By Dean Baker / Center for Economic and Policy Research (CEPR)
The Washington Post has a long history of hating on powerful unions, like the United Auto Workers (UAW), or any factor that allows blue-collar workers to earn a decent living. In keeping with that tradition, editorial writer and columnist Charles Lane argued that the UAW strike is highlighting the “contradictions” in Bidenomics.
Lane’s argument is that if we want to deal with climate change effectively, we should want to get the items needed for the green transition as cheaply as possible. This means we should want solar and wind installations produced at the lowest possible cost, as well as electric cars. According to Lane, that means we should not have import tariffs and be happy if these items are produced with low-cost non-union labor.
This is a plausible case in the short term, but that may not be true in the longer term. In the short term, obviously it is cheaper to get clean energy inputs at lower cost than at higher cost, but that may not be the case in the long term.
If the United States can build up its capacity and expertise as a top-line producer of solar panels, wind turbines, and electric cars, we may find that it is cheaper to produce these items here. There is evidence that unionized workers are more productive than poorly paid non-union workers.
Unionized workers switch jobs much less frequently and, when they know they will share in the gains of productivity-enhancing innovations, have far more incentive to share their insights with management. Countries with far higher unionization rates than the United States, notably Germany and Denmark, have been quite successful in maintaining top-level manufacturing operations.
Support our Independent Journalism — Donate Today!
The Political Coalition for a Green Transition
But apart from the economics of ensuring that unions are part of a green transition, there is also a political issue. Good policy does not just happen. It would make great sense to change the basis for the corporate income tax to a tax on stock returns. It doesn’t happen because the people who gain from the tax gaming industry (corporate accountants, tax lawyers, and the companies that do it effectively) are much more powerful than the tiny group of people who actually care about collecting the corporate income tax.
Similarly, we can reduce bloated CEO pay, and radically lower the excessive pay of high-end executives more generally (leaving more for ordinary workers), if we give shareholders more control over setting pay. However, this change doesn’t happen because there is no notable political force behind it, and the CEOs and their friends scream “communism” at efforts to give shareholders more control of the companies they ostensibly own.
The point is that change does not just happen in this world. It needs a political force to push it. Most of the country’s unions, including the UAW, have been willing to support policies for a green transition, but they want to make sure that their workers are protected in the process. The fact that Biden is willing to take a risk, that he may be raising costs somewhat, at least in the short-term, to keep this important ally, simply reflects political reality.
If this point is too subtle for the people who own and control the Washington Post, if Donald Trump gets back in the White House, there will be no green transition in the United States. He and most of his Republican allies have made it clear that they intend to sabotage private efforts to move to clean energy, not subsidize them.
In this respect, it is also worth noting that the Washington Post and other major news outlets have played an important role in making a green transition more difficult. They regularly report assertions from Republican politicians on global warming as reflecting their sincere beliefs, saying things like these politicians “believe” that global warming is not a real problem.
In addition to being awful journalism (reporters don’t know what politicians actually have in their heads), it is almost certainly not true. Many of the country’s most prominent Republican politicians, like Ted Cruz, Ron DeSantis, and Josh Hawley, have educations from top universities. It is highly unlikely that they learned nothing about global warming or somehow came to views that contradict the nearly unanimous consensus among scientists who are not on the payroll of the fossil fuel industry.
For this reason, it is absurd to treat their assertions about global warming as reflecting their sincere beliefs. A simple and neutral way to describe their assertions is to simply report what they say, or that they “claim” global warming is not a problem. Reporters can stick to reporting what they know and leave it to readers to determine for themselves whether these politicians are being honest.
Higher Costs Due Patent Monopolies and Related Protections
The Washington Post, like other elite news outlets, is always happy to beat up any real or perceived market intervention that benefits ordinary workers, however, it insists it cannot see the more costly interventions that benefit many corporations and highly-educated workers. Specifically, it virtually never raises any questions, either in news articles or opinion pieces, about the costs imposed by government-granted patent monopolies and related protections.
This is especially important in the case of prescription drugs, where life-saving medicines, that likely would sell for a few dollars a prescription in a free market, can sell for hundreds or even thousands of dollars a prescription when they have government-granted patent monopolies. We will spend over $570 billion this year on drugs that would likely sell for less than $100 billion in a free market without patent monopolies.
While the WaPo would ordinarily be very concerned about a government expenditure of $470 billion a year (nearly $5 trillion over a decade), when the government effectively makes this expenditure by granting patent monopolies, there is no room for discussion in the paper. There is a similar story with patent monopolies in clean energy.
If we are actually facing an existential crisis with global warming (we are), we should be looking to ensure that all relevant technologies are available at the lowest possible cost. If it were not a question of political power, we would be suspending patents and related protections for the relevant technologies, allowing everyone everywhere in the world to use the latest technology at zero cost. We would also be open-sourcing the research behind the technology so researchers all over the world can benefit and build on innovations, wherever they occur.
We can compensate companies for the profits they lose as a result. Of course, if they consider compensation from whatever formula is used inadequate, they can sue after the fact, but we should not let their concerns about compensation slow the process of moving to a green economy. (Yes, we should have done this during the pandemic, but we know that in polite debate, profits and pay for high-end workers are far more important than human lives.)
There is also the issue of supporting research going forward. The United States, and other countries, should be paying out money directly, sort of like what we do now with military research and with biomedical research supported by the National Institutes of Health and other government agencies, in key areas for developing clean technologies.
This would require some agreements with other countries on sharing costs, but again, we can outline the plan and start the research now, and fight over the exact compensation formulas later. But that would only be if we cared about saving the planet. Again, all this newly supported research would be fully open-source with any patents in the public domain and all results posted on the web as quickly as possible.
Bottom Line: WaPo Cares About Beating Up Blue Collar Workers, not Saving the Planet
The story with Lane, the WaPo, and really the major media outlets more generally, is that they are more committed to maintaining class distinctions and ensuring that blue-collar workers don’t get a decent paycheck, than trying to contain global warming. They dump on policies that benefit blue-collar workers that could slow the green transition in the short-term, but are just fine ignoring policies that benefit major corporations and highly-educated workers, which also slow the transition. This is not a surprise, we know who owns and controls the Washington Post.
Dean Baker co-founded CEPR in 1999. His areas of research include housing and macroeconomics, intellectual property, Social Security, Medicare and European labor markets. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. His blog, “Beat the Press,” provides commentary on economic reporting. He received his B.A. from Swarthmore College and his Ph.D. in Economics from the University of Michigan.
Dean previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He has also worked as a consultant for the World Bank, the Joint Economic Committee of the U.S. Congress, and the OECD’s Trade Union Advisory Council. He was the author of the weekly online commentary on economic reporting, the Economic Reporting Review (ERR), from 1996–2006.