The Apollo Alliance:How Global Warming Can Save

Democracy

Joel Rogers

UW-Madison, COWS, JR Commons, NCP, Apollojrogers@cows.org

Prepared for The Gaylord Nelson Retrospective Lecture Series, Madison, March 28, 2007

What I’ll talk about• GW• Apollo• Democracy• Challenges• A progressive strategy for solving them• How GW/Apollo fits in

I made some slides for you

Like this slide.

And this one.

I really wonder about power point sometimes

Global warming and Apollo

The end of the Anthropocene?• 8M BC-1780, CO2 concentration in atmosphere,

give or take ten ppm, was 280ppm• This increased 35ppm over next 150 yrs (1930s),

15 ppp over next 40 yrs (1970s), 20ppm over next 20 (1990s), 20ppm over next ten (2005)

• At present rates of growth, CO2 concentrations in the atmosphere should reach 500ppm around 2050

• Last time that happened was the Eocene period, 50 million years ago, when sea levels were 300 feet higher than today

• None of these facts is in dispute

Now•Time (thousands of years)

160 120 80 40

Temperature difference from

now °C

CO2concentration

(ppmv)

The last 160,000 years and the next 100 years

CO2 now

CO2 in 2100(with business

as usual)

100

200

300

400

500

600

700

–10

0

10

•Deg

rees

Cel

sius

•CO

2PP

MV

Images show how the areas of Greenland that melt in summer have expanded (orange) in recent years. Source: Arctic Climate Impact Assessment

Global Climate Disruption• Carbon emissions have already pushed up

global temperatures by almost 1 degree F.

• If no action is taken on emissions, there is more than a 75% chance of global temperatures rising between 3.6 and 5.4 degrees F over the next 50 years

• There is a 50% chance that average global temperatures could rise by 9 degrees F

Environmental Impacts• Melting glaciers will increase flood risk • Crop yields will decline, particularly in Africa • Rising sea levels could leave 200 million

people permanently displaced • Up to 40% of species could face extinction • There will be more examples of extreme

weather patterns

Economic Impacts• A 3.6 and 5.4 degree F rise in temperatures could

reduce global economic output by 3%

• If temperatures rise by 9 degrees F, up to 10% of global output could be lost. The poorest countries would lose more than 10% of their output

• In the worst case scenario global consumption per head would fall 20%

• To stabilize at manageable levels, emissions would need to stabilize in the next 20 years and fall between 1% and 3% after that. This would cost 1% of GWP

Apollo• National coalition of labor, environmental, business,

and social justice groups• Active nationally and in about 15 states• Goal is sustainable American energy independence

within a decade – by increased efficiency, use of renewables, and smarter growth rules

• Shift environmental discussions to include social justice, economic, security concerns

• Greater local control over the economy, taking the “high road” in smart organized democratic place

Why we call it Apollo

In 1961, President Kennedy challenged Americans to pursue a goal that seemed beyond our reach: to land a man on the moon within the decade.

“We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win... “

Not a New Idea

Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our own energy needs without depending on any foreign energy source.

Richard M. Nixon, Nov. 7, 1973

What will it do for the economy?• Add more than 3.3 million jobs• Stimulate $1.4 trillion in new GDP• Stimulate the economy through adding $953 billion in Personal

Income and $323.9 billion in Retail Sales• Offer a 22.3% annual rate of return when the effects of the

project development and the ongoing stimulus of the project are calculated

• Produce $284 billion in net annual energy cost savings• Repay the $300 billion Federal cost of the project, through

$306.8 billion in increased Federal tax revenue from increased earnings, during the 10 year period of its implementation with additional, sizable ongoing fiscal benefits thereafter

What will it do for the environment?• Reduce national energy consumption by 16%• Reduce transportation related oil consumption by

1.25-2.55M barrels a day (= to cutting Persian Gulf imports by 53-110%)

• Put 91 million advanced performance vehicles on the road (replacing 38% of the current fleet)

• Meet 15% percent of electricity demand through renewables by 2015, 20% by 2020

• Reduce carbon emissions by 23%, SO2 by 28%, NOx by 13%

Keeps Energy Local…GL

Fuel Type UnitEstimated Regional

Consumption

Estimated Regional

Production

Estimated Regional Imports

Estimated 2004 Region

Cost

Proejcted 2006 Region Cost

Petroleum Products

millions of gallons

42,335 1,058 41,277 51,595,869$ 74,298,051$

Natural Gas

thousands of cubic

feet (MCF)3,692,663 364,647 3,328,016 29,502,186$ 44,253,279$

Coal millions of short tons

253 90 163 4,222,121$ 4,222,121$

Total 85,320,175$ 122,773,450$

Great Lakes Bloc Energy Leakages (costs in $1,000s)

Source: MMTC analysis of EIA data

Keeps Energy Local…WI

Fuel Type UnitEstimated Wisconsin

Consumption

Estimated Wisconsin Production

Estimated Wisconsin

Imports

Estimated 2004 Cost

Proejcted 2006 Cost

Petroleum Products

millions of gallons

5,519 0 5,519 6,898,500$ 9,933,840$

Natural Gas

thousands of cubic feet (MCF)

394,736 0 394,736 3,542,282$ 5,313,423$

Coalmillions of short

tons26.69 0 26.69 556,753$ 556,753$

Total 10,997,535$ 15,804,016$

Wisconsin's Imported Energy Leakages (costs in $1,000s)

Source: MMTC analysis of EIA data

OntarioOntario

New BrunswickNew Brunswick

ILIL

KSKS

IAIA

SDSD

NENE

MNMN

NDND

WIWI

MOMO

MIMI

ININ

NYNY

PAPA

KYKY

VAVA

OHOH

NCNC

MEME

WVWV

TNTN

VTVTNHNH

MDMD

NJNJ

MAMA

CTCT

DEDE

ARAR

RIRI

DCDC

OntarioOntario

New BrunswickNew Brunswick

ILIL

KSKS

IAIA

SDSD

NENE

MNMN

NDND

WIWI

MOMO

MIMI

ININ

NYNY

PAPA

KYKY

VAVA

OHOH

NCNC

MEME

WVWV

TNTN

VTVTNHNH

MDMD

NJNJ

MAMA

CTCT

DEDE

ARAR

RIRI

DCDC

Canadian Research Universities

Research-Extensive Universities

CIC Universities

Takes advantage of existing research institutions…

Democracy

Elements• Universal civil right and liberties and• Substantive political equality• Real equality of opportunity• Priority for the poor

Social democracy• Keynesian synthesis• National state having control of economy within its

borders, and able to meet social demands• “Monopoly capitalism”• Class cohesion and exclusion of other concerns

Productive DemocracySocial Democracy NeoLiberalism Productive Democracy

Economic Strategy Effective demand Inequality Effective SupplySocial Contribution Enabled but Required Strongly encouraged

not required but not enabled and enabledEquality of opportunity Thick Thin DeepState/Civil Society Relation Active/distinct Passive/distinct Active/integratedPrivileged Govt. Branch Executive Judiciary LegislatureNational/State Relation Affirmative national Limiting national Progressive federalismRedistributive Peak Late in life None Early in lifeAsset Redistribution No No YesTax Strategy Progressive on Regressive on Tax universalism

private income private incomeTrade Strategy Strategic Unprincipled Goal of sustainable

protection “free trade” development, not integration per se

And So On …

High freedom, opportunity, contribution … and wide ownership and democratic power …a consistent story/narrative/frame/etc. that asserts democracy as a source of productivity and invention, not just morality, and organizes politics to realize both

Some challenges

The end of shared prosperity

0

20

40

60

80

100

120

140

160

180

1947 1955 1963 1971 1979 1987 1995 2003

Average wage, production and nonsupervisory workers

Productivity

Index 1973=100

The end of shared prosperity

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

180.00

1947 1955 1963 1971 1979 1987 1995 2003

MedianFamily Income

Average wage, production and nonsupervisory workers

Productivity

Index 1973=100

A nation of sub-minimum wages?

• Minimum wage today is $5.15, down 44% from its 1968 value of $9.27 (2006$)

• Since 1968, business productivity has increased 113 percent. A productivity-corrected minimum would be $19.75 an hour – almost 40 percent higher than today’s median wage of $14.29

• QED: Vast majority of American workers today making substantially less than the historic (productivity-normed) minimum wage

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Cumulative Share of Population

Cumulative Share of GDP

0 20 40 60 80 100 120 140 160 180 200 220 240

Metro America

Metropolitan Statistical Areas

10 US Metros and Non-US economies

SwitzerlandTurkeySwedenTaiwan Saudi ArabiaAustria

+ =

$3.51 trillion

$3.42 trillionPolandNorwayIndonesia Denmark South Africa

Germany $2.4T, UK $1.7T, France $1.7T, Italy $1.6T, Brazil/Russia $1.5T, Canada/Korea/Mexico $1T

• Incomes rise and investment moves out• Revenues decline• Public goods deteriorate• Middle class flees • Tax base erodes • Poverty concentrates

An iron law of urban decay?

Globalization: the Great Doubling Global “economically active population” (M’s)

Global Adv LDC New

1980 960 370 590 ---2000 (BD) 1460 460 1000 ---2000 (AD) 2930 460 1000 1470*

*China, 760; India, 440, Ex-Soviet, 260

BD=“Before Doubling”/AD=“After Doubling”Source: http://www.laborsta.ilo.org/ and Freeman

Now•Time (thousands of years)

160 120 80 40

Temperature difference from

now °C

CO2concentration

(ppmv)

The last 160,000 years and the next 100 years

CO2 now

CO2 in 2100(with business

as usual)

100

200

300

400

500

600

700

–10

0

10

•Deg

rees

Cel

sius

•CO

2PP

MV

Strategy … has goal, clear incremental steps, momentum (with progress making further progress easier)

Progressive … reflects our values (freedom, opportunity, responsibility, democracy)

Plausible …works under real world constraints (market capitalism, demographic & technical change, expanding globalization, firm restructuring, environmental constraints, etc.), and fits with everyday experience

What’s a progressive strategy?

The Right’s strategyGoal … end all social constraints on capital

Incremental steps … deregulate business, starve government, crush unions, regressively redistribute income and wealth, etc.

Momentum… each step increases material insecurity, and reduces social capacity to relieve it

Basic Message … “You’re on our own (YOYO!), and anybody who tells you different is a LIAR!”

Democratic strategy• Get an education

Democratic strategy (updated)• Get an education• Stop the madness in DC

Democratic strategy (updated further)

• Get an education• Stop the madness in DC• Some social insurance would be good too

So what’s a progressive alternative?

Two ways to compete: high road and low road. One’s good for workers and the other’s not. One’s sustainable and the other’s not. One’s socially accountable and the other’s not. Both are profitable.

Competition based on price, resulting in ...

• Economic insecurity• Rising inequality• Poisonous labor relations• Little firm commitment to place• Environmental damage

Competition based on value (distinctive performance), requiring ...

• Continuous improvement/invention• Better trained and equipped workers• More varied and abundant public goods

and producing …

• Higher worker incomes & profits• Reduced environmental damage• Greater firm commitment to place

High RoadLow Road

High Road vs. Low Road Firms

High road choice(…firms, policies, governments, communities)

• High wage (and the profits and productivity need to support that under competitive conditions)

• Low waste (get rid of dead weight externalities, starting with really ugly ones, uncover and use hidden assets, don’t throw away people)

• Publicly accountable (accepting the authority of clean, democratic, “open source” government that demands of itself and others accountability, metrics, and full cost accounting; that explicitly values experiment and learning; that explicitly asks for help from outside itself)

Increasing value and efficiency in democratic places

So why don’t we choose the high road?

The basic economics of the firmValue added/employee drives wages, owner return, and reinvestment

Wages /Employee

Profits /Employee

Value Added /Employee

Reinvestment /Employee

Owners'Compensation /

Employee

Taxes /Employee

The low-road firm

24,000 26,000

50,000

7,000 10,000 9,000

Reinvestment Profit Taxes

Value added

Employee share Employer share

The typical unionized firm

44,000 36,000

80,000

14,000 10,000 12,000

Reinvestment Profit Taxes

Employee share Employer share

Value added

The fundamental problem

High wages and high productivity are linked, but too loosely. Why? Because high wages are also linked to low profits.

Rx: A Higher High Road

Where we want to be on value-added

60,000 60,000

120,000

22,000 20,000 18,000

Close off the low road, help pave the high road, help workers and firms stuck on the first to roll along the second.

So what’s the basic program?

Grounds for hope1. Possible to increase firm productivity dramatically,

raising wages and promoting investment here2. Huge amount of wasteful consumption can be

eliminated, increasing disposable income3. National economy largely regional, and regions can be

organized to provide the place-specific productive infrastructure that adds value, reduces waste, and captures the benefits of doing both locally

4. Doing (1) & (2) in (3) will increase competitiveness while grounding the economy … reducing credible capital exit threats, increasing wage and government income, moving toward sustainability …through democratic action

Middle Third Upper ThirdLower Third

0

2000

0

4000

0

6000

0

8000

0

1000

00

1200

00

1400

00

1600

00

1800

00

2000

00

Very wide variation in productivity

Source: Performance Benchmarking Service

Size doesn’t determine value added

0

20

40

60

80

100

120

140

20-49 50-99 100-249 250-499 20-49 50-99 100-249 250-499 500+Plant Size

(Employees)

Val

ue-A

dded

per

FTE

($00

0)

75th Percentile 25th Percentile Median

Large CompaniesSmall CompaniesVery Large Companies

Middle Class Consumption

Transportation18%

Utilities8%Health care

7%

Pension and social security

8%

Food at home9%

Food away from home6%

Other19% Housing

25%

Typical Household Budget in 28 Metropolitan Areas

Source: Barbara J. Lipman, “A Heavy Load: The Combined Housing and Transportation Burdens of Working Families,”Center for Housing Policy, October 2006

0

5

10

15

20

25

30

35

Housing Transportation Food Health Care

Perc

ent

All Households

Working Families, Income$20,000 - $50,000

More cars or more wealth?

0

5

10

15

20

25

1976

.01

1976

.08

1977

.03

1977

.10

1978

.05

1978

.12

1979

.07

1980

.02

1980

.09

1981

.04

1981

.11

1982

.06

1983

.01

1983

.08

1984

.03

1984

.10

1985

.05

1985

.12

1986

.07

1987

.02

1987

.09

1988

.04

1988

.11

1989

.06

1990

.01

1990

.08

1991

.03

1991

.10

1992

.05

1992

.12

1993

.07

1994

.02

1994

.09

1995

.04

1995

.11

1996

.06

1997

.01

1997

.08

1998

.03

1998

.10

1999

.05

1999

.12

2000

.07

2001

.02

2001

.09

Year.Month

Mill

ions

of C

ars

0

5

10

15

20

25

Perc

ent o

f Dis

posa

ble

Inco

me

Save

d

Monthly Car Sales

Personal Savings Rate

Rebuilding America?

82.0 billion new squarefeet from replacement

131.4 billion new square feet

295.6 billion square feet in 2000

427.3 billion square feet in 2030

213.4 billion new square feet of built

space

Source: Nelson, “Toward a new Metropolis”

Metro economic engines• Big• Strategic location/regional linkages• Population and firm density, with agglomeration effects• Buying power and complementary skill sets, innovation• Infrastructure (ports, airports, other transportation networks)• Higher wages/productivity• More easily organized• Lower waste• Centers for research, education, health care, “knowledge”

economy, finance, business services, hospitality, etc.• More diverse, tolerant, attractive to youth and immigrants

10 US Metros and Non-US economies

SwitzerlandTurkeySwedenTaiwan Saudi ArabiaAustria

+ =

$3.51 trillion

$3.42 trillionPolandNorwayIndonesia Denmark South Africa

Germany $2.4T, UK $1.7T, France $1.7T, Italy $1.6T, Brazil/Russia $1.5T, Canada/Korea/Mexico $1T

10 US Metros and Non-US economies

SwitzerlandTurkeySwedenTaiwan Saudi ArabiaAustria

+ =

$3.51 trillion

$3.42 trillionPolandNorwayIndonesia Denmark South Africa

Germany $2.4T, UK $1.7T, France $1.7T, Italy $1.6T, Brazil/Russia $1.5T, Canada/Korea/Mexico $1T

Metro economic engines• Big• Strategic location/regional linkages• Population and firm density, with agglomeration effects• Buying power and complementary skill sets, innovation• Infrastructure (ports, airports, other transportation networks)• Higher wages/productivity• More easily organized• Lower waste• Centers for research, education, health care, “knowledge”

economy, finance, business services, hospitality, etc.• More diverse, tolerant, attractive to youth and immigrants

Metro Union Membership

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

0 20 40 60 80 100 120 140 160 180

Metropolitan Statistical Areas

Uni

on M

embe

rshi

p

Expected members based on population

Actual union membership

Metro economic engines• Big• Strategic location/regional linkages• Population and firm density, with agglomeration effects• Buying power and complementary skill sets, innovation• Infrastructure (ports, airports, other transportation networks)• Higher wages/productivity• More easily organized• Lower waste• Centers for research, education, health care, “knowledge”

economy, finance, business services, hospitality, etc.• More diverse, tolerant, attractive to youth and immigrants

Two views of Chicago

Metro economic engines• Big• Strategic location/regional linkages• Population and firm density, with agglomeration effects• Buying power and complementary skill sets, innovation• Infrastructure (ports, airports, other transportation networks)• Higher wages/productivity• More easily organized• Lower waste• Centers for research, education, health care, “knowledge”

economy, finance, business services, hospitality, etc.• More diverse, tolerant, attractive to youth and immigrants

2004 Presidential Election

Source: Michael Gastner, Cosma Shalizi, and Mark NewmanUniversity of Michigan

http://www-personal.umich.edu/~mejn/election/

2004 results by county population

What’s contestable?

Source: http://www.princeton.edu/~rvdb/JAVA/election2004/

• Investment moves out• Revenues decline• Public goods deteriorate• Middle class flees • Tax base erodes • Poverty concentrates

An Iron Law of Urban Decay?

Or a wasting of obvious assets?

New Metro Alliances

• Labor• Underserved communities• Women• Environmentalists• High road business• Progressive elected leadership

Soundbite(s) summary High road is about adding value, reducing waste, and capturing the benefits of doing both in smart, organized, democratic places. This bets on the productivity of democracy over business domination. It’s about adding value, not just values, to the private economy. It’s not about “managing the economy” but setting the rules for free competition. It treats markets as tools, not gods. It doesn’t “throw money at problems,”but is prepared to make specific scaled investments of proven social value.

This demands accountability of government as well as citizens. It applies the private sector’s metrics revolution and benchmarking to government and public administration. It aims at greater government efficiency, which is not the same as simply cutting prices. It values experiment and learning. It is clear on its values but works collaboratively. It is against “business as usual” but for social wealth creation. It recognizes the business contribution to society, but also society’s contribution to business.

State & metro high road1. Higher standards on firms (wage, environmental, etc.) and social wage (health care,

training, etc.) which discourage free-riding low-roaders and reduce competitive costs of high-roading (+) minimum wage, health care, taxed waste, etc.

2. Supply and demand upgrading of workforce and firms ( “qualified workers for quality jobs”) through (a) sectoral and regional organization of employers to provide leverage from and economies of scale and scope in delivering public supports and (b) integration of EWD regionally and sectorally (+) report cards on regions; state EWD supports conditioned on their organizing themselves; similar for firms; go after the supply chains and the OEMs that rely on them

3. Integrated PK-college human capital system, demand-driven at its end, with lifelong learning opportunity & modularization (-/0) PK programs for starting equal, skills standards and credit transfer, enlarged college scholarship guarantees, adult ed paid for through increased earnings

4. Organized assets, e.g., physical infrastructure and development rules promoting density and efficiencies of compact growth (in housing, transportation, and energy); regional capital pools to finance new investment (+) “Fix it first” on physical infrastructure, Apollo, [name your state tree]-fund

5. Clean accountable government that is smarter about the private economy, comparative experience, and organizing its own assets; transparent and demanding in social investments (with clear separation of capital and operating budgets) (+) ”Show me the money” (and results) on EWD, use of state university expertise, heavily IT and HR based “reinventing government” for efficiency and improvement, competitive bidding and aggressive procurement policies promoting high road practices, open source solutions, campaign and voting reform to promote wider citizen involvement and information and better representativeness.