The billionaire triumvirate of Tom Steyer, Henry Paulson, and Michael Bloomberg introduced their ballyhooed Risky Business report on the climate this June, and after all the op-eds, blog posts, and public interviews so far, all that can be said about it is that it is already an empty, meaningless PR campaign upon which the financial hotshots have wasted their money.
Logical scrutiny of the project, from its genesis to its outcome, reveals how deeply flawed and biased it is. Given the contributing factors it considers, there is no other verdict that would have been reached other than “we must all do something about global warming!” Yet the legacy media has treated Risky Business as something objectively conceived and having delivered perfectly reasonable conclusions.
That is to be expected from pack journalists who don’t look beyond the climate crystal balls (also known as “models”) spoon-fed to them by big-government scientists, but that doesn’t mean (and hasn’t in the past) that the public will swallow it.
Let’s start with the founders of Risky Business. They portray their effort as nonpartisan (Fortune called it “scrupulously nonpartisan”), striving to show the project is represented by Democrats and Republicans alike. At the cochairmen level the Democrats are Steyer and Bloomberg, and the Republican is Paulson. Although Bloomberg ran twice for mayor of New York City as a Republican (and once as an independent), he was a registered Democrat before that.
A tip for discerning public policy consumption: If the proponents use the word “nonpartisan” as part of the pitch for their work, then they are likely pushing a controversial agenda that they have attempted to sell with personalities drawn from both major political party affiliations. Unfortunately, there is no shortage of crony capitalists, government interventionists, and science ignoramuses in both the Democratic and Republican parties, and finding the players from both sides is pretty easy. So a peek under the packaging is necessary.
Steyer is the driver. Risky Business is staffed by his nonprofit group Next Generation, whose primary mission is to mitigate the “risk of dangerous climate change.” Besides the “educational” nature of his think tank, Steyer has thrown his considerable resources into the election (or reelection) of Democratic candidates via his SuperPAC NextGEN Climate. His policy priorities in the global warming fight are the revival of cap-and-trade and opposition to the Keystone XL pipeline. He pledged (but so far has miserably failed) to raise $50 million to match his own $50 million in contributions to climate-conscious candidates.
Bloomberg is the quintessential nanny-statist, so he’s perfect to join the leadership of a group that seeks to dictate what kinds of energy the masses may use. As Mayor of New York City he sought to control how citizens consumed soda, trans fats, and cigarettes, and since then has poured millions of dollars into gun control initiatives. He said, “big cities must take the lead in reducing the threat of climate change” and pushed the well-worn “green” and “sustainable” themes.
That leaves Paulson the Republican to enable Risky Business to make its claim of “nonpartisanship,” at least among the cochairmen. The former CEO of Goldman Sachs pushed for the government bailout of failing financial institutions when he was Treasury Secretary under President George W. Bush.
Paulson’s Ethical Woes
Paulson’s nomination was opposed by National Legal and Policy Center president Peter Flaherty in May 2006, over an apparent conflict of interest in chairing both Goldman Sachs and the Nature Conservancy. As NLPC stated at the time, in part:
“In November 2005, Goldman Sachs adopted an ‘Environmental Policy’ that closely parallels the Nature Conservancy agenda on key issues like global warming. Moreover, Paulson’s son Merritt is a trustee of a Nature Conservancy-related group that was the recipient of a Goldman Sachs donation in the form of a tract of land totaling 680,000 acres in Chile.
“In his remarks at the annual meeting, Flaherty also noted that the Nature Conservancy has been mired in scandal in recent years, as detailed in a Washington Post series and in Senate hearings. The group sold ecologically sensitive land at a discount to its own trustees on which they built multimillion-dollar vacation homes, and structured land donations so wealthy donors could improperly receive tax breaks.
“‘Flaherty said, ‘There remain unanswered questions about Paulson’s personal and business ethics. At Goldman Sachs, Paulson promoted his own personal interests at the expense of shareholders. As Treasury Secretary, will he promote the public interest, or his own?'”
Conventional Alarmist Positions
Paulson’s wife, Wendy, also has served on the board of The Nature Conservancy. In 2011 Paulson established the Paulson Institute at the University of Chicago, which promotes economic growth and “environmental preservation” in the United States and China. He is a “longtime conservationist” and told Bloomberg News (yes, owned by the former mayor) in October 2013 as Risky Business was launched, “Climate change is every bit as big a risk to our economy as it is to the environment. With any complex issue, we can never know with certainty what the timing and the impact will be, but we know from the data that the climate risk is very real.”
Compare that to the most recent findings about the issue in a Rasmussen poll, in which 57 percent of all voters said they think the debate is not over, and 64 percent of Republicans say the media makes climate change appear worse than it actually is. So to uphold Paulson as representative of the GOP, in a “nonpartisan” consensus on global warming, is a stretch.
It is now 2014, so we know the answer to Flaherty’s 2006 question about what kind of Treasury Secretary Paulson would be. In that office, he made sure Goldman Sachs survived the financial crisis, by banning the short-selling of Goldman shares, while Main Street businesses went under. The financial bailouts and related policies resulted in the largest transfer of wealth from working people to the rich in history. It also set back the fortunes of the Republican Party for years. (Yes, Obama and Democrats supported the bailouts, but thanks to Paulson, Republicans took the blame. No wonder Paulson gets along so well with Democrats. )
Paulson now seeks to jack up electricity rates and the cost of everything else, which will have absolutely no effect on his lifestyle. He walked away from Goldman with almost a half-billion dollars. He would, however, reduce the standard of living for just about everyone else.
Another Layer of Activism
Another layer of leadership to which the faux adjective “nonpartisan” is applied is Risky Business‘s “Risk Committee Members,” which includes prominent Democrats Henry Cisneros, Robert Rubin, and Donna Shalala, and Republicans George Shultz and former Maine Sen. Olympia Snowe. Here too the GOP participation can hardly be classified as coming from the conservative mainstream of the party.
We are apparently expected to acknowledge their authority of this cast of characters—the co-chairs to the “Risk Committee”—based on their wealth and power. We are then expected to swallow the research they’ve produced, which is billed as “an independent assessment of the economic risks posed by a changing climate in the U.S.” The possibility that there might be no “risk” (at least, not any more “risk” than there has been in the past) is not a consideration, of course, because then they wouldn’t have called the project “Risky Business.”
Hence it isn’t a surprise they called upon two firms that are all about finding supposed hazards and catastrophes. According to the Risky Business website, Steyer, Bloomberg, and Paulson “tasked” the Rhodium Group, a firm whose expertise is analysis of “disruptive global trends,” to evaluate the economic effects from climate change. They also called upon Risk Management Solutions (RMS), the “world’s largest catastrophe-modeling company for insurance, reinsurance, and investment-management companies around the world.”
Clearly, forecasting there would be no disasters as the result of global warming was not an option. Nor was challenging the premise that there has been a planetary temperature increase in the first place—even though there hasn’t been any warming for nearly 18 years. It follows that Rhodium Group chose alarmist climate scientist Dr. Robert Kopp of Rutgers University as lead scientist for Risky Business.
“My scientific and policy research interests are guided by the recognition that, over the last two centuries, human civilization has become a geological force,” Kopp writes in his autobiographical information. “We are inducing planetary environmental conditions like those that Earth has not experienced for millions of years.”
Those are the kinds of things you hear from the alarmist world. This is the foundation on which Risky Business builds economic extrapolations in order to convince the business world to account for global warming.
Those deductions are based on—you probably guessed it—econometric models. So the thesis of global warming leads to all kinds of assumptions in the Risky Business report about yields for various (but not all) crops, mortality (but not quality of life), labor production, and even violent crime. Thanks to the collaborative nature of the Internet, a ridiculously long list of things supposedly caused by global warming—supported by source links—has been compiled. Revealing that to the experts behind Risky Business could send them back to fiddle with their models.
But all the “scholarliness” doesn’t matter; there is no humanly possible way to account for all the variables and contingencies, climatically or economically, to accurately forecast the future. The point of Risky Business is not to deliver sound conclusions based on reliable data, but only to appear to be doing so. Putting out reports with lots of formulas, coefficients, technical jargon, and footnotes accomplishes that task.
Predictable and Costly Prescriptions
It is with that “authority” that Steyer, Bloomberg, and Paulson (but mostly Steyer) hope to apply pressure to the business world. On the Risky Business website, the “Next Steps” they advocate involve business adaptation, investor adaptation, and public sector response. In all the categories the goals are clear: businesses and governments must spend exorbitant amounts of money for adaptation to, and mitigation of, the effects of global warming. As a result the co-chairs want greater demands for reporting on these “actions” in boardrooms and shareholder meetings across the country.
The Risky Business co-chairs have taken their message to the public over the last month, with Steyer trying to hit up donors, Paulson writing for the New York Times, and Bloomberg promoting it through his media business. They’ve thrown gobs of money to create the appearance of an intellectual, scientific authority on both the science and economics of global warming. Investors and corporate executives should be aware of this scheme to distort their companies’ financial reporting and bottom lines.
Paul Chesser ([email protected]) is an associate fellow for the National Legal and Policy Center and publishes CarolinaPlottHound.com, an aggregator of North Carolina news. This article was first published by the National Legal and Policy Center, reprinted with permission.