21 Comments
Aug 10, 2022·edited Aug 10, 2022

Let's assume we lived in a world that understood we don't need "pay for's".

Then,

Do we need to tax corporations at all, if we

1) greatly increase individual taxes for the wealthy corporate shareholders, executives, and all other super rich people to reduce their political power and the income inequality gap,

2) make lobbying illegal

3) make corporate donations to political parties and individual politicians illegal

4) eliminate individual influence on public policies by making it illegal to donate more than 20 bucks to political parties and politicians,

5) limit corporate executive pay to x% of the lowest paid employee (not sure what that % would be, but we can figure it out)

6) make it illegal to allow politicians who exit office to land cushy jobs or get freelance consulting gigs for corporations

7) require corporations to include an x precent of labor representative on their boards

8) enforce the above

Note that "corporations" should include any business entity including shell companies, proprietorships, non-profits, etc.

I got most of these ideas from reading a great book called "The Deficit Myth".

Ps. I didn't include regulations to enforce corporate behavior for society benefits since that would stretch the scope of the taxing corporations topic even more.

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Those are excellent! That corporations do not realize they do not need to be taxed has always baffled me. That they would prefer to pay huge health insurance premiums for employee health insurance when Medicare for all would cost less and be deflationary, again is baffling and calls to question their mathematical capabilities.

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Yeah, that baffles me too. But, as we can guess, the heads of corporations are as not knowing about how money works as Powell and his team.

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What passed the Senate is a very good start on climate. There is a lot of emphasis on renewable energy, which is good. But zero-carbon electricity production will never happen without a sizeable nuclear energy component. Look what's now happening in Germany to see how you handicap efforts to produce clean power by closing nuclear power plants--which a majority of Germans now do NOT want closed. Germany is especially vulnerable because of their foolish reliance on natural gas from Russia, but no matter where you get your natural gas from, you will always need a lot of it as a backup to intermittent electric energy sources. I take that back--Denmark is doing well with wind power, but only because they get hydro from Norway as backup when the weather does not cooperate--better than natural gas but there's only so much of that too. Storage of the magnitude required to back up wind and solar is expensive and environmentally costly. Nuclear should get subsidies of the same order of magnitude that wind and solar are getting. Other than that, the Senate bill is about as strong on climate as you can get in view of the Manchin Factor.

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I agree Mark. For the shorter term smart and well-managed nuclear energy is the best solution until we can get renewables up to mass usage.

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Paul -

Thanks. But there's a problem with scaling up wind and solar: because of their variability, the bigger the share of overall electricity generation, the less stable the grid becomes, and the less valuable their contribution. No one knows just what the optimal share should be, but the best estimate I know of is found in a paper written by Lion Hirth (a German economist) , "The Optimal Share of Variable Renewables." (Look it up on web and get a free download.) I quote from the abstract: "The optimal share of wind power in North- Western Europe is estimated to be 7-10% in the medium term and around 25% in the long term. If wind speeds were constant, the optimal deployment rate would be up to twice as high. Solar power is too expensive to be deployed efficiently, even at very optimistic assumptions regarding cost development."

What Hirth was talking about (in 2012) was not the efficiency and power production of wind and solar technologies. He's talking about the "social value" of the energy MIX.

Note the caveat "if wind speeds were constant." But of course they aren't, and there's the rub. What's worse, it seems that with climate change, the prevalence of "heat domes" will rise, and wind speeds under a heat dome tend to be low, just when you want more energy for air conditioning.

You may already know what I'm saying below but it bears repeating just to appreciate the challenge of scale when comparing nuclear to wind. I apologize for running on with all this detail but once I get talking about electrical energy generation I'm hard to stop.

Claims for energy production by renewable sources can be deceptive. Usually they are spoken of in terms of power--in America we speak of watts, megawatts, gigawatts and so on. Gigantic modern wind turbines can reach powers over three megawatts--that's the maximum they deliver. But they are seldom delivering their maximum, and when they stop turning their power is nil. There's a power curve that I think peaks at wind speeds of 40-50 mph, and very tall wind turbines can capture a lot of high speed wind, so they may run close to capacity much of the time depending upon location. They cut out at speeds I believe to be about 70 mph, which frequently occur in a tropical storm.

That brings us to the question of ENERGY -- that is, the amount of power x time, commonly referred to in units of megawatt-hours in the U.S. A typical commercial nuclear reactor tends to grind steadily away at power levels of one gigawatt--a thousand megawatts or 333 wind turbines running at maximum capacity. But the reactor's output is steady around the clock so the energy produced in a day is very likely to be more than 333 times the energy from wind turbines that don't run steadily 24/7. That's what we're up against when trying to shift energy production to wind power. Solar is another story--at least it's reliable in one respect: it generates no energy at night..

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Aug 11, 2022·edited Aug 11, 2022

Hi Mark, 100% renewable source electricity with sufficient backup using pumped hydro and battery banks has been proven in Australia and is now in the process of implementation.

https://arena.gov.au/blog/the-energy-innovators-andrew-blakers/

https://www.facebook.com/andreas.bimba/posts/pfbid0UWfWVDur8zx9oiLjuTJUdSj7zGXHvZT8cmwitLYtMuspuNF2xUsmgesxhJoA6ZA2l

https://www.youtube.com/watch?v=A4116SKhd18

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Andreas -

Thanks for this, although I'm not quite sure what you mean by "in the process of implementation." Does that mean the system is not actually operational?

I don't have time at the moment to reach deep into the data, but just a few stats for starters comparing U.S. and Australia: Population U.S. 330M, Australia 26M. Population density U.S. 34/sq km, Australia 3.6/sq km. GDP U.S. $19,278B USD, Australia $1,305B USD. Energy Usage U.S. 3,989,566 GWh/year, Australia 241,020 GWh/year.

Population densities in Europe are much higher.

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Aug 12, 2022·edited Aug 12, 2022

The Australian story is complicated with the states and territory governments leading the way with the transition to renewable energy in particular South Australia and the Australian Capital Territory which is basically just Canberra while the previous conservative federal government that was in power for eight years in general did all it could to frustrate progress and it was only the federal Senate that stood in their way and thereby saved Australia from returning back the clock to the Jurassic. That previous government did however have a short period of fairly competent leadership under Prime Minister Malcom Turnbull and his Treasurer Josh Frydenberg and they initiated the large Snowy 2.0 pumped hydro project which is now due for completion in 2026 at the earliest.

The basic foundations of a 100% renewable electricity generation system are taking shape now and both South Australia and the ACT routinely generate in excess of 100% of their total power needs from wind and solar. Tasmania has lots of hydroelectric power that was built long ago and that state is also effectively at or near 100% renewable power and now that there is a grid link between Tasmania and the mainland they buy and sell power from/to the mainland and help with meeting peak demands along the mainland East coast grid where most Australians live.

https://www.sciencedirect.com/science/article/pii/S0306261918305270

The Tasmanian government also plan to build large pumped hydro energy storage capacity systems and along with another two grid links to the mainland, this will operate alongside the Snowy 2.0 pumped hydro system to provide most of the energy storage/backup requirement for a 100% renewable electricity generation system for Australia's East coast and also South Australia. Queensland is also investing heavily into renewables and their grid but will soon need pumped hydro storage and more large battery banks. South Australia has a large Tesla supplied battery bank that helps to provide the ultra fast but short term system backup as well as frequency control that complements pumped hydro that can store far more potential energy.

Western Australia is effectively an island surrounded by sea and desert and it will be a while before they are connected to the national electricity grid because of the huge distances, the same applies to the Northern Territory but that day will come.

Australia may be sparsely populated in total but the vast bulk of the population is concentrated along the East coast along with the capital cities of Perth and Adelaide. The vast interior is effectively empty so population densities are much the same as Europe or North America for those regions where most people choose to live - if that makes sense.

The first link I gave has two short videos of Professor Blakers explaining in his efficient style the reasons why it is now game over for all fossil fuels from a purely economic viewpoint and the environmental imperative just adds to this.

I accept that the colder parts of Europe and North America as well as Japan, South Korea and China will invest heavily into nuclear power as well as renewable power but nuclear is a far more expensive and slow process. Pumped hydro can utilise existing water reservoirs as is the case for Snowy 2.0 and also in Tasmania, or new reservoirs can be built in mountainous areas usually on already cleared land or marginal land. Sea water can also be used in some desert coastal locations.

New Zealand similarly is in the early stages of investigating the feasibility of the world's largest pumped hydro system in terms of energy storage capacity at Lake Onslow on the South Island which will complement their existing hydro power in dry years and also help meet daily peak demand. Unfortunately most people live on the North Island so the grid will need to be expanded but not hugely so as the Lake Onslow pumped hydro system will be providing most power when the existing hydro power stations are not providing much power.

Exciting times.

https://www.youtube.com/watch?v=GcVpfr7A2_g

https://www.stuff.co.nz/business/129202621/so-far-so-good-for-multibilliondollar-lake-onslow-power-scheme-cabinet-decides

https://www.mbie.govt.nz/building-and-energy/energy-and-natural-resources/low-emissions-economy/nz-battery/lake-onslow-option/

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Aug 11, 2022·edited Aug 11, 2022

Hi Mark, nuclear power may be needed wherever winters are long and cold but generally solar and wind power with sufficient backup from pumped hydro and battery banks including grid interconnections between regions is the cheapest form of new build electricity generation and that is without any subsidies. Renewable electricity generation is cheaper than gas or coal fired electricity generation and far cheaper and quicker to build than nuclear power electricity generation and running costs for renewable power are the lowest of all options by a considerable margin. The US needs to catch up with the reality of renewable power which has been proven economically in Australia and elsewhere:

https://arena.gov.au/blog/the-energy-innovators-andrew-blakers/

and also my Facebook post:

https://www.facebook.com/andreas.bimba/posts/pfbid0UWfWVDur8zx9oiLjuTJUdSj7zGXHvZT8cmwitLYtMuspuNF2xUsmgesxhJoA6ZA2l

https://www.youtube.com/watch?v=A4116SKhd18

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I think the definitions of "it" and "delivered" are in desperate need of revision.

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"...there is still a lot to celebrate in this bill."

So we're supposed to congratulate Democrats for bringing 51 water pistols to a 5-alarm fire? Anyone under the age of 40 is totally screwed.

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“Well, they did it. For the second time in two years the Democrats failed miserably to fullfill any of their (& Biden’s) election promises but have cobbled together something that *just* about lets them claim to have done something without actually doing anything meaningful which would make people’s lives substantively better and/or easier.”

“Record climate investment”.... Lmao Yeah, from a very, VERY low starting point. One cast iron way of assessing whether the climate stuff will in any way slow or stop the Fossil Fuel cartels from burning the planet to a crisp is to observe how the CEO’s react to it. Needless to say they are very happy indeed. Why might that be do you think?

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I'm glad we are making these investments in clean energy and health. Its not everything, but it is a progressive political victory. It is more impressive a victory as it happens in the shadow of notable inflation. The "pay backs" make it politically possible. Its what the public (voters) understand. A politician too far ahead of his constituency won't stay in office long. Until we spread the ideas of MMT more broadly in the public it will remain as such.

I'm also glad as a share holder in the $ economy that my ability to purchase won't be diminished by too many (green) dollars entering the market with the Federal spending. It's quite possible for congress to screw this up. I wonder if they still have good MMT economists advising them? I found the ideas presented by Nathan Tankus in the paper 'New Monetary Policy' referenced in the last Lens email to be intriguing. The rub seems to be finding politicians and voters who favor cooperative effort and long term investment over immediate profit

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The tax increases will nevertheless allow more spending on what matters that can be authorised in future bills. As we all know the deficit and the debt are of no real consequence and hopefully one day a proper Job Guarantee will be implemented which will ensure the full fiscal capacity available to the Federal Government will be available to serve the public interest. Thanks Stephanie for your decisive involvement which will help so many and is also a powerful precedent for the whole world.

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Don't worry, they will quickly fritter away any budget gains on the military/industrial complex which has become the laboratory experiment for MMT. It's funny that no one ever asks "How will we pay for it?" when they give the defense industry unlimited funding.

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Yes I think you are correct Gregorio but at least one very powerful political force (the military/industrial complex) can now clearly see that the MMT approach to macroeconomics is the right one which will help with isolating the appalling fossil fuel industry from political influence eventually, but unfortunately probably too late for large parts of the global natural environment. Politics nevertheless is about building alliances and purity of purpose will not cut through politically under the current debased political and public information space.

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The Medicare drug pricing provision is pretty much a nothing burger.

https://www.nakedcapitalism.com/2022/08/the-ira-drug-price-victory.html

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Re the 15% minimum tax on corporate profits: I understood this to mean that EVERY corporation would pay at least this amount with absolutely no exceptions whatsoever. Ha! The tax is in place but so are are a host of new loopholes and paybacks that, in some cases, will even give profitable corporations a negative tax rate. In my perhaps limited understanding, this part of the bill appears to be a complete fraud.

And that raises questions about everything else in it. Saying, for instance, that this is the biggest federal investment in combating climate change is saying almost nothing. Especially in light of the added favors for the fossil fuel industry. But good luck reading the mainstream media if you hope to learn anything substantive about the bill. Their superficial coverage appears geared completely to cheering on Biden and the Democrats irrespective of the garbage they churn out.

Finally, let's not be too harsh on Manchin and Sinema. If they didn't exist, the Democratic Party would surely designate one or two more Snidely Whiplashes to sabotage any constructive measures. The Today's Dems have an endlessly deep bunch for such chicanery.

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True unfortunately.

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Thanks, Andreas. Very interesting. I'll check out your links when I have some time away from work. I'm a big fan of pumped hydro where it can be placed. There are not many places where facilities can be put near population centers in the U.S. without moving a lot of people and losing a lot of wild habitat. Battery storage is expensive and lithium mining is hard on the environment. Mining a ton of lithium uses 500,000 gallons of water and many of the places it is mined are arid.

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