17/06/2019

Trump Official Goes Rogue, Says Climate Change May Cause Next Financial Crisis

Vanity Fair - 

One guess as to how the president will respond.
SAUL LOEB/AFP/Getty Images.
Since taking the oath of office in 2017, Donald Trump has made it clear that he cares about the environment about as much as freedom of the press and sounding lucid on Twitter.
In the past 29 months, he’s:
The administration has muzzled science that contradicts its official stance that climate change is nothing to worry about—or is even a thing that exists—and, to that end, hired a guy who has said carbon dioxide is being demonized “just like the demonization of the poor Jews under Hitler,” whose primary job is to discredit the conclusions of last year’s National Climate Assessment, a report written by 13 federal agencies that predicted harrowing consequences for not taking action on climate change.
At this point, it wouldn’t be entirely surprising to learn that government employees caught even uttering the words “climate change” and “not good” around the water cooler gets cattle prodded by Aunt Lydia. Which makes it all the more shocking that a top regulator has gone “rogue” and defied Trump to speak out about the issue.
Rostin Behnam, who sits on the powerful five-member Commodity Futures Trading Commission, told the New York Times in an interview Monday that the financial risks from climate change are akin to those posed by the mortgage meltdown that caused the 2008 financial crisis.
“If climate change causes more volatile frequent and extreme weather events, you’re going to have a scenario where these large providers of financial products—mortgages, home insurance, pensions—cannot shift risk away from their portfolios,” Behnam said. “It’s abundantly clear that climate change poses financial risk to the stability of the financial system.”
If you’re wondering how it came to pass that Trump appointed a guy who actually believes climate change is real, well, he didn’t exactly have a choice.
Behnam’s seat, by law, had to be filled by a Democrat; legal experts told Times reporter Coral Davenport that it would be difficult, but not impossible, for Trump to fire or even demote Behnam. (The CFTC, like the Federal Reserve, is meant to operate more independently from the West Wing than other federal agencies, presumably to the president’s explosive chagrin.)
“I have a unique bully pulpit,” said Behnam.
While people in Behnam’s position have occasionally pushed back against presidential policies in private, government affairs experts told the Times that his initiative is unusual. “Rarely do you see a commissioner go rogue and public,” said James A. Thurber, director of the Center for Congressional and Presidential Studies at American University.
And if Trump is unhappy about Behnam’s comments, he presumably won’t be thrilled with what’s coming next!
On Wednesday, Mr. Behnam plans to detail the formation of a panel of experts at the trading commission assigned to produce a report on how global warming could affect the financial sector, potentially impacting food costs, insurance markets, the mortgage industry and other economic pillars.Because the report, expected late this year or early next, would be a product of the federal government, it would most likely put Mr. Behnam in direct conflict with the policies of the Trump administration.
The report, which Mr. Behnam said he expected would focus in particular on potential harm to the nation’s agriculture sector, is likely to emerge at a moment when Mr. Trump will be making the case to farm states, which have already been hurt by his crop tariffs, to reelect him in 2020.
His interest in the financial effects of climate change, he said, stems from six years working for Debbie Stabenow, a Michigan Democrat, on the Senate Agriculture Committee. He left the agriculture committee in 2017 to join the trading commission. Earlier, he had worked as a financial trader and a corporate lawyer in New York.
In January, California electricity provider PG&E was forced to file for bankruptcy on account of billions of dollars in liability stemming from the deadly wildfires (for which Trump blamed the victims, which analysts believe is a taste of what’s to come re: the economic damage from climate change.
Thirty-nine central banks, including those of England, Canada, China, Japan, and the European Union have formed a working group to study the effects of climate change on the financial markets, a project the United States has naturally declined to take part in.
“We understand that climate change causes a big systemic risk,” said Stefano Giglio, a professor of finance at Yale University, told the Times. “But right now, we don’t have enough information, and we don’t have the right financial products to insure this risk. The CFTC can help give that information and help lay out a global marker for what we need to do.”
Given the difficulty Trump would face in trying to get rid of Behnam, it’s likely the regulator is in for the sort of unhinged attacks that Fed chairman Jerome Powell has been subjected to.
 Of course, you’d think the CEO president who ran for office on the claim that his head for business was just what the country needed might care about preventing another global financial crisis.
Then you’d remember who we’re dealing with and pray the planet fares better than the Trump Taj Mahal.

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