Joseph Stiglitz: Corporate greed is accelerating climate change. But we can still head off disaster

By Joseph E. Stiglitz

Joseph E. Stiglitz is University Professor at Columbia University and winner of the Nobel Prize in Economics. He is also the co-chair of the High-Level Expert Group on the Measurement of Economic Performance and Social Progress at the OECD, and the chief economist of the Roosevelt Institute. His latest book, People, Power, and Profits: Progressive Capitalism for an Age of Discontent, will be released by W.W. Norton on April 23. The opinions expressed in this commentary are his own.  

America's economy has not been working for a large portion of the country. Workers at the bottom of the income scale earn wages, adjusted for inflation, that are not much higher than what they were 60 years ago, while the income of a typical full‐time male worker hasn't budged much from 40 years ago. In addition, life expectancy is in decline. But the economy is not only failing American citizens. It's failing the planet, and that means it's failing future generations. 

There are many reasons for our plight, including corporate power and greed centered on immediate profits and little regard for the impacts business decisions have on low-income Americans and the environment. Corporations have translated their economic power into political power, lobbying for policies that give them free rein to despoil the environment; and the swamp President Donald Trump promised to drain has been overflowing. At the same time, Trump has publicly asserted that climate change is a hoax, and yet his administration has repeatedly been forced to admit it is a reality — in response to climate lawsuits such as Juliana v. United States, for which I'm an expert witness.

 

Climate change is real, and it includes not only an increase in the average temperature, but also more extreme weather events including droughts, floods and hurricanes that have led to a large number of deaths. The United States has borne enormous costs as a result of the warming planet — in 2017, more than 1.5% of GDP. By the end of this century, some sectors of the US economy, including agriculture and energy, could lose hundreds of billions of dollars a year because of climate change, according to the latest report issued by the U.S. Global Change Research Program. 

 

So there is a real urgency to respond to our economic malaise and our climate crisis. The good news on this Earth Day is that these are problems of our own making, and that means a change toward pro-Earth policies can make a big difference. Even better, the major investments we need to respond to the crisis would be a spur to the economy. This is one of the central messages of the Green New Deal. 

 

The transition to the "green economy," in which we rely on renewable energy, won't happen on its own, however. It will require a mobilization of resources — the kind we saw during the New Deal and the Second World War. 

 

Government will have to take the lead, and it will require public investments — including in infrastructure and research — and regulations. Environmental regulations such as the Clean Air Act can and have worked, and typically are very cost‐effective. Without these measures, our air would be even more unbreathable than the air in New Delhi or Beijing today. 

 

Dealing effectively with climate change is well within our reach; in fact, I recently co‐chaired an international commission that showed that the global goals of limiting the increase in global temperatures to 1.5 to 2 degrees Celsius were clearly achievable. It would make so much more sense to spend money retrofitting our economy to reduce the risk of disastrous climate change rather than spending money to deal with the enormous economic and human costs of coping with its consequences. 

 

Some of the required resources would come simply from eliminating the huge subsidies we provide for fossil fuels, or from taxing corporations that inflict damage on our environment. This would encourage corporations to work hard to prevent it. But there are broader changes that would help grow the economy, providing some of the needed resources: curbing the excesses of corporate power more generally would lead to a more efficient economy and to more equality. So, too, would curbing the abuses of corporate governance, like CEOs paying themselves so much at the expense both of workers and investment. Policies that reduce discrimination in the labor market and provide more flexibility in hours are examples of supply‐side measures that work. And over the long run, education policies that help all citizens live up to their potential would also help the economy grow.

 

The mobilization during World War II had some long‐term salutary effects on our economy and society: It brought women into the labor force and it helped transform us from an agrarian to an urban society. The mobilization required to fight climate change has a similar potential. As we restructure our economy and society away from a high‐carbon economy and toward a more sustainable one, we should seize this opportunity to create the society that benefits all of us, as well as the planet.

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Robert Reich's video speaks for its self!

The Intercept’s Jon Schwarz on the Investigation That Led to the Third-Largest Financial Penalty the FEC Ever Issued

By Jeremy Scahill
 
Jeremy Scahill: Earlier this month, the Federal Election Commission issued a historic fine and cited The Intercept’s 2016 investigative series called “Foreign Influence.” That series was written by Jon Schwarz and Lee Fang, and through dogged reporting, they managed to expose a major violation of campaign finance law’s strict prohibition against foreign money being used in U.S. federal elections. Their reporting was so critical that the FEC, which rarely catches these sorts of violations, actually punished both the Chinese-owned company which donated the money, and the Super PAC which received it, fining them a combined total of $940,000. Before Citizens United in 2010, corporations couldn’t spend money to directly advocate for federal candidates. After Citizens United and related court decisions, corporations that were formed in the U.S.—even ones that are completely owned and controlled by foreigners—could send money to super PACs in unlimited amounts. Enter Jeb Bush in 2016. That’s right, Jeb. 

Jeb Bush: I think the next president needs to be a lot quieter but send a signal that we’re prepared to act in the national security interests of this country, to get back in the business of creating a more peaceful world. Please clap. 

Jeremy Scahill: Jeb’s sad campaign was backed by a super PAC called “Right to Rise USA.”  They received over a million dollars in donations from a California corporation called American Pacific International Capital, or APIC. That company, APIC, was controlled completely by two Chinese citizens living in Singapore. So remember, it’s illegal for foreign nationals to contribute money in connection to U.S. elections. But APIC and Jeb Bush’s “Right to Rise USA,” tried to get away with using the loophole created by Citizens United. Because APIC was incorporated in California, it was technically not foreign. And the financial contribution would have been fine if they had not egregiously violated one part of the law still on the books. That part of the law limits this sort of foreign influence. When foreign-owned corporations make political donations, only U.S. citizens are supposed to make the decision. My colleagues at The Intercept, along with reporter Elaine Yu in Hong Kong, got Gordon Tang, the Chinese national at the head of APIC, to admit that he helped make the decision to donate to Jeb Bush. And that was very illegal. Here is The Intercept’s Jon Schwarz to walk us through this bizarre tale. 

Jon Schwarz: So, in 2010, the Supreme Court famously decides in Citizens United, that U.S. campaign finance law was wrong. Before Citizens United, you could only contribute money for U.S. political campaigns in limited amounts. It had to come from individual citizens. After Citizens United, corporations, unions could put unlimited amounts of money. It could go to super PACs for instance, and as long as they were theoretically not coordinating with individual candidates, they could take this unlimited amount of money and then spend it however they wanted, promoting anything. Very soon after the Citizens United decision in 2010 was Obama’s State of the Union Address, and in it, he said —

Barack Obama: With all due deference to separation of powers, last week the Supreme Court reversed a century of law that I believe will open the floodgates for special interests, including foreign corporations, to spend without limit in our elections. 

Jon Schwarz: What is the significance of that? If you look at the law, what is says is this: Foreign nationals are forbidden from putting money into U.S. elections. A foreign national is a foreign individual, it is a foreign government, and it is a foreign corporation. What happens if there is a U.S. corporation that is a wholly owned subsidiary of a foreign corporation? Well, according to U.S. law, that corporation counts as a U.S. national, meaning that a completely foreign-owned corporation could now, post-Citizens United, put as much money as they wanted into U.S. politics. 

Barack Obama: I don’t think American elections should be bankrolled by America’s most powerful interests; or worse, by foreign entities. They should be decided by the American people. And I’d urge Democrats and Republicans to pass a bill that helps correct some of these problems. 

Jon Schwarz: So six years later, Ellen Weintraub, then on the Federal Election Commission, now the chairman of the FEC, wrote an op-ed for the New York Times about this issue about: Are foreign-owned corporations going to able to spend without limit in U.S. elections? 

Jon Schwarz: Lee Fang and I thought this is an interesting question. We decided to look into it, see what corporations were giving money to U.S. super PACs, and find out whether there was foreign ownership of any of them. And within 10 minutes of trying to find this out, we saw something that looked tremendously suspicious, which was a corporation called American Pacific International Capital located in San Francisco. 

Just a little bit of Googling found information that suggested this was in fact 100 percent foreign owned and it had given $1.3 million to the “Right to Rise USA” super PAC, which was supporting Jeb Bush’s 2016 presidential candidacy. 

Jeb Bush: We’re 17 months from the time for choosing. The stakes for America’s future are about as great as they come. Our prosperity and our security are in the balance. So is opportunity in this nation where every life matters and everyone has the right to rise. 

Jon Schwarz: What we found out after speaking to Charlie Spies, who was the treasurer of “Right to Rise USA” and one of the most prominent campaign finance lawyers in the United States, was that Spies had actually written a memo explaining step-by-step how you could put foreign money into U.S. elections and have it be legal. We also spoke to Gordon Tang, who was the Chinese businessman behind APIC. 

[Audio: Gordon Tang, speaking in Cantonese, tells reporter Elaine Yu why the company gave over $1 million to Right to Rise USA, the main Super PAC supporting Jeb Bush.]

Jon Schwarz And to our great shock, he essentially unknowingly confessed to having broken U.S. campaign finance law. There are still some remaining weak prohibitions that you should be able to abide by that really can’t be easily enforced that will only create problems for you if reporters call you and you accidentally confess.

Jon Schwarz: If Gordon Tang had just kept his mouth shut, if he hadn’t told us, oh yes, you know, I said this seems like a good idea to me, then they would have been fine. They would have been able to, as Obama said, spend without limit in U.S. elections and there really should not have been any legal consequences. They just got sloppy. What’s crucial here is this fact: there’s sort of the law as written and the law as possible to be enforced. The law as written says: Yes, foreign-owned corporations can participate now in U.S. elections, but foreign nationals can’t participate in the decision making in terms of putting the money into the U.S. electoral process. 

Now, we were expecting that when this article came out, it would make huge news. You know, foreign interference in U.S. elections. It’s proven now. Obama called it, here it is. Essentially, nothing happened. No one paid any attention. It was the summer of 2016. It was around the time of the U.S. Democratic and Republican conventions. What we thought was an enormous story went nowhere. 

Now what happened then was: The Campaign Legal Center, which is sort of an election law watchdog in Washington, picked up our article, used the information in it to say, hey, this seems like a clear violation of very significant U.S. campaign finance law. They filed a complaint with the FEC. And then, no one heard anything for two and a half years. The FEC generally does not enforce U.S. campaign finance law. The Republican Party pretty much as policy now believes that campaign finance law is illegitimate and they simply at the FEC block it from being enforced. So we thought nothing was going to happen. And then, to our surprise, something did. 

Rachel Maddow: You don’t hear news like this all that often. You hardly ever hear about it on this scale. But a super PAC from the 2016 campaign, a super PAC that supported Jeb Bush for president, has just been hit by federal officials with a huge fine for accepting donations from foreigners. 

Jon Schwarz: It became public that the FEC was issuing the third largest fine in its history, the largest fine since Citizens United, almost $1 million. Both APIC, the foreign-owned corporation, and “Right to Rise,” the Jeb Bush super PAC, had to pay fines. Now, what it suggests is not just the fact that this was going on, that this happened for sure in 2016. But that with people who are more careful, it is probably going on in ways that can’t be detected. 

The reality is, foreign countries, foreign corporations, foreign individuals have very, very good reasons to try to influence U.S. politics. If I were a foreigner, I would try to influence U.S. politics. Of course, you have to. We’re the most powerful country on earth. You would be a fool not to try to do this. And as I say, people who are more sophisticated about it should be able to pull this off without detection. 

So, what does this mean right now? What it means is that post-Citizens United this absolutely can happen. It means that we don’t know what is happening. I would also encourage people to think about the fact that there is foreign influence on U.S. politics in all kinds of ways that was already legal before Citizens United. There’s tons of money that flows into think tanks in Washington. There’s tons of money that flows into lobbying organizations in Washington in ways that are perfectly legal but involve foreign influence on U.S. politics.

I hope that other reporters will look at this and realize that this was just out there in the open for anybody to find. Like, this information is probably there for other corporations, we just don’t know it yet. And this is actually something that anybody could do. Like, anybody can go look through the campaign finance filings. They’re on the FEC’s website. They’re at the Center for Responsive Politics. If you are interested in this issue, even if you’re not a journalist, go comb through this and send it to reporters. I guarantee you that they’ll be interested to hear about anything you find. 

Jon Schwarz: That was my colleague at The Intercept, Jon Schwarz. You can check out that series at theintercept.com. It was called “Foreign Influence.” Jon spoke to our assistant producer, Elise Swain.

In retrospect: Donald J. Trump

On January 20th, 2017, Donald J. Trump took power as president of the United States. He had openly campaigned on carnage. He ran for president promising to give the rich more, to bring back torture, to wage a war against immigrants, and to build his wall. He was gleeful in pledging to make America’s healthcare system even worse. He promised to bring back torture, to fill Guantanamo back up, to kill the families of suspected terrorists. He said he would ban Muslims from entering the United States. He encouraged police to be more brutal, has given aid and comfort to Nazis and white supremacists. He openly promised to wage war against women and their bodies, to pummel the environment, to benefit the already ultra-rich. He is corrupt to the bone, has been for a very long time, and he’s proud of it. He brought into his inner circle a dangerous cabal of neo-fascists, white supremacists and, more recently, neoconservatives.

And what now?