Per Capita Davis: Lessons learned can be easily forgotten
As a country, we periodically experience shocks, sometimes big ones that change our national psyche. The Great Depression, World War II, the Cuban Missile Crisis, the Great Recession, the attack on 9/11 come to mind as examples. In each case, our country was different after the crisis than before it. Each crisis changes the way we think about the world in fundamental ways. Each crisis had lessons for the future, some forgotten.
A question hovering over our recent crisis with COVID-19 is what change, or changes, will follow. One prediction, rather dystopian, is that nationalism will grow and inequality will increase as the economic toll and fear take center stage. A more hopeful view envisions the response to this disaster as renewing respect for science and focusing on lessons learned as we turn our attention to the climate crisis.
That may be too simply stated, too black or white, but there are already signs of conflict between these two possible roads to the future. Focusing on the more hopeful alternative, there will need to be some major adjustments to what we now consider business as usual — for example, how our taxes are spent by the federal government.
The current description of the pandemic is replete with words of battle, including that we are in a “fight” against an “invisible enemy” with a national leader who refers to himself as a “wartime president.” The federal budget annually allocates $700 billion to the military as defense against our enemies. This includes paying as much as $100 million for a single fighter jet with a total cost for a fleet of jets of over a trillion dollars. We spend more on our military than the next 10 countries combined and the $700 billion is 100 times more than was allocated to the Center for Disease Control for 2020, and more than 270 times more than was allocated to energy efficiency and alternative energy.
Perhaps one lesson learned from the COVID-19 experience will be that our “national defense” will now be understood as including issues other than military, such as preventing and responding to pandemics, with a corresponding increase in funding. And, also to the point, taking the science of the climate crisis as seriously as it deserves and prioritizing funding for energy efficiency, renewables, adaptation and resilience.
This shift in mindset and priorities among both people and politicians would require a 180-degree about-face for many, not only accepting the warnings of the scientists but also the urgency of responding. It’s a lot to hope for.
There’s another lesson from the pandemic that could be important should the climate crisis be ignored to the point that it crosses various tipping points and, like the pandemic, produces an economic crisis requiring much greater resources to respond to it than would have been required to prepare for it.
A recent article in the New York Times titled, “The Buybacks That Ate Restaurants’ Cash Up,” highlighted the intense pressure many businesses feel from stockholders for their stock prices to constantly go higher. This can be on merit, but it can also be pushed upwards by increasing dividends and stock buybacks, both of which deplete the cash reserves of the business. In the case of the pandemic, the article points out that many of the businesses, in this case restaurant chains, claimed they needed billions of dollars to avoid layoffs, notwithstanding that they had very recently spent large amounts of money buying back their stock. In other words, they needed taxpayer dollars to bail them out because they were not focused on maintaining a prudent reserve. Risk was not a primary concern or principal ingredient in standard operating procedures.
According to the article, in addition to restaurants, many in the airline industry also used dividends and stock buybacks to bolster their stock price, American Airlines’ $13 billion and Boeing’s $53 billion as examples, and both are in line for major bailouts due to their being considered “crucial to national security.”
Call me old-fashioned, but it seems there should be some common practice, or if not practice, then a requirement, for businesses, if they expect a bailout, to have some level of reserve that would make them better prepared and provide a buffer against unforeseen shocks to the economy. It would seem common sense that investors and insurance companies would see a long-term upside to such a practice. We have had enough shocks and disasters that even the shortest memory can bring a few to mind. Blending some long-term thinking (saving) into short-term goals (risk) seems to be one of the lessons from the pandemic.
Taken together, redefining what is in our national interest and simultaneously investing in energy efficiency and renewables in addition to military spending, coupled to everyone, government, business, and individuals, routinely factoring in an awareness of the inevitability of shocks such as pandemics, would help us prepare for and potentially reduce the adverse consequences of the climate crisis.
Some lessons learned from past crises shaped how we as a nation looked at the future and helped avoid repeated disasters. Hopefully, this pandemic will help us by providing a unified national vision of the need to prepare to confront the climate crisis.
— John Mott-Smith is a resident of Davis. This column appears the first and third Wednesday of each month. Please send comments to firstname.lastname@example.org.
Crossposted from the Davis Enterprise
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