Sunday, September 6, 2009

Why do we act so surprised when we were warned

The Bigger Picture
Published on August 20th in Metro Éireann By Charles Laffiteau
Given the fact that I don’t believe the citizens of the EU or America are sufficiently alarmed about the consequences of climate change to sanction paying developing countries money in order to avoid them, I think the prospects for a meaningful global agreement to cut carbon emissions is still a long ways off.
I have come to this conclusion based on my experience dealing with problems and my research regarding how difficult it is to get political leaders into action addressing their countries domestic difficulties, much less any issues that are of global concern. Government leaders outside of America would have us believe that the current economic recession could not have been anticipated and that it is all America’s fault anyway, while politicians in the US blame greedy Wall Street bankers. Poppycock!
In 2005 economists in America were warning us that our easy access to mortgage financing and the consequent ever upward trajectory of housing prices was creating a “housing bubble” that was bound to burst sooner or later. These same economists were also warning American consumers that they were spending too much on non-essential luxuries with their credit cards and not saving enough money to sustain their finances in the event of another recession. Economists also warned us that we were putting too much faith in investment portfolios that were based on inflated stock market values.
The US Comptroller General was warning us in 2003 that our healthcare expenses were gobbling up an increasing percentage of our disposable income and that the US Congress could not afford to provide Americans with a prescription healthcare benefit. He pointed out that this new benefit was unfunded and would only further add to America’s Iraq War induced budget deficit. The US Comptroller also warned us that our Medicare and Social Security entitlement programs were underfunded and would collapse unless we raised the retirement age, raised taxes and or cut benefits. Did most American consumers listen? NO! Did most of America’s politicians listen? NO!
Closer to home here in Ireland, economists warned that the housing market was overheated back in 2005. Economists here also decried the rise in both public sector employment and wage agreements because these actions were based on government revenues that ballooned thanks to stamp duties from that same overheated housing market. Economist also noted that healthcare and pension costs were rising at unsustainable rates unless action was taken to restrict benefits or raise taxes. Did most Irish consumers listen? NO! Did most of Ireland’s politicians listen? NO!
Is America, and it’s very lose regulation of Wall Street and American financial institutions, a culprit in the current global economic recession? Yes it is! But America had many willing accomplices around the globe. Without the contributions of those accomplices, consumers as well as government officials in other countries, this recession would not have been such a global affair. If we want to avoid a repeat of the current economic nastiness, we need to first look at our own behaviour and contributions to this mess before we go off pointing fingers at others for what they did or didn’t do!
Unfortunately, what I see and hear in America, Ireland and in other countries, is a complete lack of any sense of personal responsibility or accountability on the part of individual citizens, much less their political leaders. But we can not avoid repeating the same mistakes again unless we first acknowledge that we played a part in them. Only then can we begin to learn from them so we don’t find ourselves repeating these same mistakes again in 15 or 20 years. I wish I saw more evidence of this; but frankly I don’t!
The truth is; most of the time consumers and their political leaders in all countries see what they want to see and hear only what they want to hear. Economists and others who are warning us to conserve or change our spendthrift ways when our economies are booming; are routinely ignored or treated as economic Cassandra’s and criticized for their “pessimistic” perspectives. Then when the crisis they warned us would happen is upon us we ask “How could this happen?” Then we begin playing the blame game.
The issue of climate change due to carbon emission fueled global warming represents a similar conundrum for the world’s consumers and politicians. Instead of respected economists warning us about our borrowing and spending habits, we have respected climate scientist warning us about the consequences of not reducing our carbon emissions. But while there has always been some level of disagreement among economists about the economic consequences of consumer and government profligacy, there is virtually no such disagreement among the world’s climate experts.
The fact that a composite of various climate change scenarios suggests severe environmental consequences, which will disrupt the lives of all living species, should make effectively dealing with this problem our number one policy issue. Mind you these scientific models are not the worst-case scenarios, but rather the most likely results of a catastrophic rise in global temperatures based on our present carbon emissions levels.
But, unfortunately for us and future generations, both consumers and politicians tend to respond and demand policy changes only when they find themselves in the middle of a crisis, such as the recent global economic meltdown. Climate change is more insidious because it is a creeping threat and the full dimensions of the crisis won’t be apparent for many years. But by the time rising temperatures and sea levels have become so obvious that even the most skeptical observers have been silenced, it will be too late to avert the catastrophic environmental and economic consequences of climate change.
The world won’t be facing several years of economic consequences like falling house prices or rising unemployment that governments can attempt to address with economic stimulus measures. Unless we act now, it will take decades to reverse the environmental consequences that await us and, more importantly, our children. Next week, I’ll discuss what we can do now.

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