By Jonathan Kent
I think we should be grateful for the banking crisis. So, it’s an almighty balls-up but after all it’s only money.
The reason I’m grateful for it is because it’s an invaluable heads-up for how the climate crisis is going to play out.
The point is simple. The financial crisis was years in the making. Of course the wonks like to say that no one saw it coming, but that’s really not true. It wasn’t just Nouriel Roubini. It was lots of people, many of them non-economists who rather than employing enormous intelligence, vast resources and some very long words to explain why it was different this time used a little common sense to explain why it wasn’t and why the wheels were going to come off.
I know. One small example amongst many; I used to follow a blog by David Smith, Economics Editor of the Sunday Times. David spent a lot of time back in 2004/5/6 blogging to all who’d read him that it was different this time. In turn there were dozens of his readers who would explain in quite simple and comprehensible terms why it wasn’t. I was one of them. I don’t want to bore you with all the details but the fact that money supply (M4) was expanding at 12-14% while the economy was growing at 2-3% per year was just one pretty obvious warning signal we flagged to him as were the crazy asset price-bubbles that were long since blowing up and were about to burst.
Eventually David got fed up with the comments and turned them off. Not so very many months afterwards the bubble did indeed burst, credit markets froze, the crisis proper began and lots of people, David included, swore no one saw it coming.
Now, as we all know; we, the people, have bailed them, the rich nincompoops in the banks, out. The idea was that if they went to the wall that we were all screwed. It was probably a smart move. However no one told us that part of the deal was that the banks were going to take all that money and rather than use it to invest in businesses or find other clever ways of getting it back into the economy, they were going to hoard it, rebuild their own balance sheets and pay themselves fat bonuses despite the fact that they’d done nothing to earn any sort of bonus, fat or otherwise.
The moral of this story is that there are no morals. The rich write their own rules and they really don’t care what anyone else thinks. They were able to push the banks over the brink because they knew they’d be all right afterwards – someone else would pick up the tab. It’s the old ‘hand over the cash darling or the economy gets it’ trick.
So to climate change.
Perhaps some of us are being a little naïve the response to global warming. We’re looking at all those oil company types and part of us, just a little part maybe, but a part nevertheless thinks they’re going to wake up at some point and realise that the car is about to go over the cliff and do something just in time.
They’re not. They’re not because the model they have in mind is the same one as the banks. If everything goes into meltdown, if millions are displaced, if millions die… it’s not going to be them.
Crazy yes? Well don’t be surprised if they’re figuring that if you have enough money and can buy up acres in the arctic on spec, just in case you need a liveable bolthole, or build a bunker or hire security or whatever to make sure you and yours survive, you figure you can purchase your way out of the disaster that everyone else will live through.
It’s not so much that they believe climate change is or isn’t for real. It’s that they think that they don’t need to care because whatever the outcome their cash gives them an opt-out. After all experience, not least the banking crisis, has taught them exactly that. It’s the little people who suffer not them. And should things really head towards Armageddon not only will it be too late before they realise but they will still probably not care. After all the end of the world party will be a hell of a bash and so long as they have cash to put goons on the door and keep hoi polloi out they’ll die just the way they lived – in style.
The thing is we now have their number, and a choice.
[Guest post by Jonathan Kent. Originally posted at The Headstrong Club.]