Step aside AOC: with her latest economic policy proposal dubbed simply “economic patriotism”, Elizabeth Warren has blown past embracing Modern Monetary Theory in favor of a highly centralized, Soviet-style economy.
Eager to catch up with such budget-busting proposals as the “Green New Deal” pitched by her Democratic presidential competitor, Alexandra-Ocasio Cortez, on Tuesday Elizabeth Warren proposed spending $2 trillion on a new “green manufacturing” program that would invest in research and exporting American clean energy technology.
The spending blitz is part of Warren’s wide-ranging proposal for aggressive, socialist-style government intervention in U.S. markets, meant to create jobs and pursue “fundamental” and “structural” economic changes. Among the various proposals incorporated in Warren’s “patriotic” plan, her administration would:
- Actively manage the value of the U.S. dollar to boost exports
- Create a new government agency that will produce four-year jobs plans and oversee trade policy
- Increase annual investments in apprenticeship programs by 10 times
- Require nearly all products made with government-funded research to be produced in the United States
- Substantially increase spending on research and development and export promotion
In an accompanying proposal, Warren wrote that her administration would invest $2 trillion over 10 years in climate-related research, manufacturing and exporting. Not coincidentally, the plan will help achieve the targets set out in the Green New Deal proposed earlier this year by Rep. Alexandria Ocasio-Cortez, even if that particular plan was calculated by some as costing north of $100 trillion, so surely something was lost in transaction.
The plan is the first of several that will outline Warren’s vision for what she calls “economic patriotism.” Her vision is a government-centered approach to economic planning, one could call its central-planning of the type that did not quite live up to its hype in the USSR, that contains seeds of President Trump’s “America First” policies while targeting the Washington corruption that has served as the chief antagonist for Warren’s Senate career and 2020 presidential bid.
One of the plan specifics that will attract the most attention is Warren’s pledge to more “actively manage” the U.S. dollar. And in what appears to be a de facto takeover of the central bank by the Executive branch, Warren calls for “actively managing” the dollar, effectively obviating the US central bank, and cited currency management by other countries while blaming foreign investors and central banks for having “driven up the value of our currency for their own benefit.” The U.S. should work with other countries “harmed by currency misalignment,” according to the proposal.
“If we can aggressively intervene in markets to protect the interests of the wealthy and well-connected — as we have for decades with bailouts and subsidies — then we can damn well use all the tools at our disposal to protect the interests of American workers,” Warren said in the proposal that could have been cribbed straight from any five year plan developed by the USSR.
Ironically, Warren’s “dollar micromanagement” plan and Trump’s big picture monetary perspectives are virtually identical.
Trump, who is detested by Warren, has expressed concern about the dollar’s appreciation and Treasury Secretary Steven Mnuchin said in 2017 that an “excessively strong dollar” could have negative effects on the U.S. economy. Since Trump took office, the gauge has given back some of its gains, although dollar strength has resumed once again this year and recently traded near 2 year highs against its peers.
Which is why, as Bloomberg notes, Warren’s export-boosting policy can certainly be seen as an approach favoring a weak dollar and it would shake-up previous commitments on currency policies across G-20 nations, according to Mark Sobel, a former Treasury Department official.
“One could just as easily see it as targeting exchange rates for competitive gains, and that is certainly how everybody else in the world would likely see it,” said Sobel, who is now U.S. chairman for the Official Monetary and Financial Institutions Forum.
But wait, there’s more.
Warren also vowed to scrap the Commerce Department and put a Department of Economic Development, Moscow would call it the Central Committee, in its place that will oversee trade policy and produce a National Jobs Strategy every four years (at least not every five years – the similarities with Soviet planning would have been simply too grotesque). It would also subsume the Small Business Administration, Patent and Trademark Office and take on export and trade powers like the Office of the U.S. Trade Representative. It would also be tasked with research and development initiatives.
By centralizing trade policy, Warren wrote, her administration will fix a corruption problem that has existed across multiple administrations and which she said has promoted “deep ideological opposition to anything that might put the interests of American workers above the interests of multinational corporations or Wall Street.”
“The new Department will have a single goal: creating and defending good American jobs,” said the proposal, which is the latest of many policy blueprints she has released.
As part of this proposal, Warren would also require companies selling to the federal government pay their employees at least $15 an hour, that employees receive 12 weeks paid family and medical leave and be able to form unions. Labor practices were included in Green New Deal proposals.
But wait, there’s even more.
Warren plans to combine centralized planning with climate change, and according to a second policy blueprint released Tuesday called the “Green Manufacturing Plan,” Warren seeks to invest $2 trillion over the next decade in clean-energy research, manufacturing and exports as part of meeting the targets of the Green New Deal, which Warren supports. It would be split into three parts:
- $1.5 trillion in federal spending to purchase clean energy technology made in the United States
- $400 billion in a so-called “Green Apollo Program” to develop new clean energy technology
- $100 billion for a “Green Marshall Plan” that will assist other countries in purchasing such technology.
Warren said the United States currently spends $1.5 trillion on defense procurement, which she called “bloated”, and argued that an equal amount should be spent on clean energy.
According to CNBC, “Warren may find a model for her Green Marshall Plan in an unlikely place: China, the world’s biggest emitter of greenhouse gases.”
“We need other countries to slash their emissions, and that means we need to supply the world with clean energy products (at low enough prices to displace dirty alternatives) to put us on the right path,” Warren wrote.
And even more.
Finally, Warren called for creating a new federal office responsible for trying to get foreign countries to purchase U.S. clean energy technology.
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Warren’s plan will draw criticism from opponents who will argue that not only is it something that could have been written by Nikita Khruschev, but that the price tag is too high and that trying to quickly overhaul the U.S. energy sector would have crippling economic effects.
Amusingly, Warren also released an evaluation of her three-part proposal conducted by former Obama lackey, Moody’s “economist” Mark Zandi, who argued the plan would help the economy on a large scale.
“There is no free lunch, and big businesses, oil and gas companies, and multinationals pay for the cost of this plan,” Zandi wrote. “The economy benefits, although it would take more than a decade for this benefit to be fully realized.”
So where will money for the plan come from, besides eventually just printing it of course as MMT so helpfully suggests?
Warren would fund the investment nearly entirely with her proposed 7% tax on corporate profits above $100 million, Warren wrote, citing an analysis by Moody’s. The analysis also found that Warren’s plan would add a quarter of a million jobs in 2020, and more than 1 million by 2029.
The Massachusetts senator released her economic proposals ahead of campaign trips to Michigan, a Midwestern state with a large manufacturing sector that shocked political observers in 2016 when voters backed Trump and helped propel him to the White House, and Indiana where she’s expected to discuss her vision of “economic patriotism” in a part of the country that’s home to the U.S. industrial sector and may be pivotal in deciding whether Trump is re-elected next year.
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While Warren’s challengers, Joe Biden and Kamala Harris have called for more government action to address climate change or provide pay raises to teachers — Biden unveiled his climate plan Tuesday — they have not pushed for as much federal intervention as Warren or Sanders. Warren’s plan also takes a shot at Trump, who pledged to revive American manufacturing as he won Rust Belt states such as Pennsylvania, Michigan and Wisconsin in 2016.
“In my administration, we will stop making excuses. We will pursue aggressive new government policies to support American workers.” So aggressive in fact, one has to look all the way back at the formative years of the USSR to find just how successful they will be.