The journalist Michael Kinsley famously noted that “a gaffe is when a politician tells the truth.” By that standard, the White House committed a doozy in March when it released a paper on climate change’s effect on the U.S. economy. Its findings undermine any claims of an ongoing climate crisis or imminent catastrophe.
The report, produced by the Council of Economic Advisers and the Office of Management and Budget, assesses how the economic consequences of climate change could be integrated into federal budgeting. The report’s first figure—reproduced nearby—shows 12 independent peer-reviewed estimates of how America’s gross domestic product would decline as the global temperature rises.
While the estimates differ, each shows an economic impact of less than a few percentage points for a few degrees of warming. The consensus, apart from two counterbalancing outliers, is that today’s warming of 2.2 degrees Fahrenheit has reduced GDP by less than 0.5%. That is trivial, considering real GDP has grown by more than 800% since 1950. If warming reaches 4.5 degrees—about what the United Nation’s climate panel projects for 2100 under plausible scenarios for future global emissions—the consensus reduction amounts to less than 2%. In other words, if the average annual GDP growth rate is 1.5% for the next 80 years, the economy would grow 232%. A 2% climate-change effect would reduce that growth to 225%. As physicists say, that’s a difference “in the noise.”
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The report’s authors should be commended for honestly delivering likely unwelcome messages, even if they didn’t make a show of it. The rest of the Biden administration and its climate-activist allies should moderate their apocalyptic rhetoric and cancel the climate crisis accordingly. Exaggerating the magnitude, urgency and certainty of the climate threat encourages ill-considered policies that could be more disruptive and expensive than any change in the climate itself.
My GMU Econ colleague Vincent Geloso explains that global “well-being inequality” is decreasing.
Democratic lawmakers like Illinois Sen. Dick Durbin and the Justice Department’s Antitrust Division want to impose new rules for credit-card transactions that would reduce competition, harm consumers and crush small banks.
Unsurprisingly, the bill isn’t marketed that way. Mr. Durbin says his legislation—the Credit Card Competition Act of 2023—would be a boon for the free market. It wouldn’t, and one tell is that the proposal has gained unlikely support from Republicans animated by the antibank populist sentiment behind the scheme. Among them is Ohio Sen. J.D. Vance, who claims that “excessive” credit-card processing fees push up the cost of groceries, gasoline and other goods.
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The credit-card market already has at least four major processing networks, store-branded cards and thousands of card-issuing banks. According to Experian, the average American holds four credit cards. Even the Supreme Court, in Ohio v. American Express (2018), rejected the notion that the credit-card market is anticompetitive. The Durbin-Vance plan is unnecessary to accomplish its purported aims.
But it would reduce competition in adjacent markets. By artificially pushing down interchange fees on credit cards, the bill would curb an important revenue stream for banks. Larger banks, which have gotten even bigger since Dodd-Frank was enacted, could offset such losses by selling investment advice, mortgages and other products—or by imposing new fees as they did in response to the original Durbin amendment. Small banks lack these lucrative revenue streams and would have to raise fees, curtail services or merge, fueling industry consolidation. No wonder community banks and credit unions are vocal critics of the proposal.
Jane Shaw Stroup decries the unholy ‘bootleggers and Baptists’ alliance behind ethanol subsidies. (HT George Leef)
Jonah Goldberg applauds the U.S. Supreme Court’s ruling against Biden’s student-loan forgiveness.
Juliette Sellgren talks with Steven Teles about “liberaltarianism.”
In response to this simultaneously clueless and disturbing tweet by Lawrence Gostin, Don Wolt tweets: (HT Jay Bhattacharya)
Georgetown Law Prof & Director of @WHO Center on Global Health Law feels very strongly that speech which the govt deems “false & harmful” isn’t protected by the 1st Amendment.
