Process
Status Items Output None Questions None Claims None Highlights Done See section below
Highlights
id597093136
How do you pay for it? Do you tax or do you borrow? Here their choice was to make bills “paid for” by progressive taxes on the rich and closing tax loopholes of Fortune 500 companies.
✏️ The eternal question of how to pay for socialist programs. Usually it’s taxes on the elite and companies. 🔗 View Highlight
id597093510
CHIPS is the brain, Infrastructure the backbone, and the IRA the engine?
id597093624
The CHIPS and Science Act is the “brains,” because it is aimed at improving R&D, and pours money into the entire alphabet soup of American science: technology, medicine, biotech, and all of the R&D agencies.
id597093731
infrastructure, the IIJA is the “backbone” in the sense that it’s meant to create the grid and rural broadband
id597093763
The IRA is an “engine” in that it comprises an enormous artillery of public finance for loans, grants, and tax credits that build out this renewable energy system while driving manufacturing growth.
id597094599
Bribing is at the core of derisking in the sense that the state absorbs some risks from private investments in order to make certain public policy priorities investable — by improving the price signal or risk-return profile of those priority projects through fiscal, monetary, or regulatory measures.
✏️ What limited state intervention looks like.. Bribing as a way of removing the risk for private players to get into industries the state wants priority on. 🔗 View Highlight
id597094754
because the logic is of partnerships for investability, the state cannot discipline private capital into strategic priorities when market conditions change or when profitability conditions
✏️ The issue with this bribing approach is there’s no way to course correct or control things if the market changes, or if private players change how profit is approached. 🔗 View Highlight
id597100895
big green state can do. It can move away from the logic of the market signal by enforcing closer controls on the pace and nature of private investment or just through public ownership. Another thing the big green state can do is change the relationship between the institutions of macroeconomic policymaking, ushering closer coordination between, for example, the central bank and finance ministry to support a more disciplined approach to industrial policy
✏️ In contrast, a big green state can do more and impose more control and coordination. 🔗 View Highlight
id597102738
derisking logic might be defensible from a progressive point of view. For instance, there is a real theory that posited that you could get much more fiscal bang for your buck through the use of the tax code that enabled a much greater amount of climate spending than what the Congressional Budget Office (CBO) would normally allow.
✏️ Am argument for derisking is that private can spend more? 🔗 View Highlight
id597102792
But ultimately, we should discuss if these moves affect the balance of political forces, which is at the most basic level why we get the reality we get.
✏️ Still, the core issue between private and public is the balance of power in play. 🔗 View Highlight
id597104859
Consider the basic clean energy tax credit, which is going to incentivize wind, solar, geothermal, and so on. While the baseline credit you get for installing such generation facilities is 6 percent, that goes up to 30 percent if you pay prevailing wage for construction,
✏️ A way to encourage more union style labor wages… Tax credit incentives 🔗 View Highlight
id597105456
Another provision called direct pay, which progressives rightly count as a big win, means that public and nonprofit entities can for the first time receive tax credits as a direct cash payment, even though they have no tax liability. As a result, municipal governments, for example, can get in on the clean energy game in a way that they were structurally excluded from before, which creates the opportunity for public ownership
id597118514
Without more assertive public ownership and a big green state with sticks, there is a real fear that the public just ends up absorbing the costs of the climate crisis as companies go bankrupt, as homeowners lose their shirts, and the public sector just picks up the mess in the worst kind of derisking way: the socialization of all the losses. We have to find ways to bring in the public sector more proactively, in a manner that costs less and is more equitable, and less reactive
id597352722
suddenly, they had to admit that China controls 90 percent of the market for solar panels, controls critical minerals, dominates the battery supply chain, and so forth. As it became clear that an energy transition was necessary — that, one way or another, there is going to be a massive replacement of machines across the globe — policymakers came to fear that China was going to dominate those industries, which they would prefer to be located within the United States, and producing for the domestic markets, but also competing with China in what they anticipate to be the booming export markets of the future.
✏️ Just as it was with space race and ussr, US is now worried about green energy race when it comes to China. 🔗 View Highlight
id597353112
I think there is a combination of the big green state and derisking in China
id597353585
Chinese growth has been powered by domestic investment largely in the technologies of the second industrial revolution, together with a gigantic real estate boom, and a logistics boom that created a vast internal market.
id597353600
innovation, the Chinese state has been investing heavily in R&D for at least ten to fifteen years now — tens of thousands of Chinese engineers and scientists and doctors have trained at the MITs and Stanfords of the world. They are as close to the technological frontier in many sectors, if not further ahead, than the United States
id597353641
You need a straw man, an adversary for these political forces to come together.
id597353823
For example, a Ugandan state-owned company is producing electric buses for public transport with Chinese technology — this is what technology transfer looks like in a revamped, post-neoliberal framework. Such an arrangement does not exist in Bidenomics. Instead, the United States and Europe are singing from the same hymn sheet — you want green industrial policy, do it through derisking — which then puts pressure on Global South countries to hand more and more of the fiscal and regulatory reins to private capital to, say, make green hydrogen competitive
✏️ The difference between how China and how the West approach tech transfer and global stuff. 🔗 View Highlight