Several weeks ago,1 former Wall Street big shot and Treasury Sec Henry Paulson held forth on the urgent need for action on climate change, predicting “a future with more severe storms, deeper droughts, longer fire seasons and rising seas that imperil coastal cities” if we, and the rest of the world, fail to take dramatic action now!
Like so many climate change obsessive compulsives, Paulson argues passionately that the case “for” anthropogenic global warming is overwhelming (which it pretty much is) and then leaps to the unsubstantiated conclusion that we have perform major surgery on the way we go about our lives or face, well, Nature’s wrath. In other words, global warming equals global destruction.
But what is Henry’s record for predicting the future? Not so damn good, is it? It should have been “obvious” to Henry and his big shot Wall Street buddies that the surge in housing prices provoked by falling mortgage rates would have to cool off, simply because rates couldn’t continue to fall forever, but very few people did. Housing prices had risen for four or five years straight, which “proved” that they would keep rising forever.
Few people were concerned about runaway housing prices. And even if the market did cool off, so what? Housing is only about 4 percent of the economy. The Wall Street geniuses so admired by Tim Geithner wouldn’t be so dumb as to bet trillions of their clients’ money on the assumption that housing prices would continue to rise substantially for “forever,” would they? Because markets are self-policing! Everybody knows that!
Economists failed to predict the Great Recession before it hit, and after it hit they failed dangerously to predict its severity. If anyone had predicted “fracking” ten years ago the environmentalists would have laughed them out of court. Oh, a fantastic new way to obtain natural gas that would radically lower its price and convert the U.S. into a net energy producer! Yeah, right!
To top it all off, Paulson’s “solution” is a carbon tax, which, as many people have pointed out, already exists in Europe. In France, Germany, and the United Kingdom, gasoline prices are more than double the U.S. price, while consumers aren’t as wealthy, and yet Europeans drive pretty much like Americans. Furthermore, European nations have invested massively in environmentally correct energy policies, with pretty much zero result. Aren’t businessmen supposed to know what a bad investment looks like when they see one?
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Yes, this post is several weeks late. On the other hand, nothing has been done, so it’s still “timely.” ↩︎
