Friday, January 06, 2006

Deeper into the GeoGreen

Here's a good commentary on Tom Friedman's recent NYTimes column, Social Insecurity Crisis (most of which I posted previously), which focused on connecting the relationship between domestic economic and energy policy with our national security strategy (which, I've been told, is on course for victory, by the way). Pat Doherty over at sees some agreement with Friedman's offering, but argues that we need to go even deeper and wider in solving the looming economic and energy crisis:
Friedman is right that America cannot overcome the threats to the nation without dealing with energy. Energy is the lynchpin to a progressive American grand strategy. But dealing with energy requires much more than dealing with Medicare. Indeed, if we fix our economy properly, the Medicare problem will disappear.

First, energy. If there was one driver of strategic threats and friction in the world, it is our dysfunctional global energy system. There are two main problems the first is scarcity the second is environmental impact. Let's look at scarcity. If we ignore the more controversial subject of reserves and look only and production capacity, demand has almost met supply and supply has been increasing at a slower rate than demand. The implications are obvious. Prices will continue to rise and our economies have been designed around cheap energy prices. Even if fossil fuels were not triggering global warming, our economies would have to adapt to higher-priced energy.

That's where Friedman introduces Medicare imbalances—and shows his unfamiliarity with the subject of adaptation. Friedman thinks that the Medicare imbalances, driven by retiring baby boomers, will tie the hands of the government by making it impossible to spend the money necessary for an adaptation. He's wrong, but not because I'm a Keynesian purist who thinks we can handle more debt.

Rather, he's wrong because what we need to do is much more fundamental economic restructuring of our market economy. We need to make three major changes to our economic engine. First, we need to shift taxes off of wages and onto waste. That will include ending the hundreds of billions of dollars of subsidies we give to industry that drive the depletion of oil, forests, soil and freshwater. It will also mean a rapid shift to renewable energy. Second, we'll need to shift to a universal, single-payer healthcare system, taking the burden of healthcare off of our companies while making the system inclusive and efficient. Third, we'll have to rebuild America. Our present federal policy of subsidizing sprawl assumed cheap energy, and in the process has destroyed our communities and weakened our families. An aggressive policy of rebuilding America sustainably, using the tools already developed by the smart growth movement, will provide the fuel for a major domestic economic expansion—an expansion that resuscitates the American middle class.

In such a world, expensive Medicare disappears with a cheaper, universal healthcare system. Our mounting deficits disappear as we stop importing energy and start a long era of economic innovation grounded in building a better American dream.

There's much more that would need to be done, but what's important is that it is a focus on energy that will lead us out of our current strategic morass. And that focus must extend deeply into both the international and domestic arenas. Deeper than Thomas Friedman was willing to go.


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