Health advocates urge EPA regulation of greenhouse gases – Labeling climate change “a serious public health issue,” more than 100 leading health advocates called on Washington policymakers this week to allow the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions. The advocates — including 18 national public health organizations, 66 state-based groups and dozens of individual medical experts — urged lawmakers to “recognize the threat to public health posed by climate change and to support measures that will reduce these risks.” “In order to prepare for changes already under way, it is essential to strengthen our public health system so it is able to protect our communities from the health effects of heat waves, wildfires, floods, droughts, infectious diseases, and other events,” the advocates wrote Tuesday to House, Senate and White House policymakers. “But we must also address the root of the problem, which means reducing the emissions that contribute to climate change.”
Oil analyst tells Forbes: Peak oil by 2017 – Respected oil analyst Charles Maxwell has told Forbes – and with it the North American business establishment – to brace itself for peak oil by “2017 or 2018.” Much of the reaction to this isn’t over what was said – Maxwell has voiced similar peak oil warnings previously – so much as where it was said. Forbes is not noted as a friend of the peak oil hypothesis, which states geological restrictions mean there will be a time of maximum oil output and that, despite investment and innovation, production will subsequently diminish. Unconventional oil supplies such as Canadian oilsands will not be able to prevent this, despite the hype. Canada’s Prime Minister may claim “Alberta’s tar sands are second only to Saudi Arabia as the world’s largest oil reserve,” but these are “energy- and capital- and time-intensive” and have lousy flow rates – output cannot be scaled up to meet the ravenous global demand for oil.
The Larry Summers view of airports – It’s clearly not easy, being Larry Summers. For all his millions, he still needs to travel from A to B, and keeps on finding himself stymied. First of all he lost his Harvard town car and chauffeur when he moved to Washington, and stood out there for demanding a similar car and driver in recompense for not getting the job of Fed chairman.And now, it seems, the poor chap has to navigate airports fit only for the masses, while making his way to luxury resorts designed to pamper the every whim of the gilded elite. I’m sure that Summers has encountered lots of shiny new airports in his travels around the world, in comparison to which US airports look decidedly crumbly. But a lot of that is simply a function of age: it’s easy for Chinese airports to be super-modern and efficient, just because they’re brand new. (And have the advantage of very low construction costs.) It’s much harder for Delta’s Marine Air Terminal to be as Summers-friendly: it was built in 1939, long before anybody ever so much as imagined the TSA.
Consumer Advocate Seeks to Reassure Banks About Protection Agency – Elizabeth Warren, who is overseeing the creation of a federal agency charged with protecting consumers from abusive financial products, told Wall Street executives on Wednesday evening that her relationship with them need not be antagonistic, or even adversarial. In her first major speech since President Obama named her to get the Consumer Financial Protection Bureau up and running, Ms. Warren struck a conciliatory tone toward bankers with whom she has often been on frosty terms. She was the speaker at a private leadership dinner sponsored by the Financial Services Roundtable, which had expressed reservations about the creation of the bureau. Ms. Warren this month was named an assistant to Mr. Obama rather than director of the bureau, a job that requires Senate confirmation.
Elizabeth Warren Extends Olive Branch, Borrows Idea From Lenders In First Major Speech – In her first major speech as a member of the Obama administration, middle-class advocate Elizabeth Warren reached out to the heads of the nation’s biggest financial institutions, borrowing one of their ideas in an effort to usher in a cooperative relationship that could protect consumers as well as foster competitive markets. Warren, a champion of consumers and a darling of progressives, spoke to a gathering of executives Wednesday whose companies form the Financial Services Roundtable, a Washington trade group representing firms like Bank of America, JPMorgan Chase, BlackRock and State Farm. The speech didn’t shy away from reminding lenders that their core constituency — their customers — are fed up with the pages of fine print and hidden fees that are often forced upon them. But Warren also asked the lenders to work with her to create a new system of regulation designed to protect consumers — one that relies on lenders to be proactive when offering products, rather than reactive when it comes to complying with regulation.
Deficit Pipe Dreams: Social Security Cuts Would Increase Inequity and Keep Deficits, er, High – Get this: Republicans on the Deficit Commission aren’t just refusing to consider any tax increases. Now they’re proposing tax decreases designed to help the rich, while taking benefits from everyone else. Dealing with people like that is like negotiating with somebody who’s high on drugs. Most members of the Commission seem to want a deal – any deal – so they’ve decided not to address the real causes of current and future deficits: health costs, tax cuts, war spending, runaway bankers, and the growing inequality between rich and poor. Instead they’re going after something that doesn’t affect the deficit: Social Security retirement benefits. Why? Apparently, because they can.
The Ghost of Full Employment – After nearly two years of bad economic news, which topped off three decades of economic insecurity, perhaps it’s understandable that we’ve grown indifferent to labor-market pains. We shrug at long-term double-digit unemployment. We greet the news of record-breaking poverty with a national yawn. We’ve come to believe that unconscionable levels of inequality are something natural to the social order. The government’s direct response to the jobs and poverty crisis has been simple indifference. Wedded to the idea that propping up the market will naturally lead to job growth, officials have responded with "solutions" drawn only from the narrow menu of economic fundamentalism — tax cuts and stimulus. Now that gross domestic product is positive, the unemployment problem is mostly considered "structural" — a skills mismatch — and thus beyond our capacity to solve. Yet not that long ago, in the midst of another long-term economic meltdown, politicians dared to think beyond the idea that growth alone would solve all problems.
TARP Is Gone – But May Soon Be Back – The Troubled Asset Relief Program, or TARP, is over – more specifically, its legal authority expires on Sunday, so it cannot be used for new “bailout” activities (although legacy programs, with money already disbursed, could last 5 to 10 years.) The first draft of its history, looking back over the past two years, may be this: TARP was an essential piece of a necessary evil – that is, it saved the American financial system from collapse — but it was implemented in a way that was excessively favorable to the very bankers who had presided over the collapse. And this sets up exactly the wrong incentives as we head into the next credit cycle. Where do we stand today, with the Financial Stability Oversight Council meeting for the first time tomorrow? In a devastating speech last week, Mr. Volcker hit all the nails on the head – our financial system is badly broken. This will lead another runaway mania and another awful collapse.
China, Energy, and Global Power – If you want to know which way the global wind is blowing (or the sun shining or the coal burning), watch China. That’s the news for our energy future and for the future of great-power politics on planet Earth. Washington is already watching — with anxiety. Rarely has a simple press interview said more about the global power shifts taking place in our world. On July 20, the chief economist of the International Energy Agency (IEA), Fatih Birol, told the Wall Street Journal that China had overtaken the United States to become the world’s number one energy consumer. One can read this development in many ways: as evidence of China’s continuing industrial prowess, of the lingering recession in the United States, of the growing popularity of automobiles in China, even of America’s superior energy efficiency as compared to that of China. All of these observations are valid, but all miss the main point: By becoming the world’s leading energy consumer, China will also become an ever more dominant international actor and so set the pace in shaping our global future.
Regulatory Reform Implementation – Bernanke – A final element of the Federal Reserve’s efforts to implement the Dodd-Frank Act relates to the transparency of our balance sheet and liquidity programs. Well before enactment, we were providing a great deal of relevant information on our website, in statistical releases, and in regular reports to the Congress. Under a framework established by the act, the Federal Reserve will, by December 1, provide detailed information regarding individual transactions conducted across a range of credit and liquidity programs over the period from December 1, 2007, to July 20, 2010. This information will include the names of counterparties, the date and dollar value of individual transactions, the terms of repayment, and other relevant information. On an ongoing basis, subject to lags specified by the Congress to protect the efficacy of the programs, the Federal Reserve also will routinely provide information regarding the identities of counterparties, amounts financed or purchased and collateral pledged for transactions under the discount window, open market operations, and emergency lending facilities.
Finally, the Irish are forcing the banks’ bondholders to take losses – Ordinary bondholders will get paid, but the Irish are now ready to bleed the subordinate bond holders; S&P downgraded the subordinate bonds ahead of today’s decision on the recapitalisation of Anglo-Irish Bank; Lenihan defends decision to bail out Anglo-Irish, as failure to act would “bring down” Ireland; Ireland also expected to take majority stake in Allied Irish Bank; Berlusconi wins confidence vote, but must rely on splinter groups to be able to government; Umberto Bossi presses for new elections; France is embracing a super-soft version of austerity; anti-austerity protesters descended on Brussels; demand in the ECB’s three month tender was lower than expected; ECB warns that Basel III may actually increase systemic risk; the ECB said macroeconomic surveillance will be done behind closed doors (in other words, there won’t be any); Paul Krugman gets really depressed about central bankers who advocate monetary exit strategies; Wolfgang Schauble, meanwhile, is back in hospital, for another four weeks.
FT Alphaville » The problem of excess savings – What to make of the excess savings (aka boatloads of cash) that remain on US corporate balance sheets? In trying to answer this question, economist Rebecca Wilder has used data from the Fed’s latest flow of funds report to update the following graph, originally taken from JP Morgan research:The total corporate financial balance (TCFB) remains well above historical levels. And although it’s been falling in the past year, it seems the decline is coming entirely from the financial sector:That is, non-financials continue to spend less on capital and (especially) labour than their balance sheets would suggest they could — choosing instead to keep their retained earnings in cash.Wilder cites IMF and OECD research for what traditionally accounts for such a rise in corporate savings, and among the problems now is the leverage overhang that remains from the credit binge of the mid-2000s