One of the most excellent pieces of the climate bill now awaiting defenestration at the hands of Senate Blue Dogs is its creation of a Clean Energy Bank that would help finance nascent clean energy projects. More specifically, it is “an autonomous Clean Energy Deployment Administration (CEDA) within the Energy Department” that would “provide a suite of financing options, including direct loans, letters of credit, loan guarantees, insurance products and others” for “energy production, transmission, storage and other areas that could reduce greenhouse gases, diversify energy supplies and save energy.”
For a clear take on why this is needed, read John Podesta and Karen Kornbluh.
Crucially, supporting the policy means acknowledging that actually existing markets are not perfect, and that government support can help correct market failures and achieve public goods that the market alone will not provide. Being a conservative these days, of course, means absolute ideological opposition to that notion. Naturally, conservatives are now coming out in opposition to the bank, as The Wall Street Journal reports.
The WSJ piece itself isn’t that interesting, except insofar as the utterly fallacious comparison of the bank to Fannie and Freddie Mae reveals something about current conservative pathologies. It’s basically a lightly rewritten press release from the libertarian Cato Institute.
What’s interesting to me is that while liberals are predisposed to support the idea, public financing has worked in this country and others, and the economic downturn cries out for stimulative spending, the conservative bias against public investment is shared by mainstream economics. The bedrock libertarian view that government intervention in the economy slows growth and reduces overall economic productivity is woven into the DNA of current economic orthodoxy, even “environmental economics.” It’s part of the ambient lay economics (if you will) that influences all public policy discussions in America. Government can’t do anything right.
Liberals really need to start thinking about trying to mainstream some alternative economic approaches (e.g., ecological economics, or even behavioral economics). Otherwise they’re constantly going to be in the position of advocating for policies that get them tut-tutted by economists and Blue Dogs alike.
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Edward Fullbrook:
A defining characteristic of traditional or orthodox economics is that it subscribes to a Neo-Platonist theory of truth, i.e., it holds its basic tenets or propositions from which it then deduces everything else, to be self-evident. This quaint epistemological doctrine was notably enunciated for economists by Lionel Robbins in his 1932 An Essay on the Nature and Significance of Economic Science. He wrote:
. . . the propositions of Economics are on all fours with the propositions of all other sciences. As we have seen, these propositions are deduction from simple assumptions reflecting very elementary facts of general experience. [p. 104]
To a real scientist, of course, economics’ Neo-Platonism is anathema. For example the eminent physicist JP Bouchaud [2008, 9. 291; “Economics needs a scientific revolution”, real-world economics review, issue 48, December, p. 291.] recently commented:
To me, the crucial difference between physical sciences and economics or financial mathematics is rather the relative role of concepts, equations and empirical data. Classical economics [meaning today’s mainstream] is built on very strong assumptions that quickly become axioms: the rationality of economic agents, the invisible hand and market efficiency, etc. An economist once told me, to my bewilderment: These concepts are so strong that they supersede any empirical observation.”
The orthodoxy of laissez-faire casts a very long shadow into the peer-reviewed articles and department hirings. In factt, I don't personally know any progressive economists or economics graduate students.
The paradigms and theories they used are very much counter to anything we progressives believe or observe in the real world. It is all esoteric, detached, and generally supportive of a less government intervention int he economy. It doesn't matter that the bulk of the peer-reviewed articles in the more prestigious that apply a mathematical analysis of market systems seem to contradict this orthodoxy.
Social sciences are not the best sciences. In nearly every definition of science, from Bacon's to Popper's, most social sciences come up wanting. People are just very hard to categorize, generalize, and then place in scientific theories.
And I say this as a recovering social scientist.
Two good periodicals: "Monthly Review" and "Science & Society". There are many others. of course.
Radical social scientists are out there; they just aren't welcome on "The New hour with Jim Lehrer ", for example. Stiglitz and Krugman are the media's favorite "leftist" economists. Go figure! Oh well, it's an old story--on the real left, that is.
Very interesting. Even with the near-total domination of academia by liberals, you don't find them in Economics.
Well, there's an obvious reason. It's the same reason you don't find a lot of atheist priests.
Most economists understand the folly of liberalism. They understand in theory and in practice why free markets create wealthier societies. They understand why liberal dogmas such as "redistribution of wealth" create disincentives for productivity and lead to decline.
Liberals cling to a view of what ought to be. Economists (and other conservatives) are concerned more with what works.
Behavioral economics is not an alternative science... it is very mainstream . The number of Nobel prizes already awarded to Behavioralists speaks to that. It is a recognition that one cannot explain human behavior with factoring in human behavior.
If anything, the liberals have to
To feed growing population we must increase food production and bring most of food in huge cities, where decay of waste have not enough vegetation to produce new oxygen and take back GHG.
Clean energy bank will not save our planet.
We need absolutely different direction to fight Global Warming.
The 19th-century creators of neoclassical economics—the theory that now serves as the basis for coordinating activities in the global market system—are credited with transforming their field into a scientific discipline. But what is not widely known is that these now legendary economists—William Stanley Jevons, Léon Walras, Maria Edgeworth and Vilfredo Pareto—developed their theories by adapting equations from 19th-century physics that eventually became obsolete. Unfortunately, it is clear that neoclassical economics has also become outdated. The theory is based on unscientific assumptions that are hindering the implementation of viable economic solutions for global warming and other menacing environmental problems.
By Robert Nadeau, The Economist Has No Clothes
Congress is too corrupt and too much under teh control of special interests to pass any new or useful or innovative that would benefit the country.
Why can't we just use the Federal Reserve to set these things up, just make the part of the whole Federal reserve system?
lff
These people wouldn't know a good idea if it fell on them.
For this reason, I favor public options in banking and finance to help this economy make the big transition in a greener, high tech direction. And we would not have to be totally dependent on private capitalists to do it--even if they were willing or able to make such investments at all in anything but junk assets and fraud.
In a nutshell, Wall Street can't be trusted.
Wall Street is "corrupt and unreliable". Fine.
But so are politicians.
The truth is that PEOPLE are "corrupt and unreliable". The advantage of Wall Street is that it is far more accountable than a government bureaucracy.
Revolutionary clean energy breakthrough technologies have been starved for capital. Only one firm in this urgent category, BlackLight Power, has managed to attract minimally sufficient funds ($60 million).
However, staffing such a bank with open minded individuals, who can perform wise due diligence concerning science that violates textbook understanding, is likely to prove a monumental challenge.
Our own work could rapidly restore the auto industry and generate a large number of well paid new jobs.
It involves radically new fossil fuel free magnetic energy conversion technologies that can initially cut the cord on a plug-in hybrid and later replace many batteries and ultracapacitors.
A parallel development employ fractional Hydrogen and leads to a Self Powered Internal Combustion Engine - SPICE(tm). This engine will power hybrid vehicles and may require only one gallon of water as fuel every 1,000 miles.
Both technologies lead eventually to parked cars as power plants. Local utilities will be able to wirelessly purchase up to 150 kW. Future cars may pay for themselves as a result.
Scientists will doubt any of this is possible until independently validated.
Rowan University recently independently validated the BlackLight Power fractional Hydrogen system. Other labs are sure to follow.
Rewriting reality is the standard Big Money technique.
We call it lying.
I mean no disrespect when I say that what we need to do is never mention terms like ecological economics. It only opens a line of attack that our opponents can use to confuse and it doesn't actually change the minds of people who aren't predisposed to our side already.
Some criticize economics for making bad predictions: "They got it wrong again. What do they know?" Others will say it only states the obvious-- it's just accounting methods applied at the macro level. This amount of stuff moved here, etc; therefore make the appropriate spreadsheet changes. That criticism sees economics as being descriptive, but not explanatory. Physics and chemistry are both descriptive and explanatory, and the descriptions flow from the explanations.
A deeper criticism of economics occurs at the ontological level: many economic terms do not represent real objects. Marginal this's or that's would be a good example. Economic objects involve fetishism and reification. This type of analysis would identify economics as ideology--the unreal appearing to be real to people. Ideologies can be thought of as anti-science. Religiosity is based on ideological thinking. History provides a selective environment for ideological thought, filtering out whatever component that doesn't provide support for the reigning economic system. This is what happened in economics, and it isn't surprising that alternative views have been filtered out at every level.