Two Hawks, a Handsome Dane, and an Ugly American
“Arguing with German deficit hawks,” Krugman writes in today’s column (a continuation of his ongoing crusade against fiscal austerity) is “like arguing with U.S. Iraq hawks back in 2002: They know what they want to do, and every time you refute one argument, they just come up with another.” What follows is an imagined conversation between a “German Hawk” and an “Ugly American,” in which the former comes across as clueless.
What interested me was one exchange in particular:
German hawk: “We must cut deficits immediately, because we have to deal with the fiscal burden of an aging population.”
Ugly American: “But that doesn’t make sense. Even if you manage to save 80 billion euros — which you won’t, because the budget cuts will hurt your economy and reduce revenues — the interest payments on that much debt would be less than a tenth of a percent of your G.D.P. So the austerity you’re pursuing will threaten economic recovery while doing next to nothing to improve your long-run budget position.”
The Ugly American makes a sensible point: there is no sense in pursuing a policy that will cause significant short-term pain, but which will produce very minimal long-term benefits. Note, however, that Krugman, via the Ugly American, is making an argument in the New York Times similar in nature to an argument he dismissed six months ago on CNN. In that conversation, which occurred during the Copenhagen negotiations, the hawk was not an imagined opponent, but Krugman himself, who advocated that world leaders guard against worst-case scenario catastrophic warming by aggressively cutting carbon.
What you had on CNN, in other words, was a dialogue not unlike the one quoted above, but featuring Krugman as “US Hawk”, and Bjorn Lomborg, who is — it cannot be denied — one Handsome Dane:
Beginning at the 5:08 mark, the Handsome Dane contrasts the significant costs of cap-and-trade legislation with the modest benefits:
Ox-Fam was out in saying that, if you remove $50 billion from [the development aid] budget, that is going to kill 4.5 million kids. Instead, had we spent that money on climate change policies, even rather smart climate change policies, it would have reduced temperatures by the end of the century by 1/1000 of one degree Fahrenheit. And that is a question: what do we want to be remembered for? Which of these two should we be focusing on first? I don’t think you can reject that as just a false choice.
US Hawk simply denies the charge that climate change is crowding out development assistance, but Handsome Dane is, in fact, correct. Moreover, to put that number — 1/1000 of one degree Fahrenheit — into perspective, later in the interview (around the 8:22 mark), US Hawk cites a study predicting a nine degree Fahrenheit rise of temperatures by the end of the 20th century. In other words, despite a small to substantial possibility that temps will eventually rise by nine degrees, implementation of the Kyoto Protocols would, according to Handsome Dane, shave off a mere 1/1000 of one degree Fahrenheit.
Futility. That’s the problem Handsome Dane correctly identifies on CNN and Ugly American correctly identifies in the New York Times. Better to save 4.5 million children in the developing world than to piss away the development aid budget in a quixotic effort to reduce climate change; better that millions of Americans receive unemployment and the economy recovers than unsuccessfully attempt to balance the budget.
Suppose, however, that we are serious about addressing all of these challenges. If we are serious about preventing catastrophic warming and promoting job growth, while at the same time aiding the developing world and not going bankrupt (as I hope we are), half-hearted legislation and international agreements simply will not do. What we need is not piecemeal reform, but radical change from below.