Republican Civil War, Let's Get it On

As we shoe-gaze over the embarrassment of the pretender to the Presidency's twitterpations, America is teetering on the brink of calamity spawned by an ineffectual majority party. Congress has until December to pass a tax reform bill that will give Wall Street enough of a lift to overcome the downdraft of Fed tightening. A promise of relief in next year's tax provisions could provide the positive sentiment to keep us airborne long enough to provide a not-so-hard landing. The GOP, however, shows itself to be so aggrieved over its supposed leader that passing major legislation is unlikely, if only for their perverse pleasure in turning popular opinion further against the cheat executive. leading to his eventual impeachment.

Trumpeting a call to arms by his basest base, the disappointed dictator could then incite uprisings by Trumpists across the country, making articles of impeachment too parlous at this point (Rep. Al Green's (D - Tex.) righteous bid notwithstanding). Yet, as Old Blowhard's popularity shrivels with each legislative loss, continued Republican fecklessness could lower the potential of such civil war until they decide to lower the boom on the tyrant. To risk a recession by failing to pass a tax bill favoring the middle class, however, also raises the risk of civil war - a class war, rather than the race war that would come about by a premature move to Dump Trump.

War actually looks likely on several fronts (Korea, Iran, America) and Fourth Turning adherents are already expecting it. It is tempting to say that, based on the secular cycles of American history, war is inevitable in the next 5 years. To be ready, true Americans should try to identify public enemy #1 and be prepared to fight them (should it come to that) rather than expend too much blood and treasure on campaigns against #2 or #3. IMHO, our major problem isn't with fascists on the other side of the world, it is with fascism at home. We are too strong militarily to worry about nuclear attacks from anyone. The biggest near-term threat we face is fascist Trumpists who would make us more of an aggressor reich.

To avoid that calamity, the best scenario could be a bloodless civil war fought among members of the Republican party, which appears to be starting already. When the next national elections are held, a fractured Republican party could provide an opening for an upstart party like the Greens to turn this country on its head. All the better if a bloodless coup occurs in the meantime.

by Chris Goodwin

Robbing Hood

Here's the kind of tax philosophy we were hoping to get from a people's president who promised to drain the swamp in Washington, D.C.

... make corporations and the super-rich pay their fair share ... progressive taxation, shifting tax from individuals to corporations, taxing "bads" not "goods," taxing unearned income at the same rate as earned income, taxing speculation on Wall Street, and cutting corporate tax giveaways ... comprehensive tax reform to simplify the tax system ... eliminate loopholes and other exemptions that favor corporate and wealthy interests over tax justice ... Small business, in particular, should not be penalized by a tax system which benefits those who can "work" the legislative tax committees for breaks and subsidies. ... substantive and wide-ranging reform of the tax system that helps create jobs, economic efficiencies, and innovation within the small business community ... end "corporate welfare." 

Campaign promises from the Count of Mar-a-Largo? Possibly, but also an excerpt from the Green Party platform on Fair Taxation.

Photo by David Shankbone

In any case, Old Blowhard's negotiating opener on tax reform seems to be pushing in a direction egregiously in favor of corporations and the wealthy with a 1.5% tax reduction bone thrown in to mollify the middle class - a direction opposite to his campaign rhetoric.

N afta that, he swung around to leave in place the corporatist trade agreement with Mexico and Canada that will only perpetuate the poverty of laborers and further damage the environment.

These depredations will not stand. A free people will not be tricked for long by false populists before ousting them and adopting an honest and egalitarian party to lead the country.

Carbon Profligates Should Share the Wealth

At the Conference of Parties (COP) 22 in Marrakesh, Morocco, the question of reparations for climate damage by developed countries may come up again after it became a sticking point in Copenhagen and was finessed out of the agreement in Paris. The Green Party of the U.S., while it embraces environmental justice, doesn't take it that far. Nor is it necessary. To begin with, pushing for countries to compensate others for their losses doesn't get at the source of the emissions at a level that will incite prompt remedial action. It is also questionable justice if parties are retroactively punished for lawful actions.

Dr. James Hansen by Global Justice Now

At COP 21, Dr. James Hansen made it clear that the treaty would not be enforceable and that putting a fee on emissions would be a preferable approach. Rather than exact transfers from one country to another, the carbon fees would be collected internally and distributed to the respective citizens of the country of the carbon profiteering corporation. The fee would thus become revenue neutral with regard to each country's treasury. It would also be an opportunity to transfer wealth from the rich to the poor, as countries would pass the money on to those with lesser emissions. Economist Thomas Piketty would approve. The Green Party echos Hansen in their 2016 Platform statement:

Enact a Fee & Dividend system on fossil fuels to enable the free market to include the environmental costs of their extraction and use. These fees shall be applied as far upstream as possible, either when fuel passes from extraction to refining, distribution or consumption; or when it first enters the United States' jurisdiction. The carbon fee will initially be small, a dime per kilogram of carbon, to avoid creating a shock to the economy. The fee will be increased by 10% each year that global atmospheric carbon dioxide content is greater than 350 ppm, decreased 10% each year it's less than 300 ppm, and repealed entirely when it falls below 250 ppm.

The beauty of this approach is that it could address two dire problems - greenhouse gasses and widespread indebtedness - with a single mechanism. It also places the burden of payment where it belongs - with those who are at the root cause of the additional carbon emissions. Those people are relatively wealthy, and the principle way that wealth has become so divergent in this age is through leveraging of fossil energy resources. Thus have the rich become richer, and the poor, poorer. Without fossil fuels, the wealth effect would still apply, however economic growth would be much slower or nil in the long run, making the absolute differences between rich and poor much smaller.

Yesterday, the state of Washington failed to pass a ballot initiative to tax carbon in a revenue neutral arrangement. The old guard environmental movement there seems to have gotten mired in the intricacies of Washington's tax system. The state that should be leading this movement is the one with the most millionaires per square mile - Maryland. It might be surprising to see how easily we can achieve our goal of 40% reduction by 2030 without targeting specific industries, and instead, putting the burden on individuals and companies that turn out to be carbon intensive. As one of the few states that voted decisively against D Trump, perhaps we will manage to turn Green by the next round and gain a proud legacy for posterity by leading on this issue.

Fuel Switching

Nassim Nicholas Taleb's prognosis for 2016 sees commodities, rather than banks, as the locus of the next Lehman moment.  Countries and corporations whose continuance depends on stability of certain commodities are at most risk.  The U.S. economy is probably diverse enough to ride out the effects of commodity price swings, but some states will suffer more than others.  Maryland's diverse economy is among the strongest, so we don't need to be concerned that coal will continue to fall in production from its peak of 5 million below the current 2 million tons/year across 60 mines, all located in the two westernmost counties.  (John Michael Greer's Cumberland is at risk, though.)

The commodity that puts Calvert County's economy at risk is natural gas, though little is produced in Maryland. When Dominion Resources sought their approval for constructing the LNG export facility at Cove Point, our county commissioners acceded to deferring tax revenue from Dominion until the plant began to ship product.  That probably won't happen until 2018, if at all.

Initially, my doubts about the prospects of exporting natural gas were based on the high rates of depletion from fracking wells, leading to a precipitous drop in productivity.  While that alone may preclude exports a couple years from now, there are even more reasons to doubt now and they stem from economic causes.

Commodities volatility seems to favor exports from Cove Point, since fewer export facilities will likely be built in such an environment than the 18 originally envisioned.  Yet, the same volatility is causing mayhem among natural gas drillers.  As pointed out in my previous post, Chesapeake Energy, the second largest producer in the U.S., is headed for the junk pile.  Many others, whose business models were based on low-interest leverage and speculative land leases, will suffer the same fate.  With so many companies going under, the growth of fracked gas that has occurred over the past 5 years will level off and decline.  With coal being black-balled as a fuel due to its effect on the world's climate, it, too, will quickly decline in use.  This puts the onus on natural gas to fill some of the domestic demand.  Since 2000, the share of electricity produced by natural gas has risen 10%, replacing coal as the fuel.  The momentum of this fuel switching will be maintained, though farsighted power companies will opt for renewable sources instead, given the limits of natural gas reserves.

Just one-third of natural gas is used for electricity production.  The other uses are mainly for industrial and residential heating processes.  Something's got to give.  We don't have enough natural gas (especially if fracking is deemed environmentally untenable) to follow the current growth trend. Conservation will smooth our descent, but remember we also have lots of wood. It has an energy density about 1/3 of oil, but any able-bodied man with a sharp ax can get all he needs.