The Case Against Bailouts

The Guardian's George Monbiot doesn't support government handout/bailouts to corporations, especially airlines and fossil energy giants. No surprise there. That said, he makes a good case.

Before I get into Monbiot's arguments, let's go back to 2015 and the Paris climate summit where the nations gathered agreed that we must limit global heating not to 2 degrees Celsius but to just 1.5 degrees Celsius to avert catastrophic climate breakdown.

In attendance was one of Europe's top climate scientists, Hans Joachim Schellnhuber, head of the Potsdam Institute and climate advisor to Angela Merkel and Pope Francis. He agreed that the new target was essential and was feasible but warned it would require the "induced implosion" of the fossil energy industry. Governments would have to shut down the fossil energy giants and invest heavily in the development of clean energy alternatives.

Here we are, five years later, with a different emergency on our hands, a pandemic. A highly contagious but invisible virus that is, in the span of just a couple of months, ushering in massive changes/disruptions. It is threatening the very underpinnings of our neoliberal, free market economy and has governments scrambling to avert another collapse.

Back to Monbiot who contends our leaders are focusing on the wrong priorities.

Do Not Resuscitate. This tag should be attached to the oil, airline and car industries. Governments should provide financial support to company workers while refashioning the economy to provide new jobs in different sectors. They should prop up only those sectors that will help secure the survival of humanity and the rest of the living world.

They should either buy up the dirty industries and turn them towards clean technologies, or do what they often call for but never really want: let the market decide. In other words, allow these companies to fail.

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A recent survey by Ipsos of 14 countries suggests that, on average, 65% of people want climate change to be prioritised in the economic recovery. Everywhere, electorates must struggle to persuade governments to act in the interests of the people, rather than the corporations and billionaires who fund and lobby them. The perennial democratic challenge is to break the bonds between politicians and the economic sectors they should be regulating, or, in this case, closing down.

The current crisis gives us a glimpse of how much we need to do to pull out of our disastrous trajectory. Despite the vast changes we have made in our lives, global carbon dioxide emissions are likely to reduce by only about 5.5% this year. A UN report shows that to stand a reasonable chance of avoiding 1.5C or more of global heating, we need to cut emissions by 7.6% per year for the next decade. In other words, the lockdown exposes the limits of individual action. Travelling less helps, but not enough. To make the necessary cuts we need structural change. This means an entirely new industrial policy, created and guided by government.

Be honest. Do you see the Trudeau/Morneau juggernaut having the sort of epiphany such a transformation would require? Remember, the Tories would be worse, much worse.

We have stimulated consumption too much over the past century, which is why we face environmental disaster. Let us call it a survival package, whose purpose is to provide incomes, distribute wealth and avoid catastrophe, without stoking perpetual economic growth. Bail out the people, not the corporations. Bail out the living world, not its destroyers. Let’s not waste our second chance.