Carbon emissions dropped to a 20-year low
Ezra Klein's Wonkbook
RCP Obama vs. Romney: Obama +3.5%; 7-day change: Obama -0.9%.
RCP Obama approval: 48.0%; 7-day change: +0.2%.
Top story: Will America go green?
U.S. emissions of carbon dioxide dropped to a 20-year low in July. “In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal. Many of the world’s leading climate scientists didn’t see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.” Kevin Begos in The Associated Press.
The Republican ticket still doubts climate science. “Mitt Romney's views on climate change can be difficult to pin down. ‘I don't know if [rising temperatures are] mostly caused by humans,’ he told another New Hampshire crowd last summer. ‘What I'm not willing to do is spend trillions of dollars on something I don't know the answer to.’ Romney thinks climate change could conceivably be real, but he isn't willing to enact any countermeasures that could hurt the economy…Yet whatever Romney's muddled views on climate, there's less ambiguity from his new running mate, Paul Ryan…[In an op-ed,] Ryan attacked the work of climatologists, suggesting that scientists might even be engaged in a conspiracy of sorts.” Brad Plumer in The Washington Post.
@7im: Please pour stimulus cash into my district. It’ll lower greenhouse emissions. Thanks, Paul Ryan.
How politically toxic is climate change in the U.S.? “[C]limate change has been the issue that national politicians seem to avoid at all costs. Supporting renewable energy? Fine. Advocating energy independence? Great. Calling for action on global warming? Not so much…55 percent of registered voters say that the candidates' views on global warming will factor into their decisions in the polling booth. Most of these voters also believe the evidence that global warming is stepping up and that the federal government should do something about it…A Stanford University-Washington Post poll conducted in June shows that while trust in scientists has diminished in the last five years and the percentage of climate change skeptics has nearly doubled, to 25 percent…About 77 percent said the issue was important to them. But half of that group said it was only "somewhat important," the third available choice on a five-point scale.” Felicity Barranger in The New York Times.
Beyond this year’s drought, climate change will continue to wreak havoc on global food supplies. “Food security experts working on a chapter in a U.N. overview of global warming due in 2014 said governments should take more account of how extremes of heat, droughts or floods could affect food supplies from seeds to consumers’ plates. ‘It has not been properly recognised yet that we are dealing with a food system here. There is a whole chain that is also going to be affected by climate change,’ Professor Dr John Porter of the University of Copenhagen said.” Alister Doyle in Reuters.
This July was the 4th hottest on record around the world. “The global average temperature in July was the fourth-warmest on record and marked the 329th consecutive month with a worldwide temperature above the 20th century average, according to federal data released Wednesday…’In the Arctic, sea ice extent averaged 3.1 million square miles, resulting in the second lowest July sea ice extent on record,’ NOAA said…The warm temperatures helped place the first seven months of 2012 into the top 10 warmest January-July stretches on record…Last month was record-breaking the in the United States specifically -- it was the single hottest month on record in the contiguous 48 states as record heatwaves gripped many regions.” Ben German in The Hill.
The case for a carbon tax. “It's only responsible to force a shift away from fossil fuels by enacting a carbon tax. The U.S., which accounts for about 19 percent of global emissions today, should take the lead in doing so as part of broader tax reform. The benefits of such a tax are clear: It would raise immediate revenue for a strapped nation, curtail the use of fossil fuels and, as a result, drastically lower emissions…To avoid one of the biggest downsides of a carbon tax — slower economic growth — as much as 50 percent of the revenue should be used to lower corporate tax rates for all companies…The economic case is compelling: Climate change is the ‘greatest market failure the world has ever seen,’ as former World Bank economist Nicholas Stern put it, because the hefty environmental costs from burning fossil fuels are borne by society, not by those who emit greenhouse gases.” Bloomberg View Editors.
FISHMAN: The drought is an opportunity to recast American water conservation policy. “We’re in the worst drought in the United States since the 1950s, and we're wasting it…[T]he Drought of 2012 inspire efforts to reduce water consumption…The pain of this drought, a slow-motion disaster, is very real. Drought can lead to paralysis and pessimism -- or it can inspire us to fundamentally change how we use water. Water doesn't respond to wishful thinking. If it did, prayer services and rain dances would be all we'd need.” Charles Fishman in The New York Times.
PORTMAN: Here comes the ‘regulatory cliff.’ “[U]nless there’s real change in Washington, we’re also headed for a steep “regulatory cliff” that could compound the damage [of the "fiscal cliff."] After three years of bureaucratic excess, the Obama administration has been quietly postponing several multibillion-dollar regulations until after the November election. Those delayed rules, together with more than 130 unfinished mandates under the 2010 Dodd-Frank financial law, could significantly increase the regulatory drag on our economy in 2013…Avoiding the coming regulatory cliff, like the fiscal cliff, will require new leadership at the top.” Rob Portman in The Wall Street Journal.
SHAPIRO: Romney’s economists are wrong. The Romney campaign's notion that the 2007-08 financial crisis should have been followed by a rapid, strong recovery -- and, by implication, would have been but for Obama's policies -- ignores other well-known economic evidence. The data show, for example, that the current recovery is comparable to the one that followed the 2001 recession, when Hubbard chaired George W. Bush's Council of Economic Advisers. In the three years following the end of the 2001 recession, which did not involve a financial crisis, real gross domestic product grew only modestly faster than it did in the past three years. Moreover, in the 37 months since the end of the 2007-09 recession, U.S. businesses created nearly 3.9 million new jobs. Recall that fewer than 1.1 million were created in the first 37 months after the 2001 downturn.” Robert Shapiro in The Washington Post.
Also, they keep misrepresenting the work of the economists they cite: http://wapo.st/OEeF0L
NOONAN: How Paul Ryan will help the GOP. “Normally, Republican candidates for national office get to be either stupid or evil. That’s how the media and Democrats tag them. But they won’t be able to tag Paul Ryan as either, because he’s too well known as smart and decent. So they will attempt to tag him as an ideologue, and this may take on some force…Republicans know how meaningful this campaign became when Mr. Ryan was picked: He changed its subject matter just by showing up…The more you see of Paul Ryan, the more you understand and appreciate his thinking. Get him doing long interviews, not short ones--full hours on the Sunday shows, sit-downs with Bret Baier and Charlie Rose. This is high risk. He does high risk.” Peggy Noonan in The Wall Street Journal.
WEIL: Standard Chartered Fought the Lawsky and the Lawsky Won. ”Benjamin Lawsky, New York's top state banking regulator, shook up the financial world by squeezing a record settlement out of Standard Chartered Plc (STAN) over allegations that it laundered money for Iran. Let's get this much straight about him, too: He's no rogue cop. He's a loyal soldier…The Cuomo administration has upset the banking universe's traditional pecking order…If the federal government would do a better job of overseeing large banks, rather than protecting them, there would be no opportunity or reason for someone like Lawsky to step in. Having active, competent, functional state financial regulators can only be a good thing. The country needs more.” Jonathan Weil in Bloomberg.
SHLAES: Trade policy as self-parody. ”History repeats itself, first as tragedy, then as lobster. Or so you might think from reading this summer's news in Maine, which speaks volumes, or crates, about the farcical nature of North American trade policy…This year's lobster crop has been enormous…That's hitting Canadian lobstermen hard…This time the "unfair trade advantage" is allegedly on the U.S. side. But U.S. authorities aren't exactly riding to the rescue of Canadian lobstermen. They're siding with the dumpers, and ostentatiously.” Amity Shlaes in Bloomberg.
Top long reads
Andy Kroll profiles Harold Ickes, the president of Democratic super-PAC Priorities USA Action: “A fiery and highly respected Democratic operative who’s worked on more than a dozen presidential campaigns and inside the White House, Ickes is a savvy and dogged fundraiser with a reputation for pulling in big money--the kind of seven- and eight-figure checks needed to compete with Rove’s Crossroads groups and Charles and David Koch’s extensive donor network. His connections run deep in Washington and in the insular, prickly world of Democratic donors, especially Clinton supporters. Ickes served as deputy chief of staff in the Clinton White House and advised Hillary during her Senate and presidential campaigns; indeed, Ickes was tapped to plan her first Senate campaign on the same day in 1998 that the Senate dismissed the articles of impeachment against Bill. Clinton donors trust Ickes with their millions, and those millions are crucial to any outside Democratic effort.”
Jonathan Martin considers the handlers who try to protect Joe Biden from himself:“[There is a] consuming effort by operatives to stamp the spontaneity and life out of modern politics…Biden's two-day swing through small-town Virginia also offered a perfect example of why this brand of control-freak politics has emerged. His unrehearsed comment to a mixed-race audience in Danville that the Republicans and their Wall Street allies want to put people "back in chains" made national news as an example of rhetorical excess…All candidates live with the contradiction -- a media culture that implores politicians to seem authentic but is ready to punish them when they really are -- but the challenge is especially exquisite in Biden's case. He is an irrepressible, garrulous and emotive politician, who's flourished and fumbled through 40 years in national office by practicing politics the old-fashioned way…But his penchant for off-message moments regularly sends aides in the West Wing and at Chicago reelection headquarters into orbit.”
@michelleisawolf: Joe Biden is from Delaware. He’s literally doing the best he can.
@SteveChapman13: Advice for Biden: Next time you think of a really good line, sit down and DO NOT SAY A WORD. You’ll thank me.
Flamenco interlude: Jesse Cook plays “Dance of Spring” at Metropolis.
Got tips, additions, or comments? E-mail me.
Still to come: Hawkish central bankers conduct open mouth operations; Mitt Romney works a white board; the Pentagon wants to crowdsource military tech development; U.S. dependence on Saudi oil is rising; and 150 million crabs cross Christmas Island.
Euro zone faces ‘lost decade’ of economic stagnation. “The figures suggest that Europe is already well into what could become a lost decade -- a period of pernicious stagnation and wasted potential that could have lasting effects on ordinary citizens. Economic growth not realized represents investments in education that were never made, research that was never financed, businesses that failed and careers that ended too early or never got off the ground.” Jack Ewing in The New York Times.
Hawkish central bankers aim to nix further easing. “The Federal Reserve’s ‘hawks’ are speaking out against additional action by the central bank to spur the economy…Charles Plosser, president of the Federal Reserve Bank of Philadelphia, said in an interview Wednesday with The Wall Street Journal that additional action by the Fed would be of minimal long-term benefit to the economy…Dallas Fed President Richard Fisher, in an interview Thursday, expressed similar skepticism about the efficacy of Fed action…Messrs. Plosser and Fisher are in a camp of roughly half a dozen officials known as hawks who have been resistant to the Fed’s quantitative-easing programs and other unconventional policies throughout the recovery. ” Jon Hilsenrath in The Wall Street Journal.
@ObsoleteDogma: Of course, Kocherlakota isn’t a voting member of the FOMC this year. Still, big to see a former hawk turn even more dovish.
@BCAppelbaum: So all the Fed’s inflationistas have now spoken publicly against new action. A show of force — or an effort to stave off defeat?
Unemployment claims rose last week. “The number of U.S. workers filing applications for jobless benefits rose last week, though the overall trend suggests the labor market has improved slightly since early this summer. Initial jobless claims, an indication of layoffs, increased by 2,000 to a seasonally adjusted 366,000 in the week ended Aug. 11, the Labor Department said Thursday…The four-week moving average of claims, which smoothes out often choppy weekly data, fell by 5,500 to 363,750, the lowest level since the end of March.” Jeffrey Sparshott and Sarah Portlock in The Wall Street Journal.
Swing state voters glum on economic outlook. “There has been a storyline bubbling beneath the surface this election year -- The Fix boss wrote on it a couple weeks back -- that despite the continued economic hardship in this country, there are signs of progress in a handful of swing states that could, in turn, perform better for President Obama than national polls suggest…But despite the positive signs in some of those states, Gallup polling shows views of the U.S. economy in swing states are pretty much on-par with the rest of the country…Among the swing states, just two rank in the top 10 when it comes to economic confidence.” Aaron Blake in The Washington Post.
@conorsen: Has there been any time, ever, when people said, “Whew! All the macro risks are finally off the table!”?
Mortgage rates are rising again. “The 30-year fixed-rate average rose to 3.62 percent, up from 3.59 percent a week ago. Since falling below 3.5 percent for the first time late last month, the rate has increased steadily the past three weeks. It was 4.15 percent for the same week a year ago.” Kathy Orton in The Washington Post.
@TheStalwart: There may be nothing that produces more wrongness in finance media than connection between QE/The Fed and interest rates.
And there was more mixed news on housing. “New-home construction fell in July, while the number of building permits jumped to the highest level in four years, pointing to continued momentum in the recovery of the US housing market. Housing starts fell 1.1 per cent to a 746,000 annual rate from June's 754,000 pace, Commerce Department figures showed. This followed a 6.8 per cent rebound the month before. The July number fell slightly below consensus forecasts for 750,000 units. However, building permits - a proxy for future construction - rose to a 812,000 pace, the most since August 2008. This topped market expectations for 766,000 units, led by strength in the multifamily property sector. The single-family home sector also showed improvement.” Anjli Raval in The Financial Times.
College grads barely felt the recession, data show. “It's common knowledge by now that the recession has hit college graduates and non-graduates differently, but the size of the gap is dramatic. A new report from Anthony Carnevale, Tamara Jayasundera and Ban Cheah found that while employment fell for people with high school and associates' degrees, it actually rose during the recession for college graduates.” Dylan Matthews in The Washington Post.
@DLeonhart: Employment for college grads: up 2 million since recession began. For those who never attended: down 6m.
Christmas Island interlude: Watch 150 million crabs migrate for mating season.
Mitt Romney breaks out a white board in Medicare argument. “Mitt Romney wants to make the Medicare debate easy to understand. So on Thursday, he pulled out a black marker and stepped toward a trusty white board propped up on a school-room easel here to make a presentation…The presumptive Republican presidential nominee's message was simple: For current seniors under President Obama, he said, Medicare would be cut by $716 billion, and some 4 million people would be kicked off their Medicare Advantage plans. Under Romney, he said, current seniors would see ‘no adjustments, no changes, no savings.’…Obama's campaign was quick to respond. ‘Unfortunately for Mitt Romney, a whiteboard presentation can't change that he's got his facts wrong on Medicare - so Obama for America's Truth Team is releasing a whiteboard of its own to set the record straight,’ the Obama campaign said in a statement.” Philip Rucker in The Washington Post.
@bdomenech: Romney looks so comfortable in front of a white board. It’s like a warm blanket for him. http://youtu.be/t-vTzCLiTr8
Democrats begin to wield Ryan Medicare plan as weapon in ads against Republican congressman: Watch the latest one against Rep. Dan Benishek (R-MI).
New poll: Medicare more important to voters than Obamacare. “Medicare ranks first in voters’ minds and considerably above President Obama’s healthcare overhaul as Americans decide who they will support for president, according to a new poll…Medicare received top billing, meanwhile, with 73 percent saying it is either “extremely” or “very” important as they make their choice for president…According to the new Kaiser poll, 58 percent of voters say the 2010 healthcare law is important to their vote.” Elise Viebeck in The Hill.
@BCAppelbaum: Some say elections are referendums on incumbents. Some say they’re horse races. Lately we seem to be having a referendum on the challenger.
The Dept. of Health and Human Services announces disease-prevention grants. “Federal health officials touted grants under the healthcare law that will support disease-prevention efforts nationwide…[C]ities receiving funds [include] New York, Los Angeles, Chicago, Philadelphia and Houston. The total amount awarded Thursday was $48.8 million…The money will allow health departments to hire and train staff and make new investments in technology and equipment, HHS told the press.” Elise Viebeck in The Hill.
Obama and Ryan’s plans for federal health spending in one graph. “One of these things, you can pretty easily see, is not like the other…[The Bipartisan Policy Center's Loren] Adler says, ‘the difference stems almost entirely from less spending on Medicaid, CHIP, and [Affordable Care Act] subsidies.’” Sarah Kliff in The Washington Post.
@afrakt: Q: Is Medicare protected by spending more or less on it? (a) Yes, (b) No, (c) All of the above, (d) Look, squirrel!
New accounting rules for pension funds expand funding gap, may force cuts. “Already-strapped state and local governments are coming under increasing pressure to reduce pension benefits or increase taxpayer contributions that help pay for them because of new rules that would require them to report those obligations more honestly…The latest rules come on line from the bond-rating firm Moody's at the end of this month. They are projected to triple the gap between what states and municipalities report they have in their funds and what they have promised to pay out to retirees. That hole would stand at $2.2 trillion…[T]he rules will intensify pressure on state and local governments to allocate more of taxpayers' dollars to their pension funds” Michael A. Fletcher in The Washington Post.
The Pentagon is looking to crowdsource military technology design. “The Defense Advanced Research Projects Agency, known as Darpa, is preparing to assess whether crowdsourcing, a freewheeling collaborative method sometimes used to develop software, can be an effective means of designing military equipment. The U.S. military hopes crowdsourcing could help counter the enormous costs and long delays that often dog the development of new weaponry and vehicles.” James R. Hagerty in The Wall Street Journal.
Intensified monitoring of federal employees’ computer activity worries privacy advocates. “When the Food and Drug Administration started spying on a group of agency scientists, it installed monitoring software on their laptop computers to capture their communications…The stepped-up monitoring is raising red flags for privacy advocates, who have cited the potential for abuse…At least two other agencies, the Transportation Security Administration and the Federal Maritime Commission, are under congressional scrutiny for seeking and using employee monitoring software that critics say is intrusive.” Lisa Rein in The Washington Post.
Typographical interlude: How does a font affect the credibility of the words printed in it?
Obama is considering releasing oil from the Strategic Petroleum Reserve. “The White House is reviving talks over the possible release of U.S. emergency oil supplies as the price of crude oil topped $95 a barrel, an Obama administration official said. The talks are in early stages and a decision appears far from imminent, the official said…[T]he rising price of crude, along with increases in gasoline prices, is stoking fears that high fuel costs could damage an already sensitive economy.” Tennille Tracy in The Wall Street Journal.
U.S. reliance on Saudi oil is increasing. “The United States is increasing its dependence on oil from Saudi Arabia, raising its imports from the kingdom by more than 20 percent this year, even as fears of military conflict in the tinderbox Persian Gulf region grow. The increase in Saudi oil exports to the United States began slowly last summer and has picked up pace this year…The development underscores how difficult it is for the United States to lower its dependence on foreign oil -- especially the heavy grades of crude that Saudi Arabia exports -- even as domestic oil production is soaring.” Clifford Krauss in The New York Times.
Interest groups fight over ethanol quota as corn prices soar. “Three big intertwined but rival agribusinesses -- corn farmers, meat and poultry producers, and biofuel refineries -- are in a political fight to protect their interests as a drought ravages corn producers and industrial consumers alike. At issue is whether to suspend a five-year-old federal mandate requiring more ethanol in gasoline each year, a policy that has diverted almost half of the domestic corn supply from animal feedlots to ethanol refineries, driven up corn prices and plantings and created a desperate competition for corn as drought grips the nation's farm belt.” John H. Cushman in The New York Times.
Wonkbook is compiled and produced with help from Evan Soltas and Michelle Williams.