Suzuki, Friedman, and Green Economy

Last year I went to hear Thomas Friedman speak in Montreal. The organizers had David Suzuki speak before Friedman about the environment and introduce him. I think that they chose Suzuki to open for him because he is by far Canada’s most famous environmentalist and assumed that he would complement Friedman’s message well. However, The thing that I found most interesting was how different their messages actually were, despite both being considered leaders in promoting the green movement.

One of the things that Friedman argued was that the Green movement has a fundamental problem with marketing itself. This is a quote from his talk:

In the world of ideas, to name something is to own it. If you can name an issue, you can own the issue. One thing that always struck me about the term “green” was the degree to which, for so many years, it was defined by its opponents — by the people who wanted to disparage it. And they defined it as “liberal,” “tree-hugging,” “sissy,” “girlie-man,” “unpatriotic,” “vaguely French.” Well, I want to rename “green.” I want to rename it geostrategic, geoeconomic, capitalistic and patriotic. I want to do that because I think that living, working, designing, manufacturing and projecting America in a green way can be the basis of a new unifying political movement for the 21st century. A redefined, broader and more muscular green ideology is not meant to trump the traditional Republican and Democratic agendas but rather to bridge them when it comes to addressing the three major issues facing every American today: jobs, temperature and terrorism

Suzuki doesn’t place the same value in aligning green with strong business.

Economists believe the economy can grow forever. Not only do they believe it can grow forever, which it cannot, they believe it must grow forever. Since World War II, they have equated economic growth with progress. Nobody wants to stop progress, but if economic growth is what we define as progress, who is ever going to ask what an economy is for? With all this growth, are we happier? How much is enough? We do not ask those questions. We have fallen into the trap of believing that economic growth forever is possible and necessary. We are promulgating an illusion that everything is all right by using up the rightful legacy of our children and grandchildren. That is not sustainable; it is suicidal. I believe that is the challenge for our time. We have created a system that is completely out of balance with the real world that keeps us alive, and climate change is a part of the problem that we have created with this kind of economic system.

So the basic disagreement between them that I took from the event was that Friedman wanted to align the Green movement with economic growth/ business, whearas, Suzuki questioned whether our obsession with economic growth is the problem itself. I wonder if Friedman even blames people like Suzuki for giving green a bad name.

Personally, I think Suzuki’s speeches are always interesting but I think they tend to be pretty useless in the sense that I don’t he will ever enact substantial change. Our society is always going to place economic growth at the top of our priorities and I really don’t see that changing. Later in Suzuki’s speech he says, “We are social animals who need strong families and supportive communities, full employment, justice, equity and security and freedom from racism, terror, war and genocide.” I don’t really see how envisions us to have full employment in a world that doesn’t have economic growth, especially one with increasing worker productivity.

I agree with Friedman in the sense that the green movement has a marketting problem but I think it’s more than just presenting green as capitalistic and profitable. Most business people I’ve spoken to think that green is good for business but only think that is true in the long term. Many people think that taxing gasoline will be a weight on the economy and don’t see it as an opportunity to build newer energy infrastructure. So to add to what Friedman said, I think Green needs to be seen as profitable but I think it especially needs to be able to deliver growth in the short term. Given that the economy will be fragile for the foreseeable future, no politician will do anything that will be seen to be placing a burden on the economy in the short term. Not surprisingly, people like Al Gore have been disappointed with what Obama has delivered on the environment.

Here are some resources to read related to the two speakers I talked about.

Friedman’s speech , Hot, Flat and Crowded by Friedman

Suzuki’s speech , The Sacred Balance by Suzuki

Talk with David Rosenberg

I recently had the pleasure of talking with David Rosenberg, chief economist at Gluskin and Sheff and we talked about some of his impressions on the economics behind several of the songs on Recession Sessions .

Greenspan’s Defense
Rosenberg is no defender of the Maestro, and gave the legendary Central Banker a very poor grade. He also made clear to differentiate between the easy money policies of Greenspan and Bernanke. Rosenberg told me, “If you Gave Bernanke an economy that was growing at 5% – he certainly would not have kept rates that low for so long.” Rosenberg feeling was that at least Bernanke can pin his ultra-loose monetary policy on a weak economy, whereas, Greenspan had no such excuse.

This Time Around (Song about the Canadian Economy)
Rosenberg is still fairly bullish on the Canadian economy. Canadian banks have strong balance sheets, the fiscal situation is relatively better than other developed countries and the Canadian economy benefits from a recent strengthening in commodity prices. That being said, he doesn’t think that the Canadian fiscal situation is very solid either. He used the expression, “in the land of the blind, the one-eyed man is king” to sum up Canada’s fiscal situation. He understands the American economy to be 20 years behind the Canadian economy right now in terms of dealing with a serious fiscal situation.

Gold Price Factors
There was a story a month ago when George Soros sold most of his gold holdings that gold could be in a bubble.
Rosenberg’s opinion was that Gold is not even experiencing a mania let alone a bubble. He said that if you normalize the price of gold by the money supply that you don’t have a bubble at all. A bubble would start to emerge at around 3000 dollars an ounce.
He says, that gold is trading more like a currency now and less like a commodity.

Is it over yet?
Is it over yet was Rosenberg’s favourite song on the album.
His answer to the question was a resounding NO.
The global economy still faces major risks. The biggest of which are the European Debt crisis, the Japanese economy and the US economy which also faces major headwinds. However, he was not completely gloomy about the US. He added to his claim that, “The United States has immense wealth and they have a knack for getting their act together.”

Let’s hope they can do it again this time before the August 3rd deadline to raise the debt limit.