In the halting, measured language we’ve come to expect from his impromptu public remarks, President Obama posed a core dilemma of climate change yesterday at his first post-election press conference. Explaining the possible repercussions of failing to act now, he said, climate change “is going to have an impact and a cost down the road, if we don’t do something about it.”
Whether to pay for an energy transformation now, or take our chances with climate impacts and costs “down the road,” is a key, polarizing economic question within climate change policy. Another way of framing it is this: What’s the future worth to you?
People alive today and people alive 100 years from now have the same moral value it seems to me and different economic value. That sets up all sorts of trickiness. As economist Richard Tol has put it, placing an even greater economic value on the future than economists do “may be morally preferable but is clearly out of line with common practice.”
Money tends to lose value over time. A dollar today is worth much more than in 2112. We tend to believe that the economy will grow, we’ll all be richer later, the value of a dollar will gradually fall — and with it the cost of adapting to a new climate. It’ll be cheaper to adapt to changes in the future than anticipate them and pay for them with more valuable dollars now.
Part of it is also just human psychology. We live in the present, not the future, so why don’t I just take that dollar now, thank you. As J. Wellington Wimpy — yup, Popeye’s friend — expresses the problem, “I’d gladly pay you Tuesday for a hamburger today.” When he’s staring at a lightly charred, grease-oozing meat patty wedged into a bun, Tuesday sounds as agreeable as anything because it’s practically synonymous with “never.”
Blackberry maker Research In Motion shocked the market late on Thursday — reporting a much smaller-than-expected loss in the second quarter.
Written off as a has-been by technology analysts, RIM revealed that its handsets are still sought after by cost-conscious users in emerging markets.
RIM [RIMM 7.50 0.36 +5.04% ]reported a net loss of $235 million in the second quarter, far surpassing analysts’ expectations. The company posted a profit of $329 million in the same period a year earlier.
It’s a welcome bit of good news for the struggling technology group. The smartphone pioneer once produced products so in vogue that arguably the world’s hippest chief executive, President Barack Obama, famously refused to part with his BlackBerry.
But analysts remain cautious about the company’s future, waiting the launch of RIM’s much-heralded launch of its next-generation BB10 product next year.
With his bashing of private equity, Barack Obama has given Mitt Romney a huge opening. Edward Conard, Romney’s friend and former partner at Bain Capital, is eagerly seizing that opportunity with his manifesto for private investment, Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong. Conard is eloquent and passionate about the virtue of investment and even the merits of America’s trade deficit. He’s the ideal guy to challenge post-crash criticisms of America’s market economy, and to serve as a sort of shadow debating captain against the Democrats’ populist instincts.
Regrettably, Conard overplays his hand. As far off the rails as Obama can be in attacking Bain for chasing profits—which is merely capitalism at work—Conard goes him one better. You know the Democrats’ caricature of Republicans who only care about rich people? Well, meet Ed Conard.
The thesis of Unintended Consequences is that risky investment drives improved productivity, which in turn drives higher wages and living standards for the poor and the rich. This is standard trickle-down, and it’s not much in dispute. The trouble is where Conard goes with it. He chalks America’s superior performance up to the country’s being basically a capitalist nirvana. As he puts it—with characteristic humility—“U.S. innovators have produced Intel [INTC], Microsoft [MSFT], Google [GOOG], Facebook [FB], etc. The rest of the world has contributed next to nothing.”
Nonetheless, Conard thinks that the U.S. is short on capital. And if someone has to sacrifice in order to facilitate more investment, Conard, a card-carrying member of the 0.1 percent, is perfectly willing to nominate people who are less well off than he is.
Strange Random Book Quote:
“The books that help you the most are those which make you think the most.” – Theodore Parker
- Former Bain Capital Director And Top Romney Donor Pens Book Calling For Even More Income Inequality (thinkprogress.org)
- This may not be the best defense of capitalism, ever (theblaze.com)
- Ed Conard: The Man Behind the ‘Most Hated Book in America’ (Video) (bigthink.com)
- Timothy Noah: Why Those Praising Income Inequality Are Wrong (huffingtonpost.com)
- Edward Conard: payoffs for risk-taking are essential (cnnpressroom.blogs.cnn.com)
- Americans Like the Rich, and the Rich Benefit America (taxprof.typepad.com)
- Top Romney Economic Adviser Takes Ideas Of Donor Who Wants More Income Inequality ‘Seriously’ (thinkprogress.org)
- Mitt Romney’s Top Donor On Wealth Inequality: The Wealthy Should Be Wealthier So All Can Benefit (crooksandliars.com)
Strange Random Fast Food Quote:
“Eating at fast food outlets and other restaurants is simply a manifestation of the commodification of time coupled with the relatively low value many Americans have placed on the food they eat.” – Andrew F. Smith, ‘Encyclopedia of Junk food and Fast Food’ (2006)
- Overheard on CNN.com: Soldiers can’t say whatever they want, or can they? (news.blogs.cnn.com)
- Hard sell: Marketing missiles not for faint-hearted – CNN.com (exitbusiness.wordpress.com)
- Overheard on CNN.com: What brought down Gingrich’s campaign? What’s next? (news.blogs.cnn.com)
- E-books spur reading among Americans, survey shows – CNN.com (chimac.net)
- Joel Osteen: Obama, Romney are Christian (cnnpressroom.blogs.cnn.com)
- CNN.com tops 100 million video starts per month in 2011 (nextlevelofnews.com)