I'm I the only one to be really disappointed with AOC this year? I used to think she got a bad rap, and was an effective advocate for progressive causes that reach people others couldn't. But she has really doubled-down on picking bad faith arguments with centrist or centre-left Democrats this year - the misleadling arguments over the $2000 stimulus checks, odd battles on Cabinet picks, and now clearly engaging in ludicrous arguments over the Fed. She sadly seems to be someone who will only ever parrot what the most left-wing activists are saying...which isn't a strategy to achieve very much IMO
She had a lot of good public outreach, including explaining arcane things clearly to people who don’t usually listen, in her first year or two in office. That raised expectations.
Please consider that when you put it like that, it seems that you're deprecating the intelligence of service industry and/or blue collar workers. If you're sincere about that, it says more about you than her.
Being good with memes might be an important skill for politicians in the future. Making good use of new communication technology is an edge, and in close elections, edges are important.
She graduated cum laude in economics at BU. You might not agree with her economic opinions or her choices in what to fight over, but to say that economics isn't her core competency is just clearly wrong.
Wait, so unless you come from the bottom 20% of the income distribution you are a champagne socialist? Her father died and she had to fight off foreclosure on her house and she's a champagne socialist?
AOC has an asteroid named after her because she came in 2nd in the Science Fair. She's succeeded at everything she's tried to do so far. Her father died during her second year in college and she graduated cum laude anyway. She defeated an incumbent Congressman out of nowhere, an almost impossible feat. I encourage you to check out her Wikipedia page. Regardless of whether you agree with her positions or not, don't doubt the talent.
She has a double undergraduate degree from BU in economics and international relations, cum laude. She interned with Ted Kennedy's office while in college. She worked as an organizer for Bernie Sanders and other NY campaigns. Politics and economics ARE her core competencies.
If she believes in MMT, economics is not one of her core competencies. An economist would find it impossible to evaluate MMT against competing theories because the proponents of MMT completely refuse to formulate any sort of self-consistent model of their theory.
Since there are economists who claim to believe MMT is a workable model, I think your statement is self-refuting. Or, let me say, I'm not going to let a random pseudonymous commentator tell me what is or isn't economics without some evidence.
James -- You seem to know her. How would you assess her performance of late? From far away, this position on Powell seems poorly constructed. Her passionate defense of Defund the Police last year misguided. Has she had any wins? Or as Kenny mentions below, have expectations been raised too high?
I don't know her. I just believe in doing some research about someone before asserting strong opinions on their competency and ability. I suspect that, like everyone else, she will make errors. Lots of people have doubts about Powell, for both substantive and political reasons. Trusting Republicans doesn't have a very good recent track record, for example. I think the infrastructure bill bundling is definitely a win for her, to take one case.
I'm in the camp that AOC has significant political potential. That being said, I don't understand how you can give credit for the bill bundling since it hasn't happen yet. My guess is that a large (3+ trillion) reconciliation bill has less than a 50% chance of passing at this point, but its still very much TBD.
Slow Boring is hard work. She's doing the hard work of pushing infrastructure improvements (along with many others in Congress) in order to get a bill. She may not get the large one through in its current form, but bundling the two together increases the chance of passage. Holding the smaller bill hostage means that Republicans and Manchin/Sinema can't kill the small one and then the large one. Remember, the Democrats have very little margin. We're going to get some kind of infrastructure bill through, and she's part of the reason why.
I'm going to hard disagree with you here. How many political campaigns against incumbents in heavily Democratic areas have you been involved in? Barack Obama failed to do what she did in Chicago.
Dude, I was there. Check Wikipedia: "In 2000, he lost a Democratic primary race for Illinois's 1st congressional district in the United States House of Representatives to four-term incumbent Bobby Rush by a margin of two to one.[138]"
it's not quite accurate to say hard left activists are her base, but it is true to say she perceives hard left activists as her base. Her actual base, the people who will re-elect her and re-elect her for as far as the eye can see, are actually blue collar NYC residents who are probably much more main stream than she is.
The simple answer to the last question seems to be that a large fraction of Squad-adjacent self-styled progressives really enjoy fighting, and the actual making of progress is a distant second.
The National Ignition Facility just made a major fusion breakthrough going from 3% to 70%. If they got it to work a lot of climate activists would be distraught. You mean it has been fixed? Noooooo!!!!
There has been unbounded optimism that we're just about to turn the corner on fusion energy probably longer than you've been alive, I'd wager. Wake me up when we're there.
It’s a hard engineering problem sure. But the physics is sound. It will work. We just need fast enough computers, lasers, etc.
Just as an example, the largest transoceanic cable transmits 5,547 GB per second along a glass fiber that utilizes lasers controlled to an almost unimaginable degree. When your story was written the best we could do was 0.2 GB/second.
NIF is useful, but it isn't going to lead directly to reliable fusion power for the masses. A lot of other things have to be worked out first. Even if you had reliable fusion power, you would still have to electrify the car/truck/aircraft fleets. Lots of work to do.
True. My point was more that when it works* people will be able to drive their electric Suburbans that go 0-60 in 2 seconds, live in their McMansions with the AC set to 60. Fly to Europe 5 times a year, etc.
And that will drive a certain segment of society nuts.
I don't know what you are accusing me of. I'm not ideologically opposed to fusion power. I just, after looking at the science and talking to the five fusion physicists I know, don't expect to see widespread fusion power in the next 30 years at least.
* at this point it has been confirmed that it will work and at this point it’s entirely an engineering problem. A huge engineering problem, sure. But that’s a solvable problem.
On what timeline? Fusion power proponents have been promising fusion power in 10 years every decade since the 50s. Unless large-scale fusion power is available in the next 40 years, it's not relevant to the climate problem of preventing catastrophic climate change.
There will always be some people who are incapable of being happy(although I thought they were mostly Conservatives). What percentage of people do you think would actually be displeased by Climate change being solved? A few percent at most I would think.
5%? Sort of like the percentage of surgeons who disapproved of anesthesia when it was discovered. I think there is a solid 5% that would be opposed to anything.
The climate left has long embraced dubious strategies to keep hydrocarbons in the ground. They opposed the Keystone XL pipeline on the theory Canada would stop extracting shale oil if it wasn’t built. This was rubbish. Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil. Shale oil is still being extracted but is being transported by rail cars, which release more carbon per ton mile than pipelines. A dubious victory.
If I were a climate warrior, I would focus on goring fat cats. The 1% consume far more carbon per capita than normal people and they make great villains. Ban the manufacture of all private aircraft and recreational boats with more than 200 horsepower. Slap stiff taxes on existing private planes and recreational boats. If climate is important enough for working stiffs to drive a Prius, rich blokes can give up their yachts and take up sailing! Most importantly, price home energy progressively. A family’s first 1000 kilowatt hours in a month should be cheap, the next 1000 should be more expensive, and anyone who wants to air condition a 6,000 square foot home in Texas or Florida should pay German energy prices. Put a surtax on gas guzzling vehicles priced over $50k. Use all the money to build nuclear power plants. Embracing nuclear power is symbolically and critical because it would signal that climate is important enough to trump other climate concerns and to kick granola chomping hippies and technophobes to the curb.
I might buy an electric car when I no longer hear private planes circling my town for shits and giggles.
"Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil."
Canadian here. Just to expand on this a bit, managing internal tensions ("national unity") is always a significant political concern in Canada. The central challenge with Canadian climate policy is getting Alberta on board, because Alberta's economy is very dependent on fossil fuel production. Whenever the discount on Canadian oil (the WCS-WTI spread) increases by a dollar, that costs the Alberta government $300 million annually.
The Canadian approach to climate policy, negotiated during the brief window of opportunity when Albertans elected a progressive government (2015-2019), is based on a national carbon price floor rising from C$40/t today to C$170/t in 2030 (plus complementary regulations). It's basically William Nordhaus's argument for coordinating across jurisdictions based on prices rather than quantities (negotiating quotas for emission cuts): it distributes the costs across the country rather than singling out a particular region (Alberta) or industry (oil and gas). Crucially, no transfers are required from the provinces to Ottawa, or between provinces: each province can set up and administer its own carbon price, so long as it meets the national standard.
The carbon price floor and complementary regulations (phasing out coal-fired power by 2030, fuel-efficiency standards, zero-emission vehicle mandates, etc.) are demand-side measures, aimed at cutting low-value consumption of fossil fuels within Canada. The idea is that if global demand for oil falls (e.g. if the US makes a push for rapid adoption of electric vehicles), Canada's oil production will fall; if it doesn't fall, then cutting Canada's oil production isn't going to help.
For climate activists, it's far easier to mobilize against supply-side targets (pipelines and the oil sands) than it is to mobilize in support of unpopular demand-side measures like higher gas taxes. David Roberts explains: https://www.vox.com/2015/11/8/9690654/keystone-climate-activism
But demand-side measures seem like a better way to tackle the actual problem of cutting emissions. From the Leach Report (Alberta's 2015 blueprint for climate policy): "... for [trade-exposed] sectors, unduly aggressive actions taken to reduce emissions in Alberta may not lead to real emissions reductions. Instead, they could lead to emissions leakage, with production and the prosperity and employment it brings simply shifting to other jurisdictions without stringent GHG policy, and continuing to produce emissions. This would negatively affect Alberta’s economy, but not make an impact on global greenhouse gas emissions."
If an electric car is a good decision, why don't you just go ahead and buy it? Fat cats do consume a lot of carbon, but not the majority, unless you mean by fat cats the average American, German, and Chinese person.
>>A family’s first 1000 kilowatt hours in a month should be cheap, the next 1000 should be more expensive, and anyone who wants to air condition a 6,000 square foot home in Texas or Florida should pay German energy prices. <<
That's exactly how our electricity (and water) bills look like here in Los Angeles.
“Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil.”
You’re aware, presumably, that Canada is a modern, diversified economy much like the United States? Oil is perhaps 6% of Canada’s economy, vs under 2% of America’s.
“ I might buy an electric car…”
If you’re anything like me and run your existing cars until they’ve depreciated to nothing, then by the time you next want to buy a car, chances are that an EV will be far and away the best choice, and you’ll only buy an ICEV if you’re allowing ideology into the decision.
My 2007 honda accord has 257k miles and has never given me issues. I drive it proudly, even though the paint on the hood and roof have oxidized. Runs great and I’m not trying to pick up women in it.
I would love to hold out for a self driving car. I drive a lot for work and would pay the premium
Hmm, then maybe a hybrid will be a good choice until your next-next car, lol.
My 2005 Pontiac Vibe will serve me a good long while (only 130k on it and it's a Corolla drivetrain), and our other car is at the bleeding edge of fuel efficiency for a non-hybrid, but when one or the other of them outlives its usefulness, an EV will replace it because it makes sense.
Honestly, I'm of the opinion that this is all a bit overblown, simply because the technologies we need to mostly ameliorate the problem have matured so rapidly that they already win out in purely economic decisions made by experts and soon will for ordinary folk too.
Just straight-line depreciation of the world's carbon-intensive generation and transportation assets holds us to somewhere around 3 degrees Celsius of warming, because almost all of the former and most of the latter will be replaced by carbon-neutral ones.
The role of government is to figure out how to clean up around the edges, subsidize "faster-than-purely-economically-indicated" depreciation of old power plants and vehicles, and figure out how much, if any, geoengineering to throw into the mix.
I know you say your not trying to pick up women in a rusty 2007 Civic. But honestly in a mean machine like that the ladies just line up. I bet every time you come out of The grocery store you have say “ladies please I am
Just trying to shop here”. After that they Look at each other and say wow the owner of a 2007 Civic talked to me!!!!
The argument against Keystone XL here is nonsensical. It has nothing to do with keeping Canadian oil in the ground.
Why is KXL desired? Because it will make people money by reducing Oil transportation costs. How does reducing transportation costs make money? By allowing you to sell cheaper oil and thus undercutting someone else.
Cheaper oil means less competitive clean energy. Thus blocking KXL bolsters clean energy in the US by effectively taxing Canadian oil.
"Thus blocking KXL bolsters clean energy in the US by effectively taxing Canadian oil."
If a carbon tax isn't politically feasible in the US, it seems like a more straightforward way to cut American usage of Canadian oil would be to let California continue to raise vehicle fuel-efficiency standards. (California is a big enough auto market that manufacturers follow the California standards.) If the US doesn't reduce demand, blocking more Canadian oil from arriving by pipeline just means that the US imports more oil from elsewhere - tanker transport is pretty cheap.
The argument against trying to cut emissions by cutting supply is that there's multiple sources of supply. To quote Andrew Leach: "I get all my groceries from my local Safeway, but if it shuts down I'm not going to starve to death."
I am not arguing that this is the best way to fight climate change. I was replying to the absurd assertion in the post above that climate activists "opposed the Keystone XL pipeline on the theory Canada would stop extracting shale oil if it wasn’t built."
so increasing transit costs by 15% and increasing canadian oil prices by 3% will keep shake oil in the ground? that doesn’t seem to be working, calgary isn’t a ghost town yet.
It is not necessarily increasing oil prices. It is preventing a decrease in oil prices. If that is 3% then it is the equivalent of a 3% subsidy towards alternative energy.
I am not arguing that it is good policy but, that it has an impact on the makeup of energy sources, is pretty obvious to anyone not being deliberately obtuse.
world energy prices are driven by the world market and athabaskan shale is only a minor input. the cost of bringing shale energy to market might be influenced by whether their is a pipeline, but this would only impact production within a very narrow range
The climate left clearly does not believe persuasion is part of its goals, which is deeply tragic given that persuasion is probably the single most important thing activist groups do. Gay marriage activists didn't start the fight by just harassing left-wing politicians until they agreed to be pro-gay marriage, they also launched this massive, far-reaching cultural project that transformed the views of your average American over the course of a few short decades.
If the climate left wants to be useful, they need to start thinking about how they can more or less propagandize Americans into giving a shit about the climate -- and into being willing to make sacrifices for it. I think this is doable. A lot of Americans are desperate for our country to take on some great challenge and have another history-making achievement. They just need to be convinced that climate is that battle. All you need to do is convince the majority of left-of-center people that they need to be willing to accept some personal disruption to save the planet, and you do that through cultural messaging telling them this is their chance to be heroes and to make their mark on history.
I like this comment a lot, but I also think persuasion should be aimed beyond the center-left. A meaningful number of center-rightists (yes, there are still a few and on some days I feel like I am one) are also concerned, and market-based solutions are going to have to be part of the toolkit if anything is to be done.
The climate-Left in the US isn't facing a uniquely hostile problem. Everywhere in the developed world we see 2 things:
1. a significant portion of the population proportates to care about climate.
2. the vast majority of the population won't support any significant carbon pricing or prioritization of climate over other issues.
It is highly unlikely all of these countries have political parties that have missed out on effective persuasion strategy. Democracy is the problem for climate change. The solution to the problem (lower living standards now for the benefit of future generations) is unsellable.
Especially now that future emissions primarily come from the developing world. Africa & India quite reasonably are going to carbonize their economies to get out of poverty. The emissions increase from this will dwarf the developed world emissions strategy.
This sounds fatalist and it basically is. But I don't see any teneable solution beyond geo-engineering or climate authoritarianism
I see Sunrise Movement's new position is the useless, non-starter "Abolish the Senate". No doubt they're holding "Abolish the USA" back in response to a similar trivial non-issue. If Sunrise was actually a GOP false flag operation, it would be hard to distinguish from their current motivations.
I think the AOC quote highlights something important about what's going on here. I think it's not really that people believe the Fed is an important or particularly effective tool to fight the battles at the forefront of the progressive movement right now (against climate change, racism, etc.). However, the objective of people like AOC isn't really to identify the institutions that would be best suited for the task. People on the far left want to consolidate political power by ensuring that progressive priorities are the central organizing principle of EVERY important institution. In this instance, progressives' idea is that failing to effectively manage inflation is fine as long as we have another institution on our side against the greatest threats to American society.
This isn't because progressives are particularly evil-- it's natural for any political movement to try something like this if it has the chance. Evangelical Christians, for instance, want creationism taught in schools and want the Supreme Court to make laws that adhere to their religious principles. I'm sure they'd also prefer it if the corporations were run in accordance with the teachings of Jerry Falwell. But now that the left seems to have disproportionate power in many (but not all) institutions, thinking about how progressive ideology will shape the priorities of those institutions is going to be more important than thinking about how they're influenced by hardcore Christians.
Let's not let up on the Christian Dominionists just yet.
They're a near-perfect electoral coalition under our system, such that with only a very few fellow-travelers (5-7%) they can win elections while only making up 38% of the electorate.
The biggest flaw is thinking that cars charged by a green grid would need to be small or slow. There is no requirement for that at all. People could drive as many electric F150s and Suburbans as they want.
So voters are different from consumers remember the average Democratic primary voter is 53. That might be the reference the car size increase happened in the 90s and 2000s with a dip in 2008 when people where broke.
Gotta say Troy -- not following you here exactly. My point was over that past 10 years, vehicle size hasn't increased. Weight is flat. Fuel efficiency has gone up. Unless there's some sub-population tracking of vehicle purchases by "median voters" I just don't understand the "doubled the size of their car" statement.
Two points. Inflation is a sustained general increase in prices. My view, and the view of the Fed, is that there are sectoral imbalances leading to rapid price increases in particular portions of the economy. This is why the Fed is sanguine about the current inflationary environment. They have adopted a Bunker Hill approach, don't shoot until you can clearly see the target.
As for whether fossil fuel investment is risky, tell anyone who put money into the coal industry fifteen years ago that coal wasn't risky. Then duck! Coal, of course, lost in economic terms because natural gas became a less expensive way to generate electricity. The improvements in wind and solar have resulted in both being cheaper than natural gas. The support for vehicle electrification in the infrastructure should start to reduce the demand for petroleum products soon. I see lots of risks in the fossil fuel sector.
This is the thing that’s never sat well with me regarding “the Fed must strangle fossil fuel investment”…
The market is going to do that for us, waayyy faster than anyone believes is possible today.
The only fossil fuel power projects still under construction are heavily state-subsidized or nearly complete, as is. An old-fashioned grid will never be built in most of Africa, ffs.
What needs to be done is to subsidize the more rapid depreciation of existing carbon-intensive assets.
Exactly. Investment in fossil fuel infrastructure trials creating lots of stranded assets which after incapable of earning a return because they are uneconomic to use.
The only thing, IMO, that might save the supermajors is that they have the well infrastructure and expertise to put CO2 back underground safely. That's a very thin reed, contingent on our cracking efficient CCS, feeling the need to "rewind the clock", and deciding that underground storage is the safest option.
Not sure those puzzle pieces are going to come together. The safest thing to do might end up being to produce large blocks of graphite to bury.
It would be awesome if the oil companies, with all their drilling experience, led a big push on geothermal energy. As David Roberts writes, it's an exciting source of virtually unlimited, zero-carbon energy.
There is one climate step that is within the Fed's domain, although it is shared with other regulatory bodies. This is the rules regarding loan authorization.
The climate warrior focus on quasi-religious choices for technology is a failing strategy. The old BAT approach of the EPA was replaced by today's "bubble" approach because having politicians and bureaucrats in DC select the technology for every business in the US was costing 10 times what it cost to have the decision making dispersed across thousands of local private decision makers making their own personal decisions. You see this today in climate with the immensely more cost effective Energy Star approaches vs political technology selection.
Cost effectiveness and dispersed personal decision making will be needed to hit the climate goals.
One barrier to this is the collateral requirements that banks must meet. When a landlord wants to upgrade their HVAC system with a $100K smart control system they cannot get a collateralized loan. The collateral value of the smart control system is small. It's just a PC. The bank cannot consider the projected cost savings directly towards the loan evaluation.
All too often the bank cannot make this loan, or must charge a huge interest rate, because there a strict limits on non-collateral loans.
These and similar limits serve a real purpose. Non-collateral loans, and loans with grossly inadequate collateral, are a favorite for fraud and contributed significantly to the 2008 financial crisis. Loans for energy saving got caught in the regulations to clean up the mess.
Carefully considered revision of regulation of loans for energy saving devices, replacement production processes, etc., is an appropriate reform.
Sadly, AOC and the progressive wing want to continue the practice of politically chosen favorite technologies. They just want the banks to be their agents in enforcing politically chosen technologies.
Would you be so kind as to expand upon the collateral requirements from banks? Who has imposed them? Which laws cause them? What precisely are the laws? What loans do they apply to? Etc and etc. This is something I have not heard about before, and am quite interested
The full range of banking regulation is an entire specialty of commercial law. The primary Fed involvement is many regulations that say "the bank shall ..... in order to have access to Federal Reserve facilities." There is a very long list of loan, capital, audit, and other requirements. These can have unexpected side effects like this. Before 2008 loan officers had much more flexibility about approving loans, and the result was things like Ninja (No Income, No Job) loans. Those contributed to the 2008 crash. Loan officer flexibility was restrained in a great many ways, resulting in some of these unwanted side effects.
I think Jay Powell has done a great job. He is one of only three excellent personnel actions by Trump (in addition, firing that bastard Comey and hiring Scott Gottlieb). He has helped us weather some tough economic times.
Biden should thank him profusely, pat him on the back, and appoint a new Fed Chair, probably Brainard.
This has nothing to with "credibility" or finreg or climate. It has to do with the credibility of the Democratic party and how it values its most capable members. As the party of government, the Democrats have seemed awfully gun shy about entrusting the most important posts in government to actual loyal Democrats. We worry about "credibility" in national security so our Presidents appoint Chuck Hagel and Bob Gates as SecDef to reassure the world that our security will be safe in trustworthy Republican hands. We worry about "credibility" on managing the economy so our Presidents reappoint Alan Greenspan and Ben Bernanke to reassure the world that the economy will be safe in trustworthy Republican hands.
Bah. Republicans don't do that, and nor should we.
I wanted to read the linked rationalist article, but apparently, that's private according to Substack. I believe someone named madasario had the same problem earlier.
A classic! Thanks for the direct link here, I also couldn't get into it from my email so was not sure. IIRC MY also talked about this on Julia Galef's podcast.
I'm no expert on the rationalist community, more rationalist-curious. But trying hard, every day, to be less full of shit seems really important right now.
I'm a little confused as to what the stress test scenario where just fossil fuel investments go to zero is supposed to be. If climate change destroys the economy doesn't pretty much everything go down? How's a bank supposed to pass a "the modern economy is over" stress test? It seems that the scenario in which specifically fossil fuel investments collapse and everything else is fine is actually the "we do something about climate change" scenario. You'd essentially be asking banks to hedge against the risk that you accomplish your political program. Which seems... weird? Idk, I guess if you got a Fed chair in there that did all these aggressive stress tests that would be signal to the market that the climate agenda might actually succeed and maybe that lowers their willingness to invest in fossil fuels? Hardly seems likely to be a game changer.
As someone active in the bank stress test world, climate stress testing is dumb. Slow moving or policy based events are slow burn, not shocks. Climate is a strategic planning exercise. Banks have been dealing with things like droughts and hurricanes forever.
Out of curiosity, how do these stress tests work? I can't imagine any climate-related event that would dramatically devalue large quantities of assets that banks currently hold on their balance sheets. Do people just run climate stress tests and say "as expected, there is negligible risk of a climate-driven financial crisis"?
You can track fossil fuel contribution to industries with input/output tables and simulate industry level impacts of a carbon tax. That's asymmetric, but not game changing in any industry outside of energy. You can create a weather event that hits concentrations in your portfolio, but a chunk of that is insured so you probably need to assume insurance failures or large regional increases in insurance costs. Finally I've seen blanket productivity shocks, but I find those completely arbitrary. Climate change doesn't change my knowledge and ability to build widgets or cut hair.
If the impact of marginal you'd just tell your regulator all the terrible things on your scenario and that thankfully your diversification and strong underwriting allows you to weather the storm.
>>>some of it has been the surprising (to me, at least) decision to stick with Trump’s tariffs<<<
Can't say I'm too surprised. Although this would help the supply side of the economy, the administration, I'd guess, thinks the pro-China optic are bad.
But this is (yet another) area where I think they're erring excessively on the side of caution. I hate to sound too critical, because on a few areas — swinging for the fences on the two big legislative proposals now before Congress, say, or the hard-assed shut down of America's Afghanistan War — they've been anything but timid.
But there are quite a number of areas where I fear this White House is too worried about Republican attacks: vaccine mandates, vaccine passports, prosecutions for sedition and Trumpian corruption, student loan forgiveness, etc. And yes, China tariffs. They do politics for a living and I don't. So maybe I'll be proven wrong. But I do believe they could be a bit bolder on one or two of these things (Even the evictions moratorium extension was a cave-in to the party's left, not a proactive measure).
Even if the tariffs aren't the most effective option, I don't think the harms are really there to justify ending them. Tweaks to included products, yes.
But really, we do need to start figuring out how to provide credible alternatives to BRI investment to ordinary folks in the Indian Ocean basin and beef up security arrangements in East Asia.
I wonder if we can slip enough climate shit into a foreign investment bank bill to get the progressives on-board while still retaining a big anti-China tinge to keep the GOP on-side.
Biden should appoint someone as Fed Chair that best understands monetary policy because you can't predict events and how that might change the monetary policy environment. So obviously he should appoint a market monetarist. Scott Sumner would be best, but claims he wouldn't take the job, so that leaves David Beckworth. In a lot of ways Beckworth is similar to Powell (both right of center but principled and non-partisan) except that he is an actual monetary economist and has better theoretical underpinnings for his views. If Biden really needs to appointment someone that is more Democratic Party affiliated then I would propose Christina Romer or Jason Furman, who have absorbed a lot of the MM perspective.
I'm I the only one to be really disappointed with AOC this year? I used to think she got a bad rap, and was an effective advocate for progressive causes that reach people others couldn't. But she has really doubled-down on picking bad faith arguments with centrist or centre-left Democrats this year - the misleadling arguments over the $2000 stimulus checks, odd battles on Cabinet picks, and now clearly engaging in ludicrous arguments over the Fed. She sadly seems to be someone who will only ever parrot what the most left-wing activists are saying...which isn't a strategy to achieve very much IMO
Yes. But what can you expect, she’s a former bartender who’s really good with memes.
She had a lot of good public outreach, including explaining arcane things clearly to people who don’t usually listen, in her first year or two in office. That raised expectations.
Please consider that when you put it like that, it seems that you're deprecating the intelligence of service industry and/or blue collar workers. If you're sincere about that, it says more about you than her.
Being good with memes might be an important skill for politicians in the future. Making good use of new communication technology is an edge, and in close elections, edges are important.
It’s the same way I’m not going to listen to Tommy Tuberville on policy. Just not their core competency.
She graduated cum laude in economics at BU. You might not agree with her economic opinions or her choices in what to fight over, but to say that economics isn't her core competency is just clearly wrong.
She's not a champagne socialist.
Wait, so unless you come from the bottom 20% of the income distribution you are a champagne socialist? Her father died and she had to fight off foreclosure on her house and she's a champagne socialist?
AOC has an asteroid named after her because she came in 2nd in the Science Fair. She's succeeded at everything she's tried to do so far. Her father died during her second year in college and she graduated cum laude anyway. She defeated an incumbent Congressman out of nowhere, an almost impossible feat. I encourage you to check out her Wikipedia page. Regardless of whether you agree with her positions or not, don't doubt the talent.
It’s the same way I’m not going to listen to Tommy Tuberville on policy. Just not their core competency.
She has a double undergraduate degree from BU in economics and international relations, cum laude. She interned with Ted Kennedy's office while in college. She worked as an organizer for Bernie Sanders and other NY campaigns. Politics and economics ARE her core competencies.
If she believes in MMT, economics is not one of her core competencies. An economist would find it impossible to evaluate MMT against competing theories because the proponents of MMT completely refuse to formulate any sort of self-consistent model of their theory.
Since there are economists who claim to believe MMT is a workable model, I think your statement is self-refuting. Or, let me say, I'm not going to let a random pseudonymous commentator tell me what is or isn't economics without some evidence.
"She has a double undergraduate degree from BU in economics and international relations"
just goes to show that having a degree on the wall doesn't make you competent in the field.
She shouldn't be dismissed because she was a bartender of some point in her life. Definitely not the typical bartender.
Well played on this one, James L.
James -- You seem to know her. How would you assess her performance of late? From far away, this position on Powell seems poorly constructed. Her passionate defense of Defund the Police last year misguided. Has she had any wins? Or as Kenny mentions below, have expectations been raised too high?
I don't know her. I just believe in doing some research about someone before asserting strong opinions on their competency and ability. I suspect that, like everyone else, she will make errors. Lots of people have doubts about Powell, for both substantive and political reasons. Trusting Republicans doesn't have a very good recent track record, for example. I think the infrastructure bill bundling is definitely a win for her, to take one case.
I'm in the camp that AOC has significant political potential. That being said, I don't understand how you can give credit for the bill bundling since it hasn't happen yet. My guess is that a large (3+ trillion) reconciliation bill has less than a 50% chance of passing at this point, but its still very much TBD.
Slow Boring is hard work. She's doing the hard work of pushing infrastructure improvements (along with many others in Congress) in order to get a bill. She may not get the large one through in its current form, but bundling the two together increases the chance of passage. Holding the smaller bill hostage means that Republicans and Manchin/Sinema can't kill the small one and then the large one. Remember, the Democrats have very little margin. We're going to get some kind of infrastructure bill through, and she's part of the reason why.
I'm going to hard disagree with you here. How many political campaigns against incumbents in heavily Democratic areas have you been involved in? Barack Obama failed to do what she did in Chicago.
Dude, I was there. Check Wikipedia: "In 2000, he lost a Democratic primary race for Illinois's 1st congressional district in the United States House of Representatives to four-term incumbent Bobby Rush by a margin of two to one.[138]"
it's not quite accurate to say hard left activists are her base, but it is true to say she perceives hard left activists as her base. Her actual base, the people who will re-elect her and re-elect her for as far as the eye can see, are actually blue collar NYC residents who are probably much more main stream than she is.
If a "base" are the people who vote for you in primaries, based on her electoral results, her base is mostly hipsters in Queens.
The simple answer to the last question seems to be that a large fraction of Squad-adjacent self-styled progressives really enjoy fighting, and the actual making of progress is a distant second.
The National Ignition Facility just made a major fusion breakthrough going from 3% to 70%. If they got it to work a lot of climate activists would be distraught. You mean it has been fixed? Noooooo!!!!
Fusion is never ever ever going to be a thing. We've been down this "major fusion breakthrough" road many times before.
When was the last time you got caught up on the latest research?
https://news.mit.edu/2020/physics-fusion-studies-0929
Never! I just go back and read sentences like this: "the Japanese expect to have a prototype commercial fusion reactor in operation by 1993."
https://www.upi.com/Archives/1982/09/20/Fusion-energy-seen-closer/2271401342400/
There has been unbounded optimism that we're just about to turn the corner on fusion energy probably longer than you've been alive, I'd wager. Wake me up when we're there.
It’s a hard engineering problem sure. But the physics is sound. It will work. We just need fast enough computers, lasers, etc.
Just as an example, the largest transoceanic cable transmits 5,547 GB per second along a glass fiber that utilizes lasers controlled to an almost unimaginable degree. When your story was written the best we could do was 0.2 GB/second.
NIF is useful, but it isn't going to lead directly to reliable fusion power for the masses. A lot of other things have to be worked out first. Even if you had reliable fusion power, you would still have to electrify the car/truck/aircraft fleets. Lots of work to do.
True. My point was more that when it works* people will be able to drive their electric Suburbans that go 0-60 in 2 seconds, live in their McMansions with the AC set to 60. Fly to Europe 5 times a year, etc.
And that will drive a certain segment of society nuts.
Climate change doesn't care if you want to own the degrowth environmentalists or not.
Climate change doesn't care whether you're trying to double the size of the hill you need to climb by adding an ideological paradigm or not.
I don't know what you are accusing me of. I'm not ideologically opposed to fusion power. I just, after looking at the science and talking to the five fusion physicists I know, don't expect to see widespread fusion power in the next 30 years at least.
* at this point it has been confirmed that it will work and at this point it’s entirely an engineering problem. A huge engineering problem, sure. But that’s a solvable problem.
On what timeline? Fusion power proponents have been promising fusion power in 10 years every decade since the 50s. Unless large-scale fusion power is available in the next 40 years, it's not relevant to the climate problem of preventing catastrophic climate change.
It’s very relevant. Google it - tremendous progress has been made recently.
There will always be some people who are incapable of being happy(although I thought they were mostly Conservatives). What percentage of people do you think would actually be displeased by Climate change being solved? A few percent at most I would think.
Actually now that you mention it you’d have to add the luddites who would oppose the move away from fossil fuels on principle.
5%? Sort of like the percentage of surgeons who disapproved of anesthesia when it was discovered. I think there is a solid 5% that would be opposed to anything.
+1. They are the opposite of popularists.
The climate left has long embraced dubious strategies to keep hydrocarbons in the ground. They opposed the Keystone XL pipeline on the theory Canada would stop extracting shale oil if it wasn’t built. This was rubbish. Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil. Shale oil is still being extracted but is being transported by rail cars, which release more carbon per ton mile than pipelines. A dubious victory.
If I were a climate warrior, I would focus on goring fat cats. The 1% consume far more carbon per capita than normal people and they make great villains. Ban the manufacture of all private aircraft and recreational boats with more than 200 horsepower. Slap stiff taxes on existing private planes and recreational boats. If climate is important enough for working stiffs to drive a Prius, rich blokes can give up their yachts and take up sailing! Most importantly, price home energy progressively. A family’s first 1000 kilowatt hours in a month should be cheap, the next 1000 should be more expensive, and anyone who wants to air condition a 6,000 square foot home in Texas or Florida should pay German energy prices. Put a surtax on gas guzzling vehicles priced over $50k. Use all the money to build nuclear power plants. Embracing nuclear power is symbolically and critical because it would signal that climate is important enough to trump other climate concerns and to kick granola chomping hippies and technophobes to the curb.
I might buy an electric car when I no longer hear private planes circling my town for shits and giggles.
"Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil."
Canadian here. Just to expand on this a bit, managing internal tensions ("national unity") is always a significant political concern in Canada. The central challenge with Canadian climate policy is getting Alberta on board, because Alberta's economy is very dependent on fossil fuel production. Whenever the discount on Canadian oil (the WCS-WTI spread) increases by a dollar, that costs the Alberta government $300 million annually.
The Canadian approach to climate policy, negotiated during the brief window of opportunity when Albertans elected a progressive government (2015-2019), is based on a national carbon price floor rising from C$40/t today to C$170/t in 2030 (plus complementary regulations). It's basically William Nordhaus's argument for coordinating across jurisdictions based on prices rather than quantities (negotiating quotas for emission cuts): it distributes the costs across the country rather than singling out a particular region (Alberta) or industry (oil and gas). Crucially, no transfers are required from the provinces to Ottawa, or between provinces: each province can set up and administer its own carbon price, so long as it meets the national standard.
The carbon price floor and complementary regulations (phasing out coal-fired power by 2030, fuel-efficiency standards, zero-emission vehicle mandates, etc.) are demand-side measures, aimed at cutting low-value consumption of fossil fuels within Canada. The idea is that if global demand for oil falls (e.g. if the US makes a push for rapid adoption of electric vehicles), Canada's oil production will fall; if it doesn't fall, then cutting Canada's oil production isn't going to help.
The decision that Albertans need to make is whether to diversify the Alberta economy away from fossil fuel production now, or to double down. https://russilwvong.com/blog/alberta-and-national-unity/
For climate activists, it's far easier to mobilize against supply-side targets (pipelines and the oil sands) than it is to mobilize in support of unpopular demand-side measures like higher gas taxes. David Roberts explains: https://www.vox.com/2015/11/8/9690654/keystone-climate-activism
But demand-side measures seem like a better way to tackle the actual problem of cutting emissions. From the Leach Report (Alberta's 2015 blueprint for climate policy): "... for [trade-exposed] sectors, unduly aggressive actions taken to reduce emissions in Alberta may not lead to real emissions reductions. Instead, they could lead to emissions leakage, with production and the prosperity and employment it brings simply shifting to other jurisdictions without stringent GHG policy, and continuing to produce emissions. This would negatively affect Alberta’s economy, but not make an impact on global greenhouse gas emissions."
If an electric car is a good decision, why don't you just go ahead and buy it? Fat cats do consume a lot of carbon, but not the majority, unless you mean by fat cats the average American, German, and Chinese person.
>>A family’s first 1000 kilowatt hours in a month should be cheap, the next 1000 should be more expensive, and anyone who wants to air condition a 6,000 square foot home in Texas or Florida should pay German energy prices. <<
That's exactly how our electricity (and water) bills look like here in Los Angeles.
“Canada is not about to give up its biggest source of foreign exchange and become an agrarian backwater. It is so dependent on oil that the value of the Canadian dollar correlates strongly with the price of crude oil.”
You’re aware, presumably, that Canada is a modern, diversified economy much like the United States? Oil is perhaps 6% of Canada’s economy, vs under 2% of America’s.
“ I might buy an electric car…”
If you’re anything like me and run your existing cars until they’ve depreciated to nothing, then by the time you next want to buy a car, chances are that an EV will be far and away the best choice, and you’ll only buy an ICEV if you’re allowing ideology into the decision.
My 2007 honda accord has 257k miles and has never given me issues. I drive it proudly, even though the paint on the hood and roof have oxidized. Runs great and I’m not trying to pick up women in it.
I would love to hold out for a self driving car. I drive a lot for work and would pay the premium
Hmm, then maybe a hybrid will be a good choice until your next-next car, lol.
My 2005 Pontiac Vibe will serve me a good long while (only 130k on it and it's a Corolla drivetrain), and our other car is at the bleeding edge of fuel efficiency for a non-hybrid, but when one or the other of them outlives its usefulness, an EV will replace it because it makes sense.
Honestly, I'm of the opinion that this is all a bit overblown, simply because the technologies we need to mostly ameliorate the problem have matured so rapidly that they already win out in purely economic decisions made by experts and soon will for ordinary folk too.
Just straight-line depreciation of the world's carbon-intensive generation and transportation assets holds us to somewhere around 3 degrees Celsius of warming, because almost all of the former and most of the latter will be replaced by carbon-neutral ones.
The role of government is to figure out how to clean up around the edges, subsidize "faster-than-purely-economically-indicated" depreciation of old power plants and vehicles, and figure out how much, if any, geoengineering to throw into the mix.
About five years ago, I said that I will trade in my 2006 Honda Accord when I can get a self-driving car.
Thank goodness Honda makes great cars!
I know you say your not trying to pick up women in a rusty 2007 Civic. But honestly in a mean machine like that the ladies just line up. I bet every time you come out of The grocery store you have say “ladies please I am
Just trying to shop here”. After that they Look at each other and say wow the owner of a 2007 Civic talked to me!!!!
pffft
The argument against Keystone XL here is nonsensical. It has nothing to do with keeping Canadian oil in the ground.
Why is KXL desired? Because it will make people money by reducing Oil transportation costs. How does reducing transportation costs make money? By allowing you to sell cheaper oil and thus undercutting someone else.
Cheaper oil means less competitive clean energy. Thus blocking KXL bolsters clean energy in the US by effectively taxing Canadian oil.
"Thus blocking KXL bolsters clean energy in the US by effectively taxing Canadian oil."
If a carbon tax isn't politically feasible in the US, it seems like a more straightforward way to cut American usage of Canadian oil would be to let California continue to raise vehicle fuel-efficiency standards. (California is a big enough auto market that manufacturers follow the California standards.) If the US doesn't reduce demand, blocking more Canadian oil from arriving by pipeline just means that the US imports more oil from elsewhere - tanker transport is pretty cheap.
The argument against trying to cut emissions by cutting supply is that there's multiple sources of supply. To quote Andrew Leach: "I get all my groceries from my local Safeway, but if it shuts down I'm not going to starve to death."
I am not arguing that this is the best way to fight climate change. I was replying to the absurd assertion in the post above that climate activists "opposed the Keystone XL pipeline on the theory Canada would stop extracting shale oil if it wasn’t built."
so increasing transit costs by 15% and increasing canadian oil prices by 3% will keep shake oil in the ground? that doesn’t seem to be working, calgary isn’t a ghost town yet.
It is not necessarily increasing oil prices. It is preventing a decrease in oil prices. If that is 3% then it is the equivalent of a 3% subsidy towards alternative energy.
I am not arguing that it is good policy but, that it has an impact on the makeup of energy sources, is pretty obvious to anyone not being deliberately obtuse.
world energy prices are driven by the world market and athabaskan shale is only a minor input. the cost of bringing shale energy to market might be influenced by whether their is a pipeline, but this would only impact production within a very narrow range
So, your point is that it is less than 3% but it still benefits reducing climate change? If so, I agree completely.
Your entire post gave me ASMR.
The climate left clearly does not believe persuasion is part of its goals, which is deeply tragic given that persuasion is probably the single most important thing activist groups do. Gay marriage activists didn't start the fight by just harassing left-wing politicians until they agreed to be pro-gay marriage, they also launched this massive, far-reaching cultural project that transformed the views of your average American over the course of a few short decades.
If the climate left wants to be useful, they need to start thinking about how they can more or less propagandize Americans into giving a shit about the climate -- and into being willing to make sacrifices for it. I think this is doable. A lot of Americans are desperate for our country to take on some great challenge and have another history-making achievement. They just need to be convinced that climate is that battle. All you need to do is convince the majority of left-of-center people that they need to be willing to accept some personal disruption to save the planet, and you do that through cultural messaging telling them this is their chance to be heroes and to make their mark on history.
I like this comment a lot, but I also think persuasion should be aimed beyond the center-left. A meaningful number of center-rightists (yes, there are still a few and on some days I feel like I am one) are also concerned, and market-based solutions are going to have to be part of the toolkit if anything is to be done.
Yea democrats don’t win without the center right.
The climate-Left in the US isn't facing a uniquely hostile problem. Everywhere in the developed world we see 2 things:
1. a significant portion of the population proportates to care about climate.
2. the vast majority of the population won't support any significant carbon pricing or prioritization of climate over other issues.
It is highly unlikely all of these countries have political parties that have missed out on effective persuasion strategy. Democracy is the problem for climate change. The solution to the problem (lower living standards now for the benefit of future generations) is unsellable.
Especially now that future emissions primarily come from the developing world. Africa & India quite reasonably are going to carbonize their economies to get out of poverty. The emissions increase from this will dwarf the developed world emissions strategy.
This sounds fatalist and it basically is. But I don't see any teneable solution beyond geo-engineering or climate authoritarianism
“Democracy is the problem for climate change”
China leads the world in carbon emissions.
"Africa & India quite reasonably are going to carbonize their economies to get out of poverty"
There's no evidence that this is really true, and quite a bit of evidence that it's not.
“A lot of Americans are desperate for our country to take on some great challenge and have another history-making achievement.”
No, most Americans are saner than that.
I see Sunrise Movement's new position is the useless, non-starter "Abolish the Senate". No doubt they're holding "Abolish the USA" back in response to a similar trivial non-issue. If Sunrise was actually a GOP false flag operation, it would be hard to distinguish from their current motivations.
"“re-imagine a Federal Reserve focused on eliminating climate risk ....”"
"re-imagine a FBI focused on eliminating climate risk ...."
"re-imagine an Office of the Comptroller of the Currency focused on eliminating climate risk ...."
"re-imagine a Social Security Administration focused on eliminating climate risk ....”
"re-imagine the Center for Medicare and Medicaid Services focused on eliminating climate risk ....”
All make about the same amount of sense. It's like they have a pre written press release of buzzwords.
I think the AOC quote highlights something important about what's going on here. I think it's not really that people believe the Fed is an important or particularly effective tool to fight the battles at the forefront of the progressive movement right now (against climate change, racism, etc.). However, the objective of people like AOC isn't really to identify the institutions that would be best suited for the task. People on the far left want to consolidate political power by ensuring that progressive priorities are the central organizing principle of EVERY important institution. In this instance, progressives' idea is that failing to effectively manage inflation is fine as long as we have another institution on our side against the greatest threats to American society.
This isn't because progressives are particularly evil-- it's natural for any political movement to try something like this if it has the chance. Evangelical Christians, for instance, want creationism taught in schools and want the Supreme Court to make laws that adhere to their religious principles. I'm sure they'd also prefer it if the corporations were run in accordance with the teachings of Jerry Falwell. But now that the left seems to have disproportionate power in many (but not all) institutions, thinking about how progressive ideology will shape the priorities of those institutions is going to be more important than thinking about how they're influenced by hardcore Christians.
Let's not let up on the Christian Dominionists just yet.
They're a near-perfect electoral coalition under our system, such that with only a very few fellow-travelers (5-7%) they can win elections while only making up 38% of the electorate.
They control the Supreme Court, and can paralyze the Senate now.
The median voter has doubled the size of their car in the past 10 years, they don't give a single shit about climate change.
The biggest flaw is thinking that cars charged by a green grid would need to be small or slow. There is no requirement for that at all. People could drive as many electric F150s and Suburbans as they want.
The climate left is really the anti capitalism left. And that merger makes me want roll some coal.
True. But don’t forget those on the right who would upset by the move away from fossil fuels.
What are you referencing with the "median voter" distinction? Average new vehicle weight is flat over the past 10 years. Fuel efficiency is up 25%p.
https://www.epa.gov/automotive-trends/highlights-automotive-trends-report
So voters are different from consumers remember the average Democratic primary voter is 53. That might be the reference the car size increase happened in the 90s and 2000s with a dip in 2008 when people where broke.
Gotta say Troy -- not following you here exactly. My point was over that past 10 years, vehicle size hasn't increased. Weight is flat. Fuel efficiency has gone up. Unless there's some sub-population tracking of vehicle purchases by "median voters" I just don't understand the "doubled the size of their car" statement.
My wife is very concerned (until we start shopping for cars).
Cite:
Two points. Inflation is a sustained general increase in prices. My view, and the view of the Fed, is that there are sectoral imbalances leading to rapid price increases in particular portions of the economy. This is why the Fed is sanguine about the current inflationary environment. They have adopted a Bunker Hill approach, don't shoot until you can clearly see the target.
As for whether fossil fuel investment is risky, tell anyone who put money into the coal industry fifteen years ago that coal wasn't risky. Then duck! Coal, of course, lost in economic terms because natural gas became a less expensive way to generate electricity. The improvements in wind and solar have resulted in both being cheaper than natural gas. The support for vehicle electrification in the infrastructure should start to reduce the demand for petroleum products soon. I see lots of risks in the fossil fuel sector.
This is the thing that’s never sat well with me regarding “the Fed must strangle fossil fuel investment”…
The market is going to do that for us, waayyy faster than anyone believes is possible today.
The only fossil fuel power projects still under construction are heavily state-subsidized or nearly complete, as is. An old-fashioned grid will never be built in most of Africa, ffs.
What needs to be done is to subsidize the more rapid depreciation of existing carbon-intensive assets.
Exactly. Investment in fossil fuel infrastructure trials creating lots of stranded assets which after incapable of earning a return because they are uneconomic to use.
The only thing, IMO, that might save the supermajors is that they have the well infrastructure and expertise to put CO2 back underground safely. That's a very thin reed, contingent on our cracking efficient CCS, feeling the need to "rewind the clock", and deciding that underground storage is the safest option.
Not sure those puzzle pieces are going to come together. The safest thing to do might end up being to produce large blocks of graphite to bury.
It would be awesome if the oil companies, with all their drilling experience, led a big push on geothermal energy. As David Roberts writes, it's an exciting source of virtually unlimited, zero-carbon energy.
https://www.vox.com/energy-and-environment/2020/10/21/21515461/renewable-energy-geothermal-egs-ags-supercritical
There is one climate step that is within the Fed's domain, although it is shared with other regulatory bodies. This is the rules regarding loan authorization.
The climate warrior focus on quasi-religious choices for technology is a failing strategy. The old BAT approach of the EPA was replaced by today's "bubble" approach because having politicians and bureaucrats in DC select the technology for every business in the US was costing 10 times what it cost to have the decision making dispersed across thousands of local private decision makers making their own personal decisions. You see this today in climate with the immensely more cost effective Energy Star approaches vs political technology selection.
Cost effectiveness and dispersed personal decision making will be needed to hit the climate goals.
One barrier to this is the collateral requirements that banks must meet. When a landlord wants to upgrade their HVAC system with a $100K smart control system they cannot get a collateralized loan. The collateral value of the smart control system is small. It's just a PC. The bank cannot consider the projected cost savings directly towards the loan evaluation.
All too often the bank cannot make this loan, or must charge a huge interest rate, because there a strict limits on non-collateral loans.
These and similar limits serve a real purpose. Non-collateral loans, and loans with grossly inadequate collateral, are a favorite for fraud and contributed significantly to the 2008 financial crisis. Loans for energy saving got caught in the regulations to clean up the mess.
Carefully considered revision of regulation of loans for energy saving devices, replacement production processes, etc., is an appropriate reform.
Sadly, AOC and the progressive wing want to continue the practice of politically chosen favorite technologies. They just want the banks to be their agents in enforcing politically chosen technologies.
Would you be so kind as to expand upon the collateral requirements from banks? Who has imposed them? Which laws cause them? What precisely are the laws? What loans do they apply to? Etc and etc. This is something I have not heard about before, and am quite interested
The full range of banking regulation is an entire specialty of commercial law. The primary Fed involvement is many regulations that say "the bank shall ..... in order to have access to Federal Reserve facilities." There is a very long list of loan, capital, audit, and other requirements. These can have unexpected side effects like this. Before 2008 loan officers had much more flexibility about approving loans, and the result was things like Ninja (No Income, No Job) loans. Those contributed to the 2008 crash. Loan officer flexibility was restrained in a great many ways, resulting in some of these unwanted side effects.
I think Jay Powell has done a great job. He is one of only three excellent personnel actions by Trump (in addition, firing that bastard Comey and hiring Scott Gottlieb). He has helped us weather some tough economic times.
Biden should thank him profusely, pat him on the back, and appoint a new Fed Chair, probably Brainard.
This has nothing to with "credibility" or finreg or climate. It has to do with the credibility of the Democratic party and how it values its most capable members. As the party of government, the Democrats have seemed awfully gun shy about entrusting the most important posts in government to actual loyal Democrats. We worry about "credibility" in national security so our Presidents appoint Chuck Hagel and Bob Gates as SecDef to reassure the world that our security will be safe in trustworthy Republican hands. We worry about "credibility" on managing the economy so our Presidents reappoint Alan Greenspan and Ben Bernanke to reassure the world that the economy will be safe in trustworthy Republican hands.
Bah. Republicans don't do that, and nor should we.
Nice job, Jay. Step on up, Lael.
I wanted to read the linked rationalist article, but apparently, that's private according to Substack. I believe someone named madasario had the same problem earlier.
It's this one: https://www.slowboring.com/p/predictions
A classic! Thanks for the direct link here, I also couldn't get into it from my email so was not sure. IIRC MY also talked about this on Julia Galef's podcast.
I'm no expert on the rationalist community, more rationalist-curious. But trying hard, every day, to be less full of shit seems really important right now.
I was wondering, but I couldn't be sure.
I'm a little confused as to what the stress test scenario where just fossil fuel investments go to zero is supposed to be. If climate change destroys the economy doesn't pretty much everything go down? How's a bank supposed to pass a "the modern economy is over" stress test? It seems that the scenario in which specifically fossil fuel investments collapse and everything else is fine is actually the "we do something about climate change" scenario. You'd essentially be asking banks to hedge against the risk that you accomplish your political program. Which seems... weird? Idk, I guess if you got a Fed chair in there that did all these aggressive stress tests that would be signal to the market that the climate agenda might actually succeed and maybe that lowers their willingness to invest in fossil fuels? Hardly seems likely to be a game changer.
As someone active in the bank stress test world, climate stress testing is dumb. Slow moving or policy based events are slow burn, not shocks. Climate is a strategic planning exercise. Banks have been dealing with things like droughts and hurricanes forever.
Out of curiosity, how do these stress tests work? I can't imagine any climate-related event that would dramatically devalue large quantities of assets that banks currently hold on their balance sheets. Do people just run climate stress tests and say "as expected, there is negligible risk of a climate-driven financial crisis"?
You can track fossil fuel contribution to industries with input/output tables and simulate industry level impacts of a carbon tax. That's asymmetric, but not game changing in any industry outside of energy. You can create a weather event that hits concentrations in your portfolio, but a chunk of that is insured so you probably need to assume insurance failures or large regional increases in insurance costs. Finally I've seen blanket productivity shocks, but I find those completely arbitrary. Climate change doesn't change my knowledge and ability to build widgets or cut hair.
If the impact of marginal you'd just tell your regulator all the terrible things on your scenario and that thankfully your diversification and strong underwriting allows you to weather the storm.
>>>some of it has been the surprising (to me, at least) decision to stick with Trump’s tariffs<<<
Can't say I'm too surprised. Although this would help the supply side of the economy, the administration, I'd guess, thinks the pro-China optic are bad.
But this is (yet another) area where I think they're erring excessively on the side of caution. I hate to sound too critical, because on a few areas — swinging for the fences on the two big legislative proposals now before Congress, say, or the hard-assed shut down of America's Afghanistan War — they've been anything but timid.
But there are quite a number of areas where I fear this White House is too worried about Republican attacks: vaccine mandates, vaccine passports, prosecutions for sedition and Trumpian corruption, student loan forgiveness, etc. And yes, China tariffs. They do politics for a living and I don't. So maybe I'll be proven wrong. But I do believe they could be a bit bolder on one or two of these things (Even the evictions moratorium extension was a cave-in to the party's left, not a proactive measure).
What's been most surprising to me has been the continuation of tariffs that don't have anything to do with China (e.g. Canadian Lumber tariffs).
Even if the tariffs aren't the most effective option, I don't think the harms are really there to justify ending them. Tweaks to included products, yes.
But really, we do need to start figuring out how to provide credible alternatives to BRI investment to ordinary folks in the Indian Ocean basin and beef up security arrangements in East Asia.
I wonder if we can slip enough climate shit into a foreign investment bank bill to get the progressives on-board while still retaining a big anti-China tinge to keep the GOP on-side.
Biden should appoint someone as Fed Chair that best understands monetary policy because you can't predict events and how that might change the monetary policy environment. So obviously he should appoint a market monetarist. Scott Sumner would be best, but claims he wouldn't take the job, so that leaves David Beckworth. In a lot of ways Beckworth is similar to Powell (both right of center but principled and non-partisan) except that he is an actual monetary economist and has better theoretical underpinnings for his views. If Biden really needs to appointment someone that is more Democratic Party affiliated then I would propose Christina Romer or Jason Furman, who have absorbed a lot of the MM perspective.
I LOVE your suggested headline!