Greta Thunberg Understands Economics Better Than Steve Mnuchin

by Duane Nichols on January 30, 2020

Governments of the people must take responsibility for our future

Greta Versus the Greedy Grifters — Why a 17-year-old is a better economist than Steve Mnuchin

From an Essay by Paul Krugman, Opinion Columnist, January 27, 2020

I’ve never been a fan of the World Economic Forum at Davos, that annual gathering of the rich and fatuous. One virtue of the pageant of preening and self-importance, however, is that it brings out the worst in some people, leading them to say things that reveal their vileness for all to see.

And so it was for Steven Mnuchin, Donald Trump’s Treasury secretary. First, Mnuchin doubled down on his claim that the 2017 tax cut will pay for itself — just days after his own department confirmed that the budget deficit in 2019 was more than $1 trillion, 75 percent higher than it was in 2016.

Then he sneered at Greta Thunberg, the young climate activist, suggesting that she go study economics before calling for an end to investment in fossil fuels.

Well, unearned arrogance is a Trump administration hallmark — witness Mike Pompeo, the secretary of state, claiming that a respected national security reporter couldn’t find Ukraine on a map. So it may not surprise you to learn that Mnuchin was talking nonsense and that Thunberg almost certainly has it right.

One can only surmise that Mnuchin slept through his undergraduate economics classes. Otherwise he would know that every, and I mean every, major Econ 101 textbook argues for government regulation or taxation of activities that pollute the environment, because otherwise neither producers nor consumers have an incentive to take the damage inflicted by this pollution into account.

And burning fossil fuels is a huge source of environmental damage, not just from climate change but also from local air pollution, which is a major health hazard we don’t do nearly enough to limit.

The International Monetary Fund makes regular estimates of worldwide subsidies to fossil fuels — subsidies that partly take the form of tax breaks and outright cash grants, but mainly involve not holding the industry accountable for the indirect costs it imposes. In 2017 it put these subsidies at $5.2 trillion; yes, that’s trillion with a “T.” For the U.S., the subsidies amounted to $649 billion, which is about $3 million for every worker employed in the extraction of coal, oil and gas.

Without these subsidies, it’s hard to imagine that anyone would still be investing in fossil fuels.

But maybe Mnuchin thinks that the I.M.F. should also take some courses in economics — along with the thousands of economists, including every living former Federal Reserve chair, dozens of Nobel laureates, and chief economists from both Democratic and Republican administrations, who signed an open letter calling for taxes on emissions of greenhouse gases.

In short, Greta Thunberg may be only 17, but her views are much closer to the consensus of the economics profession than those of the guy clinging to the zombie idea that tax cuts pay for themselves. But could the economics consensus be wrong? Yes, but probably because it isn’t hard enough on fossil fuels.

On one side, a number of experts argue that standard models underestimate the risks of climate change, both because they don’t account for its disruptive effects and because they don’t put enough weight on the possibility of total catastrophe.

On the other side, estimates of the cost of reducing emissions tend to understate the role of innovation. Even modest incentives for expanded use of renewable energy led to a spectacular fall in prices over the past decade.

I still often find people — both right-wingers and climate activists — asserting that sharply reducing emissions would require a big decline in G.D.P. Everything we know, however, says that this is wrong, that we can decarbonize while continuing to achieve robust growth. Given all this, however, why are people like Mnuchin and his boss Trump so adamantly pro-fossil fuel and anti-environmentalist?

Part of the answer, I believe, is that conservatives don’t want to admit that government action is ever justified. Once you concede that the government can do good by protecting the environment, people might start thinking that it can guarantee affordable health care, too. The bigger issue, however, is sheer greed.

Given the scale of subsidies we give to fossil fuels, the industry as a whole should be regarded as a gigantic grift. It makes money by ripping off everyone else, to some extent through direct taxpayer subsidies, to a greater extent by shunting the true costs of its operations off onto innocent bystanders.

And let’s be clear: Many of those “costs” take the form of sickness and death, because that’s what local air pollution causes. Other costs take the form of “natural” disasters like the burning of Australia, which increasingly bear the signature of climate change.

In a sane world we’d be trying to shut this grift down. But the grifters — which overwhelmingly means corporations and investors, since little of that $3-million-per-worker subsidy trickles down to the workers themselves — have bought themselves a lot of political influence. And so people like Mnuchin claim not to see anything wrong with industries whose profits depend almost entirely on hurting people. Maybe he should take a course in economics — and another one in ethics.

>>> Paul Krugman has been a columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.


See also: Davos asks CEOs to set net-zero target by 2050 | World Economic Forum, January 17, 2020

{ 2 comments… read them below or add one }

Mary Wildfire January 30, 2020 at 7:44 am

No, Mnuchin should not take a course in ethics. Morality can’t really be taught. You can teach what various philosophers have said about it in the past, but to a sociopath, moral feeling–the concept of wrong, of sin, is equivalent to what “red” means to a colorblind person.

They can observe that other people do and say, can learn which traffic light is above and which below, but a person who is colorblind will never know what we mean by “red.”

It can’t be put into words (okay, I guess it has a particular wavelength but that doesn’t mean anything to us animals).

A sociopath — and I think not only Mnuchin but most people who achieve powerful position are sociopaths — is completely incapable of caring how his actions affect others. He can observe compassion but will see it as sentimentality or pretense.

(Or she, but psychologists say most sociopaths are males).


Greta Thunberg March 27, 2020 at 10:06 am

Greta Thunberg says it’s ‘extremely likely’ she has coronavirus
From Shannon Osaka, March 24, 2020

Seventeen-year-old Swedish climate activist Greta Thunberg is in recovery from a likely case of coronavirus.

In an Instagram post, Thunberg announced that she and her father, Svante Thunberg, have been self-isolating since returning from a trip around Central Europe two weeks ago. “I was feeling tired, had shivers, a sore throat, and coughed,” Thunberg wrote. “My dad experienced the same symptoms, but much more intense and with a fever.”

The last two weeks I’ve stayed inside. When I returned from my trip around Central Europe I isolated myself (in a borrowed apartment away from my mother and sister) since the number of cases of COVID-19 (in Germany for instance) were similar to Italy in the beginning. Around ten days ago I started feeling some symptoms, exactly the same time as my father – who traveled with me from Brussels. I was feeling tired, had shivers, a sore throat and coughed. My dad experienced the same symptoms, but much more intense and with a fever. In Sweden you can not test yourself for COVID-19 unless you’re in need of emergent medical treatment. Everyone feeling ill are told to stay at home and isolate themselves. I have therefore not been tested for COVID-19, but it’s extremely likely that I’ve had it, given the combined symptoms and circumstances. Now I’ve basically recovered, but – AND THIS IS THE BOTTOM LINE: I almost didn’t feel ill. My last cold was much worse than this! Had it not been for someone else having the virus simultainously I might not even have suspected anything. Then I would just have thought I was feeling unusually tired with a bit of a cough. And this it what makes it so much more dangerous. Many (especially young people) might not notice any symptoms at all, or very mild symptoms. Then they don’t know they have the virus and can pass it on to people in risk groups. We who don’t belong to a risk group have an enormous responsibility, our actions can be the difference between life and death for many others. Please keep that in mind, follow the advice from experts and your local authorities and #StayAtHome to slow the spread of the virus. And remember to always take care of each other and help those in need. #COVID #flattenthecurve

Although Thunberg and her father have yet to be tested — coronavirus testing is limited in Sweden to those requiring urgent medical care — she noted that “it’s extremely likely that I’ve had it, given the combined symptoms and circumstances.”

Thunberg began her rise to international fame in August 2018, when she began skipping school every Friday to protest inaction on climate change outside the Swedish parliament. Since then, she has spoken at global climate meetings in Poland and Spain, and traveled around the world (sometimes by zero-emissions sailboat) to join other youth activists pushing for policy change.

The global pandemic hasn’t stopped the progress of her movement, Fridays for Future, although it has moved youth activism online for the time being. On March 13 (week 82 of her own school strike), Thunberg asked fellow activists to join her online for a #DigitalStrike — many did so, posting pictures of themselves at home with signs reading “Stop Fossil Fools” and “There Is No Planet B.”

School strike week 82. In a crisis we change our behaviour and adapt to the new circumstances for the greater good of society. You can join the #DigitalStrike by posting a picture of you striking with a sign and use the hashtag #ClimateStrikeOnline ! #schoolstrike4climate #fridaysforfuture #climatestrike #covid_19

A post shared by Greta Thunberg (@gretathunberg) on Mar 13, 2020 at 1:06am PDT

Thunberg’s advice about the novel coronavirus is the same as her advice about climate change: Listen to the scientists. “Had it not been for someone else having the virus simultainously [sic] I might not even have suspected anything,” she wrote on Instagram, warning that young people might not know that they are ill.

“Follow the advice from experts and your local authorities and #StayAtHome to slow the spread of the virus.”


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