Follow the Money

Future Hope column, Nov. 23, 2008

By Ted Glick

“I think one of the first things we clearly need to do is put a price on carbon emissions to control greenhouse gases. That would send the right price signals to the economy and drive the trillions of dollars of investment that will have to be made both to avert the climate crisis and to rebuild our economy.”
-Dan Reicher, former Dept. of Energy assistant secretary,
quoted in Nov. 24, 2008 issue of Newsweek

There is considerable, justifiable concern among many progressives about the White House staff and Cabinet appointments that President-Elect Obama is making or is rumored to be about to make. Rahm Emanuel, Hillary Clinton, Tom Daschle, Timothy Geithner, Lawrence Summers, Robert Gates–if all of these people end up with high-level Obama administration positions, the Obama team is going to look little different than the team Hillary Clinton would have chosen if she had won. Wasn’t campaigner Obama about something new and different?

But the bottom line on the Obama Presidency will be what policies he advocates for in collaboration with Congress. And more specifically, key to whether he becomes a truly transformative President, or just one more of a long line of “don’t rock the boat” occupants of the White House, is what he does about raising and spending money.

As “Deep Throat”—Mark Felt—said to Bob Woodward, we’re going to have to “follow the money” to determine what’s really happening.

-During his campaign, Obama talked a great deal about how we couldn’t afford to spend $10 billion a month on the Iraq war. In Obama’s proposed budget for the next fiscal year, or in any special war appropriations bills, how much will he be proposing? Will the Pentagon budget be reduced to any significant degree? I doubt it, not without a reinvigorated, massive and noisy peace movement that calls for not just an end to the wars in Iraq and Afghanistan but a downsizing of the U.S. empire and its military bases in over 100 countries.

How can we rebuild our relationships with the world unless we reject the imperialistic attitudes and policies that are the reason for all these military bases, unless we cut a military budget that is responsible for half of all military spending in the world?

-Income inequality is off the charts. According to IRS data, in 2005 the top 1% of Americans, those earning more than $348,000/year, received the largest share of national income since 1928, one year before the 1929 Wall Street crash. The average income of that top 1% rose about 14% compared to the year before, to over $1.1 million each. For the bottom 90%, average income dropped .6%.

Obama indicated during the campaign that he would raise taxes somewhat on that top 5 or 10%; will he, and how significant will it be? Will he consider the idea of a wealth tax, a tax on total wealth for, say, millionaires, multi-millionaires and billionaires? Given Obama’s capacity for framing issues in understandable and clear ways, this one should be a political slam dunk given the widespread anger at all the money being given to members of the top 1% via the federal bailout of the banking industry.

-And then there’s the money that can be raised for both climate action and action on the economy by putting a steadily increasing price—a tax—on carbon-based energy sources—coal, oil and natural gas. Obama has said that he supports a “cap and trade” system in which there would be a form of a carbon tax through the auctioning of permits to emit carbon to utilities, refineries, industries and other greenhouse gas sources.

I’m not a fan of “cap and trade.” Carbon shouldn’t be traded; it should be reduced. There are too many loopholes and opportunities for gaming the system in a cap and trade system. Cap and trade systems that have been in use for years, particularly the Kyoto Protocol and the European Union system, haven’t worked; carbon emissions worldwide went up 3% last year.

What we need is a tax on carbon and, then, for some proceeds from the tax to be invested in green jobs/efficiency/renewable energy programs, and other proceeds distributed to working-class and middle-class people to help them pay for the increased costs of energy. That’s the kind of capping system that is just, fair and will be broadly supported by U.S. taxpayers and voters.

As campaigner Obama said on many occasions, to his credit, this election wasn’t about him, it was about us, the American people, and the need we have for a very different direction for the USA. Will we rise to the challenge and rise up to make it so?

Ted Glick has been active in the progressive movement since 1968. More information and past Future Hope columns can be found at