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Edward Luce: “Is democracy on course to duck the biggest challenge of our age?”

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Edward Luce (right) reports that the big reinsurance companies have called on Washington to take urgent steps to stop catastrophe, which threatens to make nonsense of their risk models.

edward luce (2)He writes: “You would never guess it from the US election. But for the third year running the world is on course to exceed a record temperature in 2016 — having suffered the hottest July in history last month”.

The hidden costs of climate change — the federal disaster relief, higher insurance rates, bigger levees and so on — will also grow.

Before the public reaches a verdict on global warming, we may be reaping the whirlwind. As Eric Reguly wrote in 2013, no climate-change deniers are to be found in the reinsurance business.

Most people encounter life through day-to-day problems. As Luce says, it is natural to worry more about job security, or the family’s healthcare, than about the grander themes of our time.

Though people fear that their children may not ‘have it as good’, they look at economic forecasts, complain about immigration and seldom mention the impact of global warming; they also fear that mwasures to address global warming, such as having a “carbon tax”, will raise the cost of living.

Luce points out that global warming is affecting daily lives in a growing number of ways:

 colorado disaterColorado event

  • Last month, America’s east coast suffered from summer temperatures so high the authorities in New York, Washington and elsewhere urged people to keep their children inside and stay well hydrated.
  • Washington was hit by two nights of electricity outage and many more such cuts are expected as. The underground cables were not designed to withstand so many days of daytime temperatures near 100F (38C).
  • Southern California has suffered from a rise in the ferocity of wildfires;
  • Louisiana, earlier this month was flooded by “once-in-a-thousand-year” rainfall;
  • Westerners may find it hard to identify with people in the Gulf, where
  • insurance rates have shot up in low-lying coastal areas, such as Florida, Alabama and even New Jersey.
  • Zillow, an online property site, forecast that one in eight homes in Florida would be underwater by the end of the century.
  • farmers in the midwest fret about the uncertainty of “extreme weather”.

Public scepticism about science and an allied distrust of funding-dependent experts has been rising in the past few years, with fear about the side-effects of vaccines on children, the impact of pesticides and fluoride in drinking water.

Most people don’t have the time or the education, to understand climate science. Luce reminds readers that scientists have consistently said that global warming will take place unevenly, unpredictably and by step-change rather than on a linear curve: “That means next year may be less hot than this year. It will not mean that global warming is a hoax. Here is one prediction: next time it snows in Washington DC, several US senators will send tweets mocking global warming.

To avoid the unpopular policy of taxation, governments have resorted to cap and trade schemes, which are floundering, ‘run by bureaucrats and vulnerable to lobbying’, but Luce believes in letting the market decide how to cut emissions by putting a price on carbon – charging those who emit carbon dioxide (CO2) for their emissions. For every dollar raised from carbon, we should receive a dollar in tax cuts — or better still, have it rebated in our tax returns.

He emphasises that the purpose should not be to raise money but to cut emissions.

 

 

 

The human race has one really effective weapon, said Mark Twain — “and that is laughter”

Last June, investigative journalist, Felicity Arbuthnot, sent a link to an article by André Vltchek, novelist, investigative journalist, filmmaker and playwright, who reflected that no revelation, no discovery of crimes committed by Western governments and companies leads men and women to demand the immediate resignations of their governments, or the changing of their entire political and economic system.

We add that mainstream mass media misleads the public by sidelining the important and focussing on the trivial:

media trivia

Vltchek continues: “We write and write, film and talk… Huge accusations are made, crimes confirmed… But again: nothing happens!

In a reply to Felicity – strengthened yesterday by Edward Luce’s Financial Times article – I suggested that only humour remains: the revelation that the Emperor has no new clothes, no honesty and no humane feeling.Broken BritainThe reply was accompanied by a collection of cartoons – the best about Britain was by Ingram Pinn – above – but it only reaches a limited audience; ‘saturation coverage’ is needed for a significant impact.

In the FT on Sunday, Luce referred to a ‘potent intervention’ from comedian John Oliver, whose use of the Monopoly board game illustrated the industry’s stranglehold on internet speeds and prompted 4m viewers to jam Washington with complaints. He marvels that:

“Far from catering to our shrinking attention, the comedy shows demand as much of their audience as the most ponderous news channels. Mr Oliver employs four full-time researchers, including two former New York Times journalists. His segments go for 20 minutes between breaks and contain more data than, say, an hour of CNN”.

Luce attributes the increased audience for humour to a collapsing or ‘cratering’ public trust in authority, as few institutions are unscathed in America, or we add, Britain:

  • rising distrust has engulfed the marbled pillars of Congress
  • the Supreme Court
  • the media,
  • the Boy Scouts,
  • corporate America,
  • the Catholic Church and so on.

He expresses two easily challenged reservations about ‘the comedic reach’: it is left leaning, so? And it has no answer to terrorist states that incinerate people (presumably not a reference to CIA drone strikes) stating that only politics can solve such problems.

But the fact is that state politics are totally failing to provide solutions. Could cartoonists and comedians do any worse?

GWhoax (1)

This one certainly presented an agenda and had an irrefutable answer to  critics.

Anglo-Saxon inequality: a moral, political and economic question

us inequality

In the FT, economist Martin Wolf observes that the US – both the most important high-income economy and much the most unequal – is providing a test bed for the economic impact of inequality. The results are worrying. This realisation has now spread to institutions that would not normally be accused of socialism. A report written by the chief US economist of Standard & Poor’s, and another from Morgan Stanley, agree that inequality is not only rising but having damaging effects on the US economy.

Wolf asks: “When should growing inequality concern us? This is a moral and political question. It is also an economic one. It is increasingly recognised that, beyond a certain point, inequality will be a source of significant economic ills.

According to the Federal Reserve, the upper 3% of the income distribution received 30.5% of total incomes in 2013. The next 7% received just 16.8%. This left barely over half of total incomes to the remaining 90%t. The upper 3% was also the only group to have enjoyed a rising share in incomes since the early 1990s. Since 2010, median family incomes fell, while the mean rose. Inequality keeps rising. The Morgan Stanley study lists among causes of the rise in inequality: the growing proportion of poorly paid and insecure low-skilled jobs; the rising wage premium for educated people; and the fact that tax and spending policies are less redistributive than they used to be a few decades ago”.

supreme court decision 2014In March, an FT article by Edward Luce (America’s democracy is fit for the 1%) was subtitled ‘Both US parties are up for rent, and patriots of all stripes should be troubled’. He correctly forecast that the US Supreme Court would remove what remains of post-Watergate limits on campaign finance. In April it did so. He commented that “in a less unequal society, the downside would be limited. But in an economy where the top 1% of the population owns more than a third of national wealth, it corrodes the republic from which such riches sprung. People fret about America’s 1% economy. They should worry more about its 1% democracy.

Both ends of the spectrum should be concerned about the rising US oligarchy. Last week several Republican presidential hopefuls trekked to Las Vegas to pay their respects to Sheldon Adelson, the gaming billionaire, who owns casinos in Nevada, Macau and Singapore . . .

Wolf continues “The transmission of educational disadvantages across the generations is also a growing handicap to the economy. A debt-addicted economy with stagnant levels of education is likely to fare ill in future . . .

“American education has also deteriorated. It is the only high-income country whose 25-34 year olds are no better educated than its 55-64 year olds. This is partly because other countries have caught up on the US, which pioneered mass college education. It is also because children from poor backgrounds are handicapped in completing college . . .

“This is not just a problem for those whose talents are not fulfilled. The failure to raise educational standards is also likely to impair the economy’s longer-term success. Some of the returns to education may just be the reward to obtaining a positional good: the educated do better because they have won a zero-sum race. Yet a better educated population would also raise everybody to a higher level of prosperity.

“The costs to society of rising inequality go further. To my mind, the greatest costs are the erosion of the republican ideal of shared citizenship. As the US Supreme Court seeks to bend the constitution to the will of plutocrats, the peril is to the politically egalitarian premises of the republic. Enormous divergences in wealth and power have hollowed out republics before now. They could well do so in our age”.

Ed: and this analysis ‘writ small” applies to England.

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American & British ‘democracies’: fit only for the 1%

As concern rises over the latest London/Delhi revolving door revelations we turn to an article written by Edward Luce, Financial Times commentator and columnist based in Washington, which was given the headline: ‘America’s democracy is fit for the 1%’.

99%-3

In the grossly unequal British and American economies, where 1% own a large proportion of the national wealth, the 99% should also worry about their 1% democracy.

The article opened with ‘uncomfortable truth’: “Both US parties are up for rent, and patriots of all stripes should be troubled” and goes on to fear that the US Supreme Court is likely to remove post-Watergate limits on campaign finance.

Luce gave examples – one reproduced below:

 luce text

 Old and New World corrupted

Luce points out that America – forged in opposition to the aristocratic corruption of Europe – has more entrenched inherited wealth than in almost every corner of the old world: “so too are legacy places at Ivy League universities that were once such wellsprings of US meritocracy”.

Both David Cameron and Barack Obama campaigned on a promise to address this form of corruption, but – apart from minimal regulatory changes in both countries – inequality continues to grow and the lobbying/PR industry flourishes.

In effect, is ‘one person, one vote’ being replaced by ‘one dollar, one vote’ in both countries?

As the 99% struggle to cope, ‘celebrity and politics are becoming bedfellows the world over’