The Strategic Inflation of Joe Biden
"The US per capita carbon footprint is 18 tons. It needs to drop to two."
The old saw runs, “When the US gets a cold, Europe gets the flu.” We could also add “…and the rest of the world gets Covid.” Why is that? Well, one reason is that sixty percent of all the money in the world is dollar-based. The dollar is a $25 trillion-dollar credit ledger, with about 6 percent of that tokenized in portraits of dead presidents and Masonic symbols.
It is expected that the Federal Reserve will be raising interest rates 100 basis points, to 3.5 to 4 percent, at their next meeting, hoping that people, and foreign governments, will be attracted to dollars. If you’re going to Europe, your purchasing power improved 20 percent over the past few months. As the dollar strengthens, those who borrow in dollars have to pay back in dollars, so more borrowers chase fewer dollars and inflation (decline of value) decreases. It works in theory.
The bond yield to maturity — what someone must pay to borrow — in Ukraine is now 50%, Argentina 43%, Tunisia 33%, El Salvador 30%. Countries that have maxed their credit and have to pay these higher rates on their junk bonds have trouble supporting critical infrastructure. That leads to fuel and food shortages, political unrest, outmigration, and the downward spiral already seen in Syria, Venezuela and elsewhere.
Meanwhile in Climate News
US citizens have the highest carbon dioxide footprints of anyone on Earth. The global average is four tons. To stay on an (extremely disruptive) 2-degree path—the best we can hope for now—humans, including USAnians, must chop their personal footprints to two tons. The US cannot ask Chinese, Indians, or Papua New Guineans to cut emissions (which from the climate legacy standpoint are minuscule compared to the US) unless USAnians lead by example. The US per capita carbon footprint is 18 tons.
To get to two tons, the average Chinese could be visualized as jumping out of a window on the first floor of the building. Maybe there will be some broken wrists and ankles there. The average USAnian has to jump from the 18th floor of the Trump Tower.
The Perfect Storm
Biden kicking the hornet’s nest in Ukraine made energy costs rise globally—gasoline prices briefly topped $6 in California, $9 in parts of Europe—and resultant inflation, now above 9 percent, is causing shocks across the entire consumer culture. This is painful, but it is precisely the rescue remedy Earth requires as we go cold turkey on our fossil addiction.
For this reason, inflation may waffle and plateau but the emerging recession is not temporary. We have to de-grow, whatever you call it. The proxy wars, too-big-to-jail bailouts of 2008 and the Covid relief packages of 2020 are not serviceable debts. The theft of the life savings of millions of Afghans and Russians is not enough to keep up with exponential energy debt and the need to de-fossilize.
After two-plus years of erupting into distinguishable peaks, the American coronavirus-case curve has a new topography: a long, never-ending plateau. Waves are now so frequent that they’re colliding and uplifting like tectonic plates, the valleys between them filling with virological rubble.
With cases quite high and still drastically undercounted, and hospitalizations lilting up, this lofty mesa is a disconcerting place to be. The subvariants keep coming. Immunity is solid against severe disease, but porous to infection and the resulting chaos. Some people are getting the virus for the first time, others for the second, third, or more, occasionally just weeks apart. And we could remain at this elevation for some time.
Many more desperate bailouts lie ahead. The Covid pandemic, the same as other pandemics from the Black Plague to the Spanish Flu, comes in waves that roll in and break over years, decades, and centuries. What we are seeing now with Omicron variants should be letting us know that this pandemic is not over by a long shot, or even the latest booster. Being bored with the plague and relaxing precautions too early was a mistake in previous global pandemics, too. Viruses don’t follow polls. Financial collapses may, but only within a limited range of motion. The example of Sri Lanka’s current collapse is what happens when a financial fire escapes containment and rages beyond all possibility of control.
Getting Political
Amidst all this doom and gloom there are rays of light. For Biden, a frail hope should be that insanity and sedition have overtaken the opposition party and nobody should be crazy enough to vote for them. Polls tell a different story. The right-wing benefits most when people are afraid. Comfort and contentment underpin liberalism. Biden was supposed to be the comfort candidate. That is why Bernie got the ax. But people are discomforted glimpsing the Four Horsemen coming over a distant ridge. Fear-mongers like Trump or DeSantis or “centrist” candidates like Mitt Romney or Liz Cheney could draw in enough Black and Latino support to sweep all branches of government in 2024.
By then, the La Niña cycle in the Pacific may have shifted to El Niño, removing the dampening effect that is holding temperatures to the low 100s (~40C) in many countries. By 2024, blue water summers in the Arctic will have increased the depth of Rossby waves that will bring more thunder blizzards, mid-continental monsoons and scorching heat waves, and further slow the Atlantic current, accelerating ice melt in Antarctica and drying out Australia. As I write this, London, Amsterdam, Paris, Chengdu and Beijing are all bracing for scorching heat. If you are in one of those places and thinking of just turning up air conditioning, falling river levels in the Seine, Rhine, Rhone and Yellow Rivers may prevent coal deliveries and nuclear power output, meaning brownouts and blackouts during peak heat. At the same time, even bulldozers can’t keep up with all the snow in Argentina.
Follow the Money
The generally accepted wisdom is that US households can tolerate two percent inflation. When it gets higher, people cannot estimate what the premium is for investing, so they stop investing and you get stagnation and inflation at the same time—stagflation. Fed Chairman Jerome Powell knows that his job is to get to the two percent target rate and get the world back to business as usual. He cannot afford to allow elevated inflation over a long period of time. He desperately needs to keep it from spiraling out of control. As the dollar asserts its supremacy, however, other nations will reflexively want to hedge their bets.
As US anti-inflationary policy creates a giant amount of pain when it hits food and fuel, those least able to survive those effects will take the streets and demand change from their governments and point to that guy in the White House and want to know why he kicked the hornet’s nest. The buck stops there.
Biden’s Dilemma
Can Biden stop or even slow this? Not unless he has a time machine that can take him to the mid-20th century—say 1950—when these effects began to lock in. He might be able to avert Near Term Human Extinction even at this late date, but the politics of getting that done is not trending in his favor.
Just before summer recess 2023, The Supreme Court will most likely rule for the North Carolina General Assembly in a case that renders popular voting purposeless. That case, Moore v. Harper, reached the high court in 2021 but has been completely revamped for the Fall 2022 term following revelations surrounding the January 6 insurrection and the radical shifts of this past term. At issue in Moore is the Giuliani/Powell “Independent State Legislatures” theory that proposes state assemblymen have the final say in how federal elections are decided.
It is expected that a 5-4 majority will rule that should the (Republican-controlled) state legislatures vote to send slates of electors to the Electoral College that favor a candidate who did not win the popular vote, that is their prerogative. After November 2023, the fix will be in. The GOP will have a clear path to take back the White House in 2024.
After that, screw climate action. Based on the IPCC predictions, the expected temperature increase this century will be 2.8°C (50% chance) to 3.0°C (67% chance). I happen to think those are underestimates, but our present experience of heat waves, fires and floods derives from only a 1.1-degree change, so triple that and try to stretch your imagination of what that world will look like then. Removing two or three trillion tons of CO2 would possibly prevent this outcome but the more likely scenario is that carbon dioxide removal will arrive too little, too late to prevent non-survivable Hothouse Earth.
Is there a way out? It might yet be biophysically possible. A recent study from Yale Climate Connections provides some reason for optimism.
According to the Yale group, a cascade of social, political and technological change could lead to an accelerating decline in emissions. That Tesla has replaced the Big Three as the largest US carmaker is such a portent. Public policy and behavior could co-evolve towards the Paris targets at a rate fast enough to reach C-neutrality by 2030. Political challenges and delayed ambition, however, would be difficult to undo.
That is where we need Joe Biden to get brilliant.
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The COVID-19 pandemic has destroyed lives, livelihoods, and economies. But it has not slowed down climate change, which presents an existential threat to all life, humans included. The warnings could not be stronger: temperatures and fires are breaking records, greenhouse gas levels keep climbing, sea level is rising, and natural disasters are upsizing.
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