Chartbook #61: Update - RIP a climate revolution in fiscal policy?
It seems that history was burying the climate revolution in fiscal policy just as I was diagnosing it.
Literally as I was doing the final edits on Chartbook #61 this morning, Joe Manchin was on Fox TV, announcing that he would not vote for the Build Back Bill.
Clearly the talks were tough. But I hadn’t heard rumors that he was about to do this. Gut punch.
Here is the FT view.
Along with everyone else, I’m reeling.
Manchin’s position is rooted in West Virginia circumstances (see Chartbook 46)
Back in November, folks close to the process felt confident of Manchin’s vote after all the concessions that he had extracted.
Counting on his vote was key to getting the Democratic Party Left to support the inadequate bipartisan infrastructure bill.
Inflation may have provided Manchin with the excuse he needed to shift position.
The New Statesman piece highlights the inflation issue and offers a fairly grim assessment.
But if this really is it, it is disastrous for the Biden admin. A truly brutal denouement.
Credit to Mark Blyth. He was calling this on a conference call a few weeks back.
The assessment of the policy process as such, still stands. It may still be worth thinking about the world we seem to be losing.
For now, all bets are off.
Apologies to readers for the poor timing.
From the viewpoint of many of us in the Midwest, totally not surprising and I think overkill to say that this is the end of the world as we know it. Manchin already voted for more than $5T in new spending in the last ten months. A lot of disconnect between what some perceive as governmental overreach in DC and underperformance locally, where crime is out of control in many high-tax cites--I live in Chicago. Climate change is really all about energy, and based upon corporate and investor sustainability goals, clean tech innovations will continue with or without the government. Long term, demographics rules all and fewer people and slower growth in coming decades will make our current levels of debt unsustainable. There is no acceptable level of inflation that can make that problem go away. And now a new round of Covid could mean fiscal support will be needed to help those affected. So not a disaster, but perhaps a time to reassess priorities and realistically survey what the American people want-and can afford.
This was always the endgame. Anyone who could not see this coming has been ignoring months of clear evidence.
Part of the plan was always to drag the "negotiations" out as long ago to expose the fact that top-level Democrats were always willing to sell out the promises they made to voters. Part of the plan was to get Biden, Schumer and the rest of the Dem establishment to focus all their energy on destroying the possibility that Dems that cared about the infrastructure bill (and voting rights, the climate, etc) could mount any countervailing pressure on belalf of those things. Part of the plan was to make sure that the establishment Dems never pointed out the massive corporate funding behind Manchin and Sinema's gamesmanship and the MSM narratives about "centrism" and that legislation that clearly had majority popular support "went too far: