By Alan Murray and David Meyer
February 11, 2019

Good morning.

My inbox continues to flood with readers debating the meaning of socialism, and decrying its use as a political dog whistle. So today, I have decided to abandon the semantic debate, and focus on substance instead. I read the 14-page House resolution calling for a “Green New Deal”—which I recommend as a seminal document for all CEO Daily readers—and the accompanying FAQ put out by AOC. (I hate to use the acronym, but it saves space.) Some clear takeaways:

—This is far more than an environmental manifesto. In addition to “clean and renewable energy,” it calls for jobs for everyone, living wages, parental leave, racial and gender justice, health care for all, strengthened labor law, vastly increased infrastructure investment, justice for indigenous people, a radical rethinking of monetary policy, and a new approach to antitrust policy. In other words, it reaches deeply into every corner of the economy.

—It shows little to no regard for market forces or economic limits. For instance, it calls for reducing emissons “as much as technologically feasible,” without any suggestion that the benefits at some point should be weighed against the cost.

—It assumes that promoting environmental goals and promoting the interests of disadvantaged populations somehow always go hand in hand, when, as any West Virginia coal miner can tell you, they don’t.

—It calls for a “government-led mobilization” on a par with World War II and the New Deal.

Why government-led? For the last half century, leaders of both political parties have shown some well-deserved humility about the ability of government to take the lead in directing economic activity. Instead, they have struggled to devise incentives and structures that shape and nudge, but don’t displace, private sector activity, and that respect the resilience and wisdom of the market place.

But the Green New Deal marks a sharp break. “Merely incentivizing private behavior doesn’t work,” the FAQ declares. “We are not saying that there isn’t a role for private sector investments; we are just saying that the level of investment required will need every actor to pitch in and the government is best placed to be the prime driver.” (Emphasis mine.)

Really? The semanticists can debate whether that is or isn’t the same as “controlling the means of production.” And voters ultimately will decide whether it’s a vision that they can or can’t endorse. But it’s no surprise to me that, for the moment, Republicans are rejoicing. If Democrats keep moving in this direction, they will likely lose the middle. And they will certainly lose business.

More news below.

Alan Murray
@alansmurray
alan.murray@fortune.com

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