Is the financial crisis more dire than the climate crisis?

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"Is the financial crisis more dire than the climate crisis?"

Not even close.

If there’s no action before 2012, that’s too late. What we do in the next two to three years will determine our future. This is the defining moment.

So warned IPCC head Rajendra Pachauri last fall when the IPCC released its major multi-year report synthesizing our understanding of climate science. And remember Pachauri was handpicked by the Bush administration to replace the “alarmist” Bob Watson. It’s the facts that make scientists alarmists, not their politics (see “Desperate times, desperate scientists“).

What happens if we fail to act in time to avert the climate catastrophe?

Worst of all, this utterly preventable catastrophe is probably irreversible on a time-scale of centuries, and thus threatens the health and well-being of our children and the their children and the next 50 generations.

A trillion-dollar climate rescue package would put us on the path to avert these catastrophic outcomes, jumpstart the transition to a clean energy economy, while largely paying for itself in energy savings. It would also sharply reduce the $10 to $20 trillion transfer of wealth to the oil exporters that we can expect over the next quarter century alone. Air pollution would drop sharply and millions of jobs would be created.

What happens if we fail to act in time to avert the financial catastrophe that Treasury Secretary Paulson says is now upon us:

  • Companies that made very bad investments would lose money, and some would go bankrupt.
  • Other countries would probably stop lending us as much money until the shakeout was over.
  • For a time, we’d have to stop living beyond our means with borrowed money that pays for massive imports from China and the oil producers.
  • More people who bought houses they couldn’t afford would lose them.
  • Our economy, which had been boosted unsustainably by phony wealth and a housing Ponzi scheme, would no doubt underperform for a few years until the shakeout was over, causing hardship for tens of millions.
  • This might trigger a global economic slowdown, causing hardship for hundreds of millions.

It is insane to glom together a trillion-dollar taxpayer-funded legislative response to this crisis in a few days while utterly ignoring the infinitely graver climate crisis.

At the very least, we should combine whatever financial bailout is deemed necessary with the $100 billion “Green Recovery” effort proposed by the Center for American Progress (where I’m a Senior Fellow). That would that create 2 million new jobs nationwide in two years and start “the reconstruction of local communities and public infrastructure all across America, setting us on a course for a long-term transition to a low-carbon economy.”

Also, the Green Recovery would also help ensure that whatever dubious financial instruments the taxpayers are stuck with in the Bush Bailout, they have more value because the U.S. economy and its infrastructure — and thus housing values — would be fast-tracked to sustainable health.

Personally, while I don’t much believe anything this administration says, I am willing to believe credible financial experts who have been warning for years about the dangers of unregulated financial system.

But why in God’s name won’t this same administration and the nation’s opinion leaders and conservative politicians and the media and the general public believe the far greater number of far more credible scientific experts who have been warning for years about the dangers of unregulated greenhouse gas emissions.

The pundits now say this trillion dollar bail out means that the next president won’t have the resources to pursue the transition to a clean energy economy, assuming the next president actually believes in using the tools of government to achieve that transition. Along the same lines, the European media reported today that “The recent economic downturn could push the European Union to adopt more modest ambitions in its fight against climate change.”

That would be tragic. In a couple of decades, nobody is going to remember this “greatest financial crisis since the Great Depression” because the nation and the world will be desperately devoting all of its economic resources in a last-ditch effort to avoid the catastrophic climate outcomes described above.

People always tell me we’re incapable of taking the steps needed to act on global warming until the impacts are so bad that it is obviously too late to act. And yet, here we are, apparently on the verge of devoting $1 trillion to prevent a financial meltdown — not waiting until another Great Depression to redesign our financial system.

Now it is certainly true that you can’t replace key elements of the entire energy infrastructure as fast as you can redesign key elements of the financial system. As I have argued in my book and many others have argued, though, if we ever did take a World War II style approach to redesigning our energy system, we could do much of what needs to be done in a couple of decade. But, of course, you have to start. Now.

For the rants thoughts of other blogs, see “Big Government: Darn Handy in a Crisis” and “Wall Street Meltdown and a melting globe.”

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50 Responses to Is the financial crisis more dire than the climate crisis?

  1. David B. Benson says:

    Yup. :-(

  2. Yes,
    I’m afraid that this will be presented as a trade-off, when in fact, a climate solution is the road to future financial health.

  3. Robert says:

    All sounds fine in the incestuous little internet bubble of a climate change blog. Back in the real world no-one I meet ever even mentions global warming.

    [JR: I think that reflects more on the circles you travel in than anything else.]

    There is a logical disconnect in your piece. The word “we” is initially used to mean “everyone in the world”, but later on to mean “the population of the USA”. Acting in concert with the rest of the world is the #1 priority; greening your own economy and ignoring the rest of the world will not fix climate change (although it might fix your trade deficit).

    [JR: If you read this blog, then you know we gotta green here first to have a shot at leading the world.]

  4. David B. Benson says:

    Are we running out of wealth to fix either?

    Robert — Two points, two points…

  5. Adrian says:

    It’s a sad fact of the world and politics in particular that fame and glory come to those who save us from a disaster after it happens; very little attention is paid to those who save us before it strikes. The financial affair is clear, immediate and affects those with the money & clout to get attention. It falls to the minority of us who are forward-thinking and driven by ethics and morals rather than individual glory.

    We’re up against it for sure. We need those of us who are in the fight to be as vocal and visible as possible so we don’t let it get as advanced as the financial world’s troubles.

  6. Earl Killian says:

    Re Adrian’s point: there are also those who willfully, because of ideology, refuse to take preventative action that was plain to almost all. Consider the second part of this radio show: http://www.thislife.org/Radio_Episode.aspx?episode=363 about Christopher Cox at the SEC. And then there is the ideology that led to the appointment of such people…

  7. nataraj says:

    We need some calamity directly linked to global warming – like AIG / Fannie May / Lehman did for the finance – then, may be then, people will be ready for action.

    Or until we can go on a major “propoganda” to educate the public. Afterall if something so stupid as Iraq war could be sold – why not this urgent crisis. We don’t need a smoking gun in the form of a category 6 hurricane to do it …

  8. An argument can be made that Wall Street and the financial system lost sight of the point of economic activity, to deliver goods and services that are useful or desirable to people. Trading was considered to be an end in itself; which is a tendency of markets. The free market ideology enshrined trading and complex derivatives of trading as the most important activity. We need to reassert the value of real goods and services rather than the trading of representations or or derivatives of those services.

    Climate solutions are highly useful and ultimately very desirable goods and services which should be publicized as such and financing structures need to be found which allow those goods and services to be delivered.

  9. rpauli says:

    Nope. Climate trumps all.

    And failure to fix and better establish a health economy really does not bode well for any other organized efforts.

    Fun while it lasted.

  10. Dano says:

    Here’s the urban ecologist speaking again:

    Is the financial crisis more dire than the climate crisis?

    Depends upon scale.

    Short term: yes.

    As was stated above, this transfer of wealth to the few from the many may make it almost impossible to be resilient enough in the future to adapt to and mitigate man-made climate change.

    Do we get what we deserve? We will know soon, if this bailout gets approved or b*tch-slapped down into the gutter where it came from.

    Best,

    D

  11. Steve H says:

    I could wax all night about the this, but the simple point is that a government that would spend nearly a $1 trillion protecting companies that generate income off usuries could not even accomplish a first step towards solving the climate crisis if it wanted to. We’d be better off without these companies, so I say good riddance.

  12. paulm says:

    What happens if we fail to act in time to avert the climate catastrophe?

    You missed a couple of big ones :
    *Floods
    * Hurricanes/Cyclones

    Theses are already putting nations under extreme economic stresses. Anywhere hit by these super storms within a couple of years after the last will be unsustainable, deteriorating in to chaos .

    Ivan devastated the Cayman Is in 2004. This is one of the richer island in the BWI. If it had been hit this year by either Ike or Gustav that would have been it for its economy and all that it provides.

    Were talking about most of the US Gulf coast and many of the Caribbean states all starting to collapse in the next 5 – 10 years.

    We are worried about Bangladesh being swamped, but the effects of climate change are happening right here in our back yard, right now – and it is turning out to be just as devastating.

  13. Bob Wallace says:

    Let me see if I can spin it in the best possible way for the climate.

    Money is going to be tight.

    That’s going to make oil even more (relatively) expensive. More motivation to move away from oil. More smaller, efficient cars. More use of public transportation.

    Higher oil means more expensive coal. That makes wind an even better deal. Even makes solar more attractive and increases the pressure to develop tidal and drilled geothermal.

    Tight money makes it very hard to borrow for new nuclear. Less chance we’ll see any new nuclear with all its problems.

    Higher energy prices are going to make it more attractive to engage in energy saving practices. More insulation, better building practices, less energy wasting lighting and appliances.

    Looks to me like there’s a chance that the financial crisis might cause a decrease in greenhouse gas emissions.

    Insurance companies will be more reluctant to insure in high risk locales. When people in lower lying coastal areas find that they have a very hard time/can’t get insurance the message of rising seas will be more real to more voters.

    The same may happen for those living in tornado alley. Risk-adverse insurance companies may start sending the message that extreme weather makes business there a bad idea.

    Even if global warming isn’t causing these big storms/possibly won’t cause more big storms in the future people are going to assume that warming is the cause. Attribution is an interesting phenomenon.

    End result – people are going to be more receptive to dealing with global climate change.

    The ‘powers that be’ will concentrate their efforts on the financial crisis first. That’s a given. It’s their own personal income that is threatened. But this problem should be mostly sorted out in a few months. Recovery will take longer.

    (Crystal ball clouds over….)

  14. Earl Killian says:

    Bob Wallace wrote, “people are going to be more receptive to dealing with global climate change.”

    One thing that worries me in the above optimistic scenario is that we are potentially just one Supreme Court appointment away from a majority that would partially return the US to Lochner era jurisprudence, and block even a majority mandate for solving the problem. To Thomas, Scalia, Roberts, and Alito add just one more, and you may see the US lose much of its New Deal ability to regulate. Would McCain, if elected, nominate someone like Janice Rogers Brown? Quite possibly. Would the Democrats object? Certainly. Could the Senate Democrats be steam rolled yet again? Possibly. The Senate numbers are quite different, but I am always amazed at how ineffective the numbers are for the Democrats. It is very scary.

  15. Meg Murphy says:

    It’s what we don’t know that is scary. Have we passed the tipping point? Recommend reading Thomas Freidman’s new book “Hot, Flat and Crowded”. Should be a textbook for all high school’s and our politicians who are in denial.

    If Al Gore had been an Evangelical he would have been deemed a god. But he happened to be a Democrat and that made climate change political.
    We’ve lost precious time and squandered the last 40 years.

  16. TomG says:

    When the Ross Ice Shelf collapses and the West Antarctic heads to sea and Greenland ice does the same, I wonder what sort of “bail-out” will be required then?
    A trillion dollars won’t buy enough buckets……

  17. Johnny Rook says:

    You’re absolutely right about this, Joe. The problem is how bad the climate crisis will have to get before it generates as much attention as this financial crisis is getting. I’ve described such a scenario, but it’s pretty grim and, I’m afraid, too far down the road to allow us any operating room.

    http://climaticidechronicles.org/2008/09/20/if-you-dont-like-this-crisis-youre-really-going-to-hate-the-next-one/

    Blogging for the future at Climaticide Chronicles

  18. Bob Wallace says:

    Earl – on my good days (and even my so-so days) I just don’t see McCain winning. Palin was a flash in the pan, her impact has washed out and her personal ratings have gone negative.

    We’re starting to see right wing pundits speaking out against McCain.

    Today George Will in his review of McCain’s performance during the last couple of days said “… John McCain who, as usual, substituting vehemence for coherence….”.

    And “John McCain showed his personality this week,” said the writer and pundit, “and made some of us fearful.”.

    When a Republican looses Will’s support the ground has shifted.

    But were something untold to happen and McCain to be elected I think we need to consider what often happens to people when they join the Court.

    Remember that most of the current members were appointed by Republican Presidents. And, in general, after some time on the bench, many shift to the left.

    I don’t think there is any hope for Scalia. He’s too deeply flawed. And Thomas is just a dumb tool. Waste of a good robe. But Roberts and Alito I’m guessing will soften with experience.

    I think the Supremes must also be dealing with the realization that they put Bush in office in 2000 and that has to cause some soul searching among the more intellectually honest. Every time something stupid comes out of the White House you know that they think “I put that fool there.”.

    As for regulation, I can’t but believe that Reganism is now dead. The country is so ready for controls to be placed on financial institutions and businesses that even if the Supremes were to strike down a law or two Congress would just fire some better written ones right back at them.

    You aren’t going to see a lot of big corporation types calling for deregulation for a while. And certainly no elected officials.

  19. Bob Wallace says:

    Meg – an interesting point you make.

    Got me thinking. Suppose it was an Evangelical/fundie who had raised the alarm about global warming.

    I wonder if the left would have readily listened?

    We have allowed ourselves to become so divided that almost everything has become a “my team/your team” contest and we sometimes don’t even consider what the other side says.

    (I happen to agree with Bush on ‘No Child Left Behind’. I agree that we should do something about failing schools and that we need an assessment program to determine which schools are not working. Possibly had we had a rational discussion with input from all sides we could have come up with a more workable plan.)

  20. Tim Groves says:

    The solution to the climate crisis couldn’t be simpler. Let the US economy crash and global consumption of fossil fuels and emissions of greenhouse gases will drop by about 20%, giving the planet and the human race a greater margin for survival. For too long the US has been the biggest single part of the problem. Now it can be the biggest single part of the solution. This will be tough for the Americans, but for the world as a whole it will be a price worth paying.

  21. John McCormick says:

    The rush to save the global finance world was cobbled together in a few weekend days by bureaucrats staring into the headlights of an oncoming train. Now, the 110th congress has until Friday to improve/enact it then adjourn. Go figure!

    Europe has its own economic downturn and housing crisis but is not willing to bail out its finance institutions for fear of public outcry as taxes are raised during their own recession.

    Crazy mortgages have five year windows before refinancing leads to foreclosures. So, look for more foreclosures and downward pressure on housing prices til 2012 and beyond.

    Weaker dollar now already pushing up oil price.

    US deficit could top $600 billion+ next year and Pakistan is about to blow itself up.

    That all is the radar screen while wind and solar try to sneak their crumbs from the federal budget each year.

    Get the PICTURE WALL STREET! You aint seen nothing yet.

    AGW is coming at you through the fog of the mess you/we created. And, if you do not snap out of your hangover and help turn this AGW bullet around now, you go down with the rest of us.

    Speak up Mr. Buffett et.al. and show some concern for the next generation and less for your portfolios.

    John McCormick

  22. Greg N says:

    Another way to spin it:

    “Kyoto/energy transformation will cost us billions, blah blah blah, moan moan moan.”

    “Yeah? Well the sub-prime/credit crunch screw up cost us trillions.”

  23. Ronald says:

    There has been the research papers done using the scientific method(s) and it has shown that man-made global warming it true and happening and will be a problem for us humans now and in the future. Much more of a problem in the future. (I call it Human Machine and Land use caused Global Warming.)

    There have been UN reports done by the scientists to spell out the problem. There has been others about solutions. There has been publicity about it. There have been websites, this one included, about what needs to be done. There have been books about it.

    What do we do next? Keep doing the same?

    Will more of the same do any good?

    Instead of more articles about what we have already written about and has been written, maybe a little more on how to change peoples opinion on the subject. Easier said that done, sure. But more of the same gets us more of the same, with this problem basically being ignored.

  24. Roger F says:

    I say give it a rest until after the election. There is no way in the short term anyone will pay attention to AGW given the current financial tsunami. After Obama is elected, lobbying can be more focused. However AGW will never be the most important issue in most voters minds.

  25. Cyril R. says:

    Acting in concert with the rest of the world is the #1 priority; greening your own economy and ignoring the rest of the world will not fix climate change (although it might fix your trade deficit).

    While global cooperation will logically be crucial to adequately solve global problems, it would be shortisighted to carry this argument too far.

    You see, it runs the risk of locking itself in inertia. Government X says we won’t do anything until governments Y and Z cooperate, and government Y and Z take the same position. The result is: nothing happens.

    There is an easy way out of this impasse: show strong inititive. An important trait of any great leader. Bush and his administration at large almost completely lack this initiative, allowing shortsightedness to have the better of him, of us, and of the entire world. Ergo, Bush is not a great leader. Exept when it comes to illegitimate wars and violation of human rights. Bush has great initiative in that.

    This is no time for GOP. It’s time for vision and acting on that vision.

  26. P. G. Dudda says:

    The problem is that the global warming deniers are also the Tax and Spend Republicans who believe in ensuring the wealth of their fellow Fat Cats rather than protecting the bottom line of the remaining 90% of the rest of us (who are “Those People” in their minds and the minds of their followers). The Fat Cats will move to cooler, safer places, and wonder why the rest of us “insist on living in squalor”.

    We’re not insisting. We’d upgrade in a heartbeat, if we had the means to do so. Too bad the Lion took his share and left none for us Lambs.

  27. Robert says:

    Joe

    “[JR: I think that reflects more on the circles you travel in than anything else.]”

    With respect, that is slightly patronising. For a start you have absolutely no idea what circles I move in (except that I live in the UK). I meet a wide variety of people, mostly well educated and “middle class”. The subject of global warming is mentioned very, very rarely these days and generally in the context of the government’s green taxes which are generally perceived as a transparent con. Msot of these people seem quite comfortable with taking several trips a year to places like Spain, Cyprus or Tenerife, joking occasionally about their massive carbon footprint…

    The BBC has gone very quiet on AGW over the last 12 months. On the other hand there is extensive reporting of high energy and food prices and the credit crunch. Soultions to both (e.g. windfall taxes on the energy companies and energy subsidy payments) are bandied around with never a mention of the climate change implications.

    That is reality. Joe, you probably move in circles where everyone talks incessently anout AGW, given your background and job. Unfortunately the voting public is less aware.

  28. Rick C says:

    Joe,

    I have two questions for you. The first question is given the colossal size of this bail out won’t the argument be made by those with a financial stake in the current energy/financial system paradigm to argue that we simply don’t have the money for the Wall Street clusterf@#$! bailout and solutions to address AGW? The second question is couldn’t solutions to address AGW be presented as a comprehensive economic stimulus program, as opposed to a stimulus package giveaway check program, to get the economy back on track?

  29. Lamont says:

    There isn’t going to be a trillion dollar bail out of wall street. The Fed may have to come up with a trillion dollars of liquidity to load out or invest, but they will likely see a return on that investment. The 80% stake of AIG that the government now owns will probably be profitable in the long run. The discount window and term lending facilities all are just low-interest loans that need to be paid back. Even the RTCv2 will be buying up distressed, illiquid assets at a firesale, and will probably be profitable in the long term. The government isn’t actually going to print a trillion dollars and drop it from helicopters over wall street.

    All of this liquidity is inflationary, but the overwhelming problem right now is actually deflation (housing prices are going down, demand is lower, GDP worldwide is declining, unemployment is increasing, and even oil is getting cheaper due to contracting demand, and the dollar is actually recovering throughout all this chaos). The deflationary environment is caused by the huge systemic bank-run going on right now where the system has become overleveraged and is now under capitalized as a couple trillion dollars of capitalization in the mortgage markets has disappeared. That is actually causing M2 values to decline (and should be showing steep declines in M3 if the government hadn’t eliminated that statistic). In this environment the government can run large deficits in order to get the country back on track. Unfortunately people (particularly the democrats, who are now the party of the fiscal hawks), may freak out completely over the deficit numbers as they come in and contract spending during the downturn (which will only deepen the downturn).

    And I don’t know if you need a trillion dollars of stimulus to combat AGW, but $50-$100bn would be a damn good start.

  30. Bob Wallace says:

    Well, I’m glad that the Democrats have become the “party of fiscal hawks”. Someone needs to take on the job after the Republican Party quit playing that role.

    We’re going to have to spend some money to get the country back up to speed creating jobs and producing tax revenues in order to get the downturn reversed. It might be a month or two before that becomes obvious to everyone. The Democrats should grasp that reality fairly quickly. They admire FDR.

    Given a new administration and a President more open to new ideas and change I’ll bet that a larger part of that stimulus spending will be given to renewable energy and energy conservation. Both of these will produce new, non-exportable American jobs.

    Unlike stimulus checks which can be spent for Asian electronics and Mid-Eastern oil.

  31. Robert says:

    Kunstler predicted events with uncanny accuracy. Shame no-one was listening.

    http://www.kunstler.com/Mags_Forecast2007.html
    http://www.kunstler.com/Mags_Forecast2008.html

  32. paulm says:

    I wonder why Russia is showing such interest in Georgia and now Venezuela?
    (May be Canada should be worried.)

    I think they are trying to out do China for the next world super power by asserting their control of oil.

    By next year everyone will come round to the fact that there just ain’t enough to go round now.

  33. paulm says:

    If the dutch are worried about SLR then so should everyone else.

    They are preparing to spend ~100 billion euros (150US) on dike upgrades and coastal expansion to avoid the ravages of rising sea levels due to Climate Change. Cant imagine what it would cost the US to protect its coast….

    Dutch government warned against rising sea levels
    http://afp.google.com/article/ALeqM5gu1GqZQ_HCXpdu8kK3ZTzNGDZ3RA


    Low-lying Netherlands must spend more than 100 billion euros on dike upgrades and coastal expansion to avoid the ravages of rising sea levels due to global warming, experts warned Wednesday.
    ….
    The security challenge is urgent: the climate is changing, the sea level rising and river flows increasing while a quarter of dikes and dams do not meet the current safety norms,” states the report presented to Prime Minister Jan Peter Balkenende in The Hague.

  34. Bob Wallace says:

    Robert – Don’t let yourself get led astray by selective reading of people who make highly hedged predictions.

    Try making a list of the predictions that Kunstler has made and see how many (few) actually were accurate.

    His record is pretty much that of a broken clock.

    Perhaps not quite as good….

  35. Bob Wallace says:

    England has identified the areas that it won’t attempt to preserve from the rising waters.

    The US will work to save the big urban centers. Cities surrounded by levees New Orleans style. No way in hell to save most of the land that will eventually be flooded.

  36. Robert says:

    Bob W, I read “The Long Emergency” when it came out in 2005 and I do believe he has the right general idea. He was predicting then that the sprawling network of oversized McMansions that make up America’s housing stock could not survive the dramatic increases in the price of crude.

    Back in 2000 the US had no trade deficit. Now it is something like $1T/yr, all of which can be attributed to the price of crude.

    Note also that the peak oil crisis has hardly started yet. Global production has been flat for a couple of years. What’s it going to be like when supply is falling by several percent a year in 10 or 15 years?

    Kunstler got Y2K wrong, but he has peak oil and America’s financial crisis spot on.

    This is my favourite oil price graph. It shows oil on a logarithmic scale for the last 10 years – virtually a straight line graph, showing constant % oil price inflation year on year. You tell me where it’s going to end.

    http://www.freecharts.com/Commodities.aspx?page=chart&sym=CLY0&data=G&date=072808&den=MED&evnt=ADV&grid=Y&jav=ADV&size=B&sky=N&sly=L&vol=Y&late=Y&ch1=011&arga=&argb=&argc=&ov1=&argd=&arge=&argf=&ch2=&argg=&argh=&argi=&ov2=&argj=&argk=&argl=&code=IC&org=stk

  37. Earl Killian says:

    Robert, the US has had a trade deficit since 1970 (with the exception of 1973):

    http://www.census.gov/foreign-trade/statistics/historical/gands.txt

  38. Earl Killian says:

    Bob Wallace, I certainly hope you right about 11/4, and I’m wrong.

    On the Supremes, I found Jeffrey Toobin’s book, The Nine to be an excellent read, and I recommend it. I think it explains why some older Republican appointed Justices didn’t turn out so bad, and how the Republicans learned from their “mistakes” and now their appointments are rock-solid in ideology, so I disagree about your hope for Roberts and Alito to soften.

    On the possibility of a Supreme shift back to Lochner era thinking, I don’t think writing better laws will get around it. It didn’t in the early FDR years; he had to wait for the Court to change. Remember that minimum wages, working hours, child labor, and so forth were repeatedly struck down as a breach of “freedom of contract”.

  39. Robert says:

    Earl, I didn’t have the exact figures to hand, but my statement is approximately correct. The US trade deficit has ballooned over the last decade by a factor of about 10.

    The US imports about 14mbopd. At $100 a barrel this equates to $511 billion, roughly equivalent to the increase in the trade deficit since oil was $10 a decade ago.

    If oil continues its trend of 30% price growth the US faces massive problems moving forward. It is my belief that energy prices are the real underlying cause of the “credit crunch” and the housing crash. If so expect it to get worse not better and with no obvious end in sight.

  40. Bob Wallace says:

    Kunstler got Y2K wrong, he simply parroted what has been said about peak oil since at least the 1950s (when I first heard it), he miscalled the Dow incredibly, the suburbs haven’t crashed (and show no signs of doing so), ….

    Need I go on?

    It’s like palm readers, astrologers, Nostradamous, and other tellers of the future. Say enough things, make them adequately vague, throw in a few obvious calls but be fuzzy on the timelines, and wait.

    Someone will come along, put the best possible interpretation to the things that are somewhat right, dismiss your misses, and declare you magic!

    BTW, what I’m seeing form people who seriously study oil is that we are likely to see something less than a 2% drop per year in supply over the next many years. Even that could be a significant problem if demand were to continue to rise as it was up until a year or so ago. But rising prices put an end to that foolishness.

    We’ll likely keep some sort of balance between supply and demand mostly by demand destruction in the near term. Longer, say about 5 years out, we should be looking at affordable alternatives that will eat away at demand.

  41. Bob Wallace says:

    Earl, people change. I give you T. Boone Pickens, for example. Or how about George Will who is on the cusp of supporting the Democratic candidate for President?

    I think we’ve hit a political milestone in America. I really believe that Reaganism has just expired. The “rock solid ideology” of “conservative thinkers” seems to have been swept away by reality.

    We’ve learned the hard way that we need regulation, that we can’t let the market be truly free. We gave the Republicans free rein to run the government for several years, we gave Reaganism a fair test and it failed. We’ve seen that at its core Reaganism is nothing but greed and self interest.

    I think Roberts and Alito, along with a lot of other intelligent conservatives, are going to be doing some soul searching. They can’t fall back on old political dogma.

    That dog died.

  42. splashy says:

    This has been the plan of the Repubs and conservatives in other countries all along, to bankrupt governments so they can’t do social programs, in a misguided attempt to preserve their dominance and wealth. They just don’t get that they are in the same boat as the rest of us.

    There is a blindness, thinking that money based on faith will carry them through any environmental problems. Blinded by greed and drunk with power, they just don’t see the reality.

  43. Always good to read a bracing column by Joe Romm and the comments that follow (shout out to “Lamont” ). On this occasion, I’m compelled, as an environmental advocate in good standing, to disagree with Joe. At bottom, solutions to the current financial crisis and the climate crisis are different. I agree with everyone who says that responding to financial crisis should not be allowed to push a fight against climate change out of the ring. However, it’s wrong to argue that (even the very best) climate policy could be the solution to our immediate financial woes. Let me say why.

    The financial crisis is a capital liquidity crisis in the system’s financial arteries. It could easily devolve into a new Great Depression that kills vital social organs and withers our collective future. The current liquidity crunch requires serious adult supervision and sharp fiscal tools. If I had my druthers, I’d bring back Glass-Steagall from the dead and that’s just for starters.

    The tools to combat climate crisis will require lots of money but these will not be fiscal tools. Rather, the tool kit will include regulatory standards (as higher CAFE standards, mega energy efficient appliance and green building standards), money for alternative energy R&D, carbon caps with carbon taxes or caps and trades, policies directed to growing good green collar jobs, just to name a few.

  44. Cyril R. says:

    Certainly, a completely free market is an unrealistic dream, as it rests on assumptions that are nothing short of absurd:
    - Everyone behaves rationally
    - Everyone has complete and correct information about the market
    - Externalities automatically internalize themselves

    The list of assumptions is much larger but these three will suffice to demonstrate the inadequacy of ‘free’ markets. Running the risk of being called flippant, I might say that the only world in which truely free markets work is a world that doesn’t need them. (as we would all be gods)

    A better way to look at markets is a potentially efficient tool to optimize an economy. If the policy, legislation and institutions are set right, it works very well. Therein lies the challenge for policymakers.

  45. Earl Killian says:

    Well said Cyril. To summarize that, consider the line from Natural Capitalism: “For all their power and vitality, markets are only tools. They make a good servant but a bad master and a worse religion.”

  46. John A. Jauregui says:

    The financial crisis has everything to do with Peak Oil and nothing to do with Global Warming. As a matter of fact, the worst possible scenario is Peak Oil coincident with Peak Warming where fuels availability declines with world average temperatures. And that is exactly where we are and no one is addressing it publicly.

  47. shop says:

    At the very least, we should combine whatever financial bailout is deemed necessary with the $100 billion “Green Recovery” effort proposed by the Center for American Progress (where I’m a Senior Fellow). That would that create 2 million new jobs nationwide in two years and start “the reconstruction of local communities and public infrastructure all across America, setting us on a course for a long-term transition to a low-carbon economy.”

  48. Brock B. says:

    Many people assembled to protest the proposed $700 billion bailout of Wall Street. For all the clamoring about getting rid of the payday loan industry, some people really want us to have them. For instance, the enormous $787 billion stimulus package, on top of the $700 billion bailout for Wall Street and troubled banks. Capitol Hill and the President have been working furiously on the payday loan to the nation. They hope to be putting it to good use as soon as possible. While it may be a good idea, how long is it going to take to pay it all back, and where are we getting the money from? The national debt is astounding. It is likely our grandkids will be paying off the down payment on it. Read more: http://personalmoneystore.com/moneyblog/2009/02/17/787-billion-economic-stimulus-payday-loan/

  49. Ollie says:

    I have the view that depression is a disease which comes from total identification with one’s thoughts and emotions and have found teachings like that of Eckhart Tolle to help me recover. What do you think?