The Mystery of the Progressive Open Market

Why is a struggling open market so hard to turn around? The answer is really quite simple: A centrally planned, totalitarian economy is easy to predetermine; in fact, that’s the point. An open market for the trade of goods and services cannot be predetermined, because its governing dynamics depend entirely on the manner in which goods and services are traded, at what volume and by whom, and direct command-and-control is likely an obstacle, not a source of efficiency.

Open markets, in their most virtuous state, foster the optimal distribution of resources, goods and services, and produce generalized value for all involved. It is at this point, where the middle class is the focus, and where it expands by inviting (and making possible) more membership from the less affluent segments of the socio-economic web, that open markets are democratizing in their effects. Intervention, then, needs to be subtle, and favor democratic outcomes, so less central control.

Posted by Joseph Robertson

Joseph is Executive Director of Citizens' Climate International. He represents Citizens’ Climate in the Carbon Pricing Leadership Coalition, the UNFCCC negotiations, and other UN processes. He is the lead strategist supporting the Acceleration Dialogues (diplomatic climate-solutions roundtables) and Resilience Intel—an effort to move the world to 100% climate-smart finance. He is Senior Advisor Sustainable Finance for the EAT Foundation, where he served as Interim Director for the Food System Economics Commission, during its start-up phase from April through November 2020, and now serves on the Secretariat of the Good Food Finance Network. He is founder of Geoversiv and a lead contributor to the Earth Intelligence podcast. He publishes a free newsletter at LivingFutures.net

Big Ideas to Solve the Debt Crisis & Restore the Middle Class

The debt crisis is attributable to “structural” causes, meaning the way the nation’s financing is structured over the next several decades, but also to political and economic causes, meaning both the way we make policy and the way we live and experience the marketplace for trade, credit and consumer purchases. So, we need to implement policies that make serious, sustainable corrections on all three fronts.

Stabilizing debt financing requires the least expensive cost of borrowing possible, i.e. a AAA credit rating and the reputation for 100% likelihood of on-time repayment. It is unhelpful and counterproductive to indicate that the US might not meet 100% of its obligations on time 100% of the time. The long-term solution has to be oriented toward making social services solvent, and reducing the costs of debt repayment.

Posted by Joseph Robertson

Toward a Creative Prosperity Agenda

creative prosperity is sustainable prosperity

To build a future of vibrant open democracy and robust and sustainable economic prosperity, it is necessary to privilege creative activities and constructive solutions to the challenges we face. Addressing major challenges in constructive, innovative ways, is the single most significant driver, historically, of sustained economic booms. In short, we need to move deliberately and swiftly toward a creative prosperity agenda.

The first consideration, then, is to examine how the creative prosperity agenda would differ from what we are doing now. At present, we are wrestling with the complex fabric of consequence related to long-running economic distortions, most of which we have not yet corrected. Healthcare reform and financial regulatory reform were comprehensive in scope, but moderate in impact, cautious and rooted in the prevailing model; energy reform needs to move forward rapidly and do more to prioritize innovation.

Posted by Joseph Robertson

What’s Wrong with the Stock Market?

What’s wrong with the stock market, particularly the New York Stock Exchange and the Dow Jones Industrial Average? The most significant problem facing the stock market is really a confluence of two problems: 1) we have too little middle class wealth, and so too little consumer demand, and 2) we face an urgent need to accelerate the transition to a new economy, but we are focused on trying to revive an old economy.

On Thursday, August 4, the Dow Jones Industrial Average dropped almost 513 points, losing 4.3% of its total value, the worst one-day decline since December 2008, and an effective reversal of 8 months’ worth of gains. It happened two days after the United States avoided a default by raising the debt ceiling and cutting government spending by about $250 billion per year over the next 10 years.

Posted by Joseph Robertson

Why We Should Have a National Infrastructure Bank

There are competing theories about what makes for good economic stimulus, and there are practices that work well and which don’t work very well. We know that tax cuts are not very stimulative, because they take a long time to show up in people’s bank accounts, and they are comprised of money that was already there to begin with. New money, extra money, is more stimulative. So food stamps, for instance, can return 70% to 100% gain in stimulus, above and beyond cost.

But we aren’t looking to fix the long recovery by using food stamps for stimulus. And we can’t really do any tax cuts that would help to expand GDP. If we want to spur a more vibrant recovery, we have to find a way to put new money, extra money, in people’s pockets, and it has to be more than they need to meet the ever-rising costs of living. It makes sense, then, that intelligent investment in high-growth activities would be the best way to make that happen.

Posted by Joseph Robertson

Not Every American “Owes” the Same on the National Debt

The House majority leader Eric Cantor (R-VA) recently published an op-ed, in which he argued that “If Washington actually had the discipline to live within its means over the long term, every American citizen would not owe $46,000 toward the national debt.” The rhetoric is effective, but the logic is flawed; not every American “owes” an equal share of the national debt.

The national debt is what the federal government owes in long-term interest on government-backed bonds, Treasury bonds. Long-term Treasury bonds pay out over several decades, and have (thanks to the high credit rating of the United States government) a very low rate of interest. The bonds are used to finance spending in the short term for which there are no sufficient tax revenues in reserve.

Posted by Joseph Robertson

Once World-leading Infrastructure in Decay: the Road to Recovery

The road to economic recovery must run through major new infrastructure upgrades, innovation and development. The American infrastructure was once the envy of the world, a valiant testament to the ingenuity and collaborative muscle of a free people; now, it is crumbling [pdf] from malignant neglect, and the cynicism of our political system’s dealings with money.

Infrastructure spending was once part of the central mission of building a great nation, open to trade and competition, where free people would migrate, ship, travel and explore, according to their own free will, imagination, and opportunity. Now, that embarrassment of riches is little more than embarrassment, and the resulting confusion over how we let such a vibrant landscape slide so far.

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Posted by Joseph Robertson

The Severe Economic Danger of Replacing Medicare with Vouchers

The so-called “Ryan budget plan” —as recently as last year considered a radical, fringe proposal, even by top Republicans, but in 2011 approved by the Republican House majority as their official legislative plan for the nation’s fiscal policy— calls for eliminating Medicare and replacing it with a system of vouchers to lower the cost of buying private insurance.

The plan has already stirred a nationwide revolt in public opinion against the new Republican majority, and turned one Congressional district, not lost by the party in over a century, decidedly Democratic, despite the disproportionately Republican makeup of the interim electorate. But the ire of seniors and the non-affluent generally is just one of the perils of the plan.

Posted by Joseph Robertson

To Create Jobs, Innovate; Don’t Favor the Least Imaginative

We will not fall magically into a rising tide of job creation, just by depriving ourselves of services and privileges we have built into our way of life and on which our prosperity depends. And we will not create jobs by privileging those industries that are doing the least to innovate. Innovation is the American way; it is what the nation has always struggled to accomplish, and it must be the cornerstone of a new job-creation boom.

It may be that moments of grave economic pressure put grave strain on a culture’s ability to give voice to and to share a common understanding of core values. It may be that after the financial collapse that struck in 2007 and 2008, the US is facing a crisis of conscience and a struggle to regain its identity. We need to remember that we can take the reins of the 21st century economic landscape, and build the economy of tomorrow.

Posted by Joseph Robertson

Fossil Energy: Hidden Costs Threaten America’s Future

As civilization evolves, and science advances, and democracy effects positive change in favor of human dignity and freedom, one paradigm replaces another, and we become better at managing the problems that threaten to destabilize the human environment. There was a time when authority could use command and control to maintain order, for a time, but in our democratic and informational age, that paradigm is as primitive and unworkable as it is unjust, and our problems demand subtler, more values-infused solutions.

As the subtitle of a recent Economist report on closed industries in Italy says it, “Cartels that make life cushy for insiders exact a heavy toll on everyone else”. There is no real way around this: to profit from doing business well and providing excellent quality of manufacture and service is one thing; to pad one’s profits by coordinating market strategies with close competitors that join with one to form an exclusive cartel, boxing out the influence of stakeholders is quite another.

Posted by Joseph Robertson

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