Climate Deniers Will be the Big Money Losers

Think Progress: A major new global financial report finds that investors who remain ignorant of or deny climate science will be big money losers compared to those who are climate-savvy.

The report has several key findings. Clearly, “climate change will give rise to investment winners and losers.” Some industries, like coal, will likely see average annual returns over the next decade “eroding between 26% and 138%,” depending on how aggressively the world attempts to fight climate change. Other industries, like renewables, could see average annual returns increase by up to 97 percent over the 10-year period — if the world does seriously move toward a 2°C pathway coming out of the Paris climate talks this December.

The report identifies three phases investors may go through — “Climate-Unaware Future Takers,” “Climate-Aware Future Takers,” and finally “Climate-Aware Future Makers”:

Takes To Makers

A key goal of the report is to get investors to “progress along these phases to the extent they can.”

Barry Ritholz: “In the real world, climate-change deniers are and will be giant money losers.”

Future Climate Uncertainty Necessitates Action

Financial Times: “Climate Shock , a punchy new book by Gernot Wagner of the Environmental Defense Fund and Martin Weitzman of Harvard University, explains why [climate] action is both so difficult and so important. The challenge is ‘almost uniquely global, uniquely long-term, uniquely irreversible and uniquely uncertain’. The book’s big contribution is on the last point: uncertainty. Climate change is a problem of insurance. For this, it is not median outcomes that matter most, but the outliers — the ‘fat tails’ of the probability distribution of temperature.”

“Climate uncertainty relates to the future. This makes discounting inescapable, to relate costs (and benefits) over time. So what discount rate should be employed? Here Climate Shock makes another crucial point: we do not know. But, it adds, the uncertainty suggests the right rate is likely to be very low.”

“Framing the challenge of climate change as a problem of insurance against disaster is intellectually fruitful. It also provides the right answer to sceptics. The question is not what we know for sure. The question is rather how certain we are (or can be) that nothing bad will happen. Given the science, which is well established, it is impossible to argue that we know the risks are small. This being so, taking action is logical. It is the right way to respond to the nature and scale of possible bad outcomes.”

Who Votes the Most Against their Party?

Philip Bump: “Using data from GovTrack, we looked at every vote taken in the House and Senate so far in the 114th Congress. We figured out the majority position for each party (in cases where it was not unanimous) and compared every member of each body’s vote against the party majority.”

“The member of the House most willing to buck his party is Walter Jones (R-N.C.), who has voted against the Republican majority more than one-third of the time. On the Democratic side, the high-water mark is Collin Peterson (D-Minn.), who’s at 30 percent.”

Obamacare Premium Increases Are Anticipated to be ‘Modest’

The Hill: “The average insurance premium under ObamaCare is probably not headed toward a double-digit hike next year, according to new data.”

“Premiums for silver plans on the federal insurance exchanges are slated to increase an average of 5.8 percent in the eight states where all data is available, according to an analysis by Avalere Health. For the lowest-cost silver plans, that increase will be 4.5 percent, or an average of $378 per year.”

“The data, which includes Maryland and Michigan, comes after a string of headlines predicting steep cost increases for health insurance plans in 2016. Instead, the insurance hikes are looking ‘modest,’ said Caroline Pearson, senior vice president for Avalere Health.”

Obama’s Bold Remarks on Supreme Court Cases: Crossing the Line?

Wall Street Journal: “Among presidents in modern times, Barack Obama stands apart in the intensity of his remarks on Supreme Court cases, a soon-to-be published article in Presidential Studies Quarterly concluded.”

‘Mr. Obama added a new data point on Monday, saying at a news conference that ‘under well-established precedent, there is no reason’ the administration should lose a challenge to the Affordable Care Act pending before the court.’

‘On most occasions, presidents have only briefly noted the existence of a Supreme Court case. Mr. Obama, who taught law at the University of Chicago, has tended to go further, Mr. Collins and his co-author, University of North Texas professor Matthew Eshbaugh-Soha, found.”

“While there have been about 50 instances between 1953 and 2012 when presidents have mentioned pending cases, Mr. Collins said most presidential commentary has concerned decisions after they are announced. There are good reasons for that, he said.”

“When presidents discuss pending litigation, ‘they are violating this very strong norm of judicial independence, that presidents and other political actors shouldn’t get involved’ when the court is deliberating, Mr. Collins said. ‘It’s not done.’”

Wiser But Not Wealthier: How Income Gets Worse with Age

Drew Altman: “Income inequality has been rising on the political agenda, yet one group has been left out of the discussion: seniors.”

Older adults are somewhat less likely than working-age adults to be poor by the government’s traditional poverty measure, developed in the 1960s. But this official measure may understate the extent to which seniors live in poverty. Under a newer, alternative scale developed by the government in 2011, known as Supplemental Poverty Measure (SPM), the rate of poverty among seniors is considerably higher.

“The SPM generally paints a fuller and more accurate picture, taking into account benefits that are ignored by the traditional measure, such as food stamps, as well as expenses such as tax liabilities or out-of-pocket health-care spending, in addition to geographic differences in the cost of living.”

Obamacare Is Now Woven into the Nation’s Social Fabric

N.Y. Times Editorial Board: “The Affordable Care Act, which has helped millions of people get health care, is now fully woven into the nation’s social fabric. As President Obama said Tuesday, there is something ‘deeply cynical about the ceaseless, endless, partisan attempts” to roll back the progress already made.'”

“There is an easy solution for the problem [if the Supreme Court rules against Obamacare subsidies in King v. Burwell.] Congress could pass a one-sentence law clarifying that subsidies will be available on all the exchanges. That’s what polls show Americans want. But congressional Republicans are not about to do anything realistic to help millions of people keep their health coverage, and are bent on destroying the law that made coverage possible.”

“Experts who have looked closely at the options say converting would not be easy. While the administration would presumably try to make the transition as smooth as possible, the states that established their own exchanges in the past did so with hundreds of millions in federal grants that are no longer available and lots of technical help from the federal government. They also had time to get the job done.”

Are More Stable Families Found in the North?

David Leonhardt: “When it comes to family arrangements, the United States has a North-South divide. Children growing up across much of the northern part of the country are much more likely to grow up with two parents than children across the South.”

“It’s not just a red-blue political divide, either. There is a kind of two-parent arc that starts in the West in Utah, runs up through the Dakotas and Minnesota and then down into New England and New Jersey. It encompasses both the conservative Mountain West and the liberal Northeast.”

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“Evidence suggests that children usually benefit from growing up with two parents. It’s probably not a coincidence, for instance, that the states with more two-parent families also have higher rates of upward mobility.”

“There are actually two models for having a large share of stable families: the blue-state model and the red-state one.”

“In the blue-state model, Americans get more education and earn higher income — and more educated, higher-earning people tend to marry and stay married … In the red-state model, educational attainment is closer to average, but ‘residents are more likely to have deep normative and religious commitments to marriage and to raising children within marriage.’”

“The lowest rates of two-parent families tend to be in states that don’t fit either model: red states with the lowest levels of education or blue states with only average levels of education.”

Republicans’ Twist on an Obamacare Solution

Greg Sargent asks, in light of recent comments by Senate Majority Leader Mitch McConnell, “how can Republicans simultaneously argue that the American people must be ‘protected’ from the damage that undoing Obamacare will do — from the damage that will ensue from a Court decision unraveling subsidies that are crucial to the law’s basic functioning — without implicitly conceding that the right response is to reverse the immediate impact of the decision, and cleanly restore the subsidies?”

“Republicans will argue that the post-King chaos is the fault of the law itself, and not the fault of the Court decision (which Republicans urged on) that is knocking out a key pillar of it. In this telling, the cause of all the damage will be that Obamacare held out the false promise of economic security for millions, in the form of expanded coverage, but that security was then snatched out from under all those people (thanks to Obummer’s incompetence) when the Court clarified what the law actually says. All this is only the latest way in which Obamacare is hurting countless Americans.”

“That’s pretty damn slick. But it doesn’t answer the question of what Republicans will do in response.”

EPA Climate Rule Would Generate Jobs

The Hill: “The Environmental Protection Agency’s (EPA) plan to cut greenhouse gas emissions at power plants will end up creating more jobs than it cuts, according to a new analysis of the proposed rule.”

“EPA’s Clean Power Plan would require existing power plants to cut their greenhouse gas emissions and transition to a cleaner supply of energy. The EPA has previously estimated that the plan would create 120,000 jobs by 2020 but lead to 24,000 job loses as plants move away from fossil fuel energy sources.”

“An Economic Policy Institute report released Tuesday said the jobs both lost and gained would have ‘a substantial ripple effect’ in other industries. The plan would lead to a net increase of 360,000 new jobs by 2020, the report said.”

Chart of the Day

Politico: “Afghanistan and Iraq loom large for both parties, but larger for Democrats.  Iran, Russia, Syria, North Korea, and Libya, on the other hand, are all mentioned far more by Republicans. Our data can’t answer the question of why certain countries came up, but it’s possible to guess a rule of thumb: Mention a country if it was involved in crises during the other party’s Presidency.”

Americans: Don’t Take Away My Freedoms!

Gallup: The federal government’s recent actions to limit the scope of what it can do to prevent terrorism are consistent with Americans’ preference to prioritize civil liberties over anti-terrorism efforts when the two come into conflict. Sixty-five percent of Americans say the government should take steps to prevent terrorism but not violate civil liberties, while 30% think any steps to prevent terrorism are justified, even if they violate liberties. In the first few months after 9/11, Americans were more divided on the issue.

Trend: Americans' Views of Tradeoffs Between Anti-Terrorism Efforts and Respecting Civil Liberties

Americans continue to place a greater emphasis on civil liberties even as concern about terrorism has risen amid the growing threat of ISIS.

The change in the public opinion climate, which is reflected in the views of elected representatives, may help explain why the newly passed USA Freedom Act pulls back some of the powers the Patriot Act provided to the government in its efforts to prevent terrorism.

Record Number of Job Openings: A Harbinger of Wage Growth?

Wall Street Journal: “The number of U.S. job openings rose to the highest level on record in April, a sign of health in the labor market that could stir upward wage pressure.”

“The U.S. had 5.4 million job openings in April, up from 5.1 million in March, according to the Labor Department’s latest Job Openings and Labor Turnover Survey, released Tuesday. The total was the highest since the department began conducting the so-called Jolts survey in 2000.”

“The record number of job openings could be a harbinger of higher wage growth, Joel Naroff of Naroff Economic Advisors said in a note to clients. ‘If firms are to fill all those openings, they will have to start attracting workers from other firms or occupations, and the best way to do that is by raising wage offers,’ he wrote.”