Flows and Chokepoints, with Tim Sahay

This transcript was automatically generated and may contain minor errors.

[00:00:00] Sound on Tape: This podcast is presented by Convergence, a magazine for radical insights.

[00:00:08] Tim Sahay: We started to trade with China. We entered them into the WTO in the two thousands with the Clinton presidency, flood of cheap goods from China, displaced factory jobs in America. Those jobs either went to Mexico. Or they were offshored in China. And what, whose role is really minimized in all of this?

[00:00:25] American capital’s role. Private equity’s role. You know, your local landlord’s role. You know, the Wall Street crash role. American militarism role. All of the stuff about our own domestic arrangements is shunted aside in favor of You know, the red enemy out there.

[00:00:48] William Lawrence: This is the Hegemonicon podcast, where we’re investigating the workings of power. What is power? How does it work? Who has it? What are they doing with it? How the heck do we get it? And other small questions like that. I’m your host, William Lawrence, and I’m an organizer from Lansing, Michigan. Currently I work with the Rent is Too Damn High Coalition, an alliance of tenant unions and housing justice groups across the state of Michigan.

[00:01:17] Formerly, I was a climate justice organizer for 10 years, including as a co founder of Sunrise Movement, the youth organization that put the green new deal on the political map. Just a quick note. We recorded the interviews for this season between May and July. Now we’re releasing them in August and September.

[00:01:34] Timber. A lot has happened in the world in between those times, such as Biden dropping out of the race. So if you hear us speaking with blissful ignorance of what was to come, that’s what’s going on. But I think that the conversations are going to hold up very well for our tasks of building an internationalist left in the months and years to come.

[00:02:13] Hi folks. Good morning. Good afternoon. And welcome back to another episode of the hegemonic on podcast. I am your host, William Lawrence recording from Lansing, Michigan. And today I’m very glad to have back on the show. Tim. So hi, Tim is the co editor of the poly crisis at phenomenal world and the co director of the net zero industrial policy lab at John Hopkins university.

[00:02:38] Tim, welcome back to the show. So we’re in the midst of a series of episodes on internationalism, and we’ve been speaking about the post unipolar world order, heightening tensions between the US and China, the war in Gaza, the very spotty, So Not completely vacant track record of internationalism on the U S American left and what all of this means for those of us seeking to build organizations and social movements to change the world.

[00:03:14] But the problem is the world is already changing all the time. So how to change a changing object. That’s the problem of analysis to try to understand how it’s flowing, how it’s moving, how it’s evolving, and then where we might be able to intervene. So I thought. You, Tim, could help our listeners by, you know, really sketching in a rough picture, no small questions, a rough picture of the global economic terrain.

[00:03:38] What are the key flows of goods and finance that define the global economy? What crises in these arenas are pending or already unfolding? And what are the choke points, if we can even identify any, that could be leveraged? By justice seeking subjects from below, these are the sorts of questions that you ask at the poly crisis project, which has a great newsletter, by the way, and everyone should subscribe to it and in your other research.

[00:04:05] So I’d like to begin with financial flows, the terms of investment and debt, you know, four years ago. Even three years ago, many people in our circles were talking about you know, a global green new deal, a massive push for green industrial policy around the world that would bring the global South along and remedy global injustice rather than leaving the South behind.

[00:04:27] Now, it’s clear that the slanted and unequal terms specifically of capital flows between the North and South is making this impossible. Of course, inflation has been a huge story under the Biden administration here in the U. S., but the rest of the world is experiencing even more severe financial disruption.

[00:04:46] Could you elaborate on this, including the role of the International Monetary Fund, the Federal Reserve, Northern led financial institutions? centers that are in fact driving politics in nations all over the globe. 

[00:05:02] Tim Sahay: Yeah, thanks. This is a story that we’ve been really tracking at the poly crisis over the course of the last 18 months, since we have started.

[00:05:10] And the basic story is an highly unequal, highly hierarchical. world economy. And that economy is defined by, as you said, the flows of finance. Yes, but also the flows of production, where things are made, you know, who gets them first. There’s always a sort of a queue of who’s in first. who gets products first and it’s basically based upon your ability to pay, right?

[00:05:35] This is one of our standard critiques of capitalism. Yes, it provides an abundance of goods, but not everybody gets it. And so the world economy can similarly be seen in much the same way that we think about, you know, classes or different groups of people in a society where poorer people are not getting Housing, even though there’s plenty of houses, they’re not getting food to eat, even though there’s, you know, loads of overproduction of food.

[00:06:02] So the price of goods is set by the price of money, the ability to borrow in the international system. And all of these were really brought home to us with the vaccine apartheid. then was brought home to us by the energy shortages across the world. And in both of those stories, there’s an underground story of different people in the world have different ability to borrow and different ability to pay.

[00:06:30] So what happened at the vaccine apartheid? You know, why were we so upset with people in the global North? People like us having multiple jabs of the vaccine, while vast Chunks of the planet did not receive a single vaccine. And the basic question there was something was very scarce. very few vaccine doses.

[00:06:52] And the global North basically said, we are first in the queue. We are going to bid up the prices and we are willing to pay hundreds of dollars per shot to get it for us and our citizens. And therefore that creates a shortage for everybody else who, you know, dies by the millions that, that, that was what it means to live in a highly hierarchical, unequal world economy.

[00:07:14] It’s a question of life and death. Same thing played out. Over the course of 2021 2022 with energy shortages and those energy shortages, you know, simultaneously caused by the reopening of the economy after covid. And so a lot of the energy use that had plummeted during the 1st 18 months of covid suddenly had to ramp up.

[00:07:35] back up and it couldn’t ramp up quickly enough. And then we had sanctions against Russia, a major energy producer. And so that really screwed up the world energy markets. But again, the same thing, Europeans, for example, were at the front of the queue. They were able to borrow money. A lot of the governments of Europe borrowed money to pay and put money into their citizens pockets so that they could get some energy.

[00:08:02] And where did the shortages appear? They appeared in Pakistan and Bangladesh and Sri Lanka, in a host of countries where it was literally lights out. So not deaths, maybe in the sense of the pandemic. But lights out and blackouts across the developing world, suffered by millions and millions of people for weeks on end.

[00:08:21] You know, people have been paying attention to the stories and from South Africa, it’s absolutely insane, right? Like a well functioning country just tipped over into chaos. And we’ve had you know, blackouts for 10, 20, 30 hours per week. Similarly in Sri Lanka, similar, similarly in Pakistan.

[00:08:40] And again, They could not afford to pay for gas prices. So literally shippers that were sending gas to developing countries broke off their contracts and instead took that gas to the Europeans who were willing to pay a higher price. So again, it’s just basically the same story, right? Some shortage of good.

[00:09:02] Some people have bigger ability to borrow. And then the question of like, where does the Fed come into all of this? Where does the IMF come into all of this? Is the Fed sets the price of money. The Fed sets the interest rate. That’s the one thing. That’s the one policy tool that they have.

[00:09:21] And they have been Delegated that responsibility to set the price of money by the U S Congress that says, look, you set the price of money independently from the politicians, but we want you to do it in a, to meet two targets that this is the fed so called dual mandate, keep full employment, try and keep employment as high as you possibly 

[00:09:44] William Lawrence: can in the U S 

[00:09:46] Tim Sahay: in the U S.

[00:09:46] domestic full employment in the United States and to keep inflation rates as stable and low as possible. We’ve given you a target to achieve 2 percent inflation rates. And that’s basically what the Fed you know, ever since the Volcker shock of the 1980s has, you know, when it jacked up interest rates and slayed inflation.

[00:10:09] Slayed the inflation of the seventies and the eighties, but got massive unemployment. This is a story of the rust belt in the United States. You know, very uneven impacts upon the United States where the manufacturing in upstate New York and the Midwest basically went into a tailspin. You know, we had loads and loads of newspapers, magazines, you know, people in the 1980s were furious at the Fed for.

[00:10:36] destroying manufacturing in the country. And so the Fed knows that it has a very powerful tool and it has been given a mandate to to achieve full employment and inflation. But when push comes to shove, they will choose the inflation mandate, not necessarily the full employment mandate. So that was the Fed’s response to high inflation from 2021 to 2020.

[00:11:01] Onwards. And we can get into, you know, where that inflation came from. So the fed basically jacked up interest rates and when it jacks up interest rates, as the interest rate goes up, every capitalist in the world. Decides who has to decide what to do with their money every single day. You know, they say, let’s just spark that money with the U S treasury because the interest rate now is 5%, 6%.

[00:11:29] Why should I put my money into any productive enterprise into anything else in the world? You know, investing in Sri Lanka or Pakistan or Bangladesh or wherever I should just pull my money out of the global South and push it up to the where I will be guaranteed a safe asset. These things are called the safest assets in the world, the US treasury.

[00:11:51] So what basically ended up happening as a fed tries to slay inflation by hiking up interest rates a wall of money sloshes out of the rest of the world and comes back and is being held in the global north. And that’s what causes those shortages. That’s what causes Dead explosions in the south.

[00:12:13] That’s what causes a massive amount of sort of Unemployment and global recessionary tendencies in, in southern countries and then has, you know, extraordinarily real impacts on the lives of citizens. You know, just yesterday we’ve been seeing Kenya in a social and political explosion where, you know, people haven’t had food to eat.

[00:12:36] This is one of the countries that has suffered dramatically from from the explosion of debt. They have to go to the IMF. Once they go to the IMF demands a program of structural adjustment, right? Like we know these phrases and we think that this is just something that happened in the 1980s, you know, but it’s back in an immense way in the world economy right now.

[00:13:00] William Lawrence: Yeah, I saw Van Jackson, who we also had on the show recently posted on Twitter yesterday, said who can speak of a post neoliberal world order when you have a picture of Kenyans demonstrating in the streets against the IMF and the IMF is one of the targets of their ire. And it’s the result of this structural adjustment and the loan terms that are being imposed.

[00:13:23] What is the. Effect of just, you do a lot of work with organization. 

[00:13:28] Tim Sahay: Can I just say one thing? Okay. So this sounds okay, a bunch of lefty people are upset about the rest of the world, right? Like, why should I care? One of the really interesting things is that the IMF, you know, and the world bank were created for precisely these kinds of moments.

[00:13:42] They are explicitly internationalist organizations explicitly designed to manage crisis. So the job of the world bank is to get money in for development projects and poverty reduction projects in the rest of the world. The job of the IMF is to act to stabilize the crisis. So that’s how they were created in the 1944 bread and woods conference.

[00:14:06] These are explicit institutions to manage crises. And so a good question for us to ask is what are the people who run these institutions and think about them? What are they saying about this current crisis, the world crisis that we are in right now in the early 2020s? So you have somebody like Larry Summers, you know, a noted radical economist.

[00:14:31] No, Larry Summers, right? He was a former secretary of the treasury. And what does Larry Summers, and you know, our favorite sort of punching bag on the left. And what does Larry Summers says? He wrote out this piece at the IMF spring meetings in Washington, D. C. that I had attended to understand how we need to be responding to this crisis.

[00:14:50] And Larry Summers puts out an entire report on how to reform the World Bank and the IMF. And he says, you are failing at your one job. This is the one job we have given you. Act to stabilize countries during A crisis when the Fed increases interest rates, money stashes out. The IMF and the World Bank should be giving more support.

[00:15:13] They should create these safety nets for countries. And he says, you know, for the, this, I’m just going to quote him from this piece called the world is still on fire. This is from April of 2024. And he says, the world is facing the worst five year span in three decades. High interest rates have left developing countries crushed by debt.

[00:15:33] Half of the poorest economies have been recovered. To where they were before the pandemic, growth is weak across the world, inflation remains high, and behind it all, the thermometer keeps inching up. Last year was the warmest on record as it is, as it has been true of nearly every month for the last 11 months.

[00:15:52] And he says, for the last several years, world leaders have made big promises. They’ve laid out bold plans to mitigate the climate crisis and help poor countries. They’ve said that the World Bank is going to transform itself to work on climate change and that. The money, multilateral system would get new money.

[00:16:08] They would lend more aggressively to the developing countries. There would be debt relief. And he says, despite all of this bold rhetoric, 2023 was a disaster in terms of support for the rest of the world. And he says, Like the global financial system has ended up extracting money out of the global south during this time of need.

[00:16:30] They’ve extracted 68 billion more in interest payments than they lent. And so he’s just like the whole formula of a safety net, the whole formula was we give you billions and you convert it into hundreds of billions for investment. That was the catch phrase for the world bank. It said, we’ll take a little bit of cash.

[00:16:50] public money, mobilize a lot of private sector money from capitalists, and then we get this project of climate investment in for developing countries. And he said that entire formula of turning billions into trillions has become, we give you millions, And we take billions out. Okay, so this is coming from an absolute core of the system where they basically say we are failing.

[00:17:16] We are failing at doing the one job and we are in desperate need of reform. 

[00:17:21] William Lawrence: So what is the political impact on this in the nations of the South who can see that there are promises that have been made that are now. Being broken or the terms do not turn out to be what was promised. How does this kind of drive the push towards a new non aligned movement, a new multipolarity people who are just simply sick of dealing with the arrangements that the U S and.

[00:17:44] Europe have to offer and are now seeking partnerships with other powerful countries in order to meet their needs for development. 

[00:17:54] Tim Sahay: Yeah. I think what we’re basically seeing is that every country is now non aligned in some way. So we had the bulk of the world’s countries being non aligned with Russia’s invasion of Ukraine.

[00:18:06] They refused to join sanctions on Russia. They continue to buy food and energy and fertilizers and metals and military goods from Russia. You know, that’s a large chunk of the world. Then we have seen the same thing with the Gaza. With Israel’s war in, in, in Gaza, a lot of countries are non aligned in the sense that they are not supporting Israel.

[00:18:28] They’re supporting the Palestinians. And so basically the world is split into competing camps where countries make their own self interested kind of choices. And what developing countries are basically saying is look, at the end of the day, we want. To support we are, we have a goal of sustainable development.

[00:18:48] We do not want to be as poor as we are. We want to get rich like the rest of you. To do that, we are going to find partners in the world, whether it’s Russia, whether it’s China, whether it’s the U S whether it’s Europe to support our goal of sustainable development. So we are going to get technologies to get future growth from either one of you.

[00:19:07] And we’re going to play everybody off from each other. We are going to seek. Advanced military hardware from again, from either one of you, because our goal is to have security, we’re going to seek the upper hand when we’re doing trade negotiations with Europe, US or this new Russian and Chinese block, we’re going to seek essential commodities that we need to keep our countries running, whether it’s food, Food, energy, metals, fertilizers.

[00:19:32] And for that, we need to keep doing business with the Russian Chinese block. And then for that dollar debt crisis that I just described with the IMF and the world bank, they said, look, we need to restructure our debt so that we are not paying so much in interest payments right now. And we protect some of our budget.

[00:19:49] So that it doesn’t go for interest payments, but is instead spent on our people, on poverty reduction, food, energy, you name it. And therefore we need to restructure our debt. And so if we are in debt to both Western Wall Street banks, to the IMF, to the World Bank, we are in debt to the Chinese. We’re going to play everybody off and try to make sure we get the best possible arrangement so that we are not spending so much in interest payments to anyone.

[00:20:16] So that’s what. Basically non alignment means it’s not a phrase. It’s not something that just happened in the past in history, but it’s something that is very actively happening in these negotiations over essential terms for the future world order. 

[00:20:35] William Lawrence: And this isn’t something that. Exactly snuck up on us either.

[00:20:40] This has been a crisis that has been foreseen, especially in the context of the energy transition, the way everyone says, this is the great new area of global capital growth. It’s also necessary in order to avert the worst of the climate crisis. We need to transition the whole energy system and countries in the South.

[00:21:01] The, I think it was a group of. 77 nations that are the less developed nations that negotiate together at the UNFCCC climate talks have been arguing for decades that, you know, sustainable development for the South would require debt relief, it would require concessionary loans, and it would require technology transfers from North to South in order for the South to develop in a sustainable manner.

[00:21:26] Because the reality is that we have dramatic inequalities of wealth in the world system, and it takes wealth in order to invest. And so this is a necessary part of the process. Now, I think that these arguments it’s worth noting have, you know, made headway over the years through international fora, like the UNF triple C and Points you know, the notion of climate debt transfers or even have been written into international climate agreements and arrangements have been made to create a a sustainable development fund.

[00:21:55] And that would provide a vehicle for transfers from north to south. But now the reality is that very little meaningful concessions have actually been happened. Funds have been created, but not meaningfully funded, and there still remain too many terms. We’re still just. In short very far from the sort of a magnanimous justice seeking transfers that would be required in order to realize this vision that people in the South have been asking for decades and now, which are, you know, acutely needed in the present because the energy transition is on and it’s time to make investments.

[00:22:27] What would it look like For the North to actually be taking these demands seriously and what is happening instead, what are the ways that, you know, strings are still being attached or promises are being unfulfilled and then what is going to happen with the energy transition or lack thereof in the South, if these kinds of transfers and climate debt payments don’t happen.

[00:22:54] Tim Sahay: Yeah. I think the main thing is that the. Climate or the energy transition requires countries to actually invest, right? They actually have to completely invest in their public transit and their energy and their buildings and their housing and the agricultural system that just requires a lot of money.

[00:23:13] And that kind of goes back to the thing that we started out with some nations have money and some nations don’t, or particularly when interest rates are very high, your ability to invest goes down dramatically. Because you have to borrow at a much higher rate to invest. So how did we do climate investments in the United States, it’s very instructive, right?

[00:23:35] Like we in the IRA in the IJA, in, in a lot of the biotechnomics builds, you know, we first. Got money into people’s pockets in the American rescue plan and in the cares plan. That was about 5 trillion of federally borrowed money injected into people’s pockets and paid for, you know, the federal government paid for unemployment insurance.

[00:24:01] It paid for child tax credits of, you know, 300 per month per family. So a lot of money and, you know, the famous stimulus checks and so on. So a lot of money was borrowed to put into people’s pockets to maintain their spending power for sort of basic necessities and keep the economy. Going during the pandemic and then for the IRA and IJR, you know, these were tax funded bills, right?

[00:24:26] So we taxed the rich, we closed some of the corporate loopholes and we made sure that there was, you know, over a trillion dollars of spending in in IRA and IJR together. So that’s basically the formula by which other countries. need to be spending on climate. They need to be able to tax the rich.

[00:24:47] They need to be able to borrow money at cheap rates. And in both of these two ways in which you can fund climate investment, borrow or tax, right? In both of these two ways, developing countries are at a massive disadvantage. Now, why is that? Can they tax the rich? What do you think they’re rich are doing?

[00:25:06] They’re opening accounts in New York, in London, in Amsterdam, in, you know, the Caribbean islands in the tech, in the Swiss banks. These are tax havens who runs, operates, manages, regulates the tax havens, private banks in the north regulated by. The U. S. Congress, you know, the European parliaments and so on.

[00:25:30] So what do developing countries say? Look, we need to be able to tax our rich. Can you please close these loopholes that are the elites are evading the tax system and going into your bank. So please close these loopholes. So that’s one big demand coming from the South. And they say, look, we understand that we cannot do this by ourselves individually.

[00:25:56] You know, we can’t just figure out where the rich in my country are squirreling away their wealth. And then let’s just do a bilateral negotiation with the Americans or the Swiss. No, we need to collectively figure this out. So that’s what the G77 countries that you mentioned, which are not 77, it’s about 130 countries.

[00:26:13] This is, you know, a block that’s grown together. And they said, we need to coordinate together and our demand. And, you know, the Biden administration and the Europeans. They too want to have this debate of how do we close tax loopholes? How do we regulate our tax savings? But they basically say, let’s have this debate inside the OECD.

[00:26:35] The OECD is the club of rich countries and to which poorer countries. the G77 response. Wait a second. Wait a second. You guys run, operate, manage, regulate the tax haven. So it’s like putting the fox in charge of the henhouse. Like we don’t trust you to regulate the tax havens. So they say, let’s put this in an independent place, the UN, which is one country, one vote.

[00:26:58] So that’s a democratic space for us to negotiate over you know, getting fairer tax arrangements. And then the second and then, you know, and that’s going to be difficult, right? Because the OECD doesn’t want to give up this ability to control the banks and, you know, maybe they are in bed with the banks themselves, you know, for all the reasons that we might think, but there’s a very serious negotiation to be had about sharing of tax revenues.

[00:27:27] based upon footloose multinational corporations that squirrel away their wealth in various tax havens and don’t pay taxes to the United States, right? This is what Bernie keeps saying. How is it possible that billionaires and corporations are paying less taxes than an ordinary person?

[00:27:43] Like how, and clearly it’s because they use the legal tax rules that accountants have set up that Congresses have set up around the world to basically legally hide their wealth. So this is a very serious negotiation. That is. ongoing to which the North has very shamefully said, no, it should all be kept inside the OECD.

[00:28:03] We do not want to do this in a multilateral space. And then the second question of can they borrow? They say lower your damn interest rates. How the hell are you? Do you expect me to borrow? If I’m a country, you, the fed or you, the Europeans are borrowing at rock bottom interest rates. We are paying sky high interest rates to borrow.

[00:28:25] So just for the same reasons why Americans prefer interest rates to be low. Why do we prefer interest rates to be low? It’s so that we would like to borrow. For houses, we would like to borrow for a car as we would like, you know, and so we prefer interest rates to be kept low. This is why high interest rates end up being so unpopular.

[00:28:47] Because people’s market rates go up people’s, you know, car leases payments go up and that just eats away into the rest of your budget. for everything else. Interest payments eat into everything else. And that’s the same, that’s basically the same demand from the South. If there’s one thing you could do in the North is lower your interest rates.

[00:29:06] Two, you need to figure out if we want to be able to borrow to spend on responsible things. We don’t want to be borrowing and spending. Spending on white elephant projects, forking over more money to our crony capitalists, we want to be spending on basically public spending for public goals, whether it’s development, whether it’s climate, whether it’s health, whether it’s education, we want to be able to spend on useful things that would improve our country’s productive capacity, our people’s prosperity, education, health, that would allow them to move up in the world.

[00:29:41] and do better over, over the coming decades. And if we are not allowed to do those things right now, then we will all slide back and we will slide back into a lost decade for our countries, where we would basically become poorer. Exactly what Larry Summers is saying. You’ve become poorer since before pandemic, before 2019.

[00:30:01] And these are countries that, you know, depending upon the country in question earns less than 10 a day, an average citizen. For people to get poorer from that is basically a massive assault on public health, a massive assault on living standards. And okay, so they say we need to be able to borrow for, That to happen sustainably, again, the global not sets the global interest rate.

[00:30:27] That’s just the way the world money system works. As I said, it’s deeply hierarchical and world money basically dances to the Fed’s tune. If the Fed pushes up interest rates, money sloshes out of the rest of the world. So the Fed is the only sort of sovereign central bank that makes policy. Every other central bank in the world is a taker of policy.

[00:30:51] In other words. They are responding to the Fed. If the Fed rises interest rates, they have to increase interest rates as well. Otherwise, all of the money from their domestic elites would flow out. So again, two things, borrow and tax. I 

[00:31:04] William Lawrence: want to really just put a pin on this for the listeners. This has been one of the biggest revelations that I’ve had in the last two to three years of coming out of a very Domestic us centered focus on climate policy in my climate organizing, and then coming and doing a lot of research to try to see how this stuff actually plays out on a global stage.

[00:31:25] The role of the fed, it sounds like Tim, you, this is your life. You live and breathe this, but for those who don’t. Cannot be understated. You said this is the only sovereign central bank in the world. The entire world has to march to the beat of the fed sets. And when the fed raises or lowers rates, the effect is either it is walls, tidal waves of capital, either being released from behind the dam to be loaned or borrowed at a favorable rates to the South and to allow for development and investment.

[00:31:59] Or it’s that sucking sound of all of the money coming back into Washington, DC and New York city and into the hands of the U S financial class. And so there’s a lot of other layers to this because then there’s a contradictory mandate of the fed’s global role. It has no mandate over its global role only to manage inflation.

[00:32:19] But it’s mandate to manage inflation comes into conflict with the fact that it has all these other. De facto commitments. It’s not commitments, but it’s responsibilities. It ought to understand and uphold on the world stage, but there’s no accountability whatsoever in the system on a structural basis.

[00:32:37] Tim Sahay: Yeah, but you could think about, you know, what happened during the crash, right? The 2007, 8 crash, you know, many of us, at least me you know, I graduated into the 2008 crash. There’s absolutely no jobs to be had. You know, almost everyone that we knew went back to living with their parents.

[00:32:54] It was just like an awful self inflicted crisis of transatlantic banks borrowing money in the transatlantic money market in New York and London and doing that with crazy leverage. And so a small turn in the housing market ended up collapsing global, the entire global economy. So we know how important the dollar market is to us.

[00:33:18] To the rest of the world. And since then, the Fed, you know, has tried to whatever, to take a lot of actions to resurrect the and stabilize. This is the, the Fed by the way doesn’t do things independently. It interprets its mandate. It’s mandate is to be independent, but it’s congress that regulates and is supposed to be in charge of the financial system.

[00:33:42] You know, one of the, one of the, one of the things in the neoliberal period, if you just wanted to think about is that. Politicians basically outsource their responsibility of financial stability, unemployment, inflation to the Fed. So it basically outsourced economic policy to the Fed. It outsourced social policy to the courts.

[00:34:05] You know, that’s just like one way to think. And it also foreign policy from the Congress to the president. So the president became extraordinarily presidential system over the last 30, 40 years. And what. What we are seeing with the deep sort of political disarray that we are in right now is political authorities, in other words, Congress has to reassert its power over these three domains that during the neoliberal period it had just outsourced while they could, I don’t know, tweet furiously about things and you’re like, no, you should be in charge of like setting the tone.

[00:34:43] These institutions arise so what we’re going to find in the, you know, in whether it’s the Trump presidency or the Biden presidency next or whoever’s, what we’re going to find is the Fed’s role is going to be extremely politicized. So if the Fed continues to keep interest rates high, you could have.

[00:35:01] You know, somebody like Trump, who’s famously wanted low interest rates. He’s like a real estate guy. He wants low interest rates. He kept interest rates, or at least put a lot of public pressure on the Fed to keep interest rates low in his last presidency. You know, you could have a severe politicization of the Fed, which in my view is not necessarily a good thing or a bad thing, the Fed ought to be an independent agency, but.

[00:35:26] Ultimately, you know, it’s the political class that is meant to decide how to manage its global responsibilities. 

[00:35:34] William Lawrence: Very interesting. It’s the whole central bank independence debate. We could go on with that. Yeah. 

[00:35:40] Tim Sahay: We could, but just since you raised a really good point that maybe we should just unpack what do we mean by this global dollar.

[00:35:48] And I think like the main thing to understand is that a lot of dollars are created by banks outside the United States, right? That’s something that it’s hard for Americans to grok, right? Because we’re just like, I don’t know, man, like I just used the dollar in the U. S. What do you mean? Like other people can create dollars?

[00:36:08] That doesn’t. That doesn’t make any sense to me, but you know, banks every day in the world are operating by lending. They’re creating money. And a lot of these sort of offshore dollar deposits are created by European banks, Japanese banks, all sorts of banks. So in that sense, most dollar creation actually happens outside the United States, not just inside the United States.

[00:36:31] And we’ve known this since the bread and wood system collapsed in the seventies, that this is a global. money system and it’s anchored. It’s anchored, meaning that the bit that allows those private banks to create dollars out of thin air is that they need to have collateral in the bank against which they can create these things.

[00:36:50] And the collateral are the so called safe assets in the system, which is the US treasury. So if you have a chunk of US treasury, you can create leverage or borrow by putting down your collateral on the daily money market and saying, look, I’ve put down X dollars. Now give me two X dollars and so on.

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[00:38:18] William Lawrence: So I want to stick with climate, move away from finance a little bit, and then we’ll close with the kind of geopolitics and trade flows. I just want to say it’s like crazy making as someone who was a You know, climate organizer for over a decade dreaming and working for a breakthrough in renewable energy to see that happening and to see charts which show the deployment of renewable energy you know, approaching a real exponential curve, but now we’re told that it’s a problem because it is the Chinese who are in the lead in solar and in electric vehicles.

[00:38:56] And now the fact that we’re seeing these incredible developments in Chinese green tech becomes the justification for a new cold war with China, because we need to, you know, stem their competitiveness. I wonder, what do you think us based internationalists can do to nip this new cold war in the bud to whatever extent possible and move Back towards or towards again, collaboration with China on common problems facing us especially the climate crisis, but also these questions of debt and development for the world as a whole.

[00:39:33] Tim Sahay: I think the first thing to say is it’s quite late in to stop the Cold War. We are, I think that ship sailed with the Biden presidency, where they had a choice about how to think and maintain some peaceful coexistence relations with China after the Trump years. And they basically maintained a lot of Trump’s policies.

[00:39:58] vis a vis China. So what did they do? They maintained tariffs, right? And they maintained the militarism in Asia. So a lot more military spending in domestically, but also making sure that American allies in East Asia are spending more on military. So we are on basically on course for a globe spanning conflict on all grounds.

[00:40:24] With China, right? So this is not just a small thing about military affairs. It’s a conflict over debt, over development, over tariffs, over technology. It’s just a globe spanning conflict on every possible sort of measure. And the alternative of sort of peaceful coexistence between the two powers that kind of provides some kind of welcoming environment so that we do some stuff cooperatively and, you know, we enhance our human rights, we work together.

[00:40:51] To make sure workers power is increased. We work together on global development and energy transition in us, China and around the world, all of those things are now at risk. And we’ve, we are now four to five years into maintaining a extremely hawkish policy towards China. And I think like we have to set.

[00:41:13] set back and ask ourselves what’s the premise of this confrontation with China? And I think the main premise is, you know, what Trump said at the debate last night, which is, China is eating our lunch, right? This is the phrase, this is the organizing idea of U. S. China conflict. U. S. has says that over the course of the neoliberal period, we made a bunch of rules.

[00:41:36] Those rules ended up benefiting American corporations and China, made China richer, wealthier, and it’s now converting that richness and wealth into power and into, you know, making the Communist Party stronger and being authoritarian, et cetera, et cetera. And then on the home front, the story that they tell.

[00:41:55] Us, is China ate our lunch. Everything bad that you experience in your life is because of China. And there are two flavors in which this comes in the Democratic flavor and the Republican flavor. I’ll just start with the Republican flavor. The Republican flavor says something extremely personal.

[00:42:14] It says China stole your jobs. China is poisoning your kids with fentanyl and addiction. So any family member died. during the opioid epidemic, fentanyl, China killed them, right? Because of the fentanyl and so on. So China stole your jobs. China’s killing your family members. China’s addicting your kids on, you know, TikTok.

[00:42:41] China’s like destroying our democracy and a lot of Chinese money is coming in, buying up farmland, buying up real estate. So if you can’t find a house China is the reason why you can’t find a find, find a house and so stole your job, poisoned your kids. Killing your family, these are extraordinarily personal, ordinary dinner tables talk, right?

[00:43:06] It’s not in the rarefied language of foreign policy or tariffs or military policy towards Taiwan, which, you know, ordinary people can just be like, I don’t know, figure it out, we don’t want to be in a war. So it’s an extraordinarily comprehensive stuff being injected into our heads and hearts and, TV screens daily.

[00:43:27] So that’s how the Republicans are going to message you know, that thousands of bills that the U. S. Congress has written over the last five or six years saying exactly all of these things. And what is the solution? If China ate our lunch, we have to stop them from eating our lunch.

[00:43:40] How do we do that? We decouple. We tell all of our private companies, get out of China. We tell America Chinese companies that are trying to come into America for any kind of investment. You know, F off. We don’t want to. And we’re going to tell the American people that all of the insults of the class war, you know, are to be blamed at China’s feet.

[00:44:03] So this is the premise of this kind of hostile relationship with China. China’s gain has been our pain, right? This is the whole China shock theory, started to trade with China. We entered them into the WTO in the two thousands with the Clinton presidency, flood of cheap goods from China, displaced factory jobs in America.

[00:44:25] Those jobs either went to Mexico or they were offshored in China. And what, whose role is really minimized in all of this? American capital’s role, private equity’s role. You know, your local landlord’s role, you know, the wall street crash role, American militarism role, all of the stuff about our own domestic arrangements is shunted aside in favor of, you know, the red enemy out there.

[00:44:52] So I think we need to be like very carefully, like unpicking some of these premises and trying to come up with our own understanding of this is a, difficult relationship. China is indeed ruled by an autocratic communist party whose interests are not the same as American interests. They are going to be doing things to their own people, to Tibetans, to Uyghurs, you know, to Hong Kong, whose democracy they crushed.

[00:45:21] You know, this is an autocratic party. The question is, how should we relate to that party? How should we relate to the Chinese? people. How should we relate to the Chinese working classes and the American working classes? And so we need to come up with a similarly expansive story of what got us into this mess.

[00:45:40] And what are the things that we want to reform? This is not a stable relationship. We need to find a better way to challenge Our own upper classes and ruling classes to arrest the slide into militarism. And secondly, to actually do right by ordinary people and workers. And that’s what I’m not hearing a lot of in the American discourse.

[00:46:04] And it’s going to be, and you know, I don’t know about the Chinese discourse but I doubt, you know, they are sitting around talking about that either. What we really have to do is come up with, you know, a program that, that, that sort of takes away power from the authoritarians, from the militarists, from the nationalists, from the nativists, and actually starts to think about what we need to do on jobs, on economy, on trade and technology.

[00:46:32] on human rights and democracy that is about what we can do that doesn’t require us to continuously ramp up this tension and you know we have some thoughts we’ve been talking to a lot of organizers and people and you know i’m happy to chat about that but i just wanted to lay out the bigger picture of the U.

[00:46:50] S. China relationship 

[00:46:53] William Lawrence: and the key thing in that developing a program and disempowering the militarists is that you know, the Chinese Communist Party is also not a monolith. There are hawks and there are doves within the terrain of the c. P. And the Chinese state. But I’ve heard people Make the point that when it’s hawkishness is what’s being expressed at the highest level in the U S that empowers Hawks within the Chinese state.

[00:47:19] And it creates this security spiral. Whereas if there are all of branches being extended and gestures towards collaboration or finding a different arrangement, then that in turn will Empower the people within the Chinese state that are also thinking in that direction. But right now the Hawks have been feeding each other for, as you said, you know, at least five years running.

[00:47:45] I want to move on and ask I’ll just say I think we need that program and we need that program at the level of diplomacy, but we also need it at the level of The grassroots and independent social movements. I think we need to make it our business to be able to envision a of a non warlike global economy for the 21st century and be able to speak and popularize that.

[00:48:09] Tim Sahay: Yeah, and, you know, we’ve done, we know what that looks like, right? This is not rocket science, right? Us policy should basically try to prevent undercutting. Of American labor by corporations, you know, it should encourage both American corporations and Chinese corporations to respect unionization, to respect worker rights, to respect all of the environmental laws that we have, wherever they operate, right?

[00:48:33] These are companies. That are regulated by the American state of the Chinese state, whether they are operating inside, you know, domestically, or they’re operating in some other country, we do not want them to be breaking labor environmental standards, right? That’s really important. That’s what we want.

[00:48:49] We should say, look. If you want to pursue a development industrial policy that creates sort of good jobs, go ahead, we are not standing in the way like we don’t want, and if there are competitive conflicts as they are, as they should be in any system, you know, competition is going to arise, then they should be resolved through negotiations, they should not be resolved through threats, and then we should say, look, you’re the world’s biggest investor.

[00:49:18] polluter right now. We are the world’s biggest historical producer. You’re the world’s biggest coal producer right now. We are the world’s biggest oil and gas producer. Between the two of us, we have a lot of greenhouse gas emissions. Therefore, the two of us have a huge and urgent responsibility to increase funding.

[00:49:40] Towards global climate and clean energy initiatives that are being done elsewhere and in our own countries, right? And then lastly, we should be saying that we need to have more people to people connections. We cannot be in a place where, you know, the Chinese since COVID are basically like foreigners are not allowed in.

[00:50:01] Oh, it’s very hard for people to get in with restrictions. Similarly in the U S you know, U S policy has made it very hard for Chinese Americans to function, right? Like they are being, they’re being demonized. It’s made it very hard for Chinese students to come to the United States to study for Chinese scientists or Chinese born scientists.

[00:50:21] This to function in American universities. I was at MIT, the department, the head, the, you know, the head of Howard’s chemistry department was like pulled aside by the FBI and, you know, and said that you’re you’re secretly working for the Chinese communist party. This is a very chilling effect on all kinds of normal.

[00:50:39] things that scientists do, doctors do, trade people do, firms do, you know, students do, a lot of people to people relations like need to be resurrected. This is not at the level of just like high policy, right? It is, these are extraordinary Dynamic civilizations, the American civilization, the Chinese civilizations.

[00:50:59] There’s no reason that we should just like completely break off. 

[00:51:04] William Lawrence: Yeah. Bad idea. You know, just on the top, I wasn’t going to mention this, but on the topic of people to people relations, part of what shapes my view of this is that I lived in Beijing for six months when I was 14. My, my father had a Fulbright exchange scholarship.

[00:51:19] And so he was over there teaching Chinese students about American constitutional law. I went over, I was in ninth grade and I went to the international school, got to know a lot of Chinese people, got to experience China’s beautiful country. It’s sure it’s a it’s a one party state, but it’s a normal country.

[00:51:34] It’s a normal place. It’s a country like any other with people just like any other. And people make their accommodations and they make due and they try to make a difference and they try to live their lives. And it, you know, it’s like the whole world is different and there’s so many cultural differences and people are also just the same.

[00:51:52] People are people. And like you said, there is like so much more to be gained by a process of Exchange and collaboration and friendship between people in the United States and people in China than whatever we’re doing now. And that basic experience is why, I’m just always going to say, this is madness.

[00:52:10] This is madness. And the caricatures that are drawn of Chinese people in the Chinese state is so far from reality. This stuff we hear in the news every day, it’s just, it was really sad. 

[00:52:20] Tim Sahay: Yeah, so one, one of the interesting things is both American leadership, she and Biden, you know, they have been meeting since you know, for about six months, since the 7th of October, 2022, when the United States launched export controls on advanced chips to China, which said, we are not going to let anyone sell you high-end chips that can be used for AI applications or military applications.

[00:52:44] You know, and the Chinese interpreted that as an act of war. As an act of economic war, you’re trying to keep us poor forever. And as far as the Chinese were concerned, they were like, this is intolerable. You can’t tell the Koreans and the Dutch and the Taiwanese to stop doing business with us.

[00:53:01] And to stop, you know, letting our country get richer and figure things out. And the United States said, no we can’t because we don’t know what you’re doing for military purposes, right? Like you could use these chips for highly advanced, whatever weapons, or you could break into our nuclear weapons.

[00:53:17] This is just, dangerous. We don’t want it for you. So we’ve launched this kind of economic war against them. That is the reason why there’s so much more militarism in, in, in Asia is a lot of countries are now wrapping up their defense budgets because they understand that relations between the two superpowers have broken that.

[00:53:34] And so Biden and she have been trying to put a floor on this to say, this is spiraling out of control guys. Like we are not just. Just the U. S. and China, we also have to be responsible actors in the world. And all of these other countries are calling us and telling us, get your shit together. You know, act responsibly.

[00:53:53] Don’t blow up the freaking planet. Cooperate on climate, whatever it is. We need to figure out something. And that something is the Biden Xi summit in November. You know, they met last year and they said, look, we need to put a floor and that floor needs to be climate. It needs to be creating global public goods, like stable climate, like development opportunities, because that’s one thing we can talk about.

[00:54:18] We can’t talk about the military tensions, we can’t talk about other things, but we can talk about climate, technology, finance, development. So let’s have some neutral, safe space on which we re select. our relationship. And then, you know, last November, there was something called the Sunnylands Statements at Sunnylands, California.

[00:54:41] You know, the Chinese had invited Gavin Newsom from California to go to China. I don’t know if you remember the whole funny thing that went viral of him like elbowing a kid in the face while playing basketball and so on. So basically there’s been this resurrection of Sub national.

[00:54:56] So California, not the DC, the Californian governor going to China, a resumption of diplomacy by Janet Yellen, US Secretary of Treasury, Anthony Blinken, Secretary of State going to China. So there’s been a re stabilization. Everyone realized that first six to nine months, 2022, 2023 was a genuine war scare.

[00:55:17] It was scary with nuclear threats and so on. And so they said let’s re stabilize our relationship. And so I think that we have to ask ourselves, you know, what part of the United States economy is actually has a high degree of linkage with China. And it’s basically you know, the two coasts, Silicon Valley in particular, Wall Street as well.

[00:55:37] But Silicon Valley has, you know, Tesla has a lot of has a lot of production in China. Apple. Has an entire manufacturing system in China and, you know, the day hostilities break out for real in the South China Seas or in Taiwan Straits, no one ever gets an Apple product ever again, five to 10 years, they will not be able to manufacture high end iPhones, laptops, etc.

[00:56:02] Really requires the skill in the manufacturing system in Shenzhen. You know, all of our phones say made in made in China designed by California. So they have a huge interest in maintaining some kind of stable relations. And so the California has an economic interest in doing that. Do they have a person to person interest in doing that?

[00:56:25] Yes. There’s a lot of Chinese Americans, Asian Americans. In China, there’s a lot of. Chinese American political leaders, you know, mayors in San Francisco, mayors in San Diego, in a lot of cities. So California has a completely different political dynamic where they are not, there’s a lot of pressure on Californian politicians to not be hawkish and warlike on China.

[00:56:46] It comes from both companies and it comes from their people from a lot of Asian Americans. So that’s the kernel of a relationship. that, you know, says we are going to have to share the same planet together, and we’re going to have to figure out some kind of a relationship. And to their credit, like this competitive relationship on green technologies that has surfaced in the tariff wars.

[00:57:09] And we can talk about that but basically BYD, which is one of the leading Chinese EV companies, they have built a manufacturing, bus manufacturing facility in China, in California. With the union contract, you know, with the sheet metal workers union. So that’s telling the American people, look, this is the future.

[00:57:29] We can all obey labor standards together. We can all respect labor unions together. Chinese investment. That is a really great company can come in and do right by American workers and maybe source. And in source, not outsource suppliers from American firms and American firms can also catch up and become as good as the leading Chinese companies are.

[00:57:51] So that’s, you know, that’s the kernel of a working relationship. Should that be done in Michigan with the Ford plant in Michigan, you know, which is partnering with the Chinese cattle company for batteries? It could. Instead, you have a bunch of political leadership that says, we are giving American taxpayer money to communist China and we should refuse this contract and end it.

[00:58:16] William Lawrence: Yeah. You can’t come say that here in Michigan, unfortunately it’s a, it’s really tough. And you know, I’m a, of course a huge supporter of the UAW. The UAW strike last year was one of the brightest, you know, moments politically of the Biden administration. And here in Michigan, you know, we want to be in favor of the EV industry and all of that.

[00:58:38] This is an auto state through and through, and also the extent to which people who are, you know, labor affiliated people, you know, with UAW and in the broader labor movement are just I think, unquestioningly, Accepting these tariff wars as the cost of booting up an American Evie industry, I find to be tremendously shortsighted.

[00:59:00] And it’s you can’t look at what BYD is doing and think that just building a wall is going to be the answer because they are years and years ahead already, clearly on their manufacturing and their technological capacity. And if the answer is to not work with them. Boy, we’re going to be in trouble.

[00:59:17] That’s going to be the biggest car company in the world. 

[00:59:19] Tim Sahay: And not just in trouble, but you know, the classic thing of, if we want climate action, we want EVs to be affordable, right? We want them to be union made and affordable. If the American EV average price sticker price is 55, 000 you get then the discount from the IRA of 7, 500.

[00:59:37] That’s still in the late 40, 000 and the Chinese, thanks to their technological ingenuity and sophistication, are making these cars for cheaper and cheaper in the last three or four years. This is not being done by subsidies. This is just wrong. It started out with subsidies.

[00:59:55] You know, the classic Alexander Hamilton, infant industries need to be protected from the world market, given subsidies, but then they have to grow up and run on their own, right? That’s what the Chinese have done. They’ve removed a lot of subsidies from the EV industry, but there’s a lot of private actors that are learning to make better production processes.

[01:00:15] A lot of scientists, engineers, metallurgy, you know, a lot of people who are, you know, You know, figuring things out and squeezing production costs. And the average price of an EV in China has fallen from 30, 000. So now they can make good EVs at 20, 000. And now the question is, you know, should we be learning similarly and improving and upgrading our own skills and capacities?

[01:00:43] And if that requires, cooperation and working together with Chinese firms, so be it. Otherwise we will be stuck with highly expensive cars. And, you know, most of the climate pollution in the United States comes from the transportation sector, right? No longer from the power sector. And what is the left’s or anyone’s reasonable response to that?

[01:01:05] Public transit, electric buses and trains. electric cars, walking, biking, bed friendly, densifying cities. All of that requires us to, you know, be exposed and learning from the Chinese firms that are making those batteries. I 

[01:01:24] William Lawrence: want to just touch the world of, you know, we’ve been talking about green tech, we’ve been talking about finance.

[01:01:29] I want to talk. Touch the world of you know, other commercial and commodity flows, goods, shipping which has also been in the news. There’s the Red Sea blockade by the Houthis in Yemen, which is soon to approach a year in duration in protest of Israel’s genocide in Gaza. This summer, we’ve also heard about a drought in the Panama canal, which is limiting commercial shipping traffic there.

[01:01:58] We aren’t back to a pandemic level of disruption to global shipping, but some articles have suggested that we’re headed in that direction. And you know, as a organizer, I think about this through the lens of blockades and choke points, because this is something we’ve Long asked in the climate movement, like what would it look like to really shut down you know, a fossil fuel port for an extended period of time as a symbolic, but also very material economic protest of fossil power.

[01:02:27] We actually got to see this March what that could look like when that. Big ship collided and collapsed Baltimore’s Francis Scott key bridge. Baltimore Harbor happens to be the United States’s second largest coal exporting port. And that bridge collapse blocked around 2. 5 million tons of coal exports over you know, six weeks, two months from being able to exit Baltimore Harbor.

[01:02:52] This would be a climate activist. Dream, to be able to block 2. 5 million tons of coal exports for weeks and weeks on end. However, even this had little impact on global prices. So we have, what are these very significant disruptions? Now I think six out of seven ships are flowing underneath.

[01:03:12] The Cape of Good Hope rather than through the the Suez Canal, nevertheless commerce continues, some goods become more expensive, but that’s okay. The shippers are able to bear higher prices. Consumers pay them in some cases, insurers pay them in other cases. And so given the you know, just, deeply.

[01:03:32] Networked and interlinked system of flows that exist in our commercial landscape, given the role of insurance, which is able to soften some of these disruptions and given the fact that, you know, just again, highly interlinked flows of commodities, you can source from a different continent if you need to, and it tends to be.

[01:03:53] You know, a few people at the bottom of the economic food chain who end up bearing shortages or higher prices, but for the, you know, markets at large, it seems like. We can just continue on. How would you characterize I don’t know the overall impact of these sorts of disruptions to trade flows.

[01:04:12] What should be the focus of our emphasis when we’re looking at these questions? Are we asking about, you know, disruptions to world capital at large, or is it more about sifting out the winners and losers in individual disruptions, individual choke points, that’s a lot to work with. I’m sure you’ll make something of that.

[01:04:29] Tim Sahay: Yeah, no, I, the funny thing is oh these conversations and questions are literally what everybody’s thinking about. How do we insulate ourselves from certain types of shocks? Those shocks could be natural, like those droughts and well, whatever, natural droughts. in the Panama Canal. They could be war caused.

[01:04:50] The Houthis are, after all, they are not a force of nature, like a drought. They’re trying to prevent a genocide. And they’ve said, look, we have this choke point near us that would reduce Israel’s and Egypt’s revenue if we stop the Suez Canal. So let’s use that and let’s use that by, I don’t know, hijacking a bunch of ships that are carrying everything from, you know, diapers to food and fertilizers to all corners of the world, right?

[01:05:15] So it’s a highly it’s a painful act. It’s intended to cause pain and it’s intended to change either American policy or Egyptian policy or Israeli policy, right? So it’s a it’s a political act to do. a blockade, not a natural act like those droughts in the Panama Canal. And so the response can be I don’t know, change some of those policies that are causing problems.

[01:05:40] So that’s like a political way to do it. And if you don’t want to, in the case of the U. S. administration, we want to continue supporting Israel and we do not want to end. You know, ceasefire in Gaza, which is after all the demand of the Houthis, then we basically end up saying what can we do to minimize the harm coming from them?

[01:06:01] And then we reached out for that set of that networked view that you’re thinking about is who are the other suppliers that we could lean upon, you know? So we are asking other countries to increase shipping routes or find some sort of alternate suppliers and so on.

[01:06:17] So let me just pull back and say how this story of global chaos leading to some problems in commodities, leading to some cost increases in ordinary people, how is that being interpreted politically? And one sort of very popular story is neoliberalism is dead. This is the revenge of the real. A lot of real shit is happening that he can’t just fix with prices.

[01:06:40] And therefore what you need to do is start an ambitious program of national investment into the three R’s as Zoltan Pozar put it, the reshoring. You know, let’s manufacture more stuff at home so that we don’t have to rely upon, you know, something might happen in Taiwan, et cetera, et cetera. So let’s do more.

[01:07:00] That’s the, after all, the story behind why we are on shoring chips. Why should the Taiwanese be making all the chips? Let’s make chips in a bunch of other countries in the world. And that way we would have some alternates in case of hostilities in Taiwan. So that’s reshoring. And they basically say there’s a bunch of reasons to do it.

[01:07:18] Let’s just do it. Then the second re is the restocking. We need to have more stockpiles of food of energy of lithium Look, we designed these strategic petroleum reserves so that we could release oil whenever there’s some war scene or blockade or whatever That’s what we have done since the russian invasion The United States has coordinated with its allies to release these stockpiles of the strategic petroleum reserves to, in an effort to keep oil prices from really soaring, but remaining in a reasonable band.

[01:07:50] So let’s have some stocks and those stocks cannot just be, the government isn’t just going to run around buying everything. They’re going to buy the essential things that keep society going, food, energy. So we’ve had an effort by a lot of countries now to start developing food stockpiles and food, what are called strategic buffers.

[01:08:10] So we should be able to ride out three months of a global storm. We should have enough grain in our granaries to feed our people for three months in the same way that we have enough oil in those strategic petroleum reserves in Texas. to, you know, keep American cars and economy going for three months.

[01:08:26] So that’s the secondary, the re shoring restocking. And then the third degree is what are these ships carrying? In most parts, they’re carrying fossil fuels. They’re carrying coal, they’re carrying oil, they’re carrying gas. That’s I forget the number, you know, we can look it up later, but it’s more than 50 percent of global ships are just carrying fossil fuel in their cargo.

[01:08:50] We don’t want to live in a world of fossil fuels. We are slowly transitioning to this green economy. Therefore, what should we do? Let’s do some rewiring and re electrification, renewables, there we go, right? So let’s, and that we don’t have to rely upon stuff coming on a ship, domestically produced energy for self sufficiency for domestic purposes.

[01:09:11] And it’s like a multi Swiss Army solution to this problem. It solves the climate crisis. It solves the inevitable shortages, blockades. It solves the fact that it’s much cheaper than fossil fuels. It’s fossil fuel tax. They’re expensive. They’re unreliable. They’re dirty. Prices shoot up in case of wars.

[01:09:28] So let’s keep prices stable and cheap with renewables. And then the fourth three is the dangerous one. The world environment is dangerous. There’s all kinds of people starting out all kinds of wars. In fact, and this is, you know, really shocked me. There are more wars right now in the world, more conflicts in the world than at any time since the end of World War II.

[01:09:54] So that is the return of war, right? There’s an ongoing war in Sudan, ongoing war in Ukraine, ongoing war in Israel and Gaza. And there’s been loads of conflicts that have started to break open, you know, a fright between Indian and China, just everywhere you look between the Venezuelans in Latin America.

[01:10:15] And so broadly speaking, return of war. What do you do in a war? You ramp up your defenses, you get the biggest, baddest weapons around, and you basically arm yourself so that no other country in this more dangerous environment tries to attack you. So the fourth re is re arming. 

[01:10:37] William Lawrence: Re arm. And 

[01:10:38] Tim Sahay: that’s what we’re, re arm.

[01:10:40] So re stock, re shore. rewire renewables and rearm. And so that’s what most governments in the world are doing in responding to this Bali crisis. That’s the solution set that they are looking. And then the question depends on how much money do you put in each? If you put a shit ton into rearming and you also do a little bit on renewables and regreening?

[01:11:03] That sounds more like a war economy than a green economy, right? So it’s a question of, you know, each political entity, a country, and their legislature is passing certain kinds of budgets. What have we done in the United States? The defense budget has gone from about 600 billion at the beginning of Biden’s term to close to 900 billion in the latest.

[01:11:25] Defense bill, right? That’s a $300 billion per year increase in defense spending as opposed to the green spending in the IRA, which is roughly, you know, if you is around $400 billion for 10 years. So that’s $40 billion per year. So $40 billion, a public money being spent on green stuff every year, and an extra $300 billion being spent on military debt and paying for them.

[01:11:53] military being given new weapons and so on. So that’s the scale of Is it a green economy? Is it a war economy? That really depends upon the type of policies that countries are pursuing. But this is just generally happening. Europeans are doubling their military budget from about 2 percent of GDP to 3 to 4.

[01:12:11] Poland is close to 5 percent of GDP. And they’re going to do that over the next decade. They want to rebuild European defense because for the first time they’ve had a European war, you know, since the 1990s. 

[01:12:24] William Lawrence: Thanks for that, Tim. Final question. You. Work to advise governments, policy makers you write the poly crisis with your collaborators, which is a really excellent resource.

[01:12:37] You know, I think a lot of these decisions in the short term, unfortunately fall to the whim of elites, which I think is why there are lots of people like yourself who are trying to produce elite facing analysis and trying to get the U S leadership class and those in other countries to, you know, intervene constructively in these In this global poly crisis towards a more peaceful and sustainable outcome for those who are just ordinary folks who are, you know, residents of the United States and you know, don’t move in those rooms, but are either organizers or just ordinary people, what do you think ordinary people ought to be doing to push this all in a less warlike More peaceful, more sustainable direction so that we can actually live here in this 21st century.

[01:13:39] Tim Sahay: put out an agenda. Democratic party elites then later used, co opted, enacted, you know, however you want to put it. So we do have a huge responsibility on our shoulders not to be demotivated and say it’s just, It’s completely f’ed, right? So my sort of understanding of this is social democracy is a very powerful actor.

[01:14:01] We still have democracy in large parts of the West and we should be using that. And what are we doing right now? A bunch of elites are getting thrown out of office. That’s just an anti incumbency wave and people are saying, not this, something different. And what should we be doing? I think firstly, we should be grounded in our communities grounded in the labor struggle, which after all is, you know, never been stronger than before.

[01:14:28] Sean Fain you know, famously says we need to build enough. power so that we could have a general strike by 2027. Right now, 10 percent of the country is unionized, 90 percent is non union. So when you hear good paying union jobs from Biden, a lot of people just check out and say, that’s not me. We need to make it me, right?

[01:14:47] So that’s, we need to hold on to our centers of power. Of building and, you know, we’re in a militant stage of the labor struggle. We had a wave of strikes last summer. A lot of new contracts were set. This is good. We need to be building upon our advances. And then on, on the sort of the political and the electoral front, we have center left and center right parties that in my view are completely decrepit.

[01:15:13] They are not parties that are responding to movements from below. They have been. They’re ruling the void as a famous sort of political science book put it. So we need to resurrect party democracies, ability to elect local leaders, ability to elect representatives. And, you know, that’s.

[01:15:32] a question that is going to stare us in the face if Trump gets elected, how do we rebuild power from the ground up and provide a serious alternative? And then lastly, on the peace, on the global peace question, the return of war is scary. It is absolutely scary. And so we need to be articulating a way for an international order to actually respond in a constructive way and not in a militaristic way.

[01:15:59] And we need to be offering, you know, our own people to people links. as an example of solidarity, of how these things can be put together, how we can find a way to live together. So I would really focus more on transnational peace efforts. There’s a lot of peace activists in Asia, you know, in Hawaii, in Korea, you know, a lot of Americans are involved in those movements and we need to make sure that happens.

[01:16:22] Anti imperialism is a serious part of our agenda going forward, and I’m really sorry I forgot to mention, you know, the ongoing sort of genocide in Gaza, where again, there’s a lot of Palestinian solidarity activists, and we need to bring an end to these wars sooner, because we could have a terrifying, you know, bloodbath in the Middle East the war in Russia could expand.

[01:16:44] You know, so we have a serious interest in maintaining peace. 

[01:16:49] William Lawrence: That’s right. Tim Sahai, thank you so much. I’ll say one more time. The Poly Crisis is an excellent online publication and newsletter hosted at Phenomenal World. Tim writes that with Tim. His collaborator, Kate McKenzie and Tim, it’s just really a pleasure to get to talk and look forward to having you back on again sometime in the spring to make sense of whatever the hell happens over the rest of this fall.

[01:17:16] Tim Sahay: Thank you so much. And it’s a huge pleasure and, you know, we’ve worked together in the past and we will, you know, Save ourselves and save the world. Salute 

[01:17:23] William Lawrence: to continua, as they say. Yeah, thank you, Tim. 

[01:17:27] Tim Sahay: This 

[01:17:29] William Lawrence: podcast is written and hosted by me, William Lawrence. Our producer is Josh Elstro, and it is published by Convergence, a magazine for radical insights.

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[01:17:59] This has been the Hegemonicon. Thanks for listening and let’s talk again soon.