how markets “think” about politics

Posted on March 10, 2025 by Peter

As I write, US stocks are plunging. I have no idea what will be happening by the time you read this post. However, stepping back from the moment, what does it mean that Wall Street indexes rose after Trump won the 2024 election but fell last week? Or that Ukrainian government bond prices rose from October 2024 until last week and then fell rapidly?

One view is that markets have wisdom–or at least predictive value–because they aggregate information from many people. Investors think critically and rigorously because their money is on the line. The recent trends make sense on their face and confirm that markets are rational.

A different view is that capitalism involves a class struggle, and capital markets rise when the upper classes expect their interests to prevail. This model has no trouble explaining why business leaders, including registered Democrats, would tell Steven Rattner that they like Trump. They were not predicting prosperity for all but expecting to profit for themselves.

I would endorse a third model. Friedrich Hayek had a genuine insight: individuals have limited cognitive capacity and diverse motives. Therefore, individuals cannot reliably assess whole societies, let alone predict the future of anything large-scale. However, says Hayek, within our own domains of experience and expertise, we can reasonably predict specific prices. After a tough spring, farmers will expect the price of wheat to rise.

Prices allow us to plan efficiently. Many people do not seek to maximize wealth but to accomplish something else, such as holding onto a valued job or retiring soon. Nevertheless, the result of all their private planning is a market that is–in certain respects–efficient.

However, markets also create opportunities to profit by correctly predicting the large-scale situation. In turn, such predictions require assessing the present. For example, to guess how the US economy will fare over the next four years, it’s necessary to evaluate Donald Trump as a leader. One can buy bonds and other securities partly on the basis of such predictions. In this way, an accurate evaluation of Trump could pay off financially.

But Hayek’s defense of markets would not encourage us to trust the aggregate results of such thinking. Just because many people trade securities, it does not follow that their overall understanding of the present or their predictions for the society as a whole are reliable.

On the contrary, each participant in a market who tries to predict how a whole economy or country will perform is subject to the same cognitive limitations that–according to Hayek–beset us as voters and policymakers.

Markets do respond intelligibly to news. Wall Street indices fall every time Trump announces tariffs and rise whenever he seems to back off. But these changes are not predictive. In fact, we can easily predict market shifts as soon as we know what Trump says. The market adds little new information.

It’s true that putting money on the line gives an individual a motivation to think rigorously and critically. But motivations do not solve cognitive limitations. The businessmen who confided in Rattner said that they didn’t like “woke stuff” under Biden. Such feelings should not directly influence their market behavior under Trump. Nevertheless, their hostility to “woke stuff” could affect their stock trades by influencing their moods or by leading them to consume news and information that is tilted in favor of Trump. As cognitively limited creatures, we must rely on limited sources and a priori models–also known as ideologies.

In recent months, CEOs reported rising confidence in the economy, while consumers’ confidence slipped. A closer look at consumer confidence reveals that it fell by 28 points among Democrats but rose by 32.8 points among Republicans between January and February. So we can compare three changing predictions: those of corporate bosses, Democrats as consumers, and Republicans as consumers. Why do the Democrats diverge from the CEOs and the average Republicans?

The CEOs tend to have different values from the Democratic consumers. If everyone agreed that Trump’s tax policies will boost corporate profits but hurt the environment, CEOs would be more positive than representative Democrats.
The CEOs have different information from Democratic consumers. They are awash in data about their own balance sheets, plus business-oriented news. Democratic consumers are seeing negative assessments of Trump.
The CEO’s and the Democrats probably hold different mental models of such fundamental issues as the role of government and businesses in our society. Everyone holds such models, without which we cannot absorb new information.
Partisan identity is working as a powerful heuristic. Americans are using the party of the incumbent president to predict the economy. This may be unwise, but human beings must use heuristics, and a party label does convey relevant information if you combine it with a model of the society.
Some people act performatively. I would probably answer almost any survey question about Trump in a way that made him look bad, even if I didn’t completely believe the literal truth of my response. Some may even buy financial instruments to make a point–witness the popularity of Trump’s cryptocurrency.
Finally, the information that people absorb may reflect political agendas. Rupert Murdoch, Jeff Bezos, and other media barons want to affect public opinion, although their impact is uneven because news consumers are sorted ideologically.

This is not a simple model, but it does have a simple core. It is methodologically individualist, presuming that the decision-makers are human beings rather than classes or other abstractions. Regardless of their interests and social positions, these individuals are cognitively constrained and not primarily concerned with assessing the whole society. When they do make general assessments and predictions, these decisions reflect their mental models (which, in turn, often reflect their social positions), limited information, and concrete issues that are salient for them at the time. As a result, markets respond intelligibly to widely reported breaking news but have little predictive value.

the future, in utilitarianism and pragmatism

Posted on March 6, 2025 by Peter

In 1993, Cornel West wrote that “the future has ethical significance” for pragmatists. “In fact, the key to pragmatism, the distinctive feature that sets it apart from other philosophical traditions—and maybe its unique American character—is its emphasis on the ethical significance of the future” (West 1993, 111). He quotes John Dewey and Josiah Royce to that effect.

At first glance, this claim seems mistaken. What about utilitarianism, which teaches that an act, policy, rule, or institution is good to the extent that it improves happiness in the future?

For philosophers, utilitarianism is a type of consequentialism. In general, consequentialism focuses on the future by assuming that our responsibility is to make things better in the long run. Utilitarianism is the version that equates “better” with greater net happiness. Therefore, isn’t utilitarianism as much concerned with the “ethical significance of the future” as pragmatism is? And isn’t pragmatism a form of consequentialism?

I agree with West that pragmatism has a distinctive focus on the future. Utilitarians believe that we know today the criterion for evaluating future states. We already know what happiness is, and we will find out later whether our current actions promote future happiness. Our concern with the future requires predicting the effects of the present on outcomes that we value today.

In contrast, pragmatists presume that values will change as a result of continuous learning. We cannot know today the criteria by which the outcomes of our present acts will later be judged.

Dewey writes that the “present meaning of action” is the “only good which can fully engage thought.” He is against measuring this present meaning in terms of “a remote good” or “future good,” whether that “be defined as pleasure, or perfection, or salvation, or attainment of virtuous character.” This sounds like a focus on the present to the exclusion of the future. But Dewey adds:

‘Present’ activity is not a sharp narrow knife-blade in time. The present is complex, containing within itself a multitude of habits and impulses. It is enduring, a course of action, a process including memory, observation and foresight, a pressure forward, a glance backward and a look outward. It is of moral moment because it marks a transition in the direction of breadth and clarity of action or in that of triviality and confusion. Progress is present reconstruction adding fullness and distinctness of meaning, and retrogression is a present slipping away of significance, determinations, grasp. Those who hold that progress can be perceived and measured only by reference to a remote goal, first confuse meaning with space, and then treat spatial position as absolute, as limiting movement instead of being bounded in and by movement. There are plenty of negative elements, due to conflict, entanglement and obscurity, in most of the situations of life, and we do not require a revelation of some supreme perfection to inform us whether or no we are making headway in present rectification. We move on from the worse and into, not just towards, the better, which is authenticated not by comparison with the foreign but in what is indigenous. Unless progress is a present reconstructing, it is nothing; if it cannot be told by qualities belonging to the movement of transition it can never be judged (Dewey 1922, 281-2)

This is rich but abstract. For me, at least, Ruth Ann Putnam helps make Dewey’s view more concrete. She defines “inquiry” as a process that begins when we perceive a problem—something that requires action. “Values typically enter into the beginning of an inquiry on an equal footing with facts,” and they emerge on an equal footing as well, but potentially changed by being explored and compared by groups of people. She writes: “the facts are value-laden, and the values are fact-laden” (Putnam 1998, 7).

See also: explaining Dewey’s pragmatism; Dewey and the current toward democracy; a John Dewey primer. Sources: Cornel West, “Pragmatism and the Sense of the Tragic,” in Keeping Faith: Philosophy and Race in America (1993): 96-106; John Dewey, Human Nature and Conduct: An Introduction to Social Psychology (Henry Holt, 1922); Ruth Ann Putnam, “Perceiving Facts and Values,” Philosophy 73, no. 283 (January 1988): 5–19

Civic Studies reel

Posted on March 5, 2025 by Peter

Thanks to my colleagues at Tisch College, here is a one-and-a-half minute video that introduces Civic Studies as a major at Tufts and also an intellectual movement. The speakers are my students and colleague (and me). It gives a sense of our daily life around here, for which I am so grateful.

features of effective boycotts

Posted on March 3, 2025 by Peter

Classic boycotts have these features:

A goal: What the boycott aims to achieve.
A target: a decision-maker who is capable of doing something relevant to the goal.
A demand: something that the target could agree to do.
A cost: something that the target will lose if they don’t meet the demand.
Negotiators: Individuals who can credibly agree to stop the boycott if the target complies sufficiently.
A message: a description of the boycott that is aimed at relevant third-parties, such as observers who are undecided about the issue.
Accountable leaders: people who decide on the previous six points and are answerable to those who actually boycott.

I am not posting this list to cast shade on the national boycott that took place on Feb. 28. I participated! And some of these components may have been in place. For example, people who boycotted through “Black churches with longstanding social justice ministries (like Trinity UCC in Chicago)” did have accountable leaders who articulated a message.

Also, it is possible that the seven features that made the Great Salt March and the Montgomery Bus Boycott succeed are not required in every successful action.

Nevertheless, we must think critically about strategy, or else we are less likely to win. I would recommend attention to the strategies that were so important to Gandhi and King.

A teaching case that I wrote for Johns Hopkins’ Agora Institute about the Montgomery Bus Boycott is available free here and can be used by voluntary groups as well as by students in courses. At its heart, it asks people to think about goals, targets, demands, methods, and decision-making processes.

the rise of oligarchy

Posted on February 28, 2025 by Peter

The public money and public liberty, intended to have been deposited with three branches of magistracy, but found inadvertently to be in the hands of one only, will soon be discovered to be sources of wealth and dominion to those who hold them… They [the assembly] should look forward to a time, and that not a distant one, when a corruption in this, as in the country from which we derive our origin, will have seized the heads of government, and be spread by them through the body of the people; when they will purchase the voices of the people, and make them pay the price. Human nature is the same on every side of the Atlantic, and will be alike influenced by the same causes. The time to guard against corruption and tyranny, is before they shall have gotten hold of us. It is better to keep the wolf out of the fold, than to trust to drawing his teeth and talons after he shall have entered (Thomas Jefferson, 1785)

In current parlance, I think, an “oligarch” is someone with great personal wealth who influences politics, whether directly or via media. Oligarchs are not publicly traded corporations, and the threat they pose to democracy is different. The rise of oligarchs is also different from income inequality. It’s not about whether the top one percent or the top 10 percent of a country has disproportionate influence but whether a few individuals are “wolves in the fold”–literally making political decisions without accountability.

In fact, wealth inequality may have declined globally since 1980, but we now have about 2,500 billionaires who collectively own about $15 trillion, which is equivalent to the GDP of China (population 1.4 billion people). Some are uninvolved with politics, but a fair number either derive their wealth from government or buy political influence. I count at least 17 countries that have been directly led by billionaires in the last decade (not including the UK, since Rishi Sunak is only worth about $850 million). There are many other countries in which billionaires wield influence without holding office.

Above all, the President of the United States is a billionaire. His sidekick is more than a third of his way to being a trillionaire. The owner of The Washington Post is about a quarter of the way there.

This situation is not exactly unprecedented. John D. Rockefeller was worth about $1.4 billion in 1937. Measured in current dollars, his fortune rivaled Musk’s today. And the Rockefeller wealth transmuted into political power. Three descendants became governors; one was also a vice-president.

However, there are distinctively 21st-century ways in which private individuals sway national politics, here and overseas. Both Musk and Trump are celebrities with massive popular influence. They have millions of followers who treat their wealth as evidence of brilliance and superiority to government. They purchase impunity from almost all forms of accountability. And they enrich themselves at the expense of the government. As Jefferson writes, they “make interested uses of every right and power which they possess, or may assume.”

Google’s NGram tool suggests that the frequency of the word “oligarch” in printed books has risen 13-fold since the millennium (see above). This is just one sign that we are living in an age of oligarchy.

Carlo Crivelli, Lamentation

Posted on February 27, 2025 by Peter

In every painting entitled “Lamentation” that I recall or can find with a Google image-search, Jesus lies prone, usually with a shroud behind him, and Mary looks downward at his limp body. She usually has companions: most often Mary Magdalen, because the relevant Gospel passages (e.g., Matt. 27:61) place the two women together from the Crucifixion to the empty tomb. (The specific moment of lamentation is not explicit in the Gospels.)

An exception is Carlo Crivelli’s Lamentation over the Dead Christ (1485) in the Museum of Fine Arts Boston. Crivelli shows Jesus’ body propped up so that he appears to look down at Mary with a gentle expression. Jesus’ hand has fallen so that it is on the same level as the hands of Mary and St. John and is intertwined with John’s in a rotationally symmetrical pattern. However, Jesus and John display opposite emotions: Jesus calm, John in anguish. Mary Magdalen’s hands help to support Jesus’ thigh so that his right foot appears to take a step.

To my eye, the color of Jesus’ body stands out more from the rest of the painting in the original than in the photo above (supplied by the MFA). Crivelli makes Jesus look animated and yet strikingly pallid.

The garland of fruit is a common motif in Crivelli’s work and seems to represent a local tradition in the region where he worked, the Marches, of hanging fruit above religious paintings during festivals. Crivelli–who favored trompe-l’oeil to the extent that Susan Sontag cited him as an example of “camp”–has incorporated this popular tradition into the painting. The garland includes a cucumber, which is so common in Crivelli’s work that it functions as a signature. The whole structure looks like a throne in the Netherlandish painting that Crivelli often imitated.

By making Jesus sit and appear to look down on Mary, and by intertwining his hands with the others’, Crivelli asks us to ponder the relationship between the living and the dead. In the Gospel account, Jesus will soon rise again. Nevertheless, he has died. It would be as much of a theological error to ignore the reality of his death as to deny his pending resurrection. I think that Mary Magdalen may be tempted by the former error as she tries to make his body move.

Katharine Bradley (1846-1914) and Edith Cooper (1862-1913) were partners in life and work who published joint poems under the pseudonym “Michael Field.” One of their poems describes a pietà by Carlo Crivelli–this one, if I am not mistaken. It is similar enough to the MFA’s Lamentation that some of their words apply to both paintings.

For instance, Michael Field writes: “His body, once blond, is soiled now and opaque / with the solemn ochres of the tomb.”

The poem implies that Mary Magdalen had found the living Jesus attractive. But now, “no beauty to desire / Is here–stiffened limb and angry vein.”

Yet there is such subtle intercourse between
   The hues and the passion is so frank
      One is soothed, one feels it good
      To be of this little group
      Of mourners close to the rank,
Deep wounds ...

apply for the 2025 Institute for Civically Engaged Research (ICER)

Posted on February 24, 2025 by Peter

The American Political Science Association (APSA) Institute for Civically Engaged Research (ICER) is a four-day, residential institute that provides political scientists with training to conduct ethical and rigorous civically engaged research. Up to 20 scholars will be selected as ICER Fellows and invited to attend the 2025 Summer Institute. ICER Fellows will network with other like-minded political scientists, and together, learn best practices for conducting academically robust, mutually beneficial scholarship in collaboration with communities, organizations, and agencies outside of academia.

ICER is organized in partnership with UCLA Social Sciences and the Center for Community Engagement (CCE) at the University of California, Los Angeles (UCLA). The 2025 Institute will be held in person at UCLA in Los Angeles, CA on July 7-10.

To apply, please complete this form. Application deadline: April 20, 2025.

What is Civically Engaged Research?

Scholars in many disciplines are grappling with how to produce rigorous scholarship that addresses significant social challenges in collaboration with communities, organizations, and agencies. They strive to learn from those working outside of academia, to benefit from the insights of all kinds of groups and institutions, and to give back to communities rather than extract value from them. Civically Engaged Research (CER) is an approach to inquiry that involves political scientists collaborating in a mutually beneficial way with people and groups beyond the academy to co-produce, share, and apply knowledge related to power or politics that contributes to self- governance. Conducting robust community and civically engaged research entails a different set of practices than other kinds of political science research,

APSA’s Institute for Civically Engaged Research

ICER trains political scientists at all career stages in best practices for conducting academically rigorous, mutually beneficial CER. The Institute Directors are Peter Levine (Tufts University), Samantha Majic (John Jay College & The CUNY Graduate Center), and Adriano Udani (University of Minnesota). Together with practitioner experts and scholarly guest speakers, ICER Directors and fellows will explore key topics related to civically engaged research by discussing relevant readings, by analyzing specific examples of civically engaged research from political science and cognate disciplines, and by considering the research plans and ideas of institute participants. From 2019-2024, ICER was hosted by the Tisch College of Civic Life at Tufts University.

Topics to be covered

Expertise: what do political scientists uniquely contribute? What are the limitations of scholarly expertise? What types of expertise do those outside of academia have?
The ethics of collaboration: sharing of credit, funds and overhead, navigating IRB, dealing with disagreements.
Communicating results: to partners, relevant communities, the press, and directly to the broader public.
How to navigate common social science values and norms while doing civically engaged work.
Career considerations: publication and credit, tenure and promotion, funding your research.
Mapping the different and varied ways that political scientists engage through research and beyond

2025 Summer Institute

The Institute will take place on campus at UCLA from July 7-10. Approximately twenty fellows will meet each day for intensive discussions and workshops. Thanks to generous support from the Haynes Foundation, participants will have access to complimentary housing on the UCLA campus alongside scholarships available to defray costs of meals and travel. Applicants are expected to seek financial support from their home institution, but admission to the Institute will not be affected by financial need.

How to Apply

ICER is intended for advanced graduate students in political science and political scientists at any stage of their careers who wish to learn more and shift to integrate Civically Engaged Research (CER). It is not meant for scholars who are already experienced CER practitioners. Scholars may apply with a current or planned project that involves CER, or without an ongoing research project. All scholars with an interest in topics or approaches to civically engaged scholarship are welcome to apply. To apply, please complete the form located here. Applications are due by April 20, 2025. Applicants to ICER will be notified of decisions by early May.

For more information about ICER, please visit our website: https://connect.apsanet.org/icer/. If you have further questions about the institute, please contact APSA’s Centennial Center at centennial@apsanet.org.

a generational call to rebuild

Posted on February 20, 2025 by Peter

In January 2024, I wrote a post entitled “calling youth to government service.” I noted that many talented young people would vote to expand government, but few were interested in working in government. I posited both demand- and supply-side explanations. Young people do not know enough about public-sector employment, nor do they sufficiently value it. At the same time, the federal government has been very bad at recruitment and retention.

Now, as someone who advises many talented and idealistic undergraduates, I cannot encourage them to apply for federal jobs.

We don’t know how long “now” will last. Bad-case scenarios envision an extended period of crisis and the kind of kleptocratic authoritarianism that will keep federal (and some state) agencies from functioning appropriately for years.

Nevertheless, it is important to begin envisioning a rebuilding phase, even while we also strive to defend current institutions. The opportunity to rebuild could begin as soon as two years from now. At least, that is when presidential campaigns will launch, and one of their core messages could be rebuilding the government. Meanwhile, today’s college students and recent graduates can be obtaining further education or experience in local government or the private sector with an eye to joining the federal civil service in 2028.

Besides, having a positive vision can change the political situation in the present. Optimism is important for morale. We should be struggling to make change, not just to block threats.

Donald Trump and Elon Musk are already educating Americans about the value of the federal government. In the latest CNN poll, substantial majorities of Americans oppose “laying off large numbers of federal government workers,” “shutting down the agency that provides humanitarian aid in low-income countries,” and (by the widest margin) “blocking health agencies from communicating without approval from a Trump appointee.” Since foreign aid generally lacks public support, and the Trump/Musk layoffs have yet to affect many voters directly, I suspect that subsequent cuts will be even more unpopular.

Many of my recent predictions have been wrong. I thought that some of the Biden-era spending would be popular, and I thought that Musk’s layoffs at Twitter would break that platform. Nevertheless, I predict that mass federal layoffs will raise awareness of the value of the federal workforce. Meanwhile, the civil service already needs hundreds of thousands of new workers to replace retiring Baby Boomers, and Trump’s layoffs will create many additional vacancies.

Under these circumstances, how should the federal civil service be rebuilt? I would posit these principles:

1. We need an eloquent generational call. Today’s young people can reconstruct their government to address social and environmental challenges. This is their historical calling. Government service is an essential means to the ends that many of them care about, including saving the earth from climate change.

2. The paradigm of service should be a full-time, professional career in the government. I am not against social entrepreneurship or temporary community service, but the civil service is much larger and more important. We do not need alternatives to government careers nearly as much as we need more and better positions within the civil service (federal, state, and local).

3. The goal is not to return to 2024. The federal workforce had well-documented problems before Trump was inaugurated. Although we must tolerate some degree of sclerosis and waste in any large system–and although current federal workers deserve credit for much valuable work under difficult circumstances–there was already a need for change. Young people should be recruited to rejuvenate and reform federal systems, not just work in them.

4. But any changes should be scrupulously legal. Rule of law is a fundamental value, and nowhere is it more important than in the executive branch, which monopolizes the legitimate use of violence in our society. The federal government can kill, imprison, monitor, or financially ruin people. Its every action must be governed by statutory law. This means that rejuvenating the federal civil service must proceed within the clear statutory authority of the president, unless new legislation passes. (And I am not expert enough on this topic to recommend legislation.)

5. Federal agencies already do some work that I would label “civic”: collaborating with groups in civil society, convening citizens for important conversations, and educating (not propagandizing) the public. But they also (inevitably) play many roles that are bureaucratic, technocratic, and managerial. A rebuilding effort should emphasize the civic aspects of government, because these are valuable, they can appeal to younger people who are skeptical of bureaucracy, and they can reinforce the public legitimacy of the executive branch. If you want people to trust experts, give them opportunities to work with experts on common problems.

The overall message should acknowledge the value of the institutions that we have built so far–and the service of our current and past public sector workers–while envisioning new and better ways of governing.

nostalgia in the face of political crisis

Posted on February 19, 2025 by Peter

Amid the barrage of bad news about US politics, I frequently find myself nostalgic.

Sometimes, it’s for the recent past–for last summer, when we were on a family vacation and Kamala Harris seemed to be surging; or the eve of last fall’s election, when I spoke dispassionately about polarization at American and Colgate universities; or even last month, when we thought that Trump might prove more feckless than reckless.

Other times, my nostalgia reaches further back, to the period between the fall of the Berlin Wall and 9/11, when this white, male, college-educated, fairly moderate American felt that the republic was secure and the public’s values were evolving for the better with each new generation. That underlying optimism was one reason I spent most of the next 20 years focused on promoting youth civic engagement.

If I wish to return to when I felt better about politics, that means that I want to go back to being naive; and we shouldn’t want that for ourselves. Nor is nostalgia reliable. In the past, not everything was dappled sunlight on a late-afternoon lawn–certainly not for people less fortunate than me.

Near the beginning of The Unbearable Lightness of Being, Kundera’s narrator says that everything is bathed in nostalgia in the face of dissolution, even the guillotine. He’s discussing Nietzsche’s trope of the Eternal Return. If we believed that the French Revolutionary Terror would recur cyclically, we would fear it. Because we know that it has passed, we bathe it in nostalgia. Our deepest fear is the passage of time, because events do not recur endlessly for us. They move permanently into the past as our time runs out.

Nostalgia can be a way of grasping at the self, trying to trap that ghost in a display case. As such, it is better avoided, regardless of its cause. As for political nostalgia, it is a common ground of reactionary politics.

A related word is “envy.” In his Theses on the Philosophy of History (#2), Walter Benjamin notes that we never envy the future. He says that happiness that makes us envious is connected to our past. We seek redemption by wishing to recover (sometimes from other people) what we already experienced. A worthy redemption, however, requires a change for the better. Political progress brings a better future into the present and thereby imparts a new meaning to what happened in the past. “For every second of time [is] the strait gate through which Messiah might enter.”

This is a pretentious and roundabout way of saying that what matters is not what used to be but what we do now to improve the world that we are in.

the theory of the Biden environmental policy may be proven right

Posted on February 13, 2025 by Peter

The Washington Post mentions “Skylar Holden, a cattle farmer in eastern Missouri,” who is not receiving $240,000 in federal funding that he was awarded under the Environmental Quality Incentives Program because Trump froze it. The headline is: “Farmers [are] on the hook for millions after Trump freezes USDA funds,” In The New York Times, Michael W. Webber describes the broader pattern: “Mr. Trump’s G.O.P. rank and file might not let him choke off the money flowing to Republican districts; a majority of federal clean energy investments for wind, solar, batteries and clean tech factories are going to those regions.”

This was the design; the policy was built to survive political opposition. I believe the authors of the the $739 billion Inflation Reduction Act and related bills (provisions in the $1.9 trillion American Rescue Plan and the $280+ billion CHIPS Act) held the mental model shown on the right side of the image that accompanies this post.

You could read the image by focusing first on the teal loop. By burning carbon, people cause both good and bad outcomes. The net result is bad; probably around $185 of damage per tonne of carbon dioxide emissions (Rennert et al 2022), which I think comes to about $6.8 trillion per year for the world.

Governmental policies could reduce that social cost. A big carbon tax is an example. However, virtually no governments do enough. The reason is that carbon produces a set of interest groups–some environmental ones, but many stronger groups that are committed to cheap carbon. Not all of these groups are elite. They include working people in carbon-intensive jobs and their elected representatives. The carbon economy also generates public opinion, including concerns about climate change as well as deep support for carbon-intensive jobs and products. The interest groups and public opinion influence governments to adopt the policies that they enact. For the most part, it is a vicious circle.

To create an alternative loop (shown in light green on the left side of the diagram), Biden and the Democratic Congress basically poured a lot of money into green industry. Their goal was to create new interest groups that would demand continued funding for green technologies as well as other supportive policies. Just as conventional car owners demand cheap gas, electric car owners will demand charging stations. Public opinion would also evolve so that more people would support environmental policies and recognize their economic benefits. Ultimately, once the green loop was bigger than the teal one, there would be political support for pushing carbon emissions down.

The Biden policy probably lowered carbon emissions substantially. But it had no positive effects on public opinion. As I have discussed before, vast expenditures received startlingly little attention. Proponents were either unwilling or unable to defend the policy. The president of the environmentalist Sierra Club, Ben Jealous, emphasized abortion when he advocated for Harris. Even the names of the Biden bills hid their purpose. For instance, the Inflation Reduction Act had nothing to do with reducing inflation and may even have raised it somewhat. In short, the pathway to policy through public opinion failed, either because the messengers barely tried or because no one could have persuaded voters about such matters.

However, the other path shown in green may still work. The Biden bills created hundred of thousands of post-carbon jobs and subsidized many farmers and business owners. Disproportionately–and by design–these people live in Republican states and districts. They are now a powerful interest group.

Clearly, the president and his team will try to wreck what they call the “Green New Deal.” But if the green loop holds, they will fail.

Source: Rennert, K., Errickson, F., Prest, B.C. et al. Comprehensive evidence implies a higher social cost of CO₂. Nature 610, 687–692 (2022). See also a trillion here, a trillion there, and pretty soon, you’re talking real money; tracking the Biden climate investments; a different way in which the 2024 election is a failure for democracy etc.