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Wow, this is a great way to sum up something I think about all the time: "But the Democrats are less of a cohesive ideologically-driven party than a collection of interest groups that each feels marginalized and generally refuses to subordinate its own priorities."

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This point is made of Democrats all the time but the same is true of Republicans. In my estimation, Republicans are the real big tent party these days, not Democrats.

True, many Republicans do not have a policy agenda at all, instead becoming champions of social outrage causes. And if your platform doesn’t exist, it cannot accurately be said to contradict the platform of others in your party. But among those who do advocate for (or against) policy, or even if we limit the analysis to policies that Trump’s administration put in place (tax cuts for the rich and corporations combined with direct cash assistance with minimal means-testing), I think we’re at best confused about what the Republican party stands for these days. They’re just all over the place.

Democrats at least appear to exist on the same continuum. How progressive a Democrat is will determine what level of spending she can stomach. From there, it’s like deciding how to spend your tax return: You could put the money in college savings account for your child (perhaps investing in renewable energy infrastructure in this analogy). Or you might use it to treat yourself to a nice dinner (perhaps the CTC in this analogy, which literally helps put food in kids’ stomachs). You might not know what to spend it on, but you’re at least okay with the premise that it should be spent on something. To me, that's a lot more certainty and unity than is true for the GOP.

Working in favor of Republican unity for decades, however, has been the single issue of abortion. Abortion is perhaps the only issue that can lead Evangelicals to unequivocally support and align themselves with a serial philanderer (or else they really are full of $h*t). For that reason, I am very interested to see what becomes of the Republican party after the SC inevitably strikes down Roe v. Wade. Without the single, unifying issue of abortion, I think the extent to which the GOP is the big tent party will become apparent.

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I've known this for awhile but also feel like the overall framing kinda misses the point. Why should I be willing to subordinate my priorities to the good of the Democratic party. My priorities are things I actually care about, and the Democratic party something that only matters (to me) insofar as it serves as a vehicle for those priorities. Being "loyal" to a party as an organization is ludicrous, and the Democratic platform is, generously, mediocre on most issues. Its just that the ones they get right (relative to the Republicans) are the handful of issues I care most about. So I side with them over the Republicans but only to the extent they actually focus on my priorities.

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Noah - you often go too deep in the weeds even for me, a 35-year wall street vet. But this one was simple, correct and utterly brilliant. Particularly the part of 'old man' Biden being the least loved but simply the absolutely only right man for the job right now - and likely never to receive the credit for it. Bravo.

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This was really good, I think the perspective hindering pragmatist policies is: "My own read on this is that Americans have become afflicted with a scarcity mindset — so afraid that people they don’t like will get something good that they refuse to do things that are interest in the nation overall.". Informed people underrate how much the average voter sees the US government the same way they see their own household. We need to clieve away it this misconception.

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That and "But the Democrats are less of a cohesive ideologically-driven party than a collection of interest groups that each feels marginalized and generally refuses to subordinate its own priorities." were the two standout sentences of this piece.

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There is NO MONEY for any of this. The country is running huge and structural fiscal and trade deficits. The endgame is a financial crisis much worse than 2008.

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Hysterical nonsense. There clearly is money for this stuff since the government is in fact passing budgets and successfully funding its operations. Plus "There is NO MONEY for any of this" ignores Keynes's basic dictum that "Anything we can actually do, we can afford".

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Ah yes, retreating to Keynes as a defense for unending deficit spending. What you (and Noah in a recent piece) get wrong about Keynes is that, while he believed in deficit spending in times of economic hardship, he most decidedly did NOT advocate for the unlimited money printing going on today. Noah's assertion that our deficit binge is not responsible for the inflation we are seeing now is willful blindness. If you're going to continue to quote one mostly discredited early 20th century economist who lived in an age when most nations balanced their budgets when they were not at war you can't really be taken seriously. The belief the MMT is simply a logical extension of Keynesian economic theory is nonsense and the dustbin of economic history is full of nations that tried to prove otherwise.

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Unsurprisingly I don't agree with your assessment of Keynes, but if you object to Keynes, fine, whatever, I don't have to rely on Keynes to point out that deficit spending doesn't destroy everything it touches.

I can simply point out that the government has routinely run deficits for at least 90 years (https://fred.stlouisfed.org/series/FYFSGDA188S) without everything falling down.

As for inflation, the single factor that best accounts for it is the price of crude oil on the global market (https://splained.substack.com/p/inflation-is-mostly-oil-prices-us). I don't see how anyone interested in the facts would jump to hard-money squawking before looking at oil prices as an explanation of US inflation.

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Crude oil? Really? Prices today, while not cheap, are nowhere near the highs we have experienced since our last bout of serious inflation. And that's in nominal prices. On an inflation adjusted basis, they are near a 50 year average. The only thing unusual about where we are today is the unfathomable amount of money being printed by both the Trump and Biden admins. The idea that money printing isn't inflationary is head-in-the-sand denialism of those who want it to continue to fund their pet priorities. We've been able to get away with more modest deficits for as long as we have due to the fact that the $US is the global reserve currency. But even that will only go so far. The profligate spending of the last few years is unsustainable and regardless of what happens to oil prices in the next year, inflation is out of control now and will hurt the poor and middle class far more than the hedge fund managers and tech billionaires who have benefitted most from the asset inflation that has absorbed the money printing binge to this point.

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What you're missing is that it's less the LEVEL of crude-oil prices that accounts for inflation, and more CHANGES in oil's price level. You can look at the write-up I linked, where I show my work, or you can do the quick, back-of-envelope exercise of plotting YOY CPI changes alongside YOY Brent-price changes on FRED: https://fred.stlouisfed.org/graph/?g=Mfeg.

I'm not sure which "last bout of serious inflation" you mean, but presumably it's either 2011 (when CPI inflation broke 3%) or the period when the Global Financial Crisis was turning into the Great Recession (when CPI inflation broke 5%). Both bouts of inflation happened roughly in parallel with YOY increases in oil prices. Look at the FRED charts!

And printing money literally isn't inflationary in itself. Obvious thought experiment: imagine literally printing money and then immediately tossing the money into a burning furnace. Money printing only causes inflation where the money's actually spent. And printed money's disproportionately been spent on FINANCIAL ASSETS, not real consumption; that explains "the asset inflation" you mention, which is NOT the same as the consumer-price inflation that directly hits everyday people's wallets.

You can reasonably object to money printing on the grounds that too much printed money goes to the already wealthy. It's less reasonable to simultaneously object on the grounds that the printing mechanically caused 7.5% CPI inflation somehow. It's even less reasonable to post "There is NO MONEY for any of this" as if that fallacy can explain 7.5% CPI inflation.

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Correlation is not causation. Look at your data. If oil prices were the biggest contributor that should at least be SOME lag in the change in CPI. Unless another factor is simultaneously driving the spike in both. Hmmm. Wonder what that could be.

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We were the reserve currency during the 80s stagflation era so that's wrong. Japan isn't a reserve currency and they run huge deficits and debt without inflation. Inflation is mostly a function of demand and supply(including money), oil makes up a large part of global GDP therefore its supply perturbations will affect the average price of everything.

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Being the reserve currency doesn't automatically exempt a country from inflationary pressures and that's not what I claimed. But the idea that oil prices now are out of the ordinary on a real basis is absurd. They are not even close to being expensive for the last 20 years when prices started to rise after 9/11. All one needs to do is chart real oil prices over the national debt number for the last 20 years to understand what's happening today.

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And just to add another cogent consideration, our debt servicing burden since Q2 2020 has not changed as a percent of GDP in spite of all the deficit spending. As Keynes said, "If we can do it, we can afford it." The question should be whether its a good idea. By all accounts BBB is a good idea.

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In fact, if I'm looking at the right time series on FRED, the federal government's interest payments have been consistently SMALLER relative to GDP since Q2 2020 (https://fred.stlouisfed.org/graph/?g=LyLC). In each quarter of 2021 they were smaller relative to GDP than at ANY time since the 1950s!

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Gosh, interest rates wouldn't have anything to do with that, would they? The historical suppression of rates since 2008 is the only thing to which we owe that phenomenon. Once the Fed starts hiking that will end as well. Additionally, any Fed transfers linked to CPI will be increasing significantly in the coming year. The idea of piling on trillions more in spending on top of the trillions we have already spent over and above our historical spending levels will only add fuel to the fire.

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If you say so. No reason to doubt YOU know what you're talking about, eh?

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As I read through this piece I kept wondering why I subscribe to you. At least Freddie DeBoer understands his limitations and for that, I respect him. He even convinced me, an ardent opponent of student loan forgiveness, of the case for limited and targeted forgiveness (he's still for a blanket wipeout but his arguments had me meeting him halfway).

But this...this is simply talking points laid out one after the other, with no convincing arguments for any of them, to make the point that Americans just don't know what's good for them. Congrats, you just rewrote "What's the Matter With Kansas" in the worst and most simplistic of ways.

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I am unsubscribing now. Random opinions are too dear even when free.

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The political analysis is weak and there wasn't a whole lot of economic insight other than "investment = good" in the piece. I think Slow Boring has some more insightful coverage of the issues with Build Back Better and a less 'Manchin canceled Christmas' vibe; https://www.slowboring.com/p/175-trillion-is-plenty-of-money-to is a good place to start. Personally, I think what we're seeing is in significant part a result of progressive's inability to do politics well.

Also, this bugged me:

> And as for green energy investment, the sad fact is that even after wildfires, droughts, hurricanes, and coastal flooding, Americans still don’t think of climate change as a very high priority.

Even if we're fabulously successful and halt climate change, we'd be locking ourselves into our current climate for some time, which includes elevated hurricane, wildfire, coastal flooding, and drought risk. Relative to the advantages of say, the economic prosperity to mitigate the effects of climate change, stopping emissions doesn't seem to be such a high priority. Much of those issues, while aggravated by climate change, are really downwind of other disastrous policy choices, which Americans would be right to prioritize fixing: zoning and housing supply constraints (driving folks to riskier locations), insurance nonsense (either forcing insurers to cover buildings that will burn, or rebuilding in flood plains at the expense of the American taxpayer), and poor building codes (hurricane and fire risk can, in fact, be mitigated).

Americans are right to prioritize government stability - the strong investment and welfare state progressives foresee solving all of our problems (even a UBI system) is 100% dependent on the state existing, remaining stable (not bleeding resources or collapsing markets with spasms of chaos or civil war), and being competent. If the United States collapses or destabilizes, whether through civil war or transition out of democracy (Insurrection 2.0), our chances at making climate progress will be in serious jeopardy. Even the optimistic scenario of a continued slide toward incompetence will hamper our ability to deliver on R&D investments and secure the business environment needed to address climate change (rule of law, courts, oversight, regulation).

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I'll refrain from critiquing the narrative around linking climate change and the increase (or not) of things like fires and hurricanes for another forum, I do wish the government would be wise and, if they really believed the risk was existential, commit to investing in nuclear, the single best option for plentiful and emission-free energy. Furthermore, the entire "the coasts will disappear" side of things can certainly be addressed. Just ask the Dutch. 17% of the country is reclaimed from the sea via the use of dikes. This isn't any modern technology beyond our ability to accomplish. But I suspect that some of the wealthiest people wouldn't be buying waterfront properties if they believed in this part of the story.

https://imagez.tmz.com/image/b8/1by1/2019/08/21/b81bf53aa57e4d2f9d4fad708a2151a1_xl.jpg

https://www.dailymail.co.uk/news/article-10481075/Scowling-Obama-inspects-new-multi-million-dollar-Hawaii-mansion-controversial-sea-wall.html?ito=social-twitter_dailymailus

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>1. Investment (both government and private)

>2. Cash benefits

>3. Care jobs

1. Good

2. Good

3. Oh no cost disease hell

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Much of the higher relative levels of science funding were due to the Cold War. In grad school (early 1980's) one of the DOD (Navy) financed research projects in our lab was working on the chemistry of Lithium batteries (we managed to have a good size lab fire). We also had access to the DarpaNet because of DOD funding. We never would have guessed how important Li batteries and the Internet would become. The point is it takes a lot of research and usually a long time for a few jewels to emerge from research. Investing in more research now won't be impactful economically for considerable time. It's not even clear with the massive drop off in foreign grad students if the system could absorb even 25% more funding, much less the 115% needed to get back to our 1960 level.

Both the research economy and the care economy are going to need more workers. Where do these come from today? The answer to both is more immigration. Although Noah has made this point before it is surprising it is not discussed here.

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Feb 19, 2022·edited Feb 20, 2022

"I think Americans are generally unaware of the rapid progress in green energy, and still think that fighting climate change means making big economic sacrifices."

While it is true that the costs of wind and solar have plummeted, as have the costs of batteries, it is not true that we are have an affordable solution to the problem of intermittancy of wind and solar, especially long term intermittancy. Batteries and hydrogen synthesis remain far too expensive to solve this problem. The huge increases in electricity costs in Europe, especially countries with the highest renewable penetration like Denmark and Germany, reveal the costs of trying to reduce emissions mainly via renewables, and show that huge economic sacrifices ARE required. The most feasible way of reducing this sacrifice is returning to nuclear power. We already know from experience in many countries in the 20th century that we can reduce emissions very quickly at low cost by building nuclear. The problem is that this expansion was stopped because of excessive fear of nuclear power, a fear that history demonstrates is unfounded: nuclear power has a fantastic safety record, and nuclear waste has never done any harm to anyone. We continue to hinder expansion of nuclear power by retaining massive regulatory obstacles and spreading myth that 100% renewables is feasible and cheap.

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It is always that we need to spend more. Really we need to reallocate our spending before we begin spending more.

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It's unlikely that the average American voter looks at Europe's energy policies as a precautionary tale for the Green New Deal agenda, but certainly the problems that we've seen in Texas are a microcosm of the risks. There are trade-offs to be made among energy sources, but the one trade-off that is not going to be made by voters is to turn the lights out. That’s not an option. And that's what happened in Texas because of the intermittency problems presented by wind & solar. And so what we see is that if the choice for voters is between unreliable energy and carbon dioxide emissions, will get carbon dioxide emissions. The other problem is that the American economy has a natural competitive advantage in being largely self-sufficient in fossil fuels. Move further to renewables via things like, say, electrical vehicles, and you cede yet another huge competitive advantage to China, which has a near monopoly on crucial rare earths required for these vehicles.

Of course, the electorate might not see it in precisely those complex terms, but at some level they recognise there are trade-offs, even allowing for the technological advances that Noah cites in his analysis. These will always represent a challenge for the Democrats, who wish to advance an energy agenda with mixed support in exchange of an outcome that today's voters are unlikely to experience directly (i.e. it's a legacy that will be left for their children and grandchildren). I'm not suggesting that this isn't a worthy aspiration (it is), but the political payoff is unlikely to be great, which creates huge challenges in the immediate future (i.e. midterms and 2024 presidential election)

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> There are trade-offs to be made among energy sources, but the one trade-off that is not going to be made by voters is to turn the lights out. That’s not an option. And that's what happened in Texas because of the intermittency problems presented by wind & solar.

Is that not rather reductive? (And not far off a tendentious Tucker Carlson/fossil-fuel flack talking point.) Wind and solar generated only about a sixth of Texan power in 2020 (https://www.dallasfed.org/research/economics/2021/0817.aspx) and the causes of the Texan storm blackouts a year ago extended to the grid writ large as well as the, uh, storm (https://www.reuters.com/article/uk-factcheck-texas-wind-turbines-explain-idUSKBN2AJ2EI).

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As a rule, I don't watch Tucker Carlson. But a sixth of the power is quite significant. And as Ed Crooks has noted, the worst of the problems hit during an extended ‘wind drought,’ with low wind speeds and power output across a vast area of the U.S., covering the ERCOT, MISO, PJM, and SPP regions for 12 days. That is a period much longer than can be managed by most standard demand response programs, or lithium-ion battery storage systems that have durations typically lasting up to four hours. As the share of wind power on the grid rises, and the shares of coal and gas decline, managing the grid to maintain electricity supplies through these wind droughts is going to become increasingly important... The story of the Texas power crisis encapsulates the central challenge of the transition to lower-carbon energy. Companies and regulators need to manage the transition to new energy sources in the medium to long term, while ensuring that the old sources can still provide reliable supplies in the short term

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> As a rule, I don't watch Tucker Carlson.

Good. In a nutshell, Carlson blamed the storm blackout on windmills freezing (https://www.foxnews.com/opinion/tucker-carlson-texas-green-new-deal-climate-catastrophe). The reasons that was ridiculous are that (1) wind turbines can in fact operate when it's cold (they're used in Antarctica!) and (2) Texan gas and coal power sources ALSO failed because of the stormy weather.

> But a sixth of the power is quite significant.

Certainly, but it suggests that given a very broad grid failure (nearly half of Texas's households lost power), solar and wind were not the sole points of failure. And indeed "all sources of electricity struggled during the frigid temperature" (https://www.texastribune.org/2022/02/15/texas-power-grid-winter-storm-2021/).

> And as Ed Crooks has noted, the worst of the problems hit during an extended ‘wind drought,’ [...] The story of the Texas power crisis encapsulates the central challenge of the transition to lower-carbon energy.

Given that coal and gas couldn't do the job either, the Texas storm blackout doesn't imply a special problem of transitioning to low-carbon energy. Rather, it implies a long-standing problem of ERCOT and Texan utilities preparing inadequately for winter storms in general. In February 2011 ERCOT resorted to imposing rolling blackouts during a winter storm (https://www.ferc.gov/sites/default/files/2020-04/08-16-11-report.pdf), when far less wind capacity was installed.

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And California? Which also has had rolling blackouts and among the highest energy costs in the nation? Generally speaking our grids and energy infrastructure suffer from chronic underinvestment. But I also think that going to 100% renewables is going to be a costly and unrealistic aspiration. Probably there will need to be a good mix of nuclear in there as well.

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California has intentional blackouts because PG&E is trying to avoid starting fires from the transmission lines, and in the past because of Enron. It’s never been because we ran out of energy.

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There's no question moving away from coal/gas will be difficult and very expensive. But we are in a situation of "pay now or probably pay a whole lot more later," I think.

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Are you saying green energy played a role in last Feb's near total shutdown of the Texas grid? My understanding is it was mostly the result of 1) lack of adequate preparation/maintenance and 2) Texas' "closed-loop" model.

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For everyone else reading, that link's to an episode of the Power Hungry podcast on which "Brent Bennett, the policy director for Life:Powered" is interviewed about last February's Texas blackouts. Fortunately there's a transcript, so it didn't take me long to spot a howler.

About 7 minutes in Bennett alleges that "last year" there was "no wind and solar and demand [was] high", which is at best hyperbole; an EIA chart shows wind supplying power through every hour of the storm (https://www.eia.gov/todayinenergy/detail.php?id=51278), and solar providing increased power on a day (February 15, 2021) when other power sources (even nuclear) were stepped down.

Considering the source as well as the factual claims, the podcast seems to confirm my fears of a "fossil-fuel flack talking point" — Bennett, the interviewee, is policy director for a program at the Texas Public Policy Foundation, which advocated for anti-environment ALEC model bills and loaned money to coal company Peabody Energy (https://www.sourcewatch.org/index.php/Texas_Public_Policy_Foundation). Flicking through the list of recent guests on that Power Hungry podcast, I see a few names familiar from when I've looked into so-called "skepticism" of climate change in the past: Roger Pielke Jr., Matt Ridley, Gregg Easterbrook. Hmm.

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For what it's worth, I wasn't making a generalised case for the climate change skepticism camp. Merely pointing out that there are consequences to the choices made. To leave aside, Texas, Europe has moved in a much more green friendly direction in the last several years and they are experiencing the same kinds of problems, especially Germany (having foolishly fazed out nuclear power generation). The transition away from traditional baseload powers sources (gas, coal, and nuclear) to intermittent renewable generation and carbon neutrality has pushed the member states away from long-term purchase agreements and towards short-term pricing, making them highly vulnerable to shortages in LNG, where prices are now skyrocketing. The crisis even more costly to energy utilities and other consumers who are now seeking alternative fuel sources. Also, by closing its coal plants closing its nuclear plants (other than France), the EU is now relying more heavily on Russian gas. So there are consequences for the policy choices being made. And that was my main point

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Fair enough. To clarify, I don't think you were consciously pushing AGW denial. I'm just sensitive to the fact that fossil-fuel interests put a lot of time and money into spreading pro-coal, pro-oil, and pro-gas memes, and even well-intentioned people can unwittingly pick those memes up — so I'm quick to interrogate claims in this sphere.

I agree that turning off working nuclear-power plants is foolish, and it's hard to dispute that any choice of energy mix will have consequences that have to be weighed with care.

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We can end on that note of comity. I think there are trade-offs no matter what energy policies we choose. I happen to think that places like France have got it largely right (yes, I'll put my cards on the table and admit that I am pro-nuclear as a big part of the solution). And I also am bothered about the fact that we have a double-standard when it comes to the developing world. We castigate them for adopting the very same strategies that we employed to allow our nations to become wealthy. There's a form of energy colonialism implicit in this. That's a bit of a digression. Suffice to say I profoundly agree with your last sentence.

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Feb 20, 2022·edited Feb 20, 2022

We know from historical experience in the USA that nuclear power can reduce emissions rapidly and at low cost. Unfortunately Americans were convinced by misinformation into believing it was more dangerous than fossil fuels and so they stopped it. If we had continued expanding nuclear it would cost 10% what it costs now. We have to choose between indulging an irrational fear and saving the planet from climate change at an affordable price.

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"It's unlikely that the average American voter looks at Europe's energy policies as a precautionary tale for the Green New Deal agenda"

Why?

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Because I don't think the average American voter ever thinks about what happens beyond the borders of the US (unless we're engaging in a war). A lot of them wouldn't be able to locate Germany on a map, let alone consider what their energy policies have meant in terms of the shortages and resultant high energy prices they are experiencing right now.

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That's what I figured you meant but didn't want to immediately assume. I disagree with your assessment of the "average" American, as if that can even be measured or established as to what would qualify one for such a moniker. If you mean the average CNN viewer then, yes, you're probably correct.

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They're no less arbitrary than the offsets made every couple of years by the BLS. Let me ask you this: I linked the list of changes over the years. Do you believe that the federal government has an interest in keeping the CPI number lower rather than higher for ANY reason at all? ANY reason you can think of?

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I live in the UK. It is not our experience that green energy equates to cheap energy; in fact, it’s just the opposite.

We need to move to more renewable sources, but it will take a long time and the lights must stay in in the meantime. Fossil fuels will be a vital contribution to energy security for many years to come.

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The "children being thrown into poverty" talking point is somewhat misleading. It makes it sound like children are falling from the middle class into poverty, but really it's more a matter of their family incomes having temporarily been raised from slightly below the federal poverty standard to slightly above, and then falling back down.

This isn't nothing, but it's a long way from the night-and-day difference implied by the "falling into poverty" rhetoric. Families with incomes just above the federal poverty standard are still poor. We can't solve poverty for the price of the expanded child tax credit, only slightly ameliorate it.

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Two typos:

> because of it’s lack of focus

> a self-inflicted would

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The only hope for "Bidenonomics" is if the Republicans field mostly dinosaurian Republican candidates for Congress - that will be so actively incompetent as to take the mantle of "inflation creator" off Biden. Note actively incompetent as opposed to mostly absent.

The first part of the above is likely; the second part is highly unlikely.

So long as Biden is POTUS and inflation is a problem - which I think any reasonable person is going to say that this period is going to last well into 2023, if not longer given, likely Fed policy - the Republicans will j'accuse Biden in particular and Democrats in general for causing the inflation and will make it stick.

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Noah, Thank you for this. Very insightful. The analogy to transformative presidents’ agendas being stymied and ultimately (at least in part) fulfilled by subsequent administrations is very helpful. I think Lincoln’s example may be the most difficult one to swallow, because, here we are more than a century and a half later, and still trying to win the “Black Lives Matter” fight.

And this has me wondering whether one can learn something even more fundamental about the sorts of issues that are most difficult to address and whether this is an indicator of how fundamental is the question of racism and the issues of racial justice . . .

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