Posted: 28 Feb 2010 01:17 AM PST
Al Gore says "a hubristic 'bubble' of market fundamentalism" tilted the political playing field against action on global warming:
We Can't Wish Away Climate Change, by Al Gore, Commentary, NY Times: It would be an enormous relief if the recent attacks on the science of global warming actually indicated that we do not face an unimaginable calamity requiring large-scale, preventive measures to protect human civilization as we know it. ... We would no longer have to worry that our grandchildren would one day look back on us as a criminal generation that had selfishly and blithely ignored clear warnings that their fate was in our hands. ...
I, for one, genuinely wish that the climate crisis were an illusion. But unfortunately, the reality of the danger we are courting has not been changed... In fact, the crisis is still growing...
January was seen as unusually cold in much of the United States. Yet from a global perspective, it was the second-hottest January since surface temperatures were first measured 130 years ago.
Similarly, even though climate deniers have speciously argued for several years that there has been no warming in the last decade, scientists confirmed last month that the last 10 years were the hottest decade since modern records have been kept.
The heavy snowfalls this month have been used as fodder for ridicule by those who argue that global warming is a myth, yet scientists have long pointed out that warmer global temperatures have been increasing the rate of evaporation from the oceans, putting significantly more moisture into the atmosphere — thus causing heavier downfalls of both rain and snow in particular regions, including the Northeastern United States. Just as it's important not to miss the forest for the trees, neither should we miss the climate for the snowstorm. ...
The political paralysis that is now so painfully evident in Washington has thus far prevented action by the Senate — not only on climate and energy legislation, but also on health care reform, financial regulatory reform and a host of other pressing issues. ...
The decisive victory of democratic capitalism over communism in the 1990s led to a period of philosophical dominance for market economics worldwide and the illusion of a unipolar world. It also led, in the United States, to a hubristic "bubble" of market fundamentalism that encouraged opponents of regulatory constraints to mount an aggressive effort to shift the internal boundary between the democracy sphere and the market sphere. Over time, markets would most efficiently solve most problems, they argued. Laws and regulations interfering with the operations of the market carried a faint odor of the discredited statist adversary we had just defeated.
This period of market triumphalism coincided with confirmation by scientists that earlier fears about global warming had been grossly understated. But by then, the political context in which this debate took form was tilted heavily toward the views of market fundamentalists, who fought to weaken existing constraints and scoffed at the possibility that global constraints would be needed to halt the dangerous dumping of global-warming pollution into the atmosphere.
Over the years, as the science has become clearer and clearer, some industries and companies whose business plans are dependent on unrestrained pollution of the atmospheric commons have become ever more entrenched. They are ferociously fighting against the mildest regulation — just as tobacco companies blocked constraints on the marketing of cigarettes for four decades after science confirmed the link of cigarettes to diseases of the lung and the heart.
Simultaneously, changes in America's political system — including the replacement of newspapers and magazines by television as the dominant medium of communication — conferred powerful advantages on wealthy advocates of unrestrained markets and weakened advocates of legal and regulatory reforms. Some news media organizations now present showmen masquerading as political thinkers who package hatred and divisiveness as entertainment. And as in times past, that has proved to be a potent drug in the veins of the body politic. Their most consistent theme is to label as "socialist" any proposal to reform exploitive behavior in the marketplace.
From the standpoint of governance, what is at stake is our ability to use the rule of law as an instrument of human redemption. After all has been said and so little done, the truth about the climate crisis — inconvenient as ever — must still be faced. ...
We have overcome existential threats before. Winston Churchill is widely quoted as having said, "Sometimes doing your best is not good enough. Sometimes, you must do what is required." Now is that time. Public officials must rise to this challenge by doing what is required; and the public must demand that they do so — or must replace them.
The financial crisis might help to dissuade people of the notion that the market can solve the climate change problem by itself, and that it's best to let it do so.
I suppose the financial crisis could also convince people that the market can't necessarily prevent big meltdowns by itself, and that government can't stop meltdowns either. And -- thinking, for example, of unemployment -- it could show that once the government wakes up to the fact that a crisis has started, it will do far short of what's needed to counteract the effects.
We're all doomed.
Posted: 27 Feb 2010 11:01 PM PST
Posted: 27 Feb 2010 09:36 AM PST
Andrew Samwick is frustrated with his party:
Dean Baker is frustrated with the media (surprise):
Dean Baker, Open Mic: Fannie Mae lost another $15 billion in the last quarter. The media has done a truly horrible job reporting on this loss and the losses from its sister institution Freddie Mac.
Fannie and Freddie buy mortgages from banks. This is all they do. If they are losing money, this means that they paid too much money to the banks for these mortgages.
This is exactly what the original TARP program was designed to do. The large ongoing losses at Fannie and Freddie mean that the Treasury Department is effectively running TARP through Fannie and Freddie. However, it is doing this with a complete end-run around Congress. There are no restrictions whatsoever on the Fannie and Freddie TARP money. The Treasury can give as much money to Lloyd Blankfein, Jamie Dimon and the rest of the banker crew with no accountability whatsoever.
It is interesting to ask where the Tea Partiers are on this one. Apparently they have no problem with "big government" handing tens of billions of taxpayer dollars to rich Wall Street bankers. They only get upset when they think that some of their money might be used to provide poor people with health care. There's nothing like principles in politics.
John Quiggin is frustrated with zombies:
Invulnerable zombies: the Efficient Markets Hypothesis. by Discussion on my last post on reanimated zombie ideas in economics touched on a lot of the themes I want to talk about in this one, about the efficient markets hypothesis and why this undead monster can never be laid to rest. (Warning: favorable references to Popper ahead!).
The ultimate zombie is one that is completely invulnerable. Neither special bullets nor hammer blows nor even decapitation can finally lay this undead being to rest. But dramatic logic requires that a zombie invulnerable to external threats must be subject to a subtle, but ultimately terminal, flaw that ends in its own destruction.
Ultimate zombies arise quite commonly in science and economics in the form of ideas that are immune from refutation. The classic examples arise from the popularized versions of Freudian psychology, centered on the Oedipus complex, named for the Greek tragic hero who unknowingly killed his father and married his mother. If a son hates his father, this is, obviously, evidence of the Oedipus complex. But, if he loves his father, this is explained as a repressed Oedipus complex. With rules like this, Freudian psychology can never be refuted.
But as a string of philosophers of science, being with the late Karl Popper, have shown, a theory that can't be refuted by any conceivable evidence isn't really a theory at all. All it says, in the end, is 'anything can happen, and probably will'.
The global financial crisis, along with the earlier dotcom crisis has shown that, on any ordinary understanding of its terms, the efficient markets hypothesis can't be right. Despite reaching a scale and sophistication unparalleled in history, global financial markets have shown themselves subject to the same manias, bubbles and busts that were seen in the Dutch tulip craze of the 17th century.
So supporters of the efficient markets hypothesis have sought a redefinition that would make it invulnerable to refutation. Their central argument is one that has already been discussed - if it is possible to diagnose the existence of a bubble, then it is possible to make arbitrarily large profits betting against it. And if someone like Warren Buffett has in fact done this, that can be put down to luck. Only if everybody can make money betting against the market can the EMH be wrong. But of course, it's impossible for everyone to bet against the market – the market is just the aggregate of bets....
As far as macroeconomics is concerned, the experience of the Great Depression and of the current Global Financial Crisis ... is pretty strong evidence that neoliberalism is not the right policy, at least not for all occasions and not in the forms that prevailed in the 1920s or the 1990s.
Update: Paul Krugman is also frustrated with the media:
You're So Vain, by Paul Krugman: Jonathan Chait and Robert Waldmann, in slightly different ways, highlight a crucial dynamic in American political debate: the extent to which public figures are punished for actually knowing what they're talking about.
It goes like this: Person A says "Black is white" — perhaps out of ignorance, although more often out of a deliberate effort to obfuscate. Person B says, "No, black isn't white — here are the facts."
And Person B is considered to have lost the exchange — you see, he came across as arrogant and condescending.
I had, I have to admit, hoped that the nation's experience with George W. Bush — who got within hanging-chad distance of the White House precisely because Al Gore was punished for actually knowing stuff — would have cured our discourse of this malady. But no. Why not?
Chait professes himself puzzled by the right's intellectual insecurity. Me, not so much. Here's how I see it: in our current political culture, the background noise is overwhelmingly one of conservative platitudes. People who have strong feelings about politics but are intellectually incurious tend to pick up those platitudes, and repeat them in the belief that this makes them sound smart. (Ezra Klein once described Dick Armey thus: "He's like a stupid person's idea of what a thoughtful person sounds like.")
Inevitably, then, such people react with rage when they're shown up on their facts or basic logic — it's an attack on their sense of self-worth.
The truly sad thing, though, is the way much news reporting goes along with the condescension meme. That's Waldmann's point. You really, really might have expected that the Bush experience would give reporters pause — that they might at least ask themselves, "Isn't it my job to ask whether a politician is right, as opposed to how he comes across?"
But NOOOO! [/Belushi]
I'm frustrated with, among other things, Congress. "Action from Congress to stimulate jobs has been woefully inadequate."
What are you frustrated about?
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