Sometimes you read something, and it strikes you at once that the writer’s point is obvious, and that it will still come to nothing. So it is with this article by Dean Baker, in which he urges the Fed to do and publish research on the likely effects of climate change on the United States economy.
Don’t bother to click on the link, as the article itself is behind a paywall of sorts, which I can breach as I’m a Patreon supporter. I’ll summarize.
Baker begins by recounting the fact that he was warning about a housing bubble years ago before the Great Recession, and that while many other economists also saw it coming, there was a sort of conspiracy of silence about it until the crash. He writes:
During the first decade of this century I was one of the few economists in the country to warn of the housing bubble and the likelihood that its collapse would lead to a serious recession. It was easy to see that the housing market was in a bubble, and that when the bubble burst it would lead to plunges in both residential construction and consumption, which was booming thanks to bubble generated housing wealth.
My favorite remedy for the bubble was talk or more specifically, talk from Alan Greenspan and other top Fed officials about research documenting the housing bubble. The point I tried to make in those years was that the hard data showed we had a bubble. It wasn’t an issue of crystal ball reading.
Likewise, there’s not much doubt that climate change will cause economic disruptions that dwarf a mere housing bubble. Baker provides an exhaustive, though likely not complete list of major economic fallout from climate change, including the risk of flooding and destruction of property, particularly in coastal areas, the ongoing destruction caused by fires, the probable effect on farmland, etc. He concludes:
This list is just the beginning. There are few areas of the economy that would not be affected in a big way, either positively or negatively, by the long-term implications of global warming. Research from the Fed could drive the realities home in a way that would have real impact.
At least as important as the direct economic impact that the Fed’s research could have, it will also help to bring home the fact that global warming has real costs in people’s everyday lives. The question is not just whether we think it would be nice to have a decent planet to pass onto our kids, it’s also an issue of how much people want to pay for their food. It’s a question of whether they want to see their home plummet in value because of the increased flooding or fire risk. It’s a question of whether they want to see an increased risk of future pandemics because of the changing habitats of various species.
This definitely seems like a job for Obviousman, but I’d say the odds are about one in a thousand that the Fed will do as Baker suggests.
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