[youtube:http://uk.youtube.com/watch?v=v48l5s8qryk]
John McCain’s first visit to the Letterman Show since The Cancellation. See also Part 2 (in which he’s questioned about the crowds at his rallies), 3 (about how Sarah Palin was selected) and 4 (whether Barack Obama ‘pals around with terrorists’).
Bernard Keane and David Howarth in Crikey:
It’s disappointing that Crikey, like others in the liberal media, have fallen for the nonsensical line that the so-called “financial crisis” is either real or requires urgent action. Anyone who disputes this claim, which is advanced with evangelical fervour by its advocates, is howled down as a heretic and a “denialist”. The days of the witch-hunt are truly back.
Put simply, there is no evidence of a human-induced financial crisis, regardless of the hysterical claims advanced in trendy films like Al Gore’s Inconvenient Loot. The financial environment moves through cycles unrelated to human activity. Financial records from the distant past demonstrate that key indices have previously been much lower than they are today, and move up and down of their own accord. Man’s contribution to these movements is dwarfed by the natural rise and fall of markets.
The following graph shows that the long-term financial trend is — inconveniently for crisis fanatics — resolutely upwards:
And to anyone objecting that the market is now declining — what happened yesterday?
Another rise. So much for the purported, so-called, alleged myth of anthropogenic financial collapse, which is not real at all, but actually made up.
Any recent, temporary falls in the Dow Jones Index are nothing to do with human-induced crises. Quite apart from natural ups and downs, recent sun spot activity has increased the cash burn rate, contributing to a mild reduction in credit availability, but again it is a wholly natural cycle, unrelated to human activity. The current cycle of solar activity is due to end in the next couple of years, returning credit availability to normal.
If there is to be any attempt to mitigate this wholly fictional crisis, it should be done with moderate, balanced measures that take into account the needs of businesses and the importance of maintaining job growth and profit share. The fanatics urging us to take immediate action must be rejected.
We should take no unilateral action, but await a comprehensive international agreement that includes the big financial emitters like China. To do otherwise would be to risk our own economy without having the slightest impact on the problem we’re trying to fix. Local jobs will be lost due to “bailout leakage” as firms simply move offshore to countries where taxpayer money is not being wasted propping up uncompetitive firms.
Other industries will simply be wiped out due to massive increases in their costs arising from the additional tax burden. Our LNG (Lots of Noxious Gits) industry is particularly vulnerable.
If we are foolish enough to take unilateral action then we must ensure full compensation for affected companies so that they are not required to contribute to the bailout. A special Bailout Liability Underwritten Banking certificate (BLUB) crediting firms with the amount of money contributed to the bailout must be provided to all trade-exposed industries, particularly those in bailout-intensive sectors.
But before we proceed, further work needs to be done on an appropriate bailout target. Setting too high a bailout target risks imposing a massive burden on the economy. A low bailout target would provide a sensible transitional pathway to stabilising the financial sector at $550 million ppm (payouts per manager) by 2050.
This prudent, moderate, sensible, balanced course of action, while opposed by trendies and financial crisis fundamentalists, will ensure we protect the very jobs and businesses most at risk from this new secular religion.
[With thanks to Michael Mainelli.]
Yesterday was World Food Day, on which subject BBC Radio 4’s World Tonight programme did a piece asking whether the current steep falls in commodity prices meant we were out of the woods on the food price spike. By no means, I argue in this interview – a point I also argued at the World Food Programme’s global senior management meeting last week.
Spending 36 hours with WFP leaders and country directors was something of an eye-opener, incidentally. I had always regarded WFP as being as the humanitarian relief agency that wouldn’t bother to co-ordinate its action in the field with other emergency aid providers, not least because its sheer size allowed it to call the shots on its own terms. But I have to say: having listened to WFP-in-introspective-mode (probably not a mode they indulge in very often, one suspects), I’ve come away with a different impression.
One thing you realise, as you spend time with them in this kind of a setting, is that they are all genuinely, viscerally passionate about what they do. Josette Sheeran, their director, likes to say that ‘nothing gets between WFP staff and a hungry child’, and as you listen to them talk to each other, it transpires that this is actually not just a neat soundbite. These people are very focused on the people they’re there to feed.
And they are also – unusually, perhaps, for a UN agency – just not that interested in process for its own sake. You could see that in part just in the sheer efficiency with which the meeting was organised: everything worked flawlessly, with no fuss.
By comparison, another UN agency which shall remain nameless asked me to speak at an event in Geneva earlier this year, and it took them six months (and a veritable torrent of chasing emails from me) to reimburse the cost of a night’s hotel stay. The reply to my last email on the subject was apologetic, but explained that most of the agency’s finance people had been away all summer, and the expenses claim needed to be approved by five different departments.
Which made me think: I know which of the two agencies I’d want to be delivering my emergency assistance, if I were an internally displaced person in a disaster. And it also gave me a new sympathy on why WFP might think that time spent in co-ordination meetings with agencies that need sign-off from seventeen departments before they can visit the bathroom, might be time better spent delivering actual aid to actual people.
With a global recession looming, international efforts to curb greenhouse gas emissions may be in jeopardy, as concerns are voiced in the US, Canada and Europe about the wisdom of adopting measures that would impose an additional cost burden on already fragile economies. Such thinking is misguided, and it is dangerous. A recession may in fact ease the introduction of carbon emissions trading schemes.
At the recent EU summit in Brussels there was widespread reluctance to meet pledges all EU governments made last year to cut CO2 emissions by 20% by 2020. Eight Eastern European countries – including Poland, Hungary, Romania, Bulgaria, Slovakia, Latvia, Lithuania and Estonia — released a joint statement urging the EU to balance the wish for cleaner air against “the need for sustainable economic growth” at a time of “serious economic and financial uncertainties.” Italy threw its weight behind these countries, threatening to veto the proposed EU plans.
Likewise in the US, top power industry executives seized the opportunity to lobby for delaying carbon emissions legislation, at the recent New York Utility Conference. More dramatically in Canada, the Liberals were dealt an electoral defeat on Wednesday largely on the basis of their strong advocacy in favour of a carbon tax (see story here).
All this backtracking is akin to forfeiting the forest for the tree. Financial crises are short-term phenomena, global warming on the other hand is with us for the long haul, and the window of opportunity for addressing it is fast narrowing. The prospect of economic recession does not in any way reduce the magnitude or the urgency of the climate problem, nor does it provide any compelling reason for delaying action. Or as EU President Barroso put it:
“Saving the planet is not an after-dinner drink, a digestif that you take or leave. Climate change does not disappear because of the financial crisis.
Moreover, as David Wheeler of the Center for Global Development argues, smart carbon regulation will be easiest, not hardest, to introduce during a recession, since a slowing economy emits less, and smart cap-and-trade regulation can “lock in” this head start on emissions reduction at almost no cost during the recession. His proposal for the US is to:
• Immediately pass a cap-and-trade bill that sets the initial total limit at the pre-recession emissions level, and schedule a progressive decline in the overall limit that will achieve the needed long-run goal.
• Establish an annual auction for 100% of the emissions permits.
• Set aside a healthy share of the auction proceeds to provide a compensating rebate for every American
In this way the consumer is shielded from cost increases, and the power provider incentivised to develop less carbon-intensive energy options for the future.
It is amply clear that big emitting developing countries such as China and India will not make significant commitments to curb their greenhouse gas emissions unless the US and EU lead by example. With only about a year to go before the new global deal to replace the Kyoto Protocol is due to be reached in Copenhagen conference, the US and EU have no room to falter. More than ever, political courage and leadership is needed to ensure global efforts to address climate change are not jeopardized.
As the financial crisis has intensified, Alex has frequently pointed us to the thoughts of NYU’s Nouriel Roubini, a long-time prophet of economic doom (see here, here and here). Given his warnings of “systemic meltdown”, you might imagine that Professor Roubini is a dour figure. Not so. In a bizarre twist to the Demise Of Capitalism As We Know It, gossip blog Gawker has gone to war with the prof:
It’s time to call bullshit. The image of Dr. Doom may satisfy the needs of the media and partygoers this Halloween—but Roubini is anything but dour. The 50-year-old Iranian-Jewish economist is a promiscuous Facebook friend who draws a cosmopolitan crowd to the frequent parties at his Tribeca loft—an apartment with walls indented with plaster vulvas, incidentally.
I’ll leave you to investigate Gawker’s initial assault and follow-up post, which includes recent correspondence on the current crisis from, er, St. Tropez. Still, in this time of generalized panic and depression, it’s good to see that one of our gurus is having a good time (and pretty hot for 51 too!).
