What Might a Green New Deal Involve? Some Notes

Thus far talk of a Green New Deal (a resolution rather than a bill for now) has been essentially a matter of broad aspirations and statements of principle. Still, it has got me thinking about what such a program might actually look like in its concrete details, particularly its scale, the speed with which it might go about its work, and the source of the needed funds.

In considering these matters it is common for people to refer to World War II. They tend not to know very much about the conflict, but they have a sense that it was a period of extraordinary efforts and extraordinary results--and as it happens, the numbers bear out this impression. As the official Wartime Production Achievements report shows, in a mere four years (1940-1944, between the Fall of France and D-Day), the U.S. built the equivalent of sixty percent of its pre-war manufacturing capacity, new, modern plant geared toward the most high-tech production, along with commensurate increases in the associated infrastructure needed to make it work. (Even electricity generation, given a low priority by wartime planners, expanded 26 percent in the relevant time frame.)

Of course, a Green New Deal is not about a headlong enlargement of output for its own sake. But all the same, there is no question but that a greening of the economy will require a massive, rapid production of modern infrastructure, vehicles, plant, with which to replace what exists now, and the World War II example does demonstrate that the U.S. successfully accomplished this in the past. Indeed, there are at least three excellent reasons to think that a Green New Deal conducted in the present could actually do much, much more at any given level effort than the wartime effort accomplished in the 1940s.

#1. The remaking of the U.S. economy was not the goal of the World War II effort. This was all secondary to supplying the biggest war effort in history, as the U.S. successfully did during the more than five years in which it was embroiled in the conflict. Had the U.S. economy's modernization been the object, much more of the resources mobilized would have been directed toward that end, with greater effect, as may be expected today.

#2. The World War II effort took place not only for the sake of a war effort, but in wartime, "siege" conditions. As the U.S. went about its role as the "arsenal of democracy," virtually all of Europe was under Nazi domination, the other great industrial center that was northeast Asia also firmly in the Axis camp, and, especially in the earlier phases of the conflict, Nazi U-boats stalked the seas. American and global resources could have been utilized much more fully in conditions where normal, peacetime trade was possible, for the sake of any conceivable end, and it is reasonable to expect that this, too, will be the case. (Still more helpful, and far from implausible, would be an American Green New Deal alongside, or coordinated with, other nations' efforts--or even a global Green New Deal--potentially achieving great synergies.)

#3. Manufacturing productivity--our ability to make physical things--has exploded. There do not seem to be many data sets which offer a comprehensive view of manufacturing growth between the 1940s and today, but it seems safe to say that per-hour output in this area has risen sixfold overall since that time. Impressive in itself, it is worth noting that this considerably outstripped the growth of the economy overall (per capita GDP rising more like three-and-a-half times since 1945), which at least hints that a given amount of time and proportion of resources would go further toward rebuilding the base (especially as it would be more a matter of replacement than of any and all possible addition in the interest of maximized wartime production). Moreover, given the realities of capacity utilization, product differentiation, and other factors business finds commercially expedient, but which obstruct efficient output, it may be that the means to hand actually confer still more productive capacity than the more mainstream statistics acknowledge, for any desired purpose.

We should also consider the host of extraordinary technological possibilities recently emerging but far from properly exploited as yet, and whose development a Green New Deal could sharply accelerate--for instance, in the area of materials that could replace an energy and greenhouse gas-intensive steel and iron industry, and the synergies they make plausible with regard to rebuilding the manufacturing base along greener lines. (What could we begin to do if we started mass-manufacturing carbon nanotubes out of captured atmospheric carbon, and then used these to build radically strong but light structures and vehicles and machinery--for instance, more efficient new wind turbines?)

Indeed, I will come out and say it--when it was possible to build the equivalent of a quarter of existing electricity generation in four years, when this was a low priority, under wartime conditions, with 1940s-era resources, when this is made a very high priority, with open access to the global market, and the fullest possible use of twenty-first century resources, it seems possible that such an effort thoroughly rebuild the electric grid, and transport, industry, agriculture too, between now and, say, 2030.

Of course, having established this people will ask "How will we pay for it?" I will say up front that this sniveling response says more about those asking the question than anything else. This is, after all, a matter of SAVING CIVILIZATION, AND MAYBE LIFE AND DEATH FOR THE ENTIRE PLANET, and the question indicates that they do not understand this--and are trying to dismiss the plan. (After all, how many of those who whine "How will we pay for it?" where environmental initiatives are concerned ask those questions when the matter is war and peace? When it is tax cuts and other goodies for the rich?)

Making them look even more foolish is the reality that paying for the project is not the impossible obstacle that opponents of a given idea always make it seem. One could easily imagine some redirection of government resources--not least, the diversion of the colossal resources devoted to subsidizing fossil fuels (depending on the mode of calculation, at the very least many tens of billions of dollars, and perhaps as much as $1 trillion a year) toward moving past them, shifting a field long, massively tilted in favor of established energy resources in favor of renewables, yet again quickening their progress. Of course, only a portion of the funds the action would raise would be conveniently at government's disposal (oil subsidies substantially consist of tax breaks and the tolerance of externalities), but the point is that it would at least create room for maneuver.

Taxes on corporations and the rich generally are also at historic lows--and one could picture significant additional funds raised by bringing back the tax levels that, we actually had back during the war, possibly helped by a crackdown on offshore tax havens. (Indeed, even without such, France's government has succeeded in taking over half its Gross Domestic Product annually in government revenue for decades, in contrast with under a third in the U.S. at all levels, a figure that if proportioned to the U.S. economy would come to $3-5 trillion a year.)

Admittedly each and every one of those possibilities makes right-wingers seethe, but their hating them is not the same as saying they would be unworkable, while the scale of the resources in questions means that even a partial capture of resources through such action could be significant. One might easily imagine a trillion dollars or more a year being raised on top of Federal infrastructure spending and other relevant orders that might be made in line with such a program, and the Federal government's capacity to induce state and local governments and private business to shift their spending along those lines it finds desirable, one would have an unprecedented, "game-changing" program in this area (orders of magnitude greater than the highly touted investments of the early Obama years).

One might also seek a measure of supporting action from the monetary system, the flexibility of which seems to be much greater than is widely appreciated. The 2008 bailout is open to very serious criticism on a great many scores. Still, reading accounts of it I cannot deny the ingenuity and dash with which portions of it were carried out--the manner in which the U.S. Federal Reserve raised and deployed nearly THIRTY TRILLION DOLLARS in support for the financial system (roughly 200 percent of U.S. GDP at the time). While the situations are not identical, there is no reason why, should it be necessary, the central bankers could not do a great deal for other purposes, with few worthier than a Green New Deal.

All the same, this would likely fall short of a true World War II level effort, which amounted to about twice the country's pre-war GDP spent in the 1941-1946 period--about $40 trillion in today's terms. And while a Green New Deal could achieve much more of its goals at any given level of investment than the World War II-era effort because of its different purposes, circumstances, and the greatly increased productivity and technological possibilities of the present, it is not inconceivable that the resources scraped up in the way discussed above might not seem enough to buy all that is desired, as desired, as quickly as desired, given the scale and severity of the environmental challenge. Deficit spending--the same deficit spending at which Green New Deal opponents do not balk for the sake of war, upper-class tax cuts, corporate welfare--is an option, the more so as spending of such a kind, on such a scale, can be expected to translate to a boom which, if World War II is anything to go by, substantially paid for itself over the longer run.

Counterintuitive as this may sound, the figures are undisputed. The U.S. economy grew by 75 percent during the war years, and the productivity increases that war effort achieved contributed to a generation of boom afterward (4 percent a year growth 1950-1973). As a result, in spite of colossal Cold War expenditures that included two major "hot" wars (Korea and Vietnam), and massively enlarged domestic spending (these were the years of the Great Society), America's debt-to-GDP ratio was actually much lower in the early 1970s than it was before the war (32 percent versus the earlier 52 percent of GDP figure). Of course, that is not to deny the fact that the U.S. was heavily indebted at war's end (with the debt-to-GDP ratio about 120 percent), but history has demonstrated that countries can, if necessary, bear a far higher debt burden than the U.S. is doing for long periods. Japan's debt, at 236 percent of GDP, while far from enviable, shows that life can go on quite comfortably under such conditions--far, far more comfortably than if we were to suffer the full brunt of the rapidly unfolding climate-energy-environmental crisis.