(The Conversation) – When she took to the floor to give her State of the Union speech on 13 September, European Commission president Ursula von der Leyen largely stood by the script. Describing her vision of an economically buoyant and sustainable Europe in the era of climate change, she called on the EU to accelerate the development of the clean-tech sector, “from wind to steel, from batteries to electric vehicles”. “When it comes to the European Green Deal, we stick to our growth strategy,” von der Leyen said.

Her plans were hardly idiosyncratic. The notion of green growth – the idea that environmental goals can be aligned with continued economic growth – is still the common economic orthodoxy for major institutions like the World Bank and the Organisation for Economic Co-operation and Development (OECD).

The OECD has promised to “strengthen their efforts to pursue green growth strategies […], acknowledging that green and growth can go hand-in-hand”, while the World Bank has called for “inclusive green growth” where “greening growth is necessary, efficient, and affordable”. Meanwhile, the EU has framed green growth as

“a basis to sustain employment levels and secure the resources needed to increase public welfare […] transforming production and consumption in ways that reconcile increasing GDP with environmental limits”.

However, a survey of nearly 800 climate policy researchers from around the world reveals widespread scepticism toward the concept in high-income countries, amid mounting literature arguing that the principle may neither be viable nor desirable. Instead, alternative post-growth paradigms including “degrowth” and “agrowth” are gaining traction.

Differentiating green growth from agrowth and degrowth

But what do these terms signify?

The “degrowth” school of thought proposes a planned reduction in material consumption in affluent nations to achieve more sustainable and equitable societies. Meanwhile, supporters of “agrowth” adopt a neutral view of economic growth, focusing on achieving sustainability irrespective of GDP fluctuations. Essentially, both positions represent scepticism toward the predominant “green growth” paradigm with degrowth representing a more critical view.

Much of the debate centres around the concept of decoupling – whether the economy can grow without corresponding increases in environmental degradation or greenhouse gas emissions. Essentially, it signifies a separation of the historical linkage between GDP growth and its adverse environmental effects. Importantly, absolute decoupling rather than relative decoupling is necessary for green growth to succeed. In other words, emissions should decrease during economic growth, and not just grow more slowly.

Green growth proponents assert that absolute decoupling is achievable in the long term, although there is a division regarding whether there will be a short-term hit to economic growth. The degrowth perspective is critical that absolute decoupling is feasible at the global scale and can be achieved at the rapid rate required to stay within Paris climate targets. A recent study found that current rates of decoupling in high-income are falling far short of what is needed to limit global heating to well below 2°C as set out by the Paris Agreement.

The agrowth position covers more mixed, middle-ground views on the decoupling debate. Some argue that decoupling is potentially plausible under the right policies, however, the focus should be on policies rather than targets as this is confusing means and ends. Others may argue that the debate is largely irrelevant as GDP is a poor indicator of societal progress – a “GDP paradox” exists, where the indicator continues to be dominant in economics and politics despite its widely recognised failings.

7 out of 10 climate experts sceptical of green growth

How prevalent are degrowth and agrowth views among experts? As part of a recent survey completed by 789 global researchers who have published on climate change mitigation policies, we asked questions to assess the respondents’ positions on the growth debate. Strikingly, 73% of all respondents expressed views aligned with “agrowth” or “degrowth” positions, with the former being the most popular. We found that the opinions varied based on the respondent’s country and discipline (see the figure below).

While the OECD itself strongly advocates for green growth, researchers from the EU and other OECD nations demonstrated high levels of scepticism. In contrast, over half of the researchers from non-OECD nations, especially in emerging economies like the BRICS nations, were more supportive of green growth.

Disciplinary rifts

Furthermore, a disciplinary divide exists. Environmental and other social scientists, excluding orthodox economists, were the most sceptical of green growth. In contrast, economists and engineers showed the highest preference for green growth, possibly indicative of trust in technological progress and conventional economic models that suggest economic growth and climate goals are compatible.

Our analysis also examined the link between the growth positions and the GDP per capita of a respondent’s country of origin. A discernible trend emerged: as national income rises, there is increased scepticism toward green growth. At higher income levels, experts increasingly supported the post-growth argument that beyond a point, the socio-environmental costs of growth may outweigh the benefits.

The results were even more pronounced when we factored in the Inequality-adjusted Human Development Index (IHDI), suggesting that aspects beyond income, such as inequality and overall development, might influence these views.

In a world grappling with climate change and socio-economic disparities, these findings should not simply be dismissed. They underline the need for a more holistic dialogue on sustainable development, extending beyond the conventional green growth paradigm.

Post-growth thought no longer a fringe position

Although von der Leyen firmly stood in the green growth camp, this academic shift is increasingly reflected in the political debate. In May 2023, the European Parliament hosted a conference on the topic of “Beyond Growth” as an initiative of 20 MEPs from five different political groups and supported by over 50 partner organisations. Its main objective was to discuss policy proposals to move beyond the approach of national GDP growth being the primary measure of success.

Image by Alexander Droeger from Pixabay

Six national and regional governments – Scotland, New Zealand, Iceland, Wales, Finland, and Canada – have joined the Wellbeing Economy Governments (WEGo) partnership. The primary aim of the movement is to transition to “an economy designed to serve people and planet, not the other way around.”

Clearly, post-growth thought is no longer a fringe, radical position within those working on solutions to climate change. Greater attention needs to be given to why some experts are doubtful that green growth can be achieved as well as potential alternatives focussed on wider concepts of societal wellbeing rather than limited thinking in terms of GDP growth.

Ivan Savin, Associate Professor of Business Analytics at ESCP Business School, Madrid campus & Research Fellow at ICTA-UAB, ESCP Business School and Lewis King, Lecturer in climate policy and green economics, Universitat Autònoma de Barcelona

This article is republished from The Conversation under a Creative Commons license. Read the original article.

(The Conversation) – Women from religious communities around the world, like the Dawoodi Bohras, are harnessing the potential of social media platforms to set up or expand their businesses and build entrepreneurial networks. The ease of access, wide reach and collaborative nature of these platforms is providing more women with financial opportunities previously unavailable to them.

Research shows that religion can impact women’s abilities to launch, operate and sustain a business. Religious attitudes towards entrepreneurship affect the support, financial or emotional, that women get from their families and communities.

But religious requirements can also provide the basis for entrepreneurship. Norms and customs around modesty or specific religious dress code can become valuable sources of income for female-led enterprises.

Yet, many women struggle to build businesses or form networks due to gender segregation rules that discourage working outside the home and make it logistically challenging.

Accessing opportunities

Using social media has helped many women navigate these issues by enabling them to conduct their business from the privacy of their homes. They have been proven to offer women more opportunities to connect personally and professionally.

The interactive nature of these platforms blurs social and geographical boundaries to form virtual communities. Through platforms, women can engage in dialogue and build networks of collaboration that provide support and feedback.

At the same time they can overcome many real-life difficulties and barriers. For many women, these virtual spaces compensate for the invisibility and lack of agency many of them often experience in professional contexts.

Online platforms help women balance their domestic and family responsibilities while enabling them to become financially independent. All-female platforms are created by traders to avoid the involvement and control of men which also helps them navigate the rules of gender segregation.

Many Orthodox Jewish women have used social media to build businesses and connections within their own communities while keeping in line with expectations around modesty. Women like Sarah Haskell, who goes by the handle @thatrelatablejew, create content that educates people about Judaism and also combats negative stereotypes about Orthodox Jewish women.

Muslim women all over the world also utilized the marketing potential of social media to create a modest fashion industry by reclaiming of the hijab. Many reappropriate symbols or phrases with negative connotations towards Islam such as “Muslim extremist” to sell t-shirts with the words “extreme Muslim” as a form of optimism-driven commodification.

They assert their identity while combating negative stereotypes about Islam and Muslim women. Entrepreneurial networks also function as a form of empowerment to overcome issues faced by them due to Islamophobia.

Bohra entrepreneurship

Dawoodi Bohras are a religious community known for their trading activities and entrepreneurial spirit. The community numbers around one million, living mainly in India with smaller diasporas around the world.

For Bohra women, work is a source of income as well as part of their religion and a way to give their lives meaning. This idea is based on historical examples of women such as the Prophet Muhammad’s wife Khadija who was known to be a tradeswoman as well as principles of equality that consider both men and women working together to ensure happiness and prosperity.

Traditionally, Bohra women would either market their products from home or operate physical stores. However, the rise of digital entrepreneurship allows them to expand online. Their ventures range from designing and selling the community’s unique religious dresses to accompanying accessories such as skullcaps, prayer mats, bags, jewelry as well as other items like food, toys, décor and religious teaching aids.

Some women sell exclusively online or as an extension of their physical businesses. They have their own websites or use different social media platforms and form online groups where women can interact, advertise their products and receive guidance and mentoring.

Support from community institutions is what differentiates Bohra women’s entrepreneurial activities on social media. Due to its entrepreneurial outlook and eager embrace of digital media, the community provides women with financial aid, online training and workshops and virtual bazaars which help them succeed.

During COVID-19 pandemic closures the community’s official business department, Al-Tijaarat Al-Raabehah, helped many entrepreneurs move to digital marketing.

The Dawoodi Bohra model shows how community support of digital entrepreneurship can help women achieve financial independence and success while respecting religious norms and beliefs.

Although these are small ventures in terms of demand and reach, social media platforms have helped Bohra women expand their realms of possibility and create strong networks across the globe.

Arwa Hussain, PhD Candidate & 2022-23 Concordia University Public Scholar, Concordia University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

High quality child care helps parents earn more now, kids earn more later, and keeps entire communities afloat.

By Mary C. King | –

Child care is one of the biggest expenses many families face — in much of the country, it can run higher than college tuition. Could a national child care program ease that burden?

We’ve come close before. During World War II, the federal government provided child care around the clock to enable more women to work in the war industries. In 1971, we nearly got a national child care program until President Richard Nixon vetoed legislation that had strong bipartisan support.

Now, with Senator Joe Manchin stalling President Biden’s Build Back Better Act, we could be on the brink of another disappointment. Or, if the bill can be rescued, our country may get another opportunity to make a historic investment in our future.

Among many other things, the Build Back Better Act would cap child care payments for working families at no more than 7 percent of their income — while raising wages for child care workers.

The U.S. is far behind other affluent — and even less affluent — nations, in the support it provides families with children. In 2017, the U.S. was 37th of the 38 OECD countries in its spending on family benefits including child care, at less than two-thirds of one percent of GDP.

Only Turkey trailed us. The United Kingdom, a lot like us in many ways, spends more than five times as much as the United States.

Yet the economic case for investing in early childhood education and care is strong. Universal preschool is a two-generation anti-poverty strategy that also benefits the middle class. Decades of research find that it reduces inequality by gender, race, ethnicity and income. Children from families with lower incomes gain the most, but all children make gains.

As it is now, young children have the highest poverty rates of any age group in this country — and the cost of child care helps explain why.

Child care is simply so expensive that many parents, especially mothers, cannot afford to work, which permanently lowers their lifetime incomes. Single mothers, who are raising almost a quarter of U.S. children, are particularly vulnerable.

Women’s ability to work in the U.S. is falling behind other countries — including Germany, Canada, and Japan — due to our weak family policies. But we don’t have to look far to find successful examples of public investments in child care. Washington, D.C.’s universal preschool program has increased the labor force participation of mothers by 10 percentage points, raising family incomes.

Care like this isn’t just good for parents. High quality preschool eases the transition to kindergarten and raises high school graduation rates, college attendance, and incomes. Down the line, it also reduces unemployment, crime, incarceration and other social ills.

Even families without kids benefit. The higher the education rate in a locality, the higher the wages are for everyone, regardless of their education, because companies can be more productive with a skilled labor force.

Finally, part of ensuring quality child care means paying child care workers salaries comparable to elementary school teachers. Without decent wages to support their families, these jobs see very high turnover — which limits the experience and relationships that are critical to quality care.

Federal investment in early childhood and care is long overdue. It’s the best economic development project we could undertake, with significant gains to the community as a whole, as well as to children, their families, and preschool workers.

The rest of the wealthy world has far lower rates of child poverty, a critical predictor of future marginalization, than we do — largely because they invest much more in their children. Let’s not waste another 50 years before investing in our children, our families, and our future.

By Mary C. King is a Professor of Economics Emerita at Portland State University. This op-ed was adapted from Inequality.org and distributed by OtherWords.org.

Progressive leaders in the U.S. Congress are refusing to back down on the Democrats’ promises to American voters to reduce poverty, expand rights to healthcare, education and clean energy, and repair a shredded social safety net. After decades of tax cuts for the rich, they are also committed to raising taxes on wealthy Americans and corporations to pay for this popular agenda.

Photo: Tom Pennington.

Germany has elected a ruling coalition of Social Democrats, Greens and Free Democrats that excludes the conservative Christian Democrats for the first time since 2000. The new government promises a $14 minimum wage, solar panels on all suitable roof space, 2% of land for wind farms and the closure of Germany’s last coal-fired power plants by 2030.

Iraqis voted in an election that was called in response to a popular protest movement launched in October 2019 to challenge the endemic corruption of the post-2003 political class and its subservience to U.S. and Iranian interests. The protest movement was split between taking part in the election and boycotting it, but its candidates still won about 35 seats and will have a voice in parliament. The party of long-time Iraqi nationalist leader Muqtada al-Sadr won 73 seats, the largest of any single party, while Iranian-backed parties whose armed militias killed hundreds of protesters in 2019 lost popular support and many of their seats.

Chile’s billionaire president, Sebastian Piñera, is being impeached after the Pandora Papers revealed details of bribery and tax evasion in his sale of a mining company, and he could face up to 5 years in prison. Mass street protests in 2019 forced Piñera to agree to a new constitution to replace the one written under the Pinochet military dictatorship, and a convention that includes representatives of indigenous and other marginalized communities has been elected to draft the constitution. Progressive parties and candidates are expected to do well in the general election in November.

Maybe the greatest success of people power has come in Bolivia. In 2020, only a year after a U.S.-backed right-wing military coup, a mass mobilization of mostly indigenous working people forced a new election, and the socialist MAS Party of Evo Morales was returned to power. Since then it has already introduced a new wealth tax and welfare payments to four million people to help eliminate hunger in Bolivia.

The Ideological Context

Since the 1970s, Western political and corporate leaders have peddled a quasi-religious belief in the power of “free” markets and unbridled capitalism to solve all the world’s problems. This new “neoliberal” orthodoxy is a thinly disguised reversion to the systematic injustice of 19th century laissez-faire capitalism, which led to gross inequality and poverty even in wealthy countries, famines that killed tens of millions of people in India and China, and horrific exploitation of the poor and vulnerable worldwide.

For most of the 20th century, Western countries gradually responded to the excesses and injustices of capitalism by using the power of government to redistribute wealth through progressive taxation and a growing public sector, and ensure broad access to public goods like education and healthcare. This led to a gradual expansion of broadly shared prosperity in the United States and Western Europe through a strong public sector that balanced the power of private corporations and their owners.

The steadily growing shared prosperity of the post-WWII years in the West was derailed by a combination of factors, including the 1973 OPEC oil embargo, Nixon’s freeze on prices and wages, runaway inflation caused by dropping the gold standard, and then a second oil crisis after the 1979 Iranian Revolution.

Right-wing politicians led by Ronald Reagan in the United States and Margaret Thatcher in the U.K. blamed the power of organized labor and the public sector for the economic crisis. They launched a “neoliberal” counter-revolution to bust unions, shrink and privatize the public sector, cut taxes, deregulate industries and supposedly unleash “the magic of the market.” Then they took credit for a return to economic growth that really owed more to the end of the oil crises.

The United States and United Kingdom used their economic, military and media power to spread their neoliberal gospel across the world. Chile’s experiment in neoliberalism under Pinochet’s military dictatorship became a model for U.S. efforts to roll back the “pink tide” in Latin America. When the Soviet Union and Eastern Europe opened to the West at the end of the Cold War, it was the extreme, neoliberal brand of capitalism that Western economists imposed as “shock therapy” to privatize state-owned enterprises and open countries to Western corporations.

In the United States, the mass media shy away from the word “neoliberalism” to describe the changes in society since the 1980s. They describe its effects in less systemic terms, as globalization, privatization, deregulation, consumerism and so on, without calling attention to their common ideological roots. This allows them to treat its impacts as separate, unconnected problems: poverty and inequality, mass incarceration, environmental degradation, ballooning debt, money in politics, disinvestment in public services, declines in public health, permanent war, and record military spending.

After a generation of systematic neoliberal control, it is now obvious to people all over the world that neoliberalism has utterly failed to solve the world’s problems. As many predicted all along, it has just enabled the rich to get much, much richer, while structural and even existential problems remain unsolved.

Even once people have grasped the self-serving, predatory nature of this system that has overtaken their political and economic life, many still fall victim to the demoralization and powerlessness that are among its most insidious products, as they are brainwashed to see themselves only as individuals and consumers, instead of as active and collectively powerful citizens.

In effect, confronting neoliberalism—whether as individuals, groups, communities or countries—requires a two-step process. First, we must understand the nature of the beast that has us and the world in its grip, whatever we choose to call it. Second, we must overcome our own demoralization and powerlessness, and rekindle our collective power as political and economic actors to build the better world we know is possible.

We will see that collective power in the streets and the suites at COP26 in Glasgow, when the world’s leaders will gather to confront the reality that neoliberalism has allowed corporate profits to trump a rational response to the devastating impact of fossil fuels on the Earth’s climate. Extinction Rebellion and other groups will be in the streets in Glasgow, demanding the long-delayed action that is required to solve the problem, including an end to net carbon emissions by 2025.

While scientists warned us for decades what the result would be, political and business leaders have peddled their neoliberal snake oil to keep filling their coffers at the expense of the future of life on Earth. If we fail to stop them now, living conditions will keep deteriorating for people everywhere, as the natural world our lives depend on is washed out from under our feet, goes up in smoke and, species by species, dies and disappears forever.

The Covid pandemic is another real world case study on the impact of neoliberalism. As the official death toll reaches 5 million and many more deaths go unreported, rich countries are still hoarding vaccines, drug companies are reaping a bonanza of profits from vaccines and new drugs, and the lethal, devastating injustice of the entire neoliberal “market” system is laid bare for the whole world to see. Calls for a “people’s vaccine” and “vaccine justice” have been challenging what has now been termed “vaccine apartheid.”

Conclusion

In the 1980s, U.K. Prime Minister Margaret Thatcher often told the world, “There is no alternative” to the neoliberal order she and President Reagan were unleashing. After only one or two generations, the self-serving insanity they prescribed and the crises it has caused have made it a question of survival for humanity to find alternatives.

Around the world, ordinary people are rising up to demand real change. The people of Iraq, Chile and Bolivia have overcome the incredible traumas inflicted on them to take to the streets in the thousands and demand better government. Americans should likewise demand that our government stop wasting trillions of dollars to militarize the world and destroy countries like Afghanistan and Iraq, and start solving our real problems, here and abroad.

People around the world understand the nature of the problems we face better than we did a generation or even a decade ago. Now we must overcome demoralization and powerlessness in order to act. It helps to understand that the demoralization and powerlessness we may feel are themselves products of this neoliberal system, and that simply overcoming them is a victory in itself.

As we reject the inevitability of neoliberalism and Thatcher’s lie that there is no alternative, we must also reject the lie that we are just passive, powerless consumers. As human beings, we have the same collective power that human beings have always had to build a better world for ourselves and our children – and now is the time to harness that power.

Via Code Pink

That is wrong, wrong, wrong.

The faster we put in solar panels and wind turbines, the more money we will save, to the tune of trillions of dollars. That is the conclusion of Oxford researchers on technological change.

Many writers on the infrastructural changes we need to make to fight the climate emergency have assumed that replacing old technology and infrastructure will cost a lot of money. This way of thinking imagines replacing coal plants or internal combustion automobiles with new, decarbonized infrastructure as like replacing concrete buildings with marble ones. They have therefore urged that we go slowly, so as to spread out the cost over decades without overburdening people living in any particular moment along the way.

There is another possibility, though. What if things like photovoltaic solar panels and wind turbines are not like expensive marble, which you need gradually to quarry and slowly to bring in to replace cinder block walls in buildings? What if they are like computer chips compared to a phalanx of abacuses?

Moore’s law was put forward in 1965 by San Francisco-born engineer Gordon E. Moore, a founder of Intel. He said that the number of transistors per silicon chip doubles yearly. Actually, we have seen a doubling of computer chip capacity about every 18 months for the past 50 years. Moore’s Law has enabled computers to plummet in price while skyrocketing in computing power.

Kevin Kelly, a co-founder of Wired, writes at his kk.org site that it is possible that Moore’s Law is not so much physical as social and economic, and it worked because the very assertion that silicon chip power would grow exponentially rather than serially gave permission to engineers and angel investors to try to make it so.

In that way, Moore’s Law would intersect with another well-known principle, Wright’s Law, put forward in 1936 by Theodore P. Wright on the basis of observations of the aviation industry. It predicts that the more we produce of a new technology and the more familiar we become with it, the more its costs fall. Wright found that for every doubling in the production of aircraft, the price fell 20 percent.

What if green technology such as solar panels is like silicon chips? Rebuilding all concrete buildings as marble ones is a serial activity, with the form of 1, 2, 3, 4, 5, 6 … etc. Improving computer chips in accordance with Moore’s Law is exponential, with the form of 1, 2, 4, 8, 16, 32, 64, 128, 256, 512, 1,024 . . . and so forth. You can see that getting to one million in the first series take 1 million steps. Just ballparking it, I’d say it only takes about 20 doublings to reach a million in the second series.

Oxford University’s Eric Beinhocker, J. Doyne Farmer, and Cameron Hepburn report at Bloomberg about a paper by Farmer and François Lafondade at Sciencedirect that makes exactly this astonishing claim.

In the paper, the authors point out,

“The first commercial nuclear power plant opened in 1956 and the first practical use of solar photovoltaics was as a power supply for the Vanguard I satellite in 1958. The cost of electricity generated by nuclear power is highly variable, but has generally increased by a factor of two or three during the period shown here. In contrast, a watt of solar photovoltaic capacity cost $256 in 1956 (Perlin, 1999) (about $1910 in 2013 dollars) vs. $0.82 in 2013, dropping in price by a factor of about 2330. Since 1980 photovoltaic modules have decreased in cost at an average rate of about 10% per year.”

The Bloomberg article points out that the solar panels’ 10% annual price drop is what one would expect if advances in this technology were following Moore’s Law.

In contrast, fossil fuels such as petroleum, coal and natural gas provide no similar cost savings or increased power over time. They note,

“Interestingly, fossil fuels don’t follow such cost improvement curves (despite receiving far more in subsidies — $447 billion worldwide for fossil fuels versus $128 billion for renewables, according to the latest figures). We’ve analyzed more than 140 years of data on oil, coal and natural gas and found that their inflation-adjusted costs are roughly the same as they were in the late 19th century,”

So here is the astounding conclusion of the authors: If we transition as rapidly as possible to wind and solar, we will actually save trillions of dollars. We’ll be dumping a technology with fixed costs and fixed yields, and moving to technologies that get 2000 times cheaper over half a century.

Not only has the cost per watt of photovoltaic solar technology fallen like a meteor, efficiency has also improved, if less rapidly.

This site at Lafayette University observes, “In 1955, Hoffman Electronics-Semiconductor Division introduced photovoltaic products with only a 2% efficiency, with an energy cost of $1,785/Watt (USD).” The efficiency of real-world panels now ranges up to 25%, and in laboratory settings 44% has been achieved. Residential solar now costs less than $3 per watt and falling.

Going big into solar in 2021 is like buying Apple stock in 1980 at $22 a share and then enjoying the ride for the next decades. (And this tidy profit at the stock market would just be an economic expression of the operation of Moore’s Law).

And if Wright’s Law operates on the new technology of the electric vehicle, as we manufacture more and more of them (Germany now has a million on the road), we could see dramatic price reductions. Again, the same downward price curve cannot be expected regarding gasoline vehicles.

—–

Bonus Video:

DW Planet A: “How solar energy got so cheap, and why it’s not everywhere (yet)”

Things are about to get worse, as Afghanistan under the Taliban is cut off from the $4 billion a year in international aid that had kept it afloat.

A lot worse.

Here’s some of how that will work:

Mohammad Sajjad Sajjadi at Euronews Dari Persian interviews Afghan officials predicting the collapse of the Afghan monetary system now that the Taliban have taken over.

They point out that because several top Taliban leaders are under sanctions and accused of terrorism, member states of the World Trade Organization will not trade with Afghanistan now. The country will not be able to export or to import, its banks will be cut off from the international banking exchanges. There will be no way to receive Afghanis (the Afghanistan currency) from Kabul banks if you are an exporter abroad. There will be no way to send dollars to Kabul if you are an importer abroad. In turn, that means no exports and no imports.

Moreover, the banking system is in big trouble. A Central Bank official who asked to remain anonymous pointed out that the government only has two choices.

It can keep the banks open, in which case there will be a run on them. Banks work by lending money, so they don’t have all their assets on hand. If the full complement of account owners ask for their money at once, the bank can’t provide it and collapses.

The other possible policy is to put restrictions on withdrawals. But that way of proceeding would leave people without access to their money and reduce the money supply, causing deflation and economic stagnancy.

Either way, the Afghani currency is in big trouble

All this is why, Al Jazeera reports, United Nations Secretary-General Antonio Guterres said at a donor conference Monday, “The financial system at the moment is extremely limited, which means that a number of basic economic functions cannot be delivered.”

Kabul is a city of 3 million, the size of Chicago inside city boundaries, and Kandahar and other cities have hundreds of thousands of residents. They can’t live on subsistence agriculture.

The UN estimates that food stocks could run out by the end of September. As I reported in August, some 14 million Afghans are food insecure, up from 12 million last spring. Even under the American-sponsored Ashraf Ghani government, about a third of the population was in danger of missing meals if any little thing went wrong.

Now, something very big has gone wrong.

Guterres made an emergency appeal for aid from international donors and garnered pledges of about $1 billion.

The United States pledged $63 million, which is not very much, but then Washington just lost a war. It contrasts with the billions it was willing to spend on bombs made by US arms manufacturers to drop on Afghanistan.

France pledged $118 million.

Guterres was pleased with the response, though it should be noted that very often these pledges are later reneged on by the donors and he’ll be lucky to get half that.

——-

Bonus Video:

CBS News: “U.N. sounds alarm on humanitarian crisis in Afghanistan

“Governing Lebanon is surely more daunting than governing France.”[1] That pearl of wisdom in an essay defending consociational democracy by University of Pennsylvania political scientist Brendan O’Leary has never been more accurate. A delicate balance of domestic interests with institutional vetoes at the best of times, Lebanese politics has been stalemated for months as the parties have failed to agree on a coalition government which would be responsible, among other pressing items, for negotiating with international creditors. More than a year ago, Lebanon failed to pay a $1.2 billion Eurobond, defaulting on a sovereign debt for the first time in its history.[2] Surprising in itself, Beirut has successfully dithered rather than accommodate the International Monetary Fund (IMF) with the sort of painful domestic policy package that sees foreign banks repaid at the expense of domestic living standards.

The country once described as the ‘Switzerland of the Middle East’ for its own international banking is no longer a ‘stalwart debtor’ in the reputational schema of Stanford University political scientist Michael Tomz. But will it become a fairweather or perhaps even a lemon debtor? Stalwart debtors never default. Think Norway. Fairweather debtors sometimes default but repay when they can. Think Thailand. Lemon debtors almost invariably default. Think Argentina. Lebanon could afford to be a stalwart debtor back when it had no competition as the financial, entertainment and media capital of the Arab World, before the influx of Syrian refugees and before the Covid-19 Pandemic hammered its economy together with the rest of the world.

Today, Lebanon is economically prostrate and there is little elite interest in accepting the sorts of economic and social pain the IMF has in mind. Viewed from Paris, London or Washington, the protracted process of forming a new government might look like a collective action problem. Viewed from Beirut, however, it may appear a means of delaying the pain and saving Lebanese leaders from the onus of imposing it.

French bankers and thus the French foreign policy establishment are so unhappy with Lebanese recalcitrance that they have threatened to impose economic sanctions via the European Union on Lebanese officials they hold responsible.[3] Economic sanctions are what the Global North has heretofore imposed for horrific war crimes committed by African warlords and predatory organized crime by post-Soviet oligarchs. Using them to punish the failure to form a government is something new.

The unprecedented threat is attributable in part to the perennial unhappiness of the French political class with its Lebanese counterpart. France, as the League of Nations mandatory power, is responsible for establishing Lebanon and Syria as separate states despite their common history. Colonial fantasies about the Frankish Crusader states perhaps inspired the effort to create a Christian dominated Arab client state. Yet the Lebanese have always displayed an inclination to be themselves rather than French. Lebanese consociationalism, with the modus vivendi political cartel among elites in a society deeply divided by religion, in particular has irritated French republican elites since the Free French opposed the 1943 Lebanese pacte nationale.

The Constitution of the Fifth Republic describes France as indivisible, though obviously it is not, but Paris wants its former colonies and semi-colonies to embrace the adversarial democracy implicit in that sort of national identity. One of the ironies here is that the Quay d’Orsay threatens to use the economic might of the European Union, itself the planet’s most complex and extensive consociational entity whose state membership includes a host of successful consociational democracies, against the planet’s second oldest consociational democracy. (The Netherlands has an older consociational regime than Lebanon).

That Lebanon is today an economic mess is undeniable. Consumer banks have been unable to pay their depositors in hard currency, a shocking dysfunction given the country’s dependence on remittances. Sudden losses in the value of the Lebanese pound have led to rioting. The Lebanese public understandably blames both official corruption and international lenders for their economic distress. A 2019 public opinion poll found that 91% of Lebanese respondents considered government corrupt to medium or large extent and 59% of respondents anticipated that the economic situation would be worse or much worse over the next two to years.[4]

Economic distress is compounded by the extraordinary stresses of its regional environment, especially Syrian refugee flight and the violations of its sovereignty by Israel. Lebanese airspace sovereignty is regularly violated by Israeli military aircraft without apparent objection from Washington, London or Paris. Against this it is amazing that today’s Lebanon has not as yet succumbed to civil war or military dictatorship. European consociational democracies have confronted nothing comparable since the end of the Second World War.

What decision-makers in the Global North ought to recognize is that Lebanon functions, whether well or badly, only when its political class is permitted to negotiate shifts in domestic relative power without excessive foreign meddling. Rather than threatening economic sanctions, France should exercise patience until a vulnerable, exhausted Lebanon rises from the dust. Paris should act less as a harassing debt collector and instead like a responsible former mandatory power. The reality is that Lebanon is unlikely to repay any of its sovereign debt in the near future without significant help. Failing to provide it risks transforming a former stalwart debtor into a permanent lemon debtor rather than a temporary fair-weather debtor. More importantly, the only hope for Lebanese to develop the sense of secular Lebanese-ness the French political class ostensibly desires, is to allow it to emerge organically from public policy problems effectively managed. The Swiss are as Swiss as they can be because and not despite their consociational institutions. Nothing more than that should be asked of the Lebanese.

[1] Brendan O’Leary. “Debating Consociational Politics: Normative and Explanatory Arguments.” In From Power-Sharing to Democracy: Post-Conflict Institutions in Ethnically Divided Societies, (Ed.) S. J. R. Noel. (Toronto: McGill-Queens University Press, 2005), pp. 3-43.

[2] M. Amlôt (8 March 2020). “Lebanon’s Eurobond Default: Here’s What Happens Next.” Al Arabiya. https://english.alarabiya.net/en/features/2020/03/08/Lebanon-s-Eurobond-default-Here-s-what-happens-next

[3] Al-Jazeera. “France Sanctions Lebanese Figures ‘For Preventing Crisis Exit’.” 29 April 2021. https://www.aljazeera.com/news/2021/4/29/france-to-bar-entry-to-some-lebanese-officials-hindering-progress

[4] Arab Barometer (2019). Arab Barometer V, Lebanon Country Report. www.arabbarometer.org Accessed 30 November 2020.

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Bonus Video added by Informed Comment:

France 24 English: “French envoy visits crisis-hit Lebanon as pressure builds”

The Center for American Progress reports that in 2019, before the distortions of the pandemic year, the median wealth of white households was $189,100.

The median wealth of Black households? $24,100, or 12.7% as much as whites.

If you do average wealth, the absolute numbers are much bigger, but the percentage difference is very similar.

Contrary to what many whites believe, this wealth gap does not come from people being lazy. CAP points out that it comes from lack of access to topflight education and from being shunted off to poorly paying jobs with little job security and few fringe benefits. You can work a 48 hour week in the United States and still not be able to afford to pay both rent and groceries.

The problem also derives from bankers’ unwillingness to lend to people of color, at least on the favorable terms they give whites. Many Black Americans don’t have access to banking services or credit because of redlining. It takes money to make money.

Black families have trouble owning a home, and if they do get into one, it does not appreciate in value at the rate of a white-owned home.

The negative effect of racism is so powerful that it often overcomes positive achievements like education. The Federal Reserve of St. Louis points out that a Black family with a breadwinner who has a bachelor’s degree makes much less on average than does a white family with a similar degree.

Worse, the St. Louis Fed concludes that “the typical Black and Hispanic families whose highest level of education was a bachelor’s degree had less median wealth than the typical white family whose highest level of education was a high school degree.” That is depressing.

President Biden and VP Kamala Harris clearly feel deeply about this issue. CAP correctly argues that they need to leverage the federal government to ensure that public sector jobs come roaring back and that people of color have a fair shot at them. CAP notes that public sector jobs are among the few that pay people of color fairly and give them job security and benefits. Unfortunately, they wrote, in “September 2020, 211,000 fewer Black workers had a job in the public sector than was the case in September 2019.” African-American workers got hit especially hard by the Covid downturn.

Going back to having the Post Office offer banking services would help, as the ACLU argues. Until the late ’60s when it was abolished, US postal banking handled 10% of banking in the US. Rahim Brooks at the ACLU writes that the big banks are closing their local branches and that

“Branches in majority-Black areas, in particular, were roughly 50 percent more likely to close than those in the rest of America. As a result, 63 percent of majority-Black census tracts do not have an active bank branch; 17 percent of Black Americans are unbanked; and 30 percent of Black Americans are underbanked.

He adds,

‘Black consumers, like low income consumers generally, are prime candidates to be exploited by the payday loan industry. “The average unbanked family with an annual income of around $25,000 will spend about $2,400 per year, almost 10 percent of its income, on financial transactions,” writes Mehrsa Baradaran in How the Other Half Banks. “This is more than these families spend on food.’

CAP also suggests revamping the Minority Business Development Agency. African-Americans are 12% of the population but have 2% of the businesses.

One thing is for certain. The wealth gap between the races has grown in the past few decades, and there is no sign of it being turned around. Unless we as a people pull out all the stops to address these problems, our grandchildren will still be dealing with them.

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Bonus Video:

PBS NewsHour: “What’s behind America’s inequality problem — and how to fix it”

Fear of inflation on the part of Republicans is insincere and ill timed. Republicans seldom worry about inflation when the military budget or massive tax cuts for the wealthy are on the line. And if policy makers wish to err on the side of precaution, a little bit of inflation is far preferable to a renewed burst of joblessness or deflation. The former is far easier control via standard monetary and fiscal policy.

What grounds their faith in the future? Though business economists know that the stock market is not the real economy and that the former can boom even as the latter slumps a booming stock market cheers the wealthy and diminishes interest in relief of the burdens imposed by the pandemic on poor and working class citizens.

Media treatment of the unemployed also plays a major role in shaping popular understanding of the course of the economy. The Bureau of Labor Statistics (BLS) releases monthly statistics on unemployment, but because the BLS definition of unemployment construes part-timers looking for full time work as fully employed and disregards so-called discouraged workers, this BLS number is almost always an undercount. Nonetheless most of the mainstream media discussions of unemployment focus exclusively on the headline number. Such a strategy, whether intended or not, hides the prevalence of corporate practices of increased reliance on part-time, no-benefit, workers.

Reliance on part-timers, erosion of the minimum wage, attacks on unions all have served to depress working class wages. The net result is that more jobs are poverty level and the headline unemployment number provides an ever more rose colored portrait of the overall economy.

Writing in Politico, former Comptroller of the Currency Eugene Ludwig argues:-“[The picture of the labor market} is completely different if you filter the same BLS data to exclude part-time workers looking for full-time work and those making less than a poverty wage (pegged conservatively at $20,000 per year). Anyone who wants full-time work but can only find part-time work, and those working full-time but earning too little to climb above the poverty line, should be considered functionally unemployed. I’ve begun to calculate this, which I’ve dubbed the True Rate of Unemployment. And the TRU in December wasn’t 6.7 percent — it was an alarming 25.1 percent”

Bad as these numbers are they also need to be taken in the context of the punitive welfare state. Tax shortfalls have been used to justify cuts in already miserly social programs, endorsed by even many so- called centrist Democrats. A center left party that no longer acknowledges the gaping holes and limitations of its domestic agenda leaves its traditional working class base increasingly vulnerable to authoritarian demagogues. In a recent report on American longevity the Lancet comments:” Trump exploited low and middle-income white people’s anger over their deteriorating life prospects to mobilise racial animus and xenophobia and enlist their support for policies that benefit high-income people and corporations and threaten health. His signature legislative achievement, a trillion-dollar tax cut for corporations and high-income individuals, opened a budget hole that he used to justify cutting food subsidies and health care.”

The Lancet reminds us that William Julius Wilson, a leading African American sociologist,

“noted the link between the loss of manufacturing jobs in Black communities in urban areas and many negative health and social effects. However, the consequences of privation and economic dislocation rarely featured in popular or academic explanations of epidemics of crack cocaine, heroin, and HIV that were prevalent in Black and Native American and Alaska Native communities ⁵⁵ Instead, these epidemics and endemic alcoholism and violence were blamed on individuals’ pathology, cultural inadequacies, and criminal tendencies, pathologies more appropriately viewed as the consequences of trauma and despair rooted in the USA’s history of land expropriation, genocide, and slavery.” (Lancet)

What we are left with is a nation scarred by levels of excess mortality unequalled in any other G-7 nation. “Most of the US mortality excess is among people younger than 65 years. If US death rates were equivalent to those of other G7 nations, two of five deaths before age 65 years would have been averted. To put this number in context, the number of missing Americans each year is more than the total number of COVID-19 deaths in the USA in all of 2020.”

To do anything about these human tragedies the first task is not to hide behind concepts and narratives that understate the problem. Ask local media how often they present stock market info as compared to any number of labor market indices like occupational injuries And most importantly don’t let media or politicians or friends and neighbors dissuade us from activism in the cause of social justice with misleading assertions that “doesn’t everyone already have a job?”

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Bonus Video:

The Hill: Jeff Stein: Fed Chair REVEALS Real Unemployment Rate Higher Than Great Recession