Among economists who sort of seem to me to make sense, Jeffrey Sachs seems to me to hold as prominent a place as Krugman and DeLong. Sachs has an interesting and straightforward article about American macroeconomics and tax avoidance in the Scientific American. (hat tip to Dennis at Samadhisoft who, like Sachs, should be held blameless for the following.)
The stimulus debate has centered heavily around the question of “bang for the buck,” that is, whether tax cuts or spending increases would produce more jobs. This perspective is very limited and misleading, however: the implications of tax cuts, for example, depend importantly on whether they are perceived to be temporary or permanent. A temporary tax cut is more likely to be saved, or used to pay down credit-card debt, than consumed, a lesson demonstrated by the failed $100 billion tax-rebate stimulus last spring.
There is a far more important point, however. The choice of spending versus taxes should turn first and foremost on the purposes of government, or on what economists quaintly call “the allocation of resources.” It’s silly to debate whether investing in a $100 million bridge creates more jobs than a $100 million tax cut if we really need the bridge! The American Society of Civil Engineers has credibly documented for years the crumbling state of U.S. infrastructure—roads, bridges, water supply, waste treatment, mass transit, toxic waste cleanup, dams and levees—and the urgent need for more than $2.2 trillion of investments for our wellbeing and competitiveness.
Whoa! Making sense! How strange!
(Note that green really is the new black: to some extent it is a fashion industry. What is or isn’t sustainable is a real question, but what is or isn’t green is a matter of perception as much as of fact.)
Note that the amount of employment and amount of resulting personal income is in no way guaranteed to be directly in excess of the income generated by the coal sector. Note especially, though, that the whole idea of promoting jobs is and has always been to celebrate inefficiency on one hand as much as the idea of stimulating the already sufficient economy has been about excess on the other. If it takes more people to produce the same amount of energy, the total wealth goes down, and something somewhere else has to get less “prosperous” at least in the way we have been defining prosperity.
Yes, of course I know about externalities. I am all about externalities. That is not a counterargument to what I am saying. That is my point!
I don’t really know whether the advocates for sustainability are marching into a trap. I think so.
In other words, those arguing for replacing coal feel ethically compelled to misrepresent a tax as a benefit.
I suppose there may be rare cases when such a thing is advisable, but they must be very extraordinary. It’s true, that our circumstances are indeed extraordinary, but nobody has made a case that I have seen that they are extraordinary in a way that calls for twisting the truth so far out of line.
The problem is that the resulting twisted discourse feeds the cynicism and distrust that is at the root of the problem in the first place. People may not know exactly why their BS detectors are going off, but they are firing left and right.
Winning one legislative vote is worthless. These things can be overturned with the next shift of the tides. What we have to do is prevent the tides from ever shifting back. It is a very tall order, but it’s the mission we are faced with. Without honesty, and truth, and respect for the public, there may be battles won but the campaign will never reach its objectives.
The red herring plus pink slip image, which I take to be composed clip art, is froma comparable argument at Higher Ed Watch, a site of the centrist New America Foundation.