We Americans are a distracted lot. I don’t have to tell you how difficult it can to focus on any one task in the era of smartphones. Email stalks you like a predator while your limited ability to focus is constantly assaulted by varying forms of media, all of which are hell-bent on siphoning away some of your prized attention span. We’re a captive audience living in a media bubble. Rarely do we have the time to form our own unique opinion about an important current event; slickly spun analysis is now part and parcel of the news media. The only way for newsmakers and advertisers to break through the clutter is to sensationalize by any means necessary! Capture that attention or somebody else will.
Last month the media circus dusted off one of its tried-and-true headliners for another spin. Lance Armstrong finally worked up the courage to tell some half-truths to Oprah about his blatantly obvious, decade-long doping scandal. Honestly, I can’t sit through an hour of Lance blabbing so I’ll let you watch the charade if you really want to. But I sincerely hope that you won’t. The more we talk about this, the more we create a world where celebrity scandal qualifies as legitimate news worthy of our most precious attention. I hate to burst your bubble, but all the cyclists are doping. You think Lance getting busted is going to stop any of that? Puh-lease. The funny thing is, we all know this and yet we keep talking about it.
The USADA (United States Anti Doping Agency) is a non-governmental organization. Even though they are an NGO, they do receive a large part of their funding from the ONDCP (Office of National Drug Control Policy), which is part of the Executive Branch and is most definitely funded by Congress. Don’t you think Congressional and Executive Offices have more important things to investigate than Lance sticking needles in his ass? I’m not saying we should do away with the USADA, but we could stop talking about doping so frequently. We could free up some capacity in the system to investigate real crimes. Ask and you shall receive! Some rays of light are starting to shine through the clouds of corporate impunity.
A couple weeks ago while everyone was talking about Beyoncé and the “Super Bowl Black Out”, the Department of Justice was doing something very uncharacteristic: they were filing charges against a corporate behemoth that had committed fraud on a scale that makes Lance look like a nice guy. You want to hear about fraud? I got a good one for you.
Congratulations, you’re the new CEO of a too-big-to-fail bank! First find an unsuspecting citizen who, based on their low credit score and modest income, has absolutely no chance of qualifying for a traditional home mortgage. Next, extend this person a mortgage loan by letting them fill in their own “income” figures without requiring verification. Is that legal? It’s your bank so you can do whatever you want! Your shareholders just want to see returns and this new brand of mortgages is as lucrative as it gets! Plus everyone else is doing it so who is going to stop you?
All right, the shitty loan has been extended. What’s next you ask? Next you’re going to take all these subprime mortgages —so called because the loan recipient may have difficulty keeping up with a payment schedule—and pool them together to create a mortgage-backed security or MBS. Now here’s where ratings agencies like Standard & Poor’s come in. You (the bank) are going to attest that, yes, while this bucket of loans contains a high percentage of subprime loans, you’ve properly spread the risk by pooling a lot of subprime loans together. The mortgage-backed securities should therefore be rated AAA, on par with U.S. Treasury Bonds. An investment grade rating allows you to peddle these things to “institutional investors”, i.e. insurance companies, college endowments, pension funds, and your banker buddies. These things are safer than safe, you promise the ratings agency. The only way these mortgage-backed securities would be threatened is if home values across the entire Untied States all fell at the same time, and everyone knows that will never happen.
Now you can take your MBS sausage and hock it to unsuspecting investors who are deceived by a Standard & Poor’s investment grade rating. After you’ve sold the most desirable slices of these mortgage pools to investors, come back to the farm and mix the leftovers—the most undesirable of the already-undesirable—with pools of new loans and go back to Standard and Poor’s for your AAA blessing. Rinse and repeat until you’ve taken the subprime mortgage stock in the United States from less than 8% to more than 20% of total outstanding housing debt in two years. Then write massive (and impressively cynical) short positions against those very same mortgage backed securities, effectively gambling against a product you just sold to your largest institutional customers under the banner of investment grade safety. Finally, light up a stogie and rake in the profits from your short positions while the global economy craters. Now that’s a real fraud. Go stick some more needles in your ass Lance.
Attorney General Eric Holder has finally begun to move towards punishing the ratings agencies for their negligence and profiteering at the expense of the American homeowner. The Department of Justice filed a suit against Standard & Poor’s in a Los Angeles federal court. The Justice Department alleges that Standard & Poor’s “knowingly and with the intent to defraud, devised, participated in, and executed a scheme to defraud investors [.]” I know, I know…Lance Armstrong tricked you too. Lance took $5.00 of your hard earned coin for a yellow bracelet that you must now throw away for fear of wearing it in public. Standard & Poor’s, on the other hand, is complicit in bankrupting the American residential mortgage machine resulting in millions of defaults and evictions. Why aren’t Lloyd Blankfein and Harold McGraw III sitting on Oprah’s couch apologizing for their dishonesty and selfishness?
While the Justice Department’s suit is better than nothing, they’ve filed it in civil court which means that nobody will go to jail. It’s embarrassing because even Lance Armstrong might go to jail! If the US Government can’t figure out how to indict and punish an actual person in the largest financial fraud in three generations…well I don’t know. The Wall Street Journal reports that the total loss to the global economy from the mortgage meltdown is in excess of $15 TRILLION, and yet the DOJ isn’t willing to indict anybody. Well, I suppose one could argue that they are punishing an individual, since corporations are people…right? This is just the latest in a series of largely ignored financial scandals to make their way to the courts. One by one they line up, and one by one the courts hand down an insultingly benign penalty. Let’s look at another, equally ruinous case—the LIBOR rigging scandal. Watch this 60-second video to get up to speed on why LIBOR matters so much:
Another massive financial clusterfuck, this one affecting upwards of $800 TRILLION in contracts worldwide. Almost every outstanding debt you have is, in one way or another, affected by the LIBOR rate. So what does Justice do about LIBOR rigging? Instead of criminally prosecuting executives from a well-known domestic bank like J.P. Morgan Chase over their complicity in the case, the DOJ has followed through on civil charges against Royal Bank of Scotland. RBS is a foreign bank that few in the US are even aware of. Put another way, RBS is the perfect fall man; Eric Holder & Co. can pretend to guard against financial crimes while not actually taking meaningful action against American banks. RBS has agreed to pay $615 million in fines, of which American regulatory agencies will collect $475 million with the rest going to European agencies. This is pitiful at best, especially considering the bank earned a pre-tax profit of over £2 billion in 2011. Compared to the scale of the fraud they participated in, the fine is hardly worth mentioning. The most baffling part is that nobody in the United States seems to give a shit about this. No, here the good old U.S. of A, we spend our time closely following the criminal prosecution of Barry Bonds.
Big-head Barry has been tied up in a steroids “scandal” since 2003 when his trainer was indicted by a federal grand jury in the United States District Court for the Northern District of California. There was all sorts of conjecture and smearing about who knew what and when, who supplied whom with what, and why exactly Mr. Bonds’ head was so colossally large. Granted, the first round of this happened in 2003 when the subprime-lending machine was just getting revved up. Standard & Poor’s wasn’t yet engaging in the type of widespread criminality that would soon double their profitability as they collected fees of up to $750,000 per rating.
After his 2003 grand jury indictment, things settled down for Mr. Bonds until 2007 when the feds came knocking again. This time they wanted to talk about possible perjury in his previous testimony. Keep in mind, the MBS fraud was in full swing at this time but instead the Department of Justice was focused on an athlete (who was paid to hit home runs) taking steroids to help him hit home runs. His official perjury trial was scheduled to begin in March of 2009, after the mortgage meltdown had commenced but because of appeals it didn’t actually begin until March of 2011, all while being endlessly profiled and speculated about in nightly news programs. Every time a Barry Bonds court deadline came near, it was news. Do you know how many banks were criminally indicted in that same two-year period? Exactly, nobody can remember. But everyone can tell you about Barry Bonds.
Here’s a timeline of the prosecutorial history of that same time period. Basically…nothing happened. Sure there were investigations, but the big fish got off the hook. Countrywide Financial— the most ostentatious of crap loan originators— and American International Group FP —the company that wrote the insurance policies on all the crap loans—had their investigations dropped by DOJ. These are perhaps the two most obviously guilty parties in the whole lineup of guilty parties, and they get a slap on the wrist and sent back out to recess.
The dust has long-since settled on the financial crisis. We now know exactly what happened and how. We know who is responsible. Matt Taibbi’s Griftopia: A Story of Bankers, Politicians, and the Most Audacious Power Grab in American History and Michael Lewis’ The Big Short are perhaps the most entertaining books on the subject, but there have been hundreds of other books and thousands of articles penned about the crisis. Still we have yet to see one high level executive prosecuted. Save a few lowly patsies, nobody has gone to jail in what amounts to the biggest rip off since the Great Depression. Even Barry Bonds was sentenced to 30 days of house arrest, two years of probation and 250 hours of community service for an obstruction of justice conviction stemming from his grand jury appearance in 2003. Come on Department of Justice, it’s just embarrassing. A swing and a miss.
Remember Roger Clemens? His steroids “scandal” was even more high profile than Barry’s. The dude was on 60 Minutes! José Canseco made a second career out of dragging Roger Clemens’ name through the mud and the mainstream media was totally complicit, giving him all the airtime he needed. Come to think of it, José Canseco was on 60 Minutes too! If there was an Emmy for “Most Time Spent Distracting the American Public From Real News Stories By Instead Reporting On Steroids In Baseball”, 60 Minutes would take that thing to the bank.
I’m not suggesting that the courts and the media shouldn’t pay attention to illegal activities. Taking anabolic steroids is against the rules of baseball (and cycling). It is illegal if not prescribed by a doctor. There should be consequences because it sends the wrong message to kids, who might think they can simply juice their way to an MLB contract or a Tour victory. On the other hand, constantly giving a new version of the same old story the most prominent mainstream airtime violates a basic trust, especially when that story doesn’t really serve in the public interest. Well-functioning media is supposed to inform us about current events that affect our daily lives. As long as we remain woefully uninformed about the fact that too-big-to-fail banks have just perpetrated the largest financial fraud of our lifetimes and gotten away with it, the more inclined DOJ will be to sit on their hands.
On the other hand, if we the people were empowered, if we challenged our judicial system to prosecute financial criminals it might actually happen. Unfortunately, if nobody knows what’s happening then nobody will care. The Department of Justice is one of the three branches of government that, in theory, is required to uphold its duty to enforce the law and administer justice. And in all fairness, the DOJ hasn’t been completely aberrant in its duty to act on behalf of the American people.
In October of 2012, United States Attorneys in New York filed charges against Bank of America over their lending practices, noting that “the fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope.” Uh, yeah…it was. We’re all so glad that it only took DOJ five years to realize just how lawless Bank of America was in the run-up to the mortgage crisis. Guess what? They actually took a big hit in the settlement. Bank of America agreed to pay over $11 billion to resolve claims that it had hustled mortgage customers and sold the resulting crap loans to federally-controlled Fannie Mae which was subsequently devastated by enormous losses. Bank of America reported that 2012 fourth-quarter profits were down 63% as a result of the massive settlement. Well-played DOJ. Of course, nobody went to prison but it’s better than nothing, because for every base hit there is a huge whiff.
Just a month before the Bank of America settlement, former Assistant US Attorney General Lanny Breuer signed off on a civil settlement deal with banking giant HSBC. Their crime? Nothing much, unless you count the fact that HSBC admitted to laundering billions of dollars for Columbian and Mexican drug cartels in clear violation of the Trading With the Enemy Act. Apparently drug dealers “would sometimes come to HSBC’s Mexican branches and deposit hundreds of thousands of dollars in cash, in a single day, into a single account, using boxes designed to fit in the precise dimensions of the teller windows.” If this doesn’t count a criminal banking activity then I don’t know what would, especially considering that some of HSBC’s Saudi and Bangladeshi clients had terrorist ties. Mr. Breuer abruptly resigned last month after Frontline aired their fantastic expose The Untouchables which explored the curious phenomenon of Wall Street banks emerging from the mortgage crisis relatively unscathed. You should watch it, it’s pretty awesome.
If the Department of Justice doesn’t have the nerve to criminally indict top banking officials over drug money laundering and supporting terrorist activities, then I doubt we’ll ever see other banking bosses go to jail over mortgage fraud. Indeed there has been no effective punishment of the banking elite. No criminal charges against the men responsible for green lighting disingenuous and illegal lending activities that ripped our economy in half. These banks have destroyed the lives of many of their most vulnerable retail customers. They’ve eviscerated the savings of their largest institutional customers. They’ve profoundly eroded the public trust in our financial organizations and yet they still continue to avoid the stigma of criminality. But Lance, Barry, and Roger…those guys are some unscrupulous characters. They need to be criminally indicted and held responsible for their lies!
I mean, just imagine an entire career built on a lie. How could someone sign a financial contract while knowing full well that they weren’t being honest with the person on the other side of the table? Imagine duping the public into believing you were doing something amazing without having to resort to cheating. Think about the crushing guilt that comes along with living that lie, and the audacity required to maintain your innocence even in the face of an obvious truth. You’re a cheater. You don’t deserve the titles and trophies and you know it. Unfortunately for us all, we can’t erase the effects of the ongoing financial crisis was an asterisk.
Welcome to Lance, Barry, and Mr. Roger’s neighborhood.
It’s here. It’s finally here. After two years of scratching, clawing, eye gouging, and worse, Election Day is upon us. What happened to us during this election cycle? Already-bitter divisions have given way to a new level of abhorrent discourse. It seems as though we’ve lost faith in our fellow man. Matt Taibbi had a great piece at Rolling Stone this morning about just that. There is a genuine belief that, if elected, the “other guy” actually wouldn’t do his best to serve the interests of the American people.
I mean, I wouldn’t blame either man for abdicating his moral responsibility to serve the 49% of voters who end up voting against him. Both candidates have been subjected to unrelenting and unprecedented assaults, thanks largely to a Citizens United ruling that has allowed “independent” groups to distort, smear, and lie with virtual impunity. It would be hard not to hold a grudge. But the suggestion that the President of the United States wouldn’t do his version of the best is pretty insulting.
We all want prosperity for ourselves and future generations, we just disagree on the right way to get there. No President would consciously advocate against citizens who didn’t vote for him. Congress, for all its squabbling and obstructionism, is working against the other half of the aisle, not the other half of the country. It’s not just Republicans either; Democrats are equally capable of crippling obstructionism. As The Atlantic reports, this “unprecedented obstructionism” we keep hearing about is in fact quite precedented.
We’re all in this together and any realistic plan for making the United States a more vibrant place surely requires participation from everyone. Of course, each Presidential candidate favors different policies that would affect our nation in different ways. For example, economic planning that more aggressively redistributes government revenues works against the interests of affluent voters while across-the-board tax cuts end up hurting our vanishing middle class. The salient point is this: both candidates have a vision of their ideal America and some sort of plan on how to make it a reality. Whether they’ve been honest with the electorate about how they intend to make that vision a reality is another issue entirely.
Presidential candidates are selling a grand vision, but they’re constrained to an electoral process that leaves them little time and even less practical ability to enact the majestic fantasy on which they campaigned. Every four years we’re sold a reimagining of the American Dream, and every four years the President scarcely gets off the starting block before being bitch slapped by the cold hand of our current reality. This pattern is extremely significant. Our political process and indeed our entire industrialized economy has become locked in a destructive pattern of Short-termism.
The inability of our political system to act much beyond a four-year timeframe has crippled our ability to affect transformative change at a time when we need it more than ever. Economic imperatives force Wall Street to measure success in 90 day increments when their very survival requires they take a much more expansive view. The challenges we face don’t have four-year solutions. These are generational problems that require a strategic approach, but Washington is mired in tactical thinking. James Gustave Speth, former White House adviser to President Jimmy Carter, just released an excellent book entitled America The Possible, which presents a hopeful reimagining of the American economy. As always, the first step is admitting we have a problem. Here’s a sample from Speth’s book. He outlines some important areas for your consideration:
Compared to the 20 member nations of the Organization for Economic Cooperation and Development (OECD), America now has:
- the highest poverty rate, both generally and for children;
- the greatest inequality of incomes;
- the lowest government spending as a percentage of GDP on social programs for the disadvantaged;
- the lowest score on the United Nations’ index of “material well-being for children”;
- the worst score on the UN’s gender inequality index;
- the lowest social mobility;
- the highest public and private expenditure on health care as a percentage of GDP, and yet the highest infant mortality rate, prevalence of mental health problems, obesity rate, percentage of people going without health care due to cost concerns, and consumption of antidepressants per capita, along with shortest life expectancy at birth;
- the third lowest scores for student performance in math and middling scores in science and reading;
- the second highest high school dropout rate;
- the highest homicide rate;
- the largest prison population, both absolutely and per capita;
- the highest water consumption per capita and the second highest carbon dioxide emissions per capita;
- the lowest score on the Yale-World Economic Forum’s Environmental Performance Index, and the second largest Ecological Footprint per capita;
- the highest rate of failing to ratify international agreements;
- the third-lowest spending on international development and humanitarian assistance as a percentage of GDP;
- the highest military spending in total and as a percentage of GDP; and
- the largest international arms sales.
Does anybody have a four-year fix to any of the challenges on this list? If you do, submit your application to the Nobel Foundation right now. The truth is we can’t solve any of these without a concerted effort spanning multiple Presidential administrations and both parties of Congress. A small handful of the conditions above would be shocking; looking at all of them in a big long list is enough to make some folks give up. How can we even begin to whittle away at that rap sheet of social, environmental, and economic crimes? A model for the required mental shift can be found in the unlikeliest of places. Wall Street.
Before you close this webpage in protest, let me explain. Wall Street, you say? A place where pathological dishonesty and corruption is rewarded with bailout checks? A place that has, until quite recently, operated outside the constraints of pesky laws? A place where Short-termism is the holy word of the Lord? Well…yes.
In any system there are outliers. Darwin would tell us that sometimes these mutations produce a species that is better adapted to current environmental conditions than the previous generation. Over time, this outlier shifts to a position of genetic supremacy and becomes the new normal. This evolutionary process plays out in our biological processes as well as in our social constructions. Currently there is an evolutionary shift happening in the backbone of our industrialized economy. All of the problems on Speth’s list have economic roots and fortunately for us, Wall Street is slowly mutating into something more reasonable.
The 90-day doctrine has arguably done more to constrain our economy’s true potential than anything else. It forces the maximization of short-term earnings and stock prices at the expense of long-term value. This in turn creates an investor base that is more short-term oriented which of course produces a more volatile market. In the same way, the firm reports on a short-term basis and the investor base expects firms to focus on short-term goals. The resultant firm-client relationship is a positive feedback loop of negative behavior.
Given uncertainty about future performance and the observability of current performance, executive compensation is typically tied to stock price. When executives are compensated based on short run performance they pressure their managers to deliver favorable short run results. What’s more, it encourages firms to systematically underperform their full potential by forcing them to publically set expectations and then actively positioning to just slightly exceed those expectations in order to appease the Street. This whole management ideology reinforces the 90-day doctrine, often at the expense long run valuation. Shockingly, 87% of companies that were on the Fortune 500 list in 1955 no longer appear on that list today, either the result of bankruptcy, acquisition, privatization, or valuation collapse. The 13% of those firms that remain are companies like Boeing, Campbell Soup, Deere, IBM, and Whirlpool.
The good news? There is a growing pool of mutants. These companies that set longer-term goals and back those goals up with systems that reward long run management. Firms run on this basis consistently out-perform the 90-day sprinters of the world. George Serafim and some of his colleagues at Harvard Business School have written a number of articles on the high risks of short-term management. There’s one in particular that I love called Short-termism, Investor Clientele, and Firm Risk, published in February of 2012. Mr. Serafim and his colleagues have been able to demonstrate a measurable market advantage for firms that have environmental and social policies in place. In this video he explains how firms that imbed sustainable (see: long-term) practices in their strategy and operations clearly outperform their competitors.
In their study, Short-termism, Investor Clientele, and Firm Risk, Serafim and his colleagues reviewed over 70,000 earnings conference calls for more than 3,600 firms from 2002-2008. Using precise key word testing they were able to determine “the time horizon that senior executives emphasize when they communicate with investors.” It shouldn’t be a surprise that the firms who engender a systemically focused, long run attitude financially outperform the other group.
What the hell does any of this have to do with the Presidential election? Everything!! Nationally and at the local level, the disadvantages of short-term thinking and clearly demonstrable advantages of long-term thinking have never been more important. Tomorrow (God-willing), this election will be over and it will be time for our newly entrusted officials to start governing. Look back over that list of items that desperately need attention. Pick one of them and ask yourself, is any one man capable of solving this problem in four short years? Even in an ideal world, I seriously doubt either Presidential candidate could deliver on their broad vision of reshaping America in 48 months.
Our political system could seriously take a lesson from the slow, silent transformation of Wall Street. Pretend for a minute that tomorrow morning, General Motors’ CEO Daniel Akerson announced to the world that by 2030 GM would offer only electric vehicles to consumers. Akerson is 64 years old and is very unlikely to remain GM’s CEO for the next 18 years. Just because he wouldn’t be in charge to see the vision realized doesn’t mean he can’t survey the market, identify key trends, and respond accordingly. Then Akerson just has to trust that the next guy who comes along will see the same value in his long-term vision and believe that customers are going to continue to respond favorably.
Surely there would be individual employees at GM, perhaps many high-ranking managers who would disagree with Akerson’s decision. Still, I have to believe that Akerson would be making such a decision because it lines up with his vision of how to keep GM competitive well into the future. Some other potential CEO might have a different idea of how to best serve the GM shareholders, but the goal remains the same: invest in the long term health of General Motors.
All I want for Christmas is a United States government that’s willing to do the same. If we want to start crossing items off that foreboding list of failures, we need to set some long-term goals. Those goals should be rooted in an explicit acknowledgement that in many key areas, America is no longer the leader it once was. It doesn’t matter who starts the process of reconciliation, as long as the next leader doesn’t come along and try to dismantle it because its got the other sides’ cooties on it. Mr. Future President: Is this attempt at long-term planning serving the best interest of a majority of Americans? Yes? Okay, leave it the fuck alone.
The current elections process is Washington’s version of a Wall Street 90-day sprint. When it’s all said and done each candidate will have spent about $1 BILLION and not have much to show for it. On May 31st, 2012 FiveThirtyEight Blog had President Obama polling at 50.6% and Romney at 48.3%. Now several billion dollars later (if you include outside money), the President is polling at 50.8% and Romney is virtually unchanged at 48.3%.
If that doesn’t blow your freaking mind then I don’t know what will. Raising and spending billions of dollars on a two-year campaign that leaves voters’ opinions virtually unchanged is the exact opposite of an effective election system. It’s distracting, it’s corrosive to our national spirit, and it doesn’t allow our elected officials to do their jobs.
In the system I just described, one candidate barely squeaks out a victory and we all lose. It keeps us stuck in the same toxic polarization and undermines any attempt to set and administer new long-term goals. It’s up to us to decide that our growing list of failures is one item too long. Government responds to constituent demand. Are you as frustrated by this as I am? Who is your Congressman? Who is your Senator? Who is your State Representative? Take a minute to write (as in hand-write) your Representative. Tell them that you want them in their office working on your behalf, not out on the campaign trail stumping for half their term. Don’t be rude, just outline what you expect and what types of behavior would earn your vote in the future.
Want to get involved in other ways? Look at the list at the top of this post. Pick the item that shocked you the most and talk to a friend about it. American exceptionalism is alive and well; I’d bet dollars to a bag of doughnuts that most American citizens wouldn’t believe half the items on that list. Spread the word.
If you haven’t already, vote! But after the election is over, your voice is still your vote. There’s nothing stopping you from standing up for what you believe in, especially when we’re not in an election cycle. Talk to your friends. Talk to your enemies. Talk to the man in the mirror. Help someone understand that these are generation-long challenges that require persistent attention from all ends of the political spectrum. No single Presidential administration is equipped to solve challenges on this scale. It’s up to us to decide that we want a new way forward and demand a sacred, long-term plan capable of delivering the goods.
Hurricane Sandy v. Denialism (AUDIO)
As Hurricane Sandy barrels into the Mid-Atlantic seaboard, we’re being treated to a sunny fall morning in the Pacific Northwest. Out here it’s the sound of silence that prevails, something I desperately wish I could share with the folks in Sandy’s path. There is another type of silence that is as damaging to people here in Seattle as it is to those on the East Coast. This insidious silence affects families all around the world and generations yet unborn. I’m talking about climate silence.
Last week I wrote about the complete absence of a discussion on global climate change in our Presidential debates up until that point. Well, we had the final debate last Tuesday and once again neither candidate felt compelled to go off-script. They swept the debates like the Giants swept the Tigers. This is the first time since 1984 that climate change or global warming was not discussed as a major policy issue in the debate process. This week, Sandy is providing a reality check for both party platforms.
Hurricane Sandy is a hybrid super storm born out of an Arctic front, which made a mutant storm baby with a tropical storm that had proceeded across the Atlantic in the usual fashion. It is the largest storm ever to hit the eastern seaboard, and while it’s not as powerful as Hurricane Katrina it could easily be as significant. The storm stretches an unprecedented 525 miles from its eye, giving it a reach Muhammad Ali would covet. It has gathered historic volume over a record-warm Atlantic Ocean and amid the lowest pressures ever recorded north of Cape Hatteras. Don’t let “Category 1” fool you. It is, quite simply, a monster.
“But wait!” you say, “Climate change doesn’t cause hurricanes. This whole argument is bunk.” I concede. Climate change does not, in itself, cause hurricanes; tropical storm systems are naturally occurring events that would happen regardless of our atmospheric tinkering. What climate change does do is provide the conditions ripe for more frequent extreme weather events. Seems to me they should really rethink the name “hundred year” flood, drought, hurricane, or storm when they are happening every single year. This morning 350.org founder Bill McKibben warned Democracy Now’s Amy Goodman:
Well, look, I mean, global warming doesn’t cause hurricanes. We’ve always had hurricanes. […] But we’re producing conditions like record warm temperatures in seawater that make it easier for this sort of thing to get, in this case, you know, up the Atlantic with a head of steam. We’re making—we’re raising the sea levels. And when that happens, it means that whatever storm surge comes in comes in from a higher level than it would have before. […] What really is different is that there is more moisture and more energy in this narrow envelope of atmosphere. And that energy expresses itself in all kind of ways. That’s why we get these record rainfalls now, time after time. I mean, last year, it was Irene and then Lee directly after that. This year, this storm, they’re saying, could be a thousand-year rainfall event across the mid-Atlantic. I think that means more rain than you’d expect to see in a thousand years. But I could pretty much—I’d be willing to bet that it won’t be long before we see another one of them, because we’re changing the odds. By changing the earth, we change the odds.
So no, climate change doesn’t explicitly create new hurricanes. What it does do is juice up the ones that do form; it makes them bigger, stronger, more persistent, and more dangerous. Shortly before Mayor Bloomberg issued an evacuation order for almost 400,000 New Yorkers yesterday, there was a demonstration in Times Square that urged people to connect the dots and “End Climate Silence.”
It’s not just protesters urging anyone who will listen to take seriously the connection between anthropogenic ocean warming and freak storm systems. Two weeks ago the National Academy of Sciences —not exactly an activist organization—published a study that concluded that North Atlantic hurricanes are, “more of a danger when ocean temperatures are higher. In particular, we estimate that Katrina-magnitude events have been twice as frequent in warm years compared with cold years.” Convenient findings since we’re currently nearing the end of the warmest year on record.
Does everyone remember the hydrologic cycle from elementary school science class? Water evaporates more quickly in warm environments than cold ones. It’s that simple. I have no professional scientific training, but it doesn’t take a Ph.D. to understand what is happening. When we warm the earth with heat-trapping industrial emissions, there’s more water evaporating into the atmosphere, therefore it’s more likely we will experience the consequences of that energy-saturated atmosphere in the form of extreme weather events. Every year we continue down the same path, we’re loading the dice even more.
Let’s pause and check my assumptions. 1.) Global climate change is happening. 2.) Humans emissions and impacts are largely responsible. 3.) Climate change increases the likelihood of a whole host of extreme weather events including hurricanes, droughts and floods. If all of these are true, it leads to the same obvious and enormous question that has been completely absent from our electoral process. Why isn’t the United States doing anything about it?
The percentage of U.S. citizens who believe in human-caused climate change has actually declined significantly from four years ago. In 2008 both major political parties devoted time to outlining their different plans to deal with global climate change. At the national level there was no debate over the importance of addressing this monumental issue. On the contrary, McCain and Obama sparred about who would deal with it more forcefully. This year the number of Americans who agree that humans are responsible for climate change has dropped to about 50%. We were not treated to a discussion of climate change mitigation strategies in the debates, even though a realistic discussion of our economy is impossible without acknowledging the reality we will soon have to confront one way or another.
Emergent confusion about climate change is the result of a highly orchestrated and well-funded misinformation campaign by organizations like the Heartland Institute, Americans for Prosperity, and the Competitive Enterprise Institute. These “think tanks” (think is a very generous word) have one goal, create uncertainties in the scientific validity of climate science. They don’t even need to “win” the argument. Partly because it’s impossible for them to legitimately win with their bunk science, but mainly because the creation of doubt is their raison d’être. Introducing doubt where there previously was none is enough to slow down the response and keep things moving along nice and steady for their boosters. Speaking of funding, the financial support for these organizations and their kin is intentionally muddy; suffice it to say they are financed largely by fossil fuel lobbies, industry groups, and fabulously wealthy executives who benefit from the status quo.
The doubt they have sewed into the American consciousness is holding up progress in the rest of the world. The United States has the power to tip the scales in the response to global climate change, but as long as the political process remains beholden to fossil fuel lobbies and the Chamber of Commerce little can be done. Compared to the rest of the world the United States near the top of the list in terms of citizens who know about climate change, but is near the bottom of the list in terms of acceptance of human causation. Shame on us.
Please don’t take my word for it. I strongly suggest you watch this fantastic Frontline report entitled “Climate of Doubt” about the misinformation campaign currently being waged in an effort to keep us trapped in a fossil fuel circus. You’ll have to watch it soon; who knows how much longer the folks at PBS will last.
Contrary to what the Heartland Institute would have you believe, the science is settled. Their efforts on behalf of the fossil fuel industry have bordered on offensive. Check out this priceless billboard they put up in Chicago last year.
It would be funny if it weren’t so pathetic. The fact remains that over 97% of climate scientists agree that human-caused climate change is real and is accelerating. Both the United Nations Intergovernmental Panel on Climate Change and NASA have issued numerous startling reports saying virtually the same thing. Don’t want to believe the scientists? Okay, that’s fine. How about the insurance industry? In early 2012 representatives from The Reinsurance Association of America met with members of the U.S. Senate to acknowledge the reality of anthropogenic climate change and plead for some sort of legislative action. It’s very possible the insurance industry as we know it will not survive the accelerating pace of “hundred year” weather events.
I can’t underscore the seriousness of our collective failure to act strongly enough. This blog is in part a chance for me to get on the record. It’s an opportunity to be on the right side of history. If we don’t confront this challenge I’ll have to explain to my children and grandchildren what was going on in the other Washington and why they didn’t act until it was too late. Check out this clip of Fmr. Representative Bob Inglis (R-SC). In 2010 he lost his reelection bid in a landslide to a Tea Party candidate. His crime? He admitted that he agreed with 97% of climate scientists about the validity of climate change and that humans were likely responsible. Imagine that, a ranking member of the House Subcommittee on Energy and the Environment listening to climate scientists.
Instead of addressing this issue head on, our elected leaders are putting their heads in the sand. Perhaps it more accurate to say that industry lobbies have dug the holes to make the head-putting easier, but ultimately it’s a failure of leadership. This failure to act is extremely significant. As Noam Chomsky recently observed, “Our response demonstrates an extraordinary willingness to sacrifice the lives of our children and grandchildren for short-term gain. Or equally remarkable, a willingness to shut our eyes so as not to see impending peril.”
I really hope that Hurricane Sandy spares everyone in her path. We used to live in Miami. I have been through hurricanes and let me tell you, they’re no fun. I earnestly pray that no lives are lost at Sandy’s behest. Being in the middle of that kind of storm is a humbling demonstration of the awesome power of nature. A hurricane does not negotiate and it does not respond to opinion polls. At the same time, sometimes the only way to encourage wholesale policy change is through widespread discomfort. Famed economist Milton Freidman said it best:
Only a crisis —actual or perceived—produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.
The increasing frequency of extreme weather is an apt reminder of who is in charge. We are all subject to the whims of Mother Nature and if we continue to abuse her, she will continue to respond in ways we humans have no control over.
Want to get involved? Come to 350.org’s Do the Math Tour. They’re coming to a city near you. Get informed. Join the movement!!