Paul Andersen: Fair Game
The Aspen Times
Aspen CO Colorado
A government-appointed panel investigating the roots of the financial crisis stated the obvious last week: “Government officials and Wall Street executives ignored warning signs and failed to manage risks.” The panel’s summation: “The crisis was avoidable.”
The crisis was also predictable. Billionaire hedge fund manager John Paulson made billions betting against the housing bubble. If Paulson could forecast accurately enough to inveigle a profit, what was wrong with the regulators? Their impotence is a scandal.
The panel revealed that the Bush and Clinton administrations, the current and previous Federal Reserve chairmen, and Treasury Secretary Timothy Geithner “all bear some responsibility for allowing the crisis to happen.” The panel also criticized bankers “who got rich by creating trillions of dollars in risky investments.”
Respected financial institutions took the country for a ride while resisting government interference on the grounds that it would “stifle financial innovation.” The only innovation to come out of Wall Street was a shell game. So what? In the end, nothing will come of it. Historians will write this chapter as a cautionary tale. But cautionary of what?
While Wall Street dons duck and cover from financial fallout, there is an even bigger shell game going on in the global arena, a game that will go on for centuries and threaten a crisis of such enormity that it will make the economic collapse look like petty graft. The big shell game is being played with carbon. The players are the developed nations, with developing nations eager for a seat at the table.
The economy got overheated in 2007 because of the housing bubble. Today’s overheating is taking place in the Earth’s atmosphere with a carbon bubble. While the scientific community has been sending out alarms, most governing bodies and economic institutions won’t even speak of climate change because it impugns the myth of perpetual growth.
That myth has inflated the carbon bubble that covers the planet and affects all human enterprise, including the entire web of life. There is no bailout for this bubble when it bursts, and those who bet against it will reap no profits from the collective angst of unmitigated upheavals.
During the housing bubble, plenty of people knew an end would come, that there would be a time of reckoning. Complacency and narrow self-interest ruled, so nothing was done to prevent the crisis. Climate change is on the same trajectory, fueled by the same foibles. As ice caps melt, ocean levels rise, and weather-related turmoil spreads around the globe, there are knee-jerk reactions of denial and helplessness.
Last week, the Aspen Institute Commission on Arctic Climate Change delivered a warning. Commission member Prince Albert II of Monaco said, “We have no choice: We must protect the Arctic ice, enable it to continue to act as an essential temperature regulator for the planet, avoid the catastrophic rise in sea levels that would result from the ice melt, and stop the disappearance of permafrost releasing irreversible quantities of greenhouse gases back into the atmosphere. It is a duty for ourselves and for all of humanity – for our children, of course, but also all those who are already suffering the dramatic effects of these developments.”
Remember the financial crisis? It resulted when bankers and regulators “ignored warning signs and failed to manage risks.” The warnings pile up on climate change, but here we go again. Action is urged. Facts are plain. Evidence accrues. Morality is invoked. And little change occurs.
Turning down the global thermostat is a collaborative venture that requires agreement and concerted effort. Reducing the carbon bubble must invoke the taboo of addressing limits for the consumer economy.
And if we fail to act? The findings of a future panel will conclude that the “crisis was avoidable.”
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