The Paradox of Good Intentions: Why Every Delay Makes Climate Change Worse

Today’s Twitter thread shows how Congressional inaction does more than just maintain the status quo of environmental destruction: It accelerates it…

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Our American Discourse, Ep. 22: While the World Burns, a More Sustainable Future Is in the Making

At this very moment, wildfires rage across Southern California. Florida, Puerto Rico, and Texas are picking up the pieces from Hurricanes Harvey, Irma, and Maria. These are only the latest instances of an increasingly volatile and destructive climate. But there is hope. Even as the United States withdraws from the Paris Agreement “for Sustainable Development,” cities, states, and private companies are rushing to fill the void. Sustainability is becoming a win-win-win: environmentally, socially, and even financially. The question is, are we too late?

In this episode, Christine Harada gives us an optimism that sustainability can prevail — and tangible proof that we can make it happen right in our own backyard.

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A Good Economist Knows What He Doesn’t Know

I’ve been banging the “uncertainty” drum (as opposed to “risk”) for a few months now (see here, here, here, and here):

In his latest book, Keynes’s biographer Lord Robert Skidelsky argues that you just can’t insure against some risks. In fact, some expectations shouldn’t be called risks at all. One of Keynes’s least appreciated contributions, also voiced by his contemporary Frank Knight, was the importance of uncertainty, events in the future that we can’t measure or predict because we don’t have enough information or computational capacity.

Markets depend on prices, and prices depend on information, rational behavior, and predictable distributions of random shocks. When those foundations break down, governments are the only institutions that have the ability to restore order, from central banks injecting liquidity during credit crunches to regulators preventing or monitoring new innovations (be they financial derivatives or oil rigs) with uncertain social costs.

One important example that I haven’t spent enough time talking about is…   Continue reading “A Good Economist Knows What He Doesn’t Know”