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Ed Dolan

Ed Dolan

Edwin G. Dolan attended Earlham College and Indiana University, where he majored in Russian Studies as an undergraduate and later earned a Masters degree from Indiana University’s Russian and East-European Institute. After earning a doctorate in economics from Yale University, he taught at Dartmouth College, the University of Chicago, George Mason University and Gettysburg College. He taught in Moscow, Russia, where he and his wife founded the American Institute of Business and Economics (AIBEc), an independent, not-for-profit MBA program.

Articles by Ed Dolan

Inaction on Healthcare Prices is the Fatal Flaw that Dooms the ACHA to Failure

March 15, 2017

photo: Tax Credits Republican reformers have repeatedly promised affordable healthcare for all Americans — doubly affordable, in fact. They promise to put premiums and out-of-pocket costs within reach of low- and middle-income consumers, and at the same time, that the plan will be affordable to the federal budget, even given the constraints their most conservative members …

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What Is the Nairu and Why Does it Matter?

December 19, 2016

Author: Ed Dolan
 ·  December 19th, 2016  ·   ›

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In December 2016, after a year-long pause, the Fed resumed its tightening of monetary policy. As usual, the action took the form of a quarter point increase in the target range for the federal funds rate (a key rate that banks charge  on short-term loans to one another). Is still more tightening in store?  Most observers think the answer is “yes,” but the Fed is leaving its options open. Its most recent projections, released immediately after its December meeting, hint at the possibility of as many as ten more quarter-point increases over the next three years—or perhaps none at all. So what will actually happen?
The wonkiest number in all of economics
What actually happens will depend , in large part, on what may be the wonkiest number in all of economics—the Nairu. Nairu stands for Non-Accelerating Inflation Rate of Unemployment—such a mouthful that no one ever says it out loud. Often, it is spelled out as an acronym, NAIRU, but increasingly, it is written as an actual word, with only the first letter capitalized. In the 1960s, Milton Friedman used the more civilized term, natural rate of unemployment. Today, many economists treat “Nairu” and “natural rate” as synonyms.
The basic idea behind the Nairu is simple.

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Deplorables Didn’t Elect Trump, Jams Did

December 14, 2016

Author: Ed Dolan
 ·  December 14th, 2016  ·   ›

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Hillary Clinton famously characterized Donald Trump’s voters as a “basket of deplorables,” but she was wrong. Our friends, the British, have figured it out: Trump was elected not by deplorables, but by jams.
“Jams,” short for “Just About Managing,” is the new term has swept British political discourse. They are defined as a social class consisting of people who have jobs and a home, but little by way of savings or discretionary income; people who see themselves as precariously comfortable at best, with nothing to fall back on if adversity strikes.
The instant popularity of the term may have something to do with the way it echoes another typically British political expression, “jam tomorrow,” meaning an often made but never fulfilled promise.
James Frayne of the British think tank Policy Exchange has written a thorough and thoroughly wonky report on jams. For statistical purposes, he equates jams with the middle half of the British class structure, sandwiched between professional and managerial classes above, and unskilled workers and those who live on social benefits, below.
What Frayne says about jams certainly makes them sound a lot like Trump voters. They work hard, pay their taxes, and play by the rules.

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One Chart Shows Why the Odds Keep RisingThat the Fed Will Raise Rates

December 5, 2016

Author: Ed Dolan
 ·  December 5th, 2016  ·   ›

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Will policymakers at the Fed raise interest rates at their December meeting? Wall Street  oddsmakers increasingly think they will. One simple chart shows why.
The chart tracks the economy’s progress toward the central  bank’s target of “stable prices and maximum employment.”  The Fed’s rate-setting Federal Open Market Committee (FOMC) has operated under this so-called  dual mandate since Congress amended the Federal Reserve Act in 1977. In recent years, the Fed has interpreted “stable prices” to mean a rate of inflation close to 2 percent per year, as measured by the annual change in the price index for personal consumption expenditures (PCE). It interprets “maximum employment” to mean the highest level that is consistent with its 2 percent inflation goal, currently thought to be an unemployment rate of about 4.8 percent.
We can use the two components of the dual mandate to draw a bullseye that the Fed is aiming for.  Here is how things are going, seven years into the recovery from the Great Recession. (All data shown in the chart are quarterly, except for the last point, which shows the latest, still-incomplete data for the fourth quarter of 2016—unemployment of 4.6 percent for November 2016 and PCE inflation of 1.

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Trade and Jobs: Why the Protectionist Cure Could be Worse Than the Globalization Disease

November 28, 2016

Author: Ed Dolan
 ·  November 28th, 2016  ·   ›

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Dramatic promises to restrict international trade were a signature element of Donald Trump’s presidential campaign. So far, he seems to be following through, with an early reaffirmation of his intent to withdraw US participation in the Trans-Pacific Partnership (TPP).
An aggressive stance on trade played a key role in gaining the support of working class voters in Midwestern manufacturing states, where upset wins swept him into the White House.  What is more, trade is one area in which Trump, as President, will have the power to act on his own without action by Congress. As Gary Clyde Hufbauer of the Peterson Institute has explained, both the US Constitution and past acts of Congress give the President ample authority to do things like withdraw from the TPP or NAFTA, label China a currency manipulator, or impose retaliatory tariffs on any country he sees as a threat to US economic security.
But how would American workers actually fare under a protectionist regime, especially older workers, and those with few skills and little education, who voted for Trump by wide margins? Not well. Here is why the protectionist cure could be worse than the globalization disease.

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Why Do Top Execs Fear Trump, and Fear to Say So?

September 22, 2016

Author: Ed Dolan
 ·  September 22nd, 2016  ·   ›

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It is not surprising that there is little love for Donald Trump’s presidential candidacy among the leaders of top US multinational corporations. Why then, asks Andrew Ross Sorkin of the New York Times, do they not speak out? Why do they quickly follow up their private comments with, “I could never say that on the record”? I find some of the views reflected in Sorkin’s article disturbing.
The attitudes of top executives would be more understandable if they centered on the issue of free trade, but they do not. Yes, big business has profited from past trade deals and backs new ones like the TPP and TTIP, which Trump promises to cancel. But Trump’s Democratic opponent and a majority of Congressional candidates from both parties have also joined the anti-trade bandwagon, so trade policy is in for a change no matter who wins this election. As Trump himself would say, there’s something else going on.
Trump the bully is one broader fear of the executive class.

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A Lesson in Unintended Consequences: How Clinton’s Policies Would Raise Effective Tax Rates for the Middle Class

September 9, 2016

Author: Ed Dolan
 ·  September 9th, 2016  ·   ›

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Hillary Clinton is often said to be a policy wonk, deeply enmeshed in specifics and details, but that may be a mischaracterization. In some ways, her approach seems disturbingly superficial, skipping one perceived problem to another with little attention to their underlying causes. In some cases, Clinton seems to have paid little attention to the unintended consequences of her proposals, as a real policy expert would do. A look at the tax implications of some of her social policy proposals will illustrate these shortcomings.
How progressive? Nominal vs. effective tax rates
Discussions of by both supporters and critics have characterized Hillary Clinton’s tax policies as progressive. The appearance of progressivity arises from her pledge to raise tax rates and close loopholes for the wealthiest Americans, while leaving nominal tax rates for middle-class families largely unchanged. According to an analysis by the Tax Policy Center, her proposals would increase revenue by $1.1 trillion over the next decade, with nearly all of the tax increases falling on the top 1 percent.

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How Occupational Licensing Undermines Labor Fluidity

August 31, 2016

Author: Ed Dolan
 ·  August 31st, 2016  ·   ›

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A healthy economy requires a fluid labor market. Even when total employment and output are stable, the labor market is in constant motion. Jobs disappear when firms close or downsize. Other jobs appear when new firms open or old ones expand. People move freely from one job to another in search of career advancement or better fit between their work and their personal lives.
Unfortunately, the US labor market is becoming less fluid. We can trace part of the decrease in fluidity to outside factors like an aging labor force and changing business practices, but much of it stems from ill-considered labor market policies. Of these, one of the most damaging is the spread of occupational licensing over recent decades. As we will see, Democrats and Republicans share the blame.
How can we measure labor fluidity and why do we care?
A paper by Stephen J. Davis of the University of Chicago and John Haltiwanger of the University of Maryland  charts the decline in US labor market fluidity.

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What Does the Unemployment Rate Measure? Labor Market Slack or the Social Stress of Joblessness? Why Does it Matter?

May 23, 2016

Author: Ed Dolan
 ·  May 23rd, 2016  ·   ›

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The unemployment rate published monthly by the Bureau of Labor Statistics is one of the most widely watched of all economic indicators. But why? What does it really measure?
The news media, politicians, and voters tend to see the unemployment rate as an index of the social stress of joblessness. There is ample evidence to support that view. Researchers have linked high unemployment rates to increased mortality and impaired mental health. A recent cross-sectional analysis shows a strong relationship between unemployment  and suicide. There is evidence that unemployment undermines personal relationships, although the impact on divorce rates is ambiguous: A weak job market can break up some couples while leaving others stuck in bad marriages because they can’t afford divorce. Rising unemployment is also associated with higher crime rates, for both violent and property crimes. There is even something called the misery index, which is the sum of the unemployment rate and the inflation rate.
Economists, on the other hand, more often view the unemployment rate as an indicator of economic slack. People who want to work but are not working are a wasted resource. Finding jobs for them would add to GDP.

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Does the Social Safety Net Provide Enough Incentive to Work?

April 28, 2016

Author: Ed Dolan  ·  April 28th, 2016  ·   › Share This Print
One of the most common criticisms of social safety net programs is that they discourage work. As House Speaker Paul Ryan has put it, they risk becoming a “hammock that lulls able-bodied people to lives of dependency and complacency,  that drains them of their will and their incentive to make the most of their lives.”
It is not hard to find examples in which the threat to work incentives is real. Not long ago, in a post on labor market adjustments to trade shocks, I cited a recent report from the Congressional Budget Office, according to which taxes and benefit reductions can claw back as much as 80 percent of each dollar of additional income earned by households whose income is just above the poverty level.
A few days later, however, a reader called my attention to a paper, “It Pays to Work: Work Incentives and the Safety Net,” by Isaac Schapiro and colleagues at the Center on Budget and Policy Priorities. The CBPP team uses the very same CBO data to support the opposite conclusion:

Some critics of various low-income assistance programs argue that the safety net discourages work.  In particular, they contend that people receiving assistance from these programs can receive more, or nearly as much, from not working — and receiving government aid — than from working.

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Promises of Corporate Tax Reform are Forgotten as Obama Wages War on Inversions

April 11, 2016

Author: Ed Dolan  ·  April 11th, 2016  ·   › Share This Print
The Obama administration has taken off the gloves in its war on runaway corporations. On April 4, the Treasury released a new set of rules designed to curb “inversions,” a strategy in which a US company cuts its corporate tax burden by merging with a foreign company and moving its official tax residence out of the United States. The pharmaceutical giants Pfizer and Allergan immediately announced that they would abandon their pending mega-billion inversion deal.
The new rules are a change in policy for the administration. At one time, President Obama saw the US corporate tax code as needing deep reform, not stronger enforcement. In his 2011 State of the Union Address, he said:

Over the years, a parade of lobbyists has rigged the tax code to benefit particular companies and industries.  Those with accountants or lawyers to work the system can end up paying no taxes at all.  But all the rest are hit with one of the highest corporate tax rates in the world.  It makes no sense, and it has to change.
So tonight, I’m asking Democrats and Republicans to simplify the system.  Get rid of the loopholes.  Level the playing field.  And use the savings to lower the corporate tax rate for the first time in twenty-five years—without adding to our deficit.  It can be done.

It could have been done, but it wasn’t.

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Voters are Angry about Free Trade. What is the Right Policy Response?

April 4, 2016

Author: Ed Dolan  ·  April 4th, 2016  ·   › Share This Print
The two most watched candidates of this presidential election season, Donald Trump and Bernie Sanders, have put anger over the effects of free trade at the center of their campaigns. In doing so, they have won millions of votes. Many of the arguments they use in their stump speeches are overly simplistic, but the anger is real. And, as Eduardo Porter noted recently, angry voters have a point: New research suggests that economists have long understated the costs of trade and underestimated the time required for the economy to adjust to trade shocks.
If that research is correct, if free trade really causes more pain than we thought, what is the right policy response? Not protectionism, in my opinion, but there are measures we could and should take to ease the pain. Read on.
What the New Research Seems to Show
Jared Bernstein, a Senior Fellow at the Center for Budget and Policy Priorities, points out that how we assess the balance between the costs and benefits of trade depends on whether we view people as consumers or as workers.
Consumers benefit from free trade through lower prices and access to a wider variety of products. The impact on workers is more complex. Some lose jobs at factories that can no longer compete with imports.

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The Great Bipartisan War on Free Trade

March 14, 2016

Photo: Dirk Dallas
Like most economists, I am strongly inclined toward free trade. I cringe to see the way free trade is under attack, from both parties, during this primary season.
The two populist candidates are the worst offenders. Bernie Sanders, whom I support on many other issues [1] [2] [3], goes off the rails when it comes to trade. Donald Trump, whose policy views are sometimes too vague to pin down, has made clear-cut opposition to “horrible trade deals” a centerpiece of his campaign.
Nor is the pushback from the rest of the field as strong as one might hope. Hillary Clinton has changed her position on the Trans-Pacific Partnership (TPP), which she supported as Secretary of State, and runs away from her previous support for the North American Free Trade Agreement (NAFTA), which she liked well enough when her husband signed it into law. On the Republican side, Ted Cruz, Marco Rubio, and John Kasich all profess to favor free trade in principle, but when pushed, as they were during last week’s Republican debate in Miami, they quickly go on defense, hedging their support for trade with numerous “ifs” and “buts”.
Let’s take a look at some of the candidates’ least defensible arguments against free trade, starting with Trump and moving on to Sanders.

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Why Sanders Healthcare Plan Is on the Right Track

March 4, 2016

Photo: Phil Roeder
Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn’t guarantee health care to all people,” he says, “And we end up spending far, far more per capita on health care as do the people of any other country: Canada, U.K., France, whatever.”
Yet, even though he’s right, his healthcare platform is under attack, not just from the right, but also from the left. Here is why I think his critics are wrong.
What to call it?
Sanders says he wants a healthcare system like those of other wealthy countries—one that provides better results at a lower cost than the one we have. Unfortunately, there is no generally accepted term that covers all such systems as a class.
Sanders calls his plan “Medicare for All,” but that is misleading. As we will see, his proposal—at least the brief version posted on his campaign website—differs from Medicare in some important ways. It also differs from many of the systems in other countries that he admires most.
Liberals tend to call Sanders’ plan a “single-payer” system. That is correct, in that Medicare for All would in fact be a system under which a single agency would make directly pay healthcare providers with funds from the government budget.

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Sanders is Right, the US Needs a Healthcare System More Like Those in Europe

March 4, 2016

Author: Ed Dolan  ·  March 4th, 2016  ·   › Share This Print
Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn’t guarantee health care to all people,” he says, “And we end up spending far, far more per capita on health care as do the people of any other country: Canada, U.K., France, whatever.”
Yet, even though he’s right, his healthcare platform is under attack, not just from the right, but also from the left. Here is why I think his critics are wrong.
What to call it?
Sanders says he wants a healthcare system like those of other wealthy countries—one that provides better results at a lower cost than the one we have. Unfortunately, there is no generally accepted term that covers all such systems as a class.
Sanders calls his plan “Medicare for All,” but that is misleading. As we will see, his proposal—at least the brief version posted on his campaign website—differs from Medicare in some important ways. It also differs from many of the systems in other countries that he admires most.
Liberals tend to call Sanders’ plan a “single-payer” system.

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Marco Rubio Would Leave Economic Policy Rudderless

February 18, 2016

Author: Ed Dolan  ·  February 18th, 2016  ·   › Share This Print
Stabilizing the national economy is one of the federal government’s key responsibilities. Is that too much to ask? OK, then, can we at least ask that the government not make things worse when instability strikes?
Not if you’re Marco Rubio. Sooner or later an oil price meltdown, a banking crisis, or a Chinese hard landing is going to threaten our economy with a new recession. If a President Rubio were to have his way, the federal government would be legally bound to allow the economy to drift rudderless onto the rocks.
I’m not making this up. I’m just going by Rubio’s own words. (And, yes, his views are widely shared within the Republican Party. I’m singling him out mainly because he expresses them so clearly.)
Let me explain the Rubio/GOP view of economic stabilization. If you remember your basic college econ course, you’ll know that the first line of defense against a recession is fiscal policy. When the economy goes into a slump, spending rises on unemployment compensation, food stamps, and other benefits. At the same time, tax receipts, which are linked to income, decrease. Because the spending increase plus the tax decrease automatically cushion the slump, economists call them automatic stabilizers.
If you’re a true Keynesian, automatic stabilizers aren’t enough.

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Why Would Anyone Want to Make the US More Like Europe?

February 15, 2016

Photo: Moyan Brenn
The idea that Democrats want to make America more like Europe is a favorite Republican attack line. Writing in The New York Times, David Brooks expresses amazement that so many millennials are supporting Bernie Sanders, an open admirer of the European model. Why would anyone in their right mind favor “sluggish” Europe over “vibrant” America?
If we focus on data rather than snappy sound bites, the attraction of the European model is clear: European countries, especially the high-income democracies of Northern Europe, make better use of their wealth in supporting a good life for their citizens.
Here is a chart that gives the big picture. The horizontal axis shows GDP per capita. (GDP here is measured at purchasing power parity (PPP) to remove distortions caused by over- or undervalued exchange rates.) The vertical axis shows a measure of human wellbeing called the Social Progress Index (SPI). Unlike some other broad indexes of human welfare, the SPI does not explicitly include income, wealth, or GDP. Instead, it regards them as “inputs” that support the production of “outputs” like health, security, and personal freedoms.

Several features stand out in the chart. First, as shown by the black trend line, higher GDP does, on average, contribute to human welfare, although the relationship is far from linear.

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Why Would Anyone Want to Make the US More Like Europe? Here are Some Reasons

February 15, 2016

Author: Ed Dolan  ·  February 15th, 2016  ·   › Share This Print
The idea that Democrats want to make America more like Europe is a favorite Republican attack line. Writing in The New York Times, David Brooks expresses amazement that so many millennials are supporting Bernie Sanders, an open admirer of the European model. Why would anyone in their right mind favor “sluggish” Europe over “vibrant” America?
If we focus on data rather than snappy sound bites, the attraction of the European model is clear: European countries, especially the high-income democracies of Northern Europe, make better use of their wealth in supporting a good life for their citizens.
Here is a chart that gives the big picture. The horizontal axis shows GDP per capita. (GDP here is measured at purchasing power parity (PPP) to remove distortions caused by over- or undervalued exchange rates.) The vertical axis shows a measure of human wellbeing called the Social Progress Index (SPI). Unlike some other broad indexes of human welfare, the SPI does not explicitly include income, wealth, or GDP. Instead, it regards them as “inputs” that support the production of “outputs” like health, security, and personal freedoms.

Several features stand out in the chart. First, as shown by the black trend line, higher GDP does, on average, contribute to human welfare, although the relationship is far from linear.

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The Case for Breaking Up Too-Big-To-Fail Banks

February 8, 2016

Author: Ed Dolan  ·  February 8th, 2016  ·   › Share This Print
The presidential campaign has brought new attention to the problem of banks that are too big to fail (TBTF). As everyone agrees, the largest banks are bigger than ever. As the following chart shows, the share of all bank assets held by the four largest banks rose from 33 percent in 2007 to 41 percent by 2015. Over the same period, the combined assets of the four largest banks, as a share of GDP, grew from 28 percent to 40 percent.

The major candidates disagree, not on whether the largest banks are too big to fail, but on what to do about it. Senator Bernie Sanders has made breaking up the banking giants a centerpiece of his campaign. Hillary Clinton favors a continuation of the regulatory approach embodied in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The GOP candidates favor an approach that combines deregulation with market discipline.
Sanders’ anger at the banks seems to resonate well with voters, but influential voices in the media skeptical. The Editorial Board of the Washington Post has argued against breaking up the big banks. The New York Times has done likewise, prominently featuring an opinion piece written by Steve Eisman, a managing director of the investment firm Neuberger Berman. Politico also thinks breaking up the banks would be a bad idea.

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China’s Latest “Devaluation:” A Currency War in the Making?

January 11, 2016

Photo: JasonParis
China’s currency has, once again, been weakening against the dollar. It is down by more than 4 percent since October, including a fall of more than one percent just last week. Writing in the New York Times, Landon Thomas, Jr. warned that “China’s decision to push the value of its currency lower has opened a new front of worry for global investors: a potential wave of currency devaluations among the so-called Asian tigers — South Korea, Singapore and Taiwan.” The Times of India echoed this, writing, “China devalued its currency once again on Thursday, prompting fears of a currency war in the Asian region.” In London, The Telegraph joined in with a headline reading, “Currency War Fears Wipe $2.6 Trillion off World Markets.”
Really? Let’s put things in perspective.
Devaluation or depreciation?
First of all, what’s happening to the yuan is a depreciation, not a devaluation. What’s the difference, and why does it matter?
If we assume that every country has either a fully fixed or a fully floating exchange rate, the distinction is simple. A devaluation is a policy-driven decrease in the value of a currency whose exchange rate was previously held fixed. In contrast, a depreciation is a market-driven decrease in the value of a freely floating currency.
Mexico’s devaluation of the peso during the 1994 “Tequila crisis” was an example of the real thing.

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Why and How Progressives Should Talk with Conservatives about Climate Change

January 8, 2016

Photo: Lisa Murray
Can liberals and progressives talk to conservatives about climate change? Some on the left say, “No.” They have the idea that it is a waste of time to bring conservatives into the discussion—conservatives have nothing to contribute, and they are all deniers anyway.
I disagree. Here is why I think discussion of the issue across political lines can be fruitful, if it is approached in the right way.
Why talk to conservatives about climate change?
The first reason for progressives to talk to conservatives, then, is that outright denial is out of fashion, at least if you believe data from surveys of public opinion. According to one recent poll, even among those who self-identify as conservative Republicans, some 54 percent believe that the earth is warming and that human activity is contributing to it. Only 9 percent of conservatives deny outright that climate change is happening.  As GOP presidential candidate Chris Christie has said, “Global warming is real. I don’t think that’s deniable. And I do think human activity contributes to it. The question is what we do to deal with it.”
Instead of denial, what we now have is a debate over the magnitude of the human impact on global warming. Climate sensitivity is a key concept in this debate.

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How Is Inequality Linked to Climate Change, and What to Do About It?

January 4, 2016

Photo: Bill Dickinson
Progressives see climate change and economic inequality as two of the big problems of our time. As the global aid organization Oxfam points out in a recent media briefing paper, “Extreme Carbon Inequality,” the two are “inextricably linked.” But just what is the nature of the linkage? Does inequality cause climate change? Does climate change cause inequality? Is there an inherent tradeoff between mitigation of climate change and reduction in global inequality, or is there a way to address both problems at once? These questions deserve a closer look.
Are the rich responsible for climate change?
The principal message of the Oxfam study is that that the rich are disproportionately responsible for climate change. As evidence, it supplies the following chart showing “lifestyle carbon emissions” by income class of global population. The report defines lifestyle emissions as those that arise from consumption of goods and services, with emissions from producing those goods attributed to the country in which consumption takes place, even if they are produced elsewhere.
The chart indicates that the poorest half of the global population is responsible for only 10 percent of total global emissions while nearly 50 percent can be attributed to the wealthiest 10 percent.

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Still Looking for a Free Lunch: Opinion Polls Bring Good News and Bad for Success of Paris Climate Talks

December 7, 2015

Author: Ed Dolan  ·  December 7th, 2015  ·   › Share This Print
The latest polls of US public opinion bring both good news and bad for the success of the COP21 climate talks now underway in Paris.
On the positive side, a new New York Times/CBS News poll finds that two-thirds of Americans think their country should join an international treaty requiring it to reduce emissions in an effort to fight global warming. That includes a slim majority of Republicans. When pollsters pointed out that such a treaty is likely to involve tradeoffs between stimulating the economy and protecting the environment, respondents favored protecting the environment by 54 to 34 percent.
Those numbers suggest the kind of strong public backing that US negotiators would need to achieve a treaty with real teeth in it. To most economists, whether conservative, progressive, or libertarian, “real teeth” can only mean carbon taxes or some other mechanism to subject frontline decision makers in households, businesses, and governments to the grinding, day-to-day pressure of market prices. Are you going to drive your Prius instead of your SUV to the store today? Are you going to serve a smaller steak for dinner? Are you going to diversify your giant energy company away from fossil fuels before it goes the way of Kodak? Probably not, if failing to act costs you nothing.

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Don’t Sweat the Debt: Why the Federal Budget is Not Really Out of Control

December 1, 2015

Author: Ed Dolan  ·  December 1st, 2015  ·   › Share This Print
The GOP primary has become an orgy of fear mongering, and not just about immigrants and terrorists. The candidates regularly portray the federal debt, too, as a dire threat to America’s future. Some samples:
Marco Rubio: “We have a $19 trillion bipartisan debt and it continues to grow as we borrow money from countries that do not like us to pay for government we cannot afford. . . The time to act is now. The time to turn the page is now. If we — if we don’t act now, we are going to be the first generation in American history that leaves our children worse off than ourselves.”
Chris Christie: “We have $19 trillion in debt. . . And we’re talking about fantasy football? Can we stop? . . . Are you concerned like I am that the debt and deficits of Washington, D.C. are endangering America’s future?”
Mike Huckabee: “I do not want to walk my five grandkids through the charred remains of a once great country called America, and say, ‘Here you go, $20 trillion dollars of debt. Good luck making something out of this mess.’ ”
Rand Paul: “You know, I left my medical practice and ran for office because I was concerned about an $18 trillion debt. We borrow a million dollars a minute. Now, on the floor of the Congress, the Washington establishment from both parties puts forward a bill that will explode the deficit.

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What Do We Learn From the Missing Piece in Hillary Clinton’s Energy Plan?

August 3, 2015

Author: Ed Dolan  ·  August 3rd, 2015  ·   › Share This Print
This week Hillary Clinton rolled out an ambitious policy proposal on energy and climate change. It sets the goal of generating a third of US energy from renewable resources by 2027. It builds on the Obama administration’s Clean Power Plan, but regards that plan’s goals as a floor, not a ceiling. It calls for extensive federal investment in research and infrastructure. It proposes generous tax incentives for private industry. Yet one piece is conspicuously missing: There is no carbon tax or any other mechanism for putting a price on carbon emissions.
Any energy policy that does not include a carbon price is deeply flawed. As her primary opponent Sen. Bernie Sanders put it in a Huffington Post op-ed last year, “A carbon tax is the most straight-forward and efficient strategy for quickly reducing greenhouse gas emissions.” The Clinton plan intentionally omits the best way to limit carbon emissions in favor of others that are both more complex and less efficient.
Leveling the playing field?
Clinton’s fact sheet pays lip service to leveling the playing field for clean energy, but the only way to really do that is by putting a price on carbon. A carbon tax puts pressure on both users and producers of all forms of energy that is proportional to their contributions to total emissions.

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