Three Banks Have Now Collapsed. A Progressive Economist Explains Why

• by: C.J. Polychroniou

Gerald Epstein is Professor of Economics and a founding Co-Director of the Political Economy Research Institute (PERI) at the University of Massachusetts, Amherst.

Three banks in the U.S. (Silicon Valley Bank, Signature Bank and Silvergate) have collapsed since early March. The collapses of Silicon Valley Bank and Signature Bank are the two biggest bank failures since 2008. Silicon Valley Bank had deep ties to the high-tech industry while Signature Bank and Silvergate were some of the world’s biggest crypto-friendly banks. So, why are banks collapsing now? Is there a banking crisis underway? Moreover, are government bailouts back? Leading progressive economist Gerald Epstein addresses these and other questions in this exclusive interview for Truthout. Gerald Epstein is professor of economics and co-director of the Political Economy Research Institute (PERI) at the University of Massachusetts Amherst, and author of a forthcoming book from the University of California Press titled, Busting the Bankers’ Club: Finance For the Rest of Us.

C.J. Polychroniou: In 2007, the biggest financial crisis since the Great Depression erupted in the U.S. and, within a couple of years, it rippled across the globe with ramifications which, in some instances, have yet to be resolved. Indeed, many analysts have been suggesting all along that the next financial crisis was just waiting to happen because the necessary structural changes to the banking system were never put in place. Now, it seems that the critics were right: On March 10, 2023, Silicon Valley Bank (SVB) collapsed due to a classic bank run and its inability to raise capital. Moreover, a couple of days earlier, California-based Silvergate Bank had also folded and on March 12, the New York-based Signature Bank, which had over $100 billion in assets, became the next casualty. What caused SVB, which was the 16th largest bank in the U.S., to collapse?

Gerald Epstein: There are five main causes of the SVB collapse and the subsequent knock-on problems facing the U.S. and global financial system: the Federal Reserve’s anti-inflation obsession causing it to raise interest rates too high and too fast; the inherent fragility of banking, which for centuries has periodically erupted in crises; inadequate regulation of this fragile system, which often leads to high profits that accrue to banks and their wealthy owners; the corruption and self-dealing that often result from banks’ insufficient supervision; and the lack of public alternatives for financial institutions and services that could perform many of the key functions of banking and finance with less risk and without the private financiers taking their cut. Some of the huge profits financiers make from this system are funneled to buy support from politicians to prevent adequate regulation, and to secure bailouts when the system crashes.

This structure produces failures in various ways and forms. The causes of SVB’s failure are both old school and new dawn — with these two being intertwined and intermingled — creating an old vintage brew poured into new, high-tech bottles. The bank’s investments (assets) were concentrated in a single industry — technology start-ups — that had been booming for several years but then dramatically slowed down, reducing business and income for SVB. To bolster its profits, SVB invested in risky financial assets to enhance short term returns: in this case it invested in long-term U.S. government bonds (and government guaranteed mortgage bonds) that were highly rated (AAA) but had high risks of loss if interest rates went up significantly. In its overzealous attempt to fight inflation, the Fed raised interest rates by more than 4 percentage points within a year, causing the market value of the government’s long-term bonds to plummet. This would not have created problems if SVB had held onto these bonds to term (e.g., 10 years). But, the bank funded these start-ups and bond investments with significant amounts of potentially flighty short-term debt — in this case, large amounts of uninsured deposits lent to the bank by Silicon Valley–oriented venture capital firms (VCs) and their customers (“founders” or “start-ups”). This means that the bank funded its risky investments with flighty debt rather than from its owners’ equity capital. In other words, the bank had high levels of “leverage” (debt relative to assets) based on debts (deposits) that could be demanded back from the bank at a moment’s notice.

Sensing problems with the bank, or just wanting to move their funds to earn higher interest rates, the VC investors began taking their money out of SVB and, as a result, SVB had to sell its government bonds at a loss in order to pay them back their deposits. These losses on the bonds cut into SVB’s capital. When SVB tried to raise more capital in order to cover these losses, this raised eyebrows about the solvency of the firm. VC firms withdrew millions of dollars and told their “start-ups” to take their money and run. When the Federal Deposit Insurance Corporation (FDIC) took control of SVB on March 10, SVB was the 16th-largest bank in the U.S., with over $200 billion in assets, and its collapse was the largest since Washington Mutual in 2008. (For context, the largest U.S. bank is JPMorgan-Chase with $3.2 trillion).

Elizabeth Warren, Bernie Sanders, and many others (law professor Jennifer Taub, Lisa Donner of Americans for Financial Reform and Dennis Kelleher of Better Markets, to name a few) are pointing to the Trump-era partial deregulation of medium-sized banks (less than $250 billion in assets), which contributed to SVB’s failure. SVB’s capital and liquidity requirements were reduced, mandatory stress tests were eliminated, the rules against proprietary trading (the Volcker Rule) were suspended, and the need to prepare plans in case the bank became insolvent (so-called ‘living wills’) was eliminated. These stricter rules would have made it much more likely that the problems with SVB would have been dealt with by the Federal Reserve and FDIC sooner and in a much less disruptive way. Right after Lehman Brothers collapsed in 2008, the Queen of England asked economists at the London School of Economists how they had all missed the warning signs. Many are now asking the same of the Federal Reserve Board and the Federal Reserve Bank of San Francisco that were supposed to be supervising SVB. It turns out that they did know of these problems at least a year ago, but, it seems, only offered toothless warnings.

This lack of serious attention reminds me of the Carmen Segarra saga after the great financial crisis. Segarra was hired to be the New York Federal Reserve monitor/supervisor onsite at Goldman Sachs in 2011. She saw first-hand the lack of risk controls at Goldman and the obsequious behavior of the other New York Fed monitors who seemed more interested in gaining favor with Goldman than protecting the public. Segarra was fired after repeatedly complaining about the lack of serious Fed supervision of Goldman. One wonders if the San Francisco Fed has put on a repeat performance.

Greg Becker, SVB’s CEO, had lobbied Congress for the Trump-era deregulation bill. He also sat on the board of directors of the Federal Reserve Bank of San Francisco up until the day the bank collapsed.

In the cases of SVB and Signature Bank, FDIC insurance will cover all depositors regardless of size, but the Biden administration says this does not amount to a bailout. Does this sound right? I mean, if the U.S. government steps in to shore up deposits in failed banks, doesn’t such a move qualify as a bailout? And who ultimately benefits from a bailout?

This question of whether the FDIC’s after-the-fact decision to cover all of SVB’s and Signature’s deposits — plus, the decision by Federal Reserve to create a special facility to lend money to banks that hold long-term government bonds, dollar for dollar at the original value of the bonds — constitutes a “bailout” is politically and morally fraught, and the discussion of it has, generally, been full of bluster with only a few illuminating contributions.

The term “bailout” is not a technical term; it is a colloquial term. Since at least the 2008 crisis, it has had a largely pejorative connotation, and suggests that someone has been compensated even though they should have known, or did know, better. Worse, perhaps they did something illicit and were still getting compensation from the government. In this meaning, bailout suggests a rescue so that these people will not have to bear the consequences of their acts. This rescue will make it more likely that they will do this irresponsible and costly action again (leading to what economists and insurance companies call “moral hazard”). After 2008, there was a widespread view that “Wall Street got bailed out and Main Street did not.” This really angered people and contributed to the rise of the “Tea Party” and later, to more perverse and dangerous incarnations. No government wants to be accused of doing bank bailouts again, including Joe Biden. Has he, or hasn’t he?

Let’s use an analogy to see if that helps us decide. Say there is a fierce hurricane that hits Miami. Compare three people. One has a house in the middle of town, and it gets destroyed. Say this person could not afford hurricane insurance. If the government comes in and gives this person compensation to help his family get back on their feet, do we think most Americans will call this a bailout? I don’t think so. It is a rescue, or aid. Let’s say another person built a house on the beach. Their house gets swamped. The government gives them compensation, without the condition that they can’t build on the beach again. Will people call this a bailout? Maybe. Then there is a third case. A big property developer who builds a huge apartment complex on the beach, a complex that erodes the beach and makes it easier for high waters to come off the ocean into the complex and the neighbors’ apartments as well. The hurricane wrecks the complex and the neighbors’ apartments, and the building developer gets compensation from the government. Will people call this a bailout? No question. And moral hazard? Definitely. The builder will just do it again with bad implications for him and his neighbors.

Let’s apply this analogy to SVB. The management and owners made bad and irresponsible decisions. The government fired the management and is giving no compensation to the bank’s owners (or other big non-depositor creditors). No bailout here. The FDIC is compensating the startups that had more than $250,000 in the bank, either because they had nowhere else to easily park their payroll and reserves, or because SVB or their VCs forced them to keep their money on deposit at SVB. Are they being bailed out or aided/rescued? I would say that most Americans who understood this situation would say no bailout here. What about the venture capitalists who made multimillion-dollar deposits into SVB, presumably in exchange for benefits from the bank, and some of whom rapidly pulled their money out and told their start-ups to do likewise. The FDIC is making them whole if they did not manage to get all their money out. This smells like a bailout to me.

There are other interesting cases that do not fit into a neat box. Little commented on, the SVB depositor rescue by the FDIC constitutes the first bailout of a major cryptocurrency firm. Circle — the issuer of its crypto-connected “stable-coin,” USD Coin (USDC) — had deposits of more than $3 billion in SVB. These are Circle’s U.S. dollar assets that they use to try to maintain a 1-to-1 dollar peg between their “stable” coin and the U.S. dollar. When SVB went under, USDC dropped off its peg to about 80 cents. U.S. financial regulators such as Securities and Exchange Commission Chair Gary Gensler had warned that these so-called stable coins were unstable and could only be made stable with bail-outs. They found evidence right here. And these regulators should nip this dangerous “financial innovation” in the bud before it causes more problems.

The FDIC will not get the funds to compensate these depositors by raising taxes but by assessing the banks. But small community banks are asking: Why should we bail out these massive VC firms? Shouldn’t the big VC investors, like Peter Thiel, get assessed for these costs?

But even the claim that the executives of SVB are not getting bailed out is questionable. No one doubts that they are largely responsible for the debacle. But it is not true that they are not getting rescued. Senators Elizabeth Warren and Richard Blumenthal have put together a whole rap sheet on possible self-dealing and wealth-grabbing by CEO Gregory Becker and other top management that contributed to SVB’s demise. These include stock sales in the weeks before the collapse and significant bonuses just before the FDIC take over. Warren, Blumenthal, Biden, and others have called for “clawbacks” of ill-gotten gains from bank executives in these situations.

The bottom line, in my view, is that there have been serious bailouts here and more will probably be discovered; but it is not correct to paint all those with large deposits who got rescued as being “bailed out.” There is a structural problem in our current financial system. There needs to be a safe place for businesses to place their reserves and working capital without providing funds to speculative financiers, and without fear that their deposits will be wiped out in a bank failure. That, among other reasons, is why we need publicly provided accounts where households and businesses can hold their money, risk-free.

Given where things stand at the present time, would you say that a banking crisis is under way? Moreover, is there a connection between the SVB collapse and the state of the U.S. economy?

There is a banking crisis underway. I don’t think it will have the strength or reach of the 2008 crisis, but the problems have spread. There is a two-way street between these banking problems and the overall economy. On the one hand, the rapid increase in central bank interest rates to fight inflation is a major precipitating factor driving the financial problems. This interest rate overshooting by the Fed is, as my colleague Bob Pollin and his co-author Hanae Bouazza have shown, due to its wrong-headed commitment to driving inflation down to an arbitrary 2 percent target. These high interest rates and the banking problems partially caused by them will probably restrict useful lending to the economy and may make a recession more likely.

The general consensus so far is that the SVB collapse will have minimal impact on global markets and global financial institutions. Be that as it may, it seems that the U.S. banking system has learned no lessons from the 2007-2008 financial crisis. If this is so, is the problem with private institutions geared toward the pursuit of profit at any cost, or with public policy?

Yes. That is clearly a big part of the problem. A healthy economy needs a set of basic institutions that provide financial services to families and businesses that facilitate their productive and necessary activities. The problem with private, more speculative banks like the big banks that dominate our economy is that they provide lousy and costly services to most families and smaller businesses. And as SVB shows, sometimes these deposit accounts for families and businesses are held alongside large speculative deposits that fund speculative investments that put the whole bank at risk.

At a minimum, we need to restore the levels of financial regulation we had after the Dodd-Frank Act was implemented, but this is not enough. We have to have public provision of basic financial services, such as Federal Reserve Accounts, and/or a postal banking system where anyone can have risk free deposit accounts and, in the latter case, households can get basic banking services. Public banks at the state, municipal or regional level are another example of financial institutions that can provide loans and other financial services insulated from the negative aspects of the profit motive of private banking.

And we need to regulate the regulators, like the Federal Reserve, to prevent them from doing the bidding of the banks. Major structural changes need to be implemented, but I am afraid these issues are beyond the scope of this interview.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over Despair: Noam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New Deal: The Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The Precipice: Neoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the Left: Interviews with Progressive Economists (2021).

Religion, Nationalism, And ‘Western’ Hate: The Covid-19 Crisis Explained In Russian-Speaking And Arab-Islamic Regions

• by: Nataliia Vdovychenko, Jan Jaap de Ruiter & Massimiliano Spotti

1 Introduction
When the world was hit by the Covid-19 pandemic, reactions from religious leaders were inevitable. Christian and Islamic leaders were no exception to that rule, trying to formulate explanations for cause of the pandemic. Some statements breathed the atmosphere of resignation: the pandemic is affecting the world and therefore believers and the faithful must also resist the pandemic based on their beliefs (Kowalczyk, Roszkowski, Montane et al., 2020). Often religious leaders streamlined their statements with national government policies. In such cases they strove to have the rules of conduct for the faithful to deviate as little as possible from the relevant national approaches to the epidemic (Hart & Koenig, 2020). Yet statements were also made in which religious authorities cite reasons why the world was hit by the pandemic, and in particular the role of God in it (Kowalczyk, Roszkowski, Montane et al., 2020). There are religious authorities who explain the calamities that befall the world in terms of God’s punishment for the sinful behavior of unbelievers (Moravec & Lacková, 2021). In doing so, they would exonerate themselves. Religions have in common the notion of sacredness and sacredness by definition cannot be ‘polluted’ by whatever cause (Chryssides & Geaves, 2011). And with this background in mind,  leaders were also confronted with the question of what to do now that the pandemic was affecting rituals that are sacred within the communities concerned. Based on these considerations, an interesting question is how religious authorities interpret the Covid-19 pandemic. In our expose,  we make a comparison between the reaction of the Russian Orthodox Church and various Islamic fundamentalist organizations on the pandemic. We do this because on initial consideration we found that there seem to be remarkable similarities and differences in the reactions of both.

Thus, this article examines two cases of religious leaders having to formulate answers to questions raised by the pandemic. On the one hand, this concerns the question of how the Russian Orthodox Church reacted to the question of whether believers were still allowed to touch sacred objects such as icons, and on the other hand, the question is how Islamic fundamentalist jihadi movements explain the origin of the pandemic and what they recommend their followers to do to prevent contamination and spread. In short this article aims to answer the following question: ‘How did Russian Orthodox and Islamic fundamentalist officials address the Covid-19 crisis and what motivated them to react as they did?’. The choice to research this particular question is also motivated by the dominant value religion has in Russian-speaking and Islamic societies. Statements of religious leaders have a serious impact on the faithful and the general population of these areas.

This article is structured as follows. The next section outlines the theoretical background on the basis of which the cases are treated. This is followed by a description of both cases, that of the Russian Orthodox Church first, followed by that of Islamic fundamentalist organizations. The article ends with the formulation and a discussion of the conclusions.

2 Theoretical background
The Covid-19 pandemic has made it hard for the authorities to immediately change and adapt countries’ policies to the newly emerging reality of the increasing danger. Governments’ slow reactions and delayed quarantine measures have led to a series of issues in which online and offline misinformation became countries’ strategies to counter the virus (Alimardnai & Elswahi, 2020). This contributes to the global stream of sharing false information to support political goals. The spread of untruthful facts has become one of the key features of contemporary media due to its rapid distribution via user-generated content and propagandist channels (Bakir & McStay, 2017).

Scholarly debates differentiate various definitions of false information depending on its spread and intent to cause harm (Wang et al., 2019; Wardle & Derakhsan, 2017). Misinformation, disinformation, and mal-information are politicized terms of what is commonly referred to in the media as ‘fake news’ (Wang, et al., 2019). Separating different subgroups of deceptive information helps provide a set of clear-cut characteristics of specific ‘fake news’ types that can be helpful for scholars and policymakers alike. However, a foreseeable difficulty with defining these concepts is finding the intent of a fake news story spread and putting it in a category solely based on factors not entirely known to the researcher (Wang et al., 2019). The current article sticks to the following definition of misinformation in relation to mass media and politics — “when false information is shared, but no harm is meant” (Wardle & Derakhsan, 2017). However, the paper also uses misinformation as an umbrella term for all the media stories that have a certain degree of deception because scholars cannot always be certain about the intent of news materials reaching the public. This could be a possible limitation of the studies focusing on the false information spread.

The research topic of misinformation remains very relevant, however, with numerous scholars describing the current period as the “era of fake news” (Wang, et al., 2019). What brings misinformation studies under the spotlight is its abuse by political actors in the public sphere. The main issue with the increasing usage of misinformation by political parties is that while they use it to their advantage, at the same time they create a challenge for the society of undermining democracy (Bakir & McStay, 2017). Namely, wrongly informed citizens get emotionally invested given the provocative nature of misinformation and keep sharing false news while being stuck in digital echo chambers (Bakir & McStay, 2017).

What makes it particularly easy for a misleading news story to gain visibility is its topicality in the specific time period. The ‘basic law of rumor’ is applied here with the amount of circulation varying due to the importance of the subject to the individuals concerned multiplied by the ambiguity of the evidence applied to the topic (Wang, et al., 2019, Allport & Postman, 1947). During the COVID-19 crisis, the two aspects intensified due to the growing individual importance of the news articles regarding the pandemic, and the hoax of evidence and information spread by media outlets. We do not need to undermine the overall vulnerability of individuals and institutions in what homes to misinformation about health (Wang, et al., 2019).

The U.S. And UK’s Submarine Deal Crosses Nuclear Red Lines With Australia

• by: Prabir Purkayastha

Prabir Purkayastha – Photo: YouTube

The recent Australia, U.S., and UK $368 billion deal on buying nuclear submarines has been termed by Paul Keating, a former Australian prime minister, as the “worst deal in all history.” It commits Australia to buy conventionally armed, nuclear-powered submarines that will be delivered in the early 2040s. These will be based on new nuclear reactor designs yet to be developed by the UK. Meanwhile, starting from the 2030s, “pending approval from the U.S. Congress, the United States intends to sell Australia three Virginia class submarines, with the potential to sell up to two more if needed” (Trilateral Australia-UK-U.S. Partnership on Nuclear-Powered Submarines, March 13, 2023; emphasis mine). According to the details, it appears that this agreement commits Australia to buy from the U.S. eight new nuclear submarines, to be delivered from the 2040s through the end of the 2050s. If nuclear submarines were so crucial for Australia’s security, for which it broke its existing diesel-powered submarine deal with France, this agreement provides no credible answers.

For those who have been following the nuclear proliferation issues, the deal raises a different red flag. If submarine nuclear reactor technology and weapons-grade (highly enriched) uranium are shared with Australia, it is a breach of the Nuclear Non-Proliferation Treaty (NPT) to which Australia is a signatory as a non-nuclear power. Even the supplying of such nuclear reactors by the U.S. and the UK would constitute a breach of the NPT. This is even if such submarines do not carry nuclear but conventional weapons as stated in this agreement.

So why did Australia renege on its contract with France, which was to buy 12 diesel submarines from France at a cost of $67 billion, a small fraction of its gargantuan $368 billion deal with the U.S.? What does it gain, and what does the U.S. gain by annoying France, one of its close NATO allies?

To understand, we have to see how the U.S. looks at the geostrategy, and how the Five Eyes—the U.S., the UK, Canada, Australia, and New Zealand—fit into this larger picture. Clearly, the U.S. believes that the core of the NATO alliance is the United States, United Kingdom, and Canada for the Atlantic and the United States, United Kingdom, and Australia for the Indo-Pacific. The rest of its allies, NATO allies in Europe and Japan and South Korea in East and South Asia, are around this Five Eyes core. That is why the United States was willing to offend France to broker a deal with Australia.

What does the U.S. get out of this deal? On the promise of eight nuclear submarines that will be given to Australia two to four decades down the line, the U.S. gets access to Australia to be used as a base for supporting its naval fleet, air force, and even U.S. soldiers. The words used by the White House are, “As early as 2027, the United Kingdom and the United States plan to establish a rotational presence of one UK Astute class submarine and up to four U.S. Virginia class submarines at HMAS Stirling near Perth, Western Australia.” The use of the phrase “rotational presence” is to provide Australia the fig leaf that it is not offering the U.S. a naval base, as that would violate Australia’s long-standing position of no foreign bases on its soil. Clearly, all the support structures required for such rotations are what a foreign military base has, therefore they will function as U.S. bases.

Who is the target of the AUKUS alliance? This is explicit in all the writing on the subject and what all the leaders of AUKUS have said: it is China. In other words, this is a containment of China policy with the South China Sea and the Taiwanese Strait as the key contested oceanic regions. Positioning U.S. naval ships including its nuclear submarines armed with nuclear weapons makes Australia a front-line state in the current U.S. plans for the containment of China. Additionally, it creates pressure on most Southeast Asian countries who would like to stay out of such a U.S. versus China contest being carried out in the South China Sea.

While the U.S. motivation to draft Australia as a front-line state against China is understandable, what is difficult to understand is Australia’s gain from such an alignment. China is not only the biggest importer of Australian goods, but also its biggest supplier. In other words, if Australia is worried about the safety of its trade through the South China Sea from Chinese attacks, the bulk of this trade is with China. So why would China be mad enough to attack its own trade with Australia? For the U.S. it makes eminent sense to get a whole continent, Australia, to host its forces much closer to China than 8,000-9,000 miles away in the U.S. Though it already has bases in Hawaii and Guam in the Pacific Ocean, Australia and Japan provide two anchor points, one to the north and one to the south in the eastern Pacific Ocean region. The game is an old-fashioned game of containment, the one that the U.S. played with its NATO, Central Treaty Organization (CENTO), and Southeast Asia Treaty Organization (SEATO) military alliances after World War II.

The problem that the U.S. has today is that even countries like India, who have their issues with China, are not signing up with the U.S. in a military alliance. Particularly, as the U.S. is now in an economic war with a number of countries, not just Russia and China, such as Cuba, Iran, Venezuela, Iraq, Afghanistan, Syria, and Somalia. While India was willing to join the Quad—the U.S., Australia, Japan, and India—and participate in military exercises, it backed off from the Quad becoming a military alliance. This explains the pressure on Australia to partner with the U.S. militarily, particularly in Southeast Asia.

It still fails to explain what is in it for Australia. Even the five Virginia class nuclear submarines that Australia may get second hand are subject to U.S. congressional approval. Those who follow U.S. politics know that the U.S. is currently treaty incapable; it has not ratified a single treaty on issues from global warming to the law of the seas in recent years. The other eight are a good 20-40 years away; who knows what the world would look like that far down the line.

Why, if naval security was its objective, did Australia choose an iffy nuclear submarine agreement with the U.S. over a sure-shot supply of French submarines? This is a question that Malcolm Turnbull and Paul Keating, the Australian Labor Party’s former PMs, asked. It makes sense only if we understand that Australia now sees itself as a cog in the U.S. wheel for this region. And it is a vision of U.S. naval power projection in the region that today Australia shares. The vision is that settler colonial and ex-colonial powers—the G7-AUKUS—should be the ones making the rules of the current international order. And behind the talk of international order is the mailed fist of the U.S., NATO, and AUKUS. This is what Australia’s nuclear submarine deal really means.

Author Bio:

This article was produced in partnership by Newsclick and Globetrotter

Prabir Purkayastha is the founding editor of Newsclick.in, a digital media platform. He is an activist for science and the free software movement.

Source: Globetrotter

Why China’s Actions Toward Ukraine And Russia Could Shape The Course Of Future Geopolitics

• by: John P. Ruehl

John P. Ruehl

China has sought to portray itself as a neutral party in the Russia-Ukraine War. But Beijing’s balancing act masks its support for the Kremlin that enables it to continue its campaign.

Days before the one-year anniversary of the Russian invasion of Ukraine on February 24, 2023, U.S. officials claimed that China was considering providing Russia with lethal weaponry to support its military campaign. China denied the accusations, and on the anniversary of the invasion instead put forth its 12-point peace plan to end the conflict. These events followed after tensions between Beijing and Washington flared during the Chinese spy balloon scandal that began in early February 2023.

Since the war’s inception, the U.S. has cautioned China not to support Russia. Following reports that Russia had asked China for military assistance in March 2022, Washington warned that countries providing “material, economic, financial [or] rhetorical” support to Russia would face “consequences.” The Biden administration also confronted China in January 2023 with “evidence that [suggested] some Chinese state-owned companies may be providing assistance” to the Russian military.

China has largely adhered to Western sanctions restricting business with Russia. Nonetheless, it has been essential to Russia’s economic resilience and its war campaign since February 2022. China substantially increased its coal, oil, and natural gas imports from Russia in 2022, for example, which alongside India’s increased imports, have helped the Kremlin negate some of the effects of declining energy sales to Europe. The underlying motive for increased Chinese and Indian purchases of Russian energy, however, remains the steep discounts they have been offered by Russia, which is desperate to replace its former customers in Europe.

China has also increased its technology exports to Russia for use by its defense industry after many Russian companies were denied access to technology from Europe and the U.S. because of the imposition of sanctions. According to the think tank Silverado Policy Accelerator, “Russia continues to have access to crucial dual-use technologies such as semiconductors, thanks in part to China and Hong Kong.” Additionally, China has helped Russia undermine Western economic sanctions by developing international payment systems outside of Western control and has advocated for building an “international alliance of businesses” comprising non-Western companies.

Beijing has also been essential in undermining Western efforts to portray Russia as an international pariah. China has repeatedly abstained from UN votes condemning the Russian invasion and voted against an April 2022 resolution to suspend Russia from the Human Rights Council. Beijing also seems to have vacillated between calling the situation in Ukraine a conflict and calling out the breaking of UN rules regarding borders. In addition, China, alongside Russia, declined to endorse the G-20 communique that featured language critical of the war in Ukraine at the end of the meeting on March 2, 2023. Chinese state media has also been largely favorable or neutral to Russia since the invasion began.

Russian and Chinese forces have held several bilateral military exercises and patrols since February 2022. The last exercise took place in the East China Sea in December 2022, and the “main purpose of the exercise [was] to strengthen naval cooperation between the Russian Federation and the People’s Republic of China and to maintain peace and stability in the Asia-Pacific region,” the Russian Ministry statement said. Meanwhile, both Russian President Vladimir Putin and Chinese President Xi Jinping met and posed for photos at the September 2022 Shanghai Cooperation Organization summit. And in the coming months, Xi Jinping is expected to travel to Russia after top Chinese diplomat Wang Yi visited Moscow in February 2023.

While China has shown it is willing to assist Russia, it has been careful to avoid perceptions of overt support. China has cited the need to respect and safeguard “the sovereignty and territorial integrity of all countries,” without denouncing Russia or calling for it to end the conflict. But after China’s top drone maker, Da Jiang Innovations (DJI), banned exports of its drones to Ukraine and Russia in April 2022, Russia has continued to freely operate DJI surveillance technology to target Ukrainian drone operators, demonstrating the limits of Chinese neutrality.

Alongside the suspected impending Chinese military supplies to Russia, that were referred to by the Biden administration, Beijing is clearly more invested in a Russian victory than a Ukrainian one, even if it won’t admit it publicly.

So why is China so invested in supporting Russia while refusing to do so openly? There is no doubt a calculus in Beijing that the greater and longer the West focuses on Ukraine, the fewer resources Western countries can afford to give to Taiwan and the Asia-Pacific region. Prolonging the conflict would also weaken Russia, which in some Chinese nationalist circles is still viewed as a competitor and as having unjustly seized Chinese territory in the 19th century.

Still, there are clear benefits for China if the conflict ends sooner rather than later, and on Russian terms. Just weeks before the invasion in February 2022, Russia and China had signed their “no limits” partnership, while both Xi and Putin have called the other their “best friend.” Giving support to allies will help increase trust toward Beijing while also growing its leverage over a strained Russia.

China also desires a stable, friendly neighbor. A Russian defeat could lead to the country’s collapse, potentially destabilizing much of Eurasia. Russian leadership change, in case of a defeat, could also usher in a pro-Western Russian government on China’s doorstep, something Beijing is keen to avoid.

The war has in turn destabilized global energy and food markets and caused extreme instability in the global economy, at a time when China’s national economy is still fragile as it recovers from the effects of the COVID-19 pandemic. Russia is a vital economic partner to China, largely in the energy industry, but also owing to the Kremlin’s role in China’s Belt and Road Initiative to increase trade across Eurasia.

While Russia’s importance in this regard has diminished since the invasion, Moscow retains significant leverage among the former Soviet countries that form the Eurasian Economic Union (EAEU), as well as across the energy industries of Central Asia.

A Ukrainian military defeat would also have negative effects on the U.S.’ standing in global affairs by proving Western military assistance was unable to turn the tide of a major conflict. Contrastingly, a Ukrainian victory would solidify Western support for Taiwan, embolden Western-style democracy advocates around the world, and reverse perceptions in China of Western decline in global affairs.

But an open supply of lethal weaponry could destroy China’s economic relations with the West when China is still studying the effects of sanctions on a major economy like Russia. This has not prevented Beijing from pointing out the U.S.’ double standard in supplying the Taiwanese military with weapons, most recently in March 2023, when Foreign Minister Qin Gang asked “Why, while asking China not to provide arms to Russia, has the United States sold arms to Taiwan in violation of a [1982] joint communique?”

While relations between the U.S. and China are increasingly tense, there is fear in Beijing that overt support for Russia could damage Beijing’s relations with the EU. The EU is now China’s largest export market, and China still hopes to drive a wedge between the EU and the U.S. and prevent the development of a joint trans-Atlantic policy toward China. Meanwhile, German Chancellor Olaf Scholz on March 5, 2023, said that China will not supply Russia with lethal military aid “suggesting that Berlin has received bilateral assurances from Beijing on the issue.” Together with Xi Jinping’s comments in November 2022 stressing the need to avoid the threat or use of nuclear weapons, China seeks to highlight its mediating position and prove it is a responsible actor in world affairs that promotes peace. The Chinese-brokered deal between Iran and Saudi Arabia to re-establish official relations on March 10, 2023, was further evidence of this initiative.

Contrastingly, China views the U.S. as a rogue superpower, and sees “confrontation and conflict” with the U.S. as inevitable unless Washington changes course, according to Qin Gang. And while China continues to be suspicious of U.S. attempts to contain it, such policies have become increasingly acknowledged even in U.S. political circles in recent years.

Nonetheless, both lethal and non-lethal military aid to Russia from China will likely increase, funneled indirectly through willing third countries. Belarusian President Alexander Lukashenko’s arrival for a state visit to Beijing on February 28 caused alarm in the U.S. precisely because of this reason. Ultimately, China sees the Ukraine war as part of a wider conflict with the U.S.-led Western world. Aiding Russia is seen as a strategic decision for China, meaning its “pro-Russian neutrality” will continue to be cautiously tested in Beijing.

While China did not cause the Ukraine crisis, it seeks to navigate it effectively. The Sino-Soviet split in the early 1960s allowed Beijing to rapidly expand its ties with the West, and the Ukraine crisis will help China benefit from its relationship with Russia amid global economic uncertainty. China will take the necessary steps to avoid spooking the EU, while recognizing that tension with Washington may be inescapable.

Author Bio:
This article was produced by Globetrotter.

John P. Ruehl is an Australian-American journalist living in Washington, D.C. He is a contributing editor to Strategic Policy and a contributor to several other foreign affairs publications. His book, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’, was published in December 2022.

Source: Globetrotter

Pushing For Regime Change In Russia Implies An Embrace Of War In Ukraine To The End

• by: Alexandra Boutri & CJ Polychroniou

Is it Russian imperialism or great-power politics that explains Putin’s invasion of Ukraine? And how likely is it that we could see regime change in Moscow? Moreover, do ideological labels matter in today’s political climate? C. J. Polychroniou tackles these questions in an interview with the French-Greek journalist Alexandra Boutri. He contends that Russia’s invasion of Ukraine is a major war crime but that the ongoing war is rooted in NATO’s eastward expansion and associated with the game of great-power politics. As for those who compare Putin to Hitler and call for regime change in Russia, Polychroniou argues that such claims and demands are both absurd and dangerous.

Alexandra Boutri: Let me start by asking you to share with me your views about an international relations topic that has dominated headlines for the past year, namely, the Russia-Ukraine war. Does it have its roots on Russian imperialistic aggression, which is the general view among most mainstream pundits, including many on the Left, or is it something more complicated than that?

C. J. Polychroniou: I think the best way to address your question is by putting this unnecessary tragedy, which, incidentally, could very well drag on for years to come, in historical context and thus realizing how easily it could have been avoided. Indeed, Putin’s decision to launch a full-scale invasion of Ukraine on February 24, 2022, may have taken everyone by surprise but the seeds of this war had been sown long before. Now, Ukrainians tend to emphasize Russia’s seizure of Crimea in 2014 as the origin of the conflict between the two countries. This is not an accurate description because the great-power rivalry between the United States and Russia is left out of the equation.

But let’s start with Crimea. For whatever reason, Crimea was gifted from Soviet Russia to Soviet Ukraine in 1954. Interestingly enough, the overwhelming majority of the population of Crimea in the 1950s was ethnic Russian and there was still an ethnic Russian majority of over 60 percent in 2014. It should also be pointed out that the Crimean Peninsula has always been a strategically vital location on the Black Sea. Indeed, Crimea’s position in the Black Sea holds such strategic importance that Zbigniew Brzezinski, the hawkish national security adviser to President Jimmy Carter, made strong hints in a 1997 book titled The Grand Chessboard that the Crimean Peninsula could become a major source of instability in the territories of the former Soviet Union. Putting aside for now the legality of the Russian operation to annex Crimea, what is often ignored in the Ukrainian and western narrative is that it took place in the aftermath of NATO’s enlargement following the collapse of the Soviet Union. And it wasn’t just Putin who was wary of NATO’s eastward expansion. Gorbachev was also suspicious of the perpetuation of NATO following the end of the Cold War while Boris Yeltsin, in a letter sent to President Clinton in 1993, had strongly opposed NATO’s expansion to the east.

It seems appropriate here to recall that Putin did not mince words when it came to giving his opinion about the eastward expansion of NATO at the Security Conference in Munich on February 2007:

I think it is obvious that NATO expansion does not have any relation with the modernisation of the Alliance itself or with ensuring security in Europe. On the contrary, it represents a serious provocation that reduces the level of mutual trust. And we have the right to ask: against whom is this expansion intended? And what happened to the assurances our western partners made after the dissolution of the Warsaw Pact? Where are those declarations today? No one even remembers them. But I will allow myself to remind this audience what was said. I would like to quote the speech of NATO General Secretary Mr Woerner in Brussels on 17 May 1990. He said at the time that: “the fact that we are ready not to place a NATO army outside of German territory gives the Soviet Union a firm security guarantee”. Where are these guarantees?

Each round of NATO expansion since the fall of the Berlin Wall (NATO grew from 16 countries at the peak of the Cold War to 30 today, several of which were part of the Warsaw Pact) was followed by loud complaints from Russia that such moves posed a threat to Russia’s national security. Moreover, the prospect of Georgia and Ukraine becoming members of the trans-Atlantic military alliance constituted a red line for Moscow. Yet pledges were made by NATO leaders at the Budapest Summit in April 2008 that Georgia and Ukraine would eventually become NATO member states. In fact, relations between NATO and Ukraine go back to the early 1990s and, after 2014, the level of military cooperation between the two intensified in critical areas.

From the perspective of the Kremlin, what NATO (i.e., the US) was up to amounted to an “encirclement” of Russia. Indeed, it shouldn’t be difficult to understand why Russian leaders felt this way, and there is no doubt that US officials knew all along that they were crossing Russia’s red lines on NATO expansion.

In this context, Russia’s invasion of the territories of South Ossetia and Abkhazia in Georgia in 2008, Crimea’s annexation in 2014, and the disastrous invasion of Ukraine in 2022 are all part of the game of great-power politics and have little to do with Putin’s alleged push for a new Russian empire.

Alexandra Boutri: So, according to the analysis you just provided, the idea that Putin might want to invade countries in Europe is utter hogwash. But what about the suggestion that Putin is a tyrant, this generation’s Adolf Hitler, and therefore his regime must be overthrown?

C. J. Polychroniou: The idea that Putin has plans to invade countries in Europe is so absurd and ridiculous as to be laughable. Indeed, the only serious question here is why so many refuse to acknowledge that NATO and the US bear responsibility for Putin’s illegal invasion of Ukraine and are now failing to pursue a diplomatic path in order to put an end to this great tragedy, which is going to get much worse in the months to come as Ukraine keeps receiving more and more weapons from the west and Russia is preparing for a bigger fight. The losses on both sides are already staggering and Ukraine’s economy and infrastructure are on the verge of collapse. This is a completely senseless war that could have easily been avoided if U.S. and NATO had paid proper attention to Russia’s red lines. In fact, many top-level diplomats and academic experts had predicted that NATO’s provocative actions would lead to war.

Having said that, it goes without saying of course that Russia’s invasion of Ukraine is wrong, violates the UN Charter and cannot be justified under international law. Moreover, Russia could easily be charged with war crimes for the Ukraine invasion. Yet isn’t it interesting that the Kremlin’s legal justification for the invasion is based on the “pre-emptive principle” first argued by the US when it invaded Iraq in 2003?  Of equal interest is to see how the western community has reacted to Russia’s invasion of Ukraine in comparison to the way it reacted to the US invasion of Iraq. Most Americans still have no idea of the level of destruction that the invasion unleashed. The prestigious medical journal The Lancet estimated in a 2006 study that more than 600,000 Iraqis were killed during the first 40 months of war and occupation in Iraq. But the western community is king of the double standard.

To address your question about Putin, he is no doubt a ruthless autocrat. Manipulation and repression are integral components of his regime. They have been so from the day he was sworn in as president of Russia, more than 20 years ago. Now he is also a war criminal, but we must be careful with crazy comparisons with Hitler. If Putin is the new Hitler because of his decision to invade Ukraine, why shouldn’t the same be said about George W. Bush when he invaded Iraq? However, such analogies are not only ludicrous but extremely offensive because they cheapen the memory of millions of innocent people killed by the Nazis. Hitler’s monstrous regime carried out various major genocides and countless of mass murders. This may run counter to how major segments of the media are portraying Putin these days, but he is a rational and strategic actor, though he badly miscalculated his military strength when he decided to launch a full-scale invasion of Ukraine as well as Ukrainian resistance. Furthermore, he has always been very popular with the Russian people and is even more popular today. In September 2022, his popularity level stood at 77 percent. After the invasion of Ukraine, the approval rating increased. In February 2023, Putin’s approval rating at home jumped up to 82 percent.

So, when pundits and experts alike in the US and elsewhere speak of regime change in Russia, one really wonders what they may have in mind. Is regime change going to come from the inside, through a coup or revolution, or from the outside, through a foreign invasion? The security forces, which are the core and backbone of Putin’s regime, answer directly to Putin and they will surely protect him from any possible coup. On the other hand, his popularity is so great that simply precludes the possibility that he can be overthrown by his own people. A foreign invasion of Russia to overthrow Putin’s regime is sheer madness and totally out of the question, so all this talk about regime change in Moscow amounts to nothing more than dangerous political posturing. Why so? Because regime change seekers suspect, and they are probably right, that the most likely scenario for Putin to be removed from power is through the weakening of Russia. This means either Putin losing the war in Ukraine or witnessing the collapse of his own economy. In either case, achieving the goal of Putin’s removal from power mandates an indefinite continuation of the war regardless of what happens to Ukraine itself. But even so, what guarantee is there that Putin won’t be replaced by someone even more ruthless? A weakened and humiliated Russia will most likely lead to the emergence of an even more ruthless leader. After all, it was the economic collapse and humiliation of the 1990s that made Putin such a popular figure with the Russian people.

Alexandra Boutri:  The far-right seems to have sided with Putin in Russia’s war against Ukraine, while many of the left are defending Ukraine and even going so far as to support a stronger NATO. Do political labels matter in today’s world? Indeed, is the left-right political spectrum still valid today?

C. J. Polychroniou: The situation with far-right groups and individuals supporting Putin in Russia’s war against Ukraine is a bit complicated. Some on the far-right in both the US and Europe seem to have sided with Putin simply because they see him as a white supremacist and the “savior” of western culture. But my own impression is that this is the case far more so with America’s far-right than it is with Europe’s far-right. Indeed, there has been a marked shift in the rhetoric of many extreme right-wingers in Europe since the war started. For instance, both Marine Le Pen in France and Matteo Salvini in Italy, both of them long-time admirers of Vladimir Putin, have condemned “Russian aggression.” They may have done so purely out of political opportunism, but there you have it. Anyway, ideological consistency is not the forte of the far-right. However, the same can be said nowadays about certain segments of the Left. Indeed, who would have thought 10 or even 5 years ago that the Left might one day be defending the enlargement of NATO?  But we live in a time of interminable crises and perhaps political identity plight comes with the territory. Today, more than any other time in recent history, the traditional political terms “left” and “right” have become a bit redundant, though I am not suggesting by any stretch of the imagination of doing away with the distinction. But consider this: Some of today’s conservative governments in Europe are pursuing policies, such as trying to tame the market and using the state to support vulnerable populations, that are hardly representative of neoliberalism or even traditional conservatism. Greece and Poland come to mind, both countries governed by right-wing political parties. By the same token, so-called “left” parties have moved ever so closer to the right, pursuing even neoliberal policies when they are in power, to the point that blue collar workers have switched allegiances. And the Green parties of today bear no resemblance whatsoever to the Green Movement of the seventies. The German Green party, for instance, is now advocating for stronger U.S. militarism.

In the United States, of course, the situation is in some ways quite different. The Republican party has moved so far to the right that it has developed a serious extremism problem while the Democratic party has drifted towards its progressive faction.  However, both “left” and “right” in the US are involved in a growing “culture war” and both practice cancel culture. The mania over political correctness and identity politics, which are the last things that the Left should be embracing given its historical commitment to free speech and universality, is terrible business. It is in fact helping today to give shape and form to the reactionary politics and policies of Ron DeSantis, the rising star of America’s hard- right.

Source: Originally published by Z. Feel free to share widely.

The Path To A Green New Deal Must Involve A Series Of Separate Bills

• by: C.J. Polychroniou

Kaniela Ing – Photo: Twitter

The Infrastructure Investment and Jobs Act and the Inflation Reduction Act are two landmark bills with the potential to carry significant economic and environmental benefits. They also speak volumes of the role that progressive voices and organizations can play in helping to create sustainable and equitable economic growth and in powering a safer future. Of course, they are imperfect bills, points out National Director of the Green New Deal Network Kaniela Ing in this exclusive interview for Truthout, but they are important stepping stones toward a Green New Deal and advancing justice for frontline and BIPOC (Black, Indigenous, people of color) communities. For now, however, the most immediate concern, Ing says, is making sure that “the full benefits of the Inflation Reduction Act and Infrastructure Investment and Jobs Act reach communities across the country and have a positive impact on the planet and its people.”

Ing was a founding member of the Green New Deal Network (GNDN) as the climate justice director for People’s Action, where he led campaigns to combat climate change. While at People’s Action, Ing co-created and led mass mobilizations around the People’s Bailout and THRIVE Agenda, which largely shaped the suite of federal legislation.

C.J. Polychroniou: Last year, the United States Congress passed the largest federal investment to tackle climate change, the Inflation Reduction Act of 2022. This was preceded by Congress passing the Infrastructure Investment and Jobs Act of 2021, another bill breaking spending records to restore and modernize our infrastructure. What role did the Green New Deal Network and other movement organizations have in passing these bills?

Kaniela Ing: The historic levels of investments passed in the last two years is a direct result of communities across the country fighting for climate, care, jobs and justice. Coalitions like mine have built on the decades of work by leaders and activists, advocating that everyone have access to essential goods and services, be protected from crises, and have the opportunity to thrive.

Since 2020, organizations and activists within the Green New Deal Network (GNDN) have fought for Congress to pass a package that tackles the overlapping crises facing our nation: climate chaos, economic instability, racial injustice, outdated infrastructure and corporate influence over our government. The Green New Deal Network — and its 15 national organizations and 24 state coalitions — crafted the THRIVE Act, a $10 trillion climate, care, jobs and justice bill that would create enough jobs to end unemployment; build modern, reliable infrastructure; and invest in community resources while ensuring labor and justice protections.

What we secured was nearly $3 trillion in infrastructure, transportation, climate and health care over two bills, the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. By turning people out in the streets, supporting progressive leaders in Congress, advocating for much-needed and popular policies, and pressuring politicians that were pandering to corporate influence, we have started charting a path to a Green New Deal.

Our network’s multisectoral coalition was crucial in ensuring that the Infrastructure Investment and Jobs Act and Inflation Reduction Act create millions of local, family sustaining jobs, target funding to communities that are often left behind, and begin taking on the climate crisis. By having a coalition of labor, climate, racial justice and political organizations moving together as a united front, GNDN was able to ensure that the policies in the two bills extended beyond simply reducing climate change-causing emissions, but also began to act on jobs, justice and health care.

Now that these historic bills have passed, how much closer are we to securing a true Green New Deal?

The Green New Deal was always meant to be a series of legislation, an all-of-government approach to climate justice that cuts across issues, geographies and sectors. The climate investments we have thus far secured are a down payment on the bolder bills we know we need Congress, state and local governments to pass in order to reach the vision of a thriving future.

A recent study by Evergreen and the Natural Resources Defense Council found that the Inflation Reduction Act’s investments will result in 66 percent of the U.S. being powered by clean energy by 2030. However, if we plan to mitigate the climate crisis once and for all, we need to meet President Biden’s goal of 100 percent clean energy by 2035 and 80 percent by 2030.

In addition to falling short of our full climate goals, the Inflation Reduction Act and Infrastructure Investment and Jobs Act also neglect investing at scale (or entirely) in other key sectors where Americans are facing immense challenges. From the housing crisis exacerbated by high utility bills, to inaccessible care services where caregivers are expected to work without paid or sick leave, people all across the country need our government to take a holistic approach to tackle the overlapping challenges our communities experience. At its foundation, the Green New Deal should simultaneously be investing in modernizing all sectors of the economy because our families do not simply experience one crisis at a time.

Finally, a true Green New Deal does not pander to fossil fuel corporations and throw lifelines to the fossil fuel industry. In order to tackle the climate crisis, we can’t continue to toss tax dollars and create government-mandated pathways for the development of dirty energy when the science is clear: our overreliance on fossil fuels led us to the climate and environmental justice crisis we are facing and the reality is that the clock is rapidly running out on mitigating catastrophe.

What is the role of organizations like your own and our government in implementing the provisions in the Inflation Reduction Act and Infrastructure Investment and Jobs Act for real world benefits?

For years, our fight was to attain passage of federal legislation that met the scope of the climate crisis. In the end, we accomplished some, not all, but some very important gains in the Inflation Reduction Act and Infrastructure Investment and Jobs Act.

Now, it has to be the role of leaders and climate champions to ensure these gains are implemented into tangible wins. If we stop our campaign to secure transformative change in climate and environmental justice at its signing into law, then we fail. At this moment, there is an opportunity to make a difference in the lives of families and communities across the country. It’s important that we don’t miss it.

This means that it is our responsibility to ensure that the public funding we fought so hard to win is allocated correctly, and reaches the communities it is meant for: those most impacted.

It is a necessity that we begin by building public awareness around these investments and working together with grassroot organizations, BIPOC communities, and tribal governments to provide the resources needed to track and apply for funds being doled out by federal agencies. It also means holding state legislators accountable in the equitable use of these funds to outfit their states, and most importantly, implementing Justice40 to direct 40 percent of the benefits of federal investments into communities facing disproportionately high and detrimental health and environmental impacts. In doing so, we ensure that communities that have historically been divested from have access to a future that is just and healthy for everyone.

What are the biggest challenges that you anticipate to face as you forge ahead and how can they be overcome?

The fight for climate justice in the U.S. is at a crossroads.

The Inflation Reduction Act and Infrastructure Investment and Jobs Act contain the most significant climate investments in our nation’s history, and it is the role of organizations, community leaders, local governments and members of Congress to now ensure that the hard-won federal funds become real benefits for our communities.

If implemented at the behest of climate polluters, the compromised provisions in these acts could worsen injustice, disillusion our base and jeopardize our governing power by putting climate-friendly politicians at risk of losing their elections. For instance, we need to ensure that the utilities don’t use funding in these bills to continue operating fossil fuel plants that are costly and dirty.

We already know that utilities and corporations have a vested interest in preventing a transition to clean energy. Despite solar being the cheapest source of power in the U.S., the majority of our energy is from coal and fracked gas, with a measly 1.3 percent from solar. Between 2020 and 2021, while Americans were grappling with the COVID-19 crisis, fossil fuel corporations were profiting off of price hikes on already costly dirty energy. For instance, Southern Power Company — the third largest investor-owned utility in the country — increased its operating revenue by 12.5 percent largely due to higher fuel costs. Meanwhile, 28 percent of Americans were unable to buy basics like food and medicine so that they could afford to pay their utility bills. It is safe to assume that these same utilities that have been hampering the transition to renewable energy will seek ways to keep profiting off their dirty fossil fuel infrastructure through climate destructive provisions in the Inflation Reduction Act and Infrastructure Investment and Jobs Act.

In the Inflation Reduction Act, we see the direct influence of fossil fuel corporations through mandates that support the growth of oil and gas, despite the climate and environmental harms caused by dirty energy. These Inflation Reduction Act provisions require that all new solar and wind energy development on federal lands and waters must have a prerequisite oil and gas lease sale, thus choking the growth of renewables to fossil fuel development. Additionally, the Inflation Reduction Act mandates oil and gas lease sales in the Gulf of Mexico and Cook Inlet, Alaska — despite the recent history of failed fossil fuel leasing attempts in both places.

The influence of corporations on the policies in the Inflation Reduction Act and Infrastructure Investment and Jobs Act is likely to extend into the implementation of these bills, making it crucial for communities and leaders to champion true climate solutions rooted in a just transition to a 100 percent clean energy economy.

When will working families and communities across the country expect to start feeling the benefits of these bills? What role do everyday people have to play in ensuring that Inflation Reduction Act and Infrastructure Investment and Jobs Act implementation is a success?

If implemented with respect to our communities, the Inflation Reduction Act and Infrastructure Investment and Jobs Act will serve as a down payment on a Green New Deal, advance justice for frontline and BIPOC communities, and incentivize members of Congress to fund additional federal climate justice investments that science and the future of our communities demands.

More specifically, the Inflation Reduction Act’s $370 billion in climate investments includes almost $270 billion in tax credits and another $100 billion in the form of loans and grants to governments and nonprofit organizations, of which roughly $45-60 billion is set aside for environmental justice [in] communities. Working families, corporations and local governments will be able to access most of the funds between 2023-2028.

Among the impacts of this bill will be:

– Millions of new, local, family sustaining jobs, including 9 million jobs over the next decade through the Inflation Reduction Act.
– Reduced utility costs for every family by $500 by increasing renewably generated energy.
– Tax rebates of $1,000-$4,000 per household when upgrading to clean, modern electric appliances.
– Tax credits covering 30 percent of the costs to install solar panels and battery storage systems at homes as well as community solar.
– Up to $7,500 in tax credits to buy new electric vehicles (EVs) as well as $4,000 tax credits for the purchase of used EVs.
– Full and permanent funding for the Black Lung Disability Trust Fund to ensure coal miners suffering from Black Lung disease have access to medical care.
– Provisions that would tax corporate polluters, the wealthy and tax evaders, reducing the national deficit by nearly $300 billion and protect frontline communities from pollution.

With the majority of the climate investments going toward tax credits, it is crucial for working families, landlords, small businesses and manufacturers to take advantage of the reduced cost of electrification. Because many of these tax provisions are uncapped, the more people use them, the more money the federal government will put toward providing tax credits. Just as importantly, the more successful the implementation of the Inflation Reduction Act and Infrastructure Investment and Jobs Act are, the more likely Green New Deal champions will win elections and put forth bolder climate, care, jobs and justice bills. But we will only see the full impacts of these bills if community and government leaders take the time to educate and activate everyday people to invest in cleaner and safer infrastructure.

If you had to describe what a win for this campaign would look like, how would you do so? Is there a cost to not succeeding in implementing the policies being fought for?

We are already on the pathway to having a Green New Deal by 2030 with the passage of the biggest climate investment in our nation’s history. Beginning this year, we will also be making sure that the full benefits of the Inflation Reduction Act and Infrastructure Investment and Jobs Act reach communities across the country and have a positive impact on the planet and its people.

Let’s be clear, the Inflation Reduction Act and Infrastructure Investment and Jobs Act are imperfect bills. They fall short on 100 percent emissions reductions and investing in key sectors like public transportation and housing — gaps that need to be addressed in order to stop the climate crisis and deliver environmental justice to BIPOC and frontline communities. There is no denying that these bills continue to prop up the fossil fuel industry, despite the affordability and sustainability of clean energy solutions. While we defend the wins in the Inflation Reduction Act and Infrastructure Investment and Jobs Act, we also need to prevent exacerbating the climate crisis and environmental injustices.

For our coalition, winning this campaign is winning a full Green New Deal by the end of the decade. Winning for us is when we have created enough jobs so that anyone who wants to work can do so and expect fair and dignified working conditions; when natural disasters stop creating refugees among our poorest BIPOC community members; and when working families don’t have to pick between paying for food versus keeping the lights on. It is about laying the foundation for a sustainable and modern future where everyone is thriving, and our children are given the opportunity to lead healthy lives, with the guarantee of pollutant-free and lead-free drinking water, toxin-free air and unburdened access to all essential services. This future, rooted in restoring a regenerative economy, ensuring climate resiliency, and delivering environmental justice is not only just a win for our campaign, but a win for all of us.

The cost to not do so is too large to quantify.

This interview has been lightly edited for clarity.

Copyright © Truthout. May not be reprinted without permission.

C.J. Polychroniou is a political scientist/political economist, author, and journalist who has taught and worked in numerous universities and research centers in Europe and the United States. Currently, his main research interests are in U.S. politics and the political economy of the United States, European economic integration, globalization, climate change and environmental economics, and the deconstruction of neoliberalism’s politico-economic project. He is a regular contributor to Truthout as well as a member of Truthout’s Public Intellectual Project. He has published scores of books and over 1,000 articles which have appeared in a variety of journals, magazines, newspapers and popular news websites. Many of his publications have been translated into a multitude of different languages, including Arabic, Chinese, Croatian, Dutch, French, German, Greek, Italian, Japanese, Portuguese, Russian, Spanish and Turkish. His latest books are Optimism Over Despair: Noam Chomsky On Capitalism, Empire, and Social Change (2017); Climate Crisis and the Global Green New Deal: The Political Economy of Saving the Planet (with Noam Chomsky and Robert Pollin as primary authors, 2020); The Precipice: Neoliberalism, the Pandemic, and the Urgent Need for Radical Change (an anthology of interviews with Noam Chomsky, 2021); and Economics and the Left: Interviews with Progressive Economists (2021).