essays
Reflections on Money
by Kianga Daverington
September 1, 2020
This essay, written by Kianga Daverington of Daverington PLLC , was originally published in January 2020. The piece as been condensed for clarity.
Money is not a physical object like a coin, a bar of gold or a dollar bill. Money is at its core, a technology. It is a human invention designed to solve a specific set of human problems. Consider money, perhaps, in a new way. Think of money as a system for capturing time.
Time is the one thing we each have that is absolutely finite. We are born, we die, and the dash in between is all the time we have.
Think of production. We can usually produce more of some good by adding people to a task (also known as “WORK”). But we are still constrained by time. Whatever we produce is still limited by the amount of humans that can be organized to go into that production. Each of us possesses a limited amount of time available to us individually, so we need to convince or coerce others to add their time to ours if we want to achieve more than we can alone.
Out of this imperative, nations are born.
The most important quality of any particular form of money is how well it preserves the value of time over time. Can you buy the same amount of stuff or more in the future than you can buy today? If yes, congratulations - your money is accumulating time for you and future generations while you relax on the beach. If it takes more and more of a unit of money to buy the same amount of time in the future, well then I’m sorry, but that unit of money is getting weaker and weaker. It’s losing value or said another way – it’s losing purchasing power. The longer you hold it, the less it buys.
In a way, by purchasing goods and services, you are purchasing time. Every product and every service requires time to make and time to deliver - your time and/or someone else’s. The price therefore reflects the collective value of all the time put in. Money is a way we exchange time and move it around from where it is valued less to where it is valued more.
This is where prosperity comes from. It comes out of how well a society, collectively and each person, spends its time. How much time is spent creating and making? How much time is spent consuming? If we make more than we consume, we have something left over called wealth. If we consume more than we make, we are left with debt. You can’t consume what you don’t have, unless someone extends credit. Where does this “credit” come from? Basically –it’s made up.
Too much credit or debt eventually collapses and everyone is mixed up in the collapse.
If we understand that a unit of money represents a unit of time, and we understand time is limited, then a unit in a system of money with unlimited supply cannot have any value. This is the problem we are facing today with the world’s money supply. The supply of money in the world is increasing exponentially as central banks create money by giving loans to national governments, which is where our money comes from.
Our entire world financial system is a powder keg of debt.
National currencies today are known as fiat money, a currency without intrinsic value that has been given its power to be used as money by a government that says it is money by regulation. Wikipedia says, “Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value.” Well said, Wiki.
A government’s job of maintaining the value of its national money boils down to a confidence game. On what basis do the people who use that government’s money believe it has value?
What happens to the money and those who hold it when the foundation of that belief begins to crumble?
essays
Climate Politics In America
by Michael Green
February 27, 2019
Michael Green leads Climate XChange. He’s served as a representative to the United Nations focusing on international climate science and policy since 2012. He was recognized as a Champion of Change by President Obama in 2016 for his focus on climate change as an equity issue.
There has always been a rift between the understanding of climate and energy policy and security in American politics. On the one side, policies are being introduced to guarantee that future fossil fuel needs and energy demand are met by American provided solutions. It focuses on developing our national resources and ensuring security through energy independence. On the other hand, are those who believe that the future security threats of global climate change create the need for a dramatic economic switch towards clean renewable energy through the further development of clean tech and innovation. The themes of energy reliability, security, and economic progress are championed by both sides, yet the reality of the divide between the two visions could not be greater.
On June 1, 2017, President Donald Trump announced that the United States would begin the process of pulling out from the Paris Agreement. Many feared that the international climate treaty’s days would be numbered under the current administration and when the President made the announcement that he wanted to represent “Pittsburgh not Paris”, it became all too clear that the administration would keep to their campaign promise of promoting a ‘new’ energy vision for the country. The decision not only had major ramifications for the United States as it furthered the political divide within the country, but also for global policy, as the administration’s exit from the Paris Agreement left a perceptible gap in global climate leadership.
Since the announcement, federal policy has been dominated by a series of subsequent energy policy and pollution standards rollbacks, all of which prioritize deregulation and short term fossil fuel gain rather than demonstrate a clear understanding of the direction the planet is heading. Over the past two years, policies such as the Clean Power Plan, which were set to reduce carbon pollution by 30% from the electricity sector by 2030, have not seen the light of day. The federal agencies tasked with promulgating and enforcing such policies have shown no interest or direction to see them progress. During this time we have also seen industries related to renewable energy and energy efficiency slow in pace. The administration believes that they will be able to bring back jobs in industries such as coal however during the last two years, we have seen close to no indication that those jobs are coming back.
Almost 20% of the existing coal plants in the country have closed their doors in the past five years, and there are currently no plans to build any new facilities in the country. One of the key drivers in this decline has been the economics of such an investment. Coal fired power plants can take upwards of 50 years to become profitable. At the same time technological development has done little to shorten this timeline, while progress in the R&D of distributed energy systems have cut costs in half, making them more profitable on a much shorter timeline, and therefore a safer investment.
The Republican party has struggled to articulate a clear vision of the american energy future and how they will meet the demands of a growing nation. They seem to be adamantly set on pushing back against, and undoing much of the policy work by the previous administration, without offering a viable or logical alternative. Unfortunately the anti-Obama sentiment is what seems to fuel these choices. They are taking away smart policies because of who put them in place, and not necessarily because what they set out to accomplish.
It was not until the Green New Deal (GND) started grabbing national headlines, and the most recent congressional hearings on climate change, that there has been any sign of interest in charting a new pathway forward from elected leaders in Washington. The Green New Deal has been heralded as ambitious and reflective of the urgency we currently face. The deal has also been the target of strong criticism from the political right and pundits who have branded it as a socialist ploy, and dramatizing cherry-picked talking points from the broad and far reaching policy. While a split down party lines on climate change and policy solutions is nothing new, the debate around the GND has been much more personal and nasty than any climate or energy debate in the past.
As outlined in the popular New York Times piece, Losing Earth, the politicization and partisan divide on climate policy has been going on for almost thirty years. The reasons behind this change and the wider divide on the issue are vast, among them are the current administration, the rise of young political leaders, and their threatening popularity.
Only a few months prior to the Green New Deal making headlines, there was a bipartisan supported climate bill that was making its rounds in Washington D.C., The Energy Innovation and Carbon Dividend Act. Unfortunately, the bill did not garnish nearly as much attention and was unable to capture the news cycle as the GND has been able to. The bill was introduced by a small team of Democrats and Republicans and aimed to put a price on carbon pollution, a policy approach to reducing greenhouse gases, one that has broad support among economists, business leaders, and activists alike. A fee on carbon emissions is a way in which policy can serve to incentivise the move towards a low-carbon economy, without imposing regulation, therefore allowing consumers and industry to make the transition in their own terms. It can also raise vital revenue, that can be used in different ways. Where the bill begins to lose its appeal however, is in its plan to rebate the raised revenue from back to households equitably. A carbon rebate has long been studied and championed as a way to get the a carbon tax away from being perceived as well, a tax. While this may be a smart policy wonk fix, it fails to acknowledge two key points in engaging the larger public in the political process and gaining their attention and support.
First, the left puts too much weight on the idea that conservatives are inherently anti-tax. It is not that they don’t want to see public services provided, and many would acknowledge that these things need to be paid for through government spending. Their skepticism is rooted in a distrust of government more generally, and the ways in which money is spent. When told that all the money is going to be rebated, the first thing that crosses a skeptics brain is, “no it wont. Due to a complexity of historic and very real precedents set, people have lost their trust in our government.
Second, when polled on the issue, a majority of people want to see the money spent on programs that further advance the goals of building a clean energy economy. An approach that would use revenue from a carbon fee could also invest that revenue to create more jobs, fund energy efficiency programs, advance clean transportation access, and restore our natural habitat to further protect us from the impacts of climate change.
The Energy Innovation and Carbon Dividend Act came up short because it failed to aspire towards a vision of the future in the way the Green New Deal does. While it might seem that a carbon fee at the federal level is at an impasse, it does not have to be. There is a world in which a price on carbon emissions and the GND can work together to garner true bipartisan support and a feasible way forward. The Green New Deal sets forth a vision for the country where we regain our footing as a global leader, and sets the pace for a national mobilization that would rival that of World War II. From providing meaningful employment in low carbon sectors of the economy, transitioning our energy needs to 100% renewable, reimagining our transportation system and shifting our food systems, the resolution reads like a list of policies previously only imagined in climate policy textbooks. While it covers a wide range of pollution reduction strategies, the framework to fund such ambitious projects is noticeably absent. A Green New Deal for Energy and Innovation would be able to overcome that hurtle.
It fits ever so clearly into the psychic of what has made the Trump administration popular in the middle of the country. By bringing the two bills together we would be building a clean energy economy and have the polluters responsible for causing the problem pay for it. This would strengthen our country, create millions of jobs, and reinstate our leadership globally as a champion on climate action.
While a split political system and constant bickering around policy may be good for the endless cycle of breaking news, it is not what most Americans want. It has done little to support the kind of economic growth and innovation we should be striving for, has provided little certainty to the role we hope to play in the global community, and failed to address the vulnerabilities of communities already facing climate change impacts. Political leaders need to break down their entrenched camps and begin to find solutions where they can work together. Having the Green New Deal provide the vision, and the Energy Innovation Act provide a bipartisan framework, we could bring a larger segment of the american public along in the conversation. The global scientific community believes that we have 12 years left to take dramatic action. We need the creative and brave to step up to the challenge and provide action and meaningful leadership in these challenging and uncertain times.