergency at the speed and scale that science and justice require.
In a crisis (like a pandemic, an economic meltdown, a climate breakdown, or all of the above at once) people across the ideological spectrum want and expect government to ride to the rescue. While it does so, there is a historic opportunity to heal all kinds of wounds across the land.
Imagine, just for one example, if on the other side of the coronavirus pandemic, the federal government started painting Alberta in publicly-owned solar panels, creating tens of thousands of jobs that paid prevailing energy industry wages, while enforcing the law of polluter pays to spark a reclamation boom cleaning up a century of oil and gas wells and infrastructure.
The job creation per federal dollar would be exponentially higher than the purchase of a white elephant pipeline. And speaking of which, once we’re all hard at work building the future together – it’ll be a lot less painful to wash our hands of the relics of the past. SOURCE
Avi Lewis is a filmmaker and strategic director of The Leap
In Sunday’s debate, Sanders made a clear-eyed case for taking the profit motive out of healthcare, while Biden railed against “revolution.”
Bernie Sanders at the presidential debate in Washington, D.C. on March 15. (Photo by Mandel Ngan/AFP via Getty Images)
Sunday’s Democratic debate featured urgent questions about how presidential candidates Bernie Sanders and Joe Biden would address the coronavirus pandemic. As the outbreak spreads across the United States at a breakneck pace, officials are faced with two paths of how to respond: hand off public services and assets to further enrich the corporate elite, or expand social programs to protect the working class.
In her influential book The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein warned of how free market fundamentalists exploit crises like 9/11 and Hurricane Katrina—but at the same time, Klein highlighted the opportunities for positive social change inherent in “communal recovery” to crisis. As disasters make apparent the deep inequities at the heart of our capitalist society, they allow us to rethink and, in Klein’s words, “remake” the world in order to benefit working people.
Sanders has laid out an expansive vision of government intervention to deal with coronavirus, including implementing a Medicare for All system to provide universal testing and treatment for those who contract the virus, as well as free healthcare going forward for all Americans, regardless of income. Sanders also called for guaranteed paid sick leave and a national moratorium on evictions, home foreclosures and utility shutoffs as immediate steps to deal with the crisis.
“What we’ve got to do is move aggressively so that every person in this country understands that they don’t have to worry about money for treatment. I believe in Medicare for All, I will fight for that as president. Do not worry about the cost right now because we are in the midst of a national emergency,” Sanders said during Sunday’s debate, continuing later, “This coronavirus pandemic exposes the incredible weakness and dysfunctionality of our current healthcare system.”
Biden, meanwhile, has endorsed free testing and treatment for coronavirus patients and emergency paid leave, but refused to back Medicare for All, citing concerns about the cost, pragmatism and wisdom of such a universal system.
“You have a single payer system in Italy, it doesn’t work there. It wouldn’t solve the problem at all,” Biden claimed Sunday.
Biden’s critique misses the fact that coronavirus patients in Italy are receiving all of their care free of cost, whereas in the United States, the cost of simply getting tested can reach above $3,000, and the House coronavirus response package recently passed with bipartisan support, which would make testing free, has yet to be signed into law.
The safety threat of the crisis can’t be overstated. The New York Times has reported that up to 214 million Americans could become infected with the virus—over 60% of the population—and 1.7 million could die. What’s more, up to 21 million may require hospitalization, while the country’s healthcare system currently has less than 1 million staffed hospital beds. This could lead to a catastrophic result, where the system becomes overwhelmed and doctors are forced to make impossible decisions about which patients get to live and which don’t, as has already been the case in Italy.
But the potential fallout from the crisis goes much deeper, threatening to bankrupt businesses and individuals alike as a result of the halting of economic activity. Over half of all Americans live paycheck to paycheck, relying on a regular influx of cash to pay for bills, rent, childcare and healthcare costs. If their income is stunted by their work shutting down or by getting sick and being forced to stay home, these millions of people face financial disaster—especially with social safety programs having been undermined and restricted in recent years.
“What we have got to address is not just the current economic crisis, but also address the fragility of the economy, in which so few have so much and so many have so little,” Sanders said during the debate.
Biden has used the pandemic as an opportunity to illustrate the flaws of the Trump administration—which are indeed glaring—while Sanders has taken a wider lens, using it as an opportunity to illustrate the flaws in a society that prioritizes profit above all else. The divide between the two was highlighted in the headlines of dueling CNN op-eds from the candidates, published Sunday. Biden’s read, “The virus lays bare the shortcomings of the Trump administration,” while Sanders’ declared, “Coronavirus highlights the flaws in our healthcare and economic systems.”
The outbreak has put those flaws on full display. On March 12, the Federal Reserve pumped $1.5 trillion in short-term loans into financial markets to help stabilize them. Trump’s Treasury Secretary Steven Mnuchin is asking Congress to upend the 2010 Dodd-Frank financial reforms—put in place to protect from another collapse—as a way to deal with the economic impacts of coronavirus. And Trump himself has floated bailing out the fossil fuel, airline and cruise industries as part of his administration’s response.
Meanwhile, the Democratic-controlled House’s response package excludes a full 80% of the workforce from the bill’s paid sick leave protections. At a time when the richest 10% of America’s families claim 70% of all wealth in the country, Whole Foods—owned by Jess Bezos, the richest man in the world—has encouraged employees to “donate” their own paid leave to fellow workers who get sick.
These responses from the political and corporate establishment don’t come close to dealing with the crisis that’s spreading like wildfire across the country. Doing so will require transforming national priorities, from protecting corporate interests to protecting human life.
Throughout the debate, Biden brushed away Sanders’ calls for a transformative approach, saying “People are looking for results, not a revolution.”
The crisis shows not just the callousness of the current system but the potential for radical change. Pushed by necessity, governments have been responding with measures socialists have long called for: Cities such as Miami and New York are halting evictions. Others like Detroit are reversing their water shutoff policies. Even Trump has announced that those with student loans administered by the government will see their interest fees waived during the crisis.
These policy changes reveal that government has always had the power, and the ability, to protect the most vulnerable residents—it’s just previously chosen not to pursue them. But with the virus becoming a clear and present danger, Americans are realizing more and more that the function of our government must be to provide safety and care for its people. According to a new Morning Consult poll, 41% of adults now say that the outbreak has made them more likely to “support universal healthcare proposals, where all Americans would get their health insurance from the government.”
At the debate, Sanders stated, “This is not the time for profiteering.” If the coronavirus outbreak can show us anything, it’s that when it comes to basic human needs, profiteering never has a place in society. Only solidarity does.
Naomi Klein explains how governments and the global elite will exploit a pandemic.
The coronavirus is officially a global pandemic that has so far infected 10 times more people than SARS did. Schools, university systems, museums, and theaters across the U.S. are shutting down, and soon, entire cities may be too. Experts warn that some people who suspect they may be sick with the virus, also known as COVID-19, are going about their daily routines, either because their jobs do not provide paid time off because of systemic failures in our privatized health care system.
These are the perfect conditions for governments and the global elite to implement political agendas that would otherwise be met with great opposition if we weren’t all so disoriented. This chain of events isn’t unique to the crisis sparked by the coronavirus; it’s the blueprint politicians and governments have been following for decades known as the “shock doctrine,” a term coined by activist and author Naomi Klein in a 2007 book of the same name.
History is a chronicle of “shocks”—the shocks of wars, natural disasters, and economic crises—and their aftermath. This aftermath is characterized by “disaster capitalism,” calculated, free-market “solutions” to crises that exploit and exacerbate existing inequalities.
Klein says we’re already seeing disaster capitalism play out on the national stage: In response to the coronavirus, Trump has proposed a $700 billionstimulus package that would include cuts to payroll taxes (which would devastate Social Security) and provide assistance to industries that will lose business as a result of the pandemic.
“They’re not doing this because they think it’s the most effective way to alleviate suffering during a pandemic—they have these ideas lying aroundthat they now see an opportunity to implement,” Klein said.
This interview has been lightly edited for length and clarity.
Let’s start with the basics. What is disaster capitalism? What is its relationship to the “shock doctrine”?
The way I define disaster capitalism is really straightforward: It describes the way private industries spring up to directly profit from large-scale crises. Disaster profiteering and war profiteering isn’t a new concept, but it really deepened under the Bush administration after 9/11, when the administration declared this sort of never-ending security crisis, and simultaneously privatized it and outsourced it—this included the domestic, privatized security state, as well as the [privatized] invasion and occupationof Iraq and Afghanistan.
The “shock doctrine” is the political strategy of using large-scale crises to push through policies that systematically deepen inequality, enrich elites, and undercut everyone else. In moments of crisis, people tend to focus on the daily emergencies of surviving that crisis, whatever it is, and tend to put too much trust in those in power. We take our eyes off the ball a little bit in moments of crisis.
Where does that political strategy come from? How do you trace its history in American politics?
The shock-doctrine strategy was as a response to the original New Deal under FDR. [Economist] Milton Friedman believes everything went wrong in America under the New Deal: As a response to the Great Depression and the Dust Bowl, a much more activist government emerged in the country, which made it its mission to directly solve the economic crisis of the day by creating government employment and offering direct relief.
If you’re a hard-core free-market economist, you understand that when markets fail it lends itself to progressive change much more organically than it does the kind of deregulatory policies that favor large corporations. So the shock doctrine was developed as a way to prevent crises from giving way to organic moments where progressive policies emerge. Political and economic elites understand that moments of crisis is their chance to push through their wish list of unpopular policies that further polarize wealth in this country and around the world.
Right now we have multiple crises happening: a pandemic, a lack of infrastructure to manage it, and the crashing stock market. Can you outline how each of these components fit into the schema you outline in The Shock Doctrine ?
The shock really is the virus itself. And it has been managed in a way that is maximizing confusion and minimizing protection. I don’t think that’s a conspiracy, that’s just the way the U.S. government and Trump have utterly mismanaged this crisis. Trump has so far treated this not as a public health crisis but as a crisis of perception, and a potential problem for his reelection.
The shock doctrine was developed as a way to prevent crises from giving way to organic moments where progressive policies emerge.
It’s the worst-case scenario, especially combined with the fact that the U.S. doesn’t have a national health care program and its protections for workers are abysmal. This combination of forces has delivered a maximum shock. It’s going to be exploited to bail out industries that are at the heart of most extreme crises that we face, like the climate crisis: the airline industry, the gas and oil industry, the cruise industry—they want to prop all of this up.
How have we seen this play out before?
In The Shock Doctrine I talk about how this happened after Hurricane Katrina. Washington think tanks like the Heritage Foundation met and came up with a wish list of “pro-free market” solutions to Katrina. We can be sure that exactly the same kinds of meetings will happen now— in fact, the person who chaired the Katrina group was Mike Pence. In 2008, you saw this play out in the original [bank] bail out, where countries wrote these blank checks to banks, which eventually added up to many trillions of dollars. But the real cost of that came in the form of economic austerity [later cuts to social services]. So it’s not just about what’s going on right now, but how they’re going to pay for it down the road when the bill for all of this comes due.
Is there anything people can do to mitigate the harm of disaster capitalism we’re already seeing in the response to the coronavirus? Are we in a better or worse position than we were during Hurricane Katrina or the last global recession?
When we’re tested by crisis we either regress and fall apart, or we grow up, and find reserves of strengths and compassion we didn’t know we were capable of. This will be one of those tests. The reason I have some hope that we might choose to evolve is that—unlike in 2008—we have such an actual political alternative that is proposing a different kind of response to the crisis that gets at the root causes behind our vulnerability, and a larger political movement that supports it.
This is what all of the work around the Green New Deal has been about: preparing for a moment like this. We just can’t lose our courage; we have to fight harder than ever before for universal health care, universal child care, paid sick leave—it’s all intimately connected.
If our governments and the global elite are going to exploit this crisis for their own ends, what can people do to take care of each other?
”’I’ll take care of me and my own, we can get the best insurance there is, and if you don’t have good insurance it’s probably your fault, that’s not my problem”: This is what this sort of winners-take-all economy does to our brains. What a moment of crisis like this unveils is our porousness to one another. We’re seeing in real time that we are so much more interconnected to one another than our quite brutal economic system would have us believe.
We might think we’ll be safe if we have good health care, but if the person making our food, or delivering our food, or packing our boxes doesn’t have health care and can’t afford to get tested—let alone stay home from work because they don’t have paid sick leave—we won’t be safe. If we don’t take care of each other, none of us is cared for. We are enmeshed.
We’re seeing in real time that we are so much more interconnected to one another than our quite brutal economic system would have us believe.
Different ways of organizing society light up different parts of ourselves. If you’re in a system you know isn’t taking care of people and isn’t distributing resources in an equitable way, then the hoarding part of you is going to be lit up. So be aware of that and think about how, instead of hoarding and thinking about how you can take care of yourself and your family, you can pivot to sharing with your neighbors and checking in on the people who are most vulnerable. SOURCE