The Right, The Left, The Radical and the Conservative

I have said time and again that the lack of response to my efforts at an analysis of events causes me to have less and less enthusiasm for this endeavor.

However, I have also indicated that where I have a private exchange that I think might interest my readers, the work already having been done, I will continue to post and distribute.

In this case I received a succinct e-mail from Janet Wood, an American citizen residing in Toronto, Canada.

She wrote:

This was sent to me by a very Conservative friend.  It's succinct and I thought you might find it interesting.

For the article, which she sent, see here. The reader must read the article to comprehend the rest of the exchange,

My response was:

That is rather curious. Why would a conservative friend send this to you? It represents what is generally associated with a liberal viewpoint. Though I have a problem with the terminology that is in vogue. Increasingly, the Right wing view seems rather radical (not conservative) and the Left (don’t touch Social Security or Medicare) rather conservative.

But the article is right on the money as far as I am concerned. Here again I find the political debate often strained. The Right wants taxes “flatter." The liberal wing wants taxes on the wealthiest increased to generate more revenue. The Right says we generate more revenue by growing the economy. The liberal wing rarely responds to this. But of course growing the economy is the best way forward and we should all agree on this. The question is what is the best way to grow the economy? And the answer should be obvious. With 70% of the economy being generated by consumers, putting more money into the hands of consumers (i.e. those who will spend it, and those at the top who already have everything they want. will not) is the best way forward, provided the there is slack in the means of production, which there is.

The article points out that money in the producers is not being spent to increase production but rather to inflate the value of the assets. But increasing the productive capacity, without increasing demand can only bring deflation; just as demand outstripping production capacity will create inflation. Balance is all.

At this time consumers whether in the US or in Germany or for that matter in China are not spending enough and so these economies depend on export, but we can’t all be exporting economies and the US isn’t even successful in this area, since we have an unfavorable trade balance.

There is no economic justification for the tax system to favor capital over labor, particularly at a time where there is excess capital and not enough demand. We love to hold forth the Protestant work ethic, but then discourage work by this tilting of the tax code in favor of capital. But the tax code is even worse than most appreciate. Not only are Capital Gains taxes lower than earned income (labor) but we favor capital in myriad of ways that are not often even discussed, e.g. when assets with great gains are sold, a tax, albeit a relatively small one, is assessed, but if held and passed on by way of inheritance, the capital gains are forgiven and the beneficiary gets a new tax basis, so that if the beneficiary sells there is no tax (none) on the gains. This for some reason is never even discussed.

In the long run our economy will only thrive if we invest, and right now, as the article points out there is little investment in the private sector, and even less, in the public. If future generations are to thrive, and we keep hearing of generational theft, we must create the infrastructure that will give them prosperity. That means dealing with the greatest threat to their future in global warming, and building the equivalent of the railroads of the past. We need larger ports. We need better transportation. Our bridges are falling down and our highways are strangled with congestion. NJ Governor Christie in canceling the NY-NJ rail tunnel undermined a vital project for regional and national prosperity, and even though this was first proposed by the Giuliani Administration, got very little push-back.

Above all our future depends on the education of our children. We neglect that at our peril.

P.S. And Canada thinks only of the tar sands.

Which prompted this insightful reply:

Thanks for your response.  It is always a pleasure to get you going because you always have something "meaty" to say!

I am hoping they sent me this because they are experiencing a change of view, if not heart.  These two voted for our notorious Mayor Ford because he was going to control spending and reduce taxes!  The fact that he was unfit was visible then if one cared to see.

And it's not just the tar sands; it's fracking as well.  I am very worried about water and the cavalier way they contaminate it.  Water is a quiet worldwide issue--Ethiopia damming the Nile, the Kurd territory having the water and Tibet as well--no wonder China is going to keep it.

I have to say I find the world a much scarier place then I used to.

Prompting this extensive expression of my views:

I agree with you that water is the canary in the coalmine.

It is indeed a worldwide issue and future wars will not be fought over oil but over water. This along with climate change will bring about the greatest migration in the world’s history, with huge causalities from people drowning, and from bullets, as countries try to keep hordes off refugees from overrunning their borders. I dread to think about the future. I will not live to see the cataclysm, but I fear that my daughter and certainly my granddaughter will.

But I have to disagree with you about fracking. When considering whether something needs to be stopped, consideration of alternatives must always be evaluated. Let us be frank. The US, Canada, China, indeed the world, need an abundant energy supply. Nothing will change that. The only question is from what source. Ideally, it is renewable clean energy, from the sun, wind, and even tides. Maybe some day atomic fusion, (not fission) but not for a long time. 

But these are all still very inadequate and very expensive. What happens in the meantime?

Allow me to quote from NPR:

"Despite a slowdown in U.S. consumption, coal is poised to replace oil as the world's top energy source — possibly in the next five years, according to the International Energy Agency. The rise will be driven almost entirely by new energy demands in China and India, the IEA says. 

"'This report sees that trend continuing. In fact, the world will burn around 1.2 billion more tonnes of coal per year by 2017 compared to today – equivalent to the current coal consumption of Russia and the United States combined."   "Together, China and India will account for more than 90 percent of the rise in demand for coal over the next five years, according to the IEA. "The agency predicts that coal's growth trend will hold everywhere in the world except the United States, where it says the wide availability of cheap natural gas brought a decline in coal demand — a situation also summed up in a recent post by NPR's State Impact team."

As can be seen from the above the problem is coal. Anything that replaces coal is a plus. Oil is better than coal; natural gas is better than oil.

Fracking has created a huge windfall for the US’s energy supply. It has the potential to free us from Mid-East oil and even for the US to become a net-energy exporter. That is good for our economy and for the world’s economies, as well on the amount of CO2 that goes into the atmosphere.

Yes, it has the potential to poison our water supplies and that makes it very dangerous.

But fortunately proper regulation can obviate most of that. I quote:

"On Monday, Governor Pat Quinn signed legislation to regulate fracking in the state of Illinois. Legislation overwhelmingly passed both the Illinois Senate (52-3) and the House (108-9) last month. The law is now seen as the nation’s strictest for oil and gas drilling.    

 "The Chicago Tribune writes that the legislation will force oil and gas companies to register with the Department of Natural Resources. In the permitting process they must detail:  

• how the well will be drilled 

• the amount of fluid used and at what pressure 

• how it will withdraw water, contain waste, and disclose the chemicals used 

  

"Additionally, a 30-day public comment period begins seven days after the Department of Natural Resources receives a permit application; and people who suspect fracking has polluted their water supply can request an investigation forcing the Department of Natural Resources to investigate within 30 days and reach a determination within 180 days.”

Other states are in the process of adopting regulations.

The answer in my view is proper regulation The alternatives to fracking are far worse than fracking, and if we look at fracking’ downside, without evaluating what happens without it, we follow a destructive path.

And then added:

Since writing the e-mail below I came across an interesting article in the New York Times.

This is an area of pollution and misery that cannot be overlooked.

I particularly call your attention to the following paragraph:

"The developed world needs a smarter approach toward cleaner fuels. The United States has been showing the way. Hydraulic fracturing has produced an abundance of inexpensive natural gas, leading to a shift away from coal in electricity production. Because burning natural gas emits half the carbon dioxide of coal, this technology has helped the United States reduce carbon dioxide emissions to the lowest level since the mid-1990s, even as emissions rise globally. We need to export this technology and help other nations exploit it.”

We do not live in a world where the ideal is the practical.

 Comments, questions, or corrections, are welcome and will be responded to, but will only be published at my discretion.