James Pethokoukis

Politics and policy from inside Washington

One more reason why cap-and-trade is in trouble

May 21, 2009 17:33 UTC

Some interesting factoids from a new Pew Research poll (bold is mine):

In the new poll, 51% agree that protecting the environment should be given priority even if it causes slower economic growth and some job losses, down from 66% in 2007. At the same time, the share saying that people should be willing to pay higher prices in order to protect the environment has dropped from 60% in 2007 to 49% currently. This represents a 17-year low point on this measure. Surprisingly, declines since 2007 in support for economic sacrifices to protect the environment have been particularly large among young people and political independents.

The public remains broadly supportive of a variety of options for addressing the nation’s energy supply – 82% favor increased funding for research on wind, solar and other alternatives, while 68% say more offshore oil and gas drilling should be permitted. The idea of expanding nuclear energy continues to be more contentious (45% favor/48% oppose); 60% of college graduates favor increased use of nuclear power.

Me: When times are tough, money talks and climate models walk. Indeed, when I chat with Republicans and anti-climate regulation activists, they are almost giddy with how the climate debate is going. Dems, not so much.

The science of bank solvency

May 19, 2009 19:23 UTC

Because everyone in Washington wants to take a bite at the delicious apple that is the Wall Street meltdown, the Investigations and Oversight subcommittee of the House Science and Technology committee held a hearing today on the “Science of Insolvency.” Now I was hoping to get a panel chock full of new-fangled “econophysicists.” Instead I had to settle for Columbia’s Jeffrey Sachs, blogger and former IMF economist Simon Johnson, Dean Baker of the Center for Economic and Policy Research and David John of the Heritage Foundation.

To be honest, the best part was when Paul Broun, a Georgia Republican, tersely rebuked Sachs for not submitting his testimony in advance and warned him never to pull such a stunt again. Ouch! But beyond that, there was pretty much uniform agreement that the best-case scenario for economy was a “muddling through” recovery of sluggish growth thanks to the battered financial sector.  But there really wasn’t much science on display since determining the future solvency of banks is economy dependent to a great extent. And calling economic forecasting a “science” is an affront to the term. That being said, none of the panelists would be surprised if big banks needed more capital than called for by the “stress tests” and all of them seemed pretty worried about the impact of commercial real estate and construction lending by small and medium-sized banks. Clearly, all of them read their WSJ today.

In Medias Res

May 19, 2009 17:43 UTC

Greetings! I am the new Washington-based Money & Politics columnist and blogger for Reuters. I will be writing about the big picture U.S. economy and economic policy. Think of my beat as the nexus of Washington and Wall Street, how politics and policy affect the economy and how the economy affects politics and policy. In short, political risk. Previously, I held the same position at U.S.News & World Report magazine. More to come …