Fiscal policy

While the opponents of Reconstruction were painting themselves as staid and respectable fiscal conservatives, they were simultaneously engaged in a radical plan to subvert democratic elections across the South. In principle, the Redeemers’ open campaign of voter suppression, political intimidation, and violence risked further federal intervention, but the North was losing the will to defend black political freedom. In fact, wealthy Northerners—even those who had been strongly anti-slavery—began doubting the logic of universal male suffrage as it empowered the immigrant working class in their cities. The political identity of the “taxpayer” was born in this reaction to black freedom and working-class political power, and it has existed ever since to oppose the specter of a multiracial working-class alliance.

Called together by the Charleston Chamber of Commerce and the Charleston Board of Trade, the Tax-Payers’ Convention of South Carolina met in Columbia in May 1871 and again in February 1874 to seek, “for the holders of property and the payers of taxes, a voice and a representation in the councils of that State.” They had a duty to speak up, the Tax-Payers argued, because the state of South Carolina was suffering from “the fearful and unnecessary increase of the public debt”; “wild, reckless and profligate” spending; and “excessive taxation.”

[…]

Emphatic color-blindness was, to say the least, a recent development in the public rhetoric of South Carolina’s white elite. As recently as 1868, a number of Tax-Payers had signed a petition to the U.S. Congress, entitled a “Respectful Remonstrance on Behalf of the White People of South Carolina,” that opposed black male suffrage because “the superior race is to be made subservient to the inferior.” Porter himself had argued that black people had “traits, intellectual and moral,” and “credulous natures” that left them with an “incapacity” to rule.

At their Tax-Payers’ Conventions, however, these same men, despite sporadic remarks on the “negro character,” no longer officially identified themselves as advocates on behalf of the white race; they were simply representatives of the “over-burthened tax-payers.” This self-appointed role was ironic: as slaveholders, the Southern elite had done everything in their power to cripple the tax capacity of both their states and the federal government. Now, the South Carolina Tax-Payers called into question the right of black people and poor whites to govern because they believed these voters did not pay a substantial amount of taxes. “They who lay the taxes do not pay them, and that they who are to pay them have no voice in the laying of them,” Porter asserted, wondering if “a greater wrong or greater tyranny in republican government” could be conceived.

[…]

It is no coincidence that when the Jim Crow laws were finally dismantled, the reaction to the civil rights movement once again featured paeans to “the taxpayer” and a new wave of tax limitations. The rhetoric of the taxpayer is readymade to call into question the right of black and poor Americans to participate in or benefit from their government. The taxpayer was the foil to Reagan’s welfare queen, who he claimed had a “tax-free cash income” of $150,000 a year. Reagan’s story was a fiction—he’d change the numbers from speech to speech—but that hardly mattered. Talking about taxes allowed voters to put a dollar figure on their resentments, and to experience the poverty of others as persecution.

A reminder to self that the difference between Corbyn and Starmer was, in this respect at least, not as great as I may have wanted.

The Office for Budget Responsibility - the government's economic watchdog - will be given new powers to "whistle blow" when it believes that the "credibility rule" has been breached.

And under the Labour plans it will also report to Parliament rather than the Treasury.

"We know now from the world's central banks that the world economy is looking at stagnation, and there needs to be a new rule," Mr McDonnell told me.

"And we want people to have confidence in a Labour government. That means we are introducing a new fiscal credibility rule.

"First, that a Labour government will always balance day to day expenditure.

"Second, that we will only borrow for the long term, and that means for investment - investment in our infrastructure, in the homes that we need, the railways, the roads, the renewable energy.

"And in new technology to grow our economy.

"Third, debt will fall under a Labour government over a five year period.

Recent coverage of insurance markets has highlighted the industry’s involvement in the so-called “climate risk doom loop”: looming climate risks and worse disasters are raising the price of insurance for real estate and infrastructure assets, exacerbating their owners’ vulnerability to future disasters and feeding into higher insurance prices in the future―or the withdrawal of insurance coverage altogether.

Rising insurance prices and the credible threat of insurer divestment from higher-risk areas will constrain investment in both homes and businesses across vulnerable communities. Yet more people are moving into higher-risk areas, and some politicians fear backlash if they let insurance companies deny these communities coverage. In response, state leaders in California and Florida have sought to prevent divestment by directing their insurance commissioners to adjust pricing regulations, invite competition in insurance markets, or derisk insurers by imposing disaster-risk fees on all insurance purchasers regardless of risk.

Private investors, meanwhile, believe the insurance industry should follow price signals: if firms can identify the climate risks an assets could face, and investors price those risks into building and maintaining costs, then market actors will invest prudently.

I argue that insurance is a woefully inadequate financial tool for coping with the impacts of climate change. Improving insurance markets does little to address the fact that the core drivers of the “climate risk doom loop” rest in the design of capital markets, which are structured to direct investment away from vulnerable communities when they most need it.