The Economist - UK (2019-06-01)

(Antfer) #1

34 United States The EconomistJune 1st 2019


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year has yet surpassed a huge flood in 1903,
but he says the Mississippi in St Louis has
reached historically high water marks in
four of the past seven years.
“Rivers are being constrained like never
before,” he says. The Missouri river, for ex-
ample, is on average half the width of its
former natural state. Narrowed channels
plus rising rainfall make sudden collapses
of levees more likely, such as the one that
wrecked the Riverdock Restaurant in 1993,
or another that struck part of Davenport, an
Iowan city on the Mississippi, early in May
this year. Sudden floods can “tear asphalt
off roads, strip top soil away, smash grain
silos”, making them more destructive than
gradual ones.
As waters rise, politicians across the
Midwest are starting to speak more about
climate change. In part that is because sev-
eral Democrats took over governors’ man-
sions after elections last year. By late April
24 governors, including those of industry-
heavy places like Illinois, Michigan, Penn-
sylvania and Wisconsin, had joined an alli-
ance of states formed in 2017 to combat cli-
mate change. Members vow to meet
emissions targets set in the Paris climate
accord, defying President Donald Trump’s
promise to pull America out of it.
Tony Evers, Wisconsin’s Democratic go-
vernor, for example, says he has “brought
science back” to his state after eight years
of “climate-change deniers” under his Re-
publican predecessor, Scott Walker. He did
so because he worries about the “amount of
water that’s been dumped on the state, as
the crazy weather happenings continue.
We’re having hundred-year floods every
couple of years.” He has also beefed up the
state’s once-neglected environmental
agency. Illinois Democratic governor, J.B.
Pritzker, declared in January that “climate
change is real” and that the state’s emis-
sions would fall by at least 26% (compared
with 2005) by 2025.
Democrats are also responding to voters
who tell pollsters they care more about the
subject than ever. Several aspiring presi-
dential candidates support some form of a
“green new deal”. Jay Inslee, Washington’s
governor, is basing his presidential run on
the issue. Pete Buttigieg, from Indiana,
says “climate change is happening in the
Midwest now, it is not theoretical”. He says
even Catholic conservatives in Indiana
warmed to the topic after a papal encyclical
on the environment in 2015.
Mr Trump remains as hostile as ever.
The New York Timesreports that his admin-
istration has told scientists not to include
worst-case scenarios of climate change in
the next nca, due before 2022. Some were
told not to make any forecasts for changes
beyond 2040, when the biggest disruption
is likeliest. Yet ever more voters can see
what is happening first-hand.
Older polling, by Pew, had suggested

that coast-dwellers were more alarmed by
climate change than those living 300 miles
or more inland. But inlanders’ views seem
to be shifting, too. A survey published this
year by the Energy Policy Institute, part of
the University of Chicago, found that 70%
of Americans believe climate change is
real. Nearly half are also more persuaded
by warnings from climate scientists than
they were five years earlier.
Many said that witnessing extreme
weather events—like the tornadoes,
storms and floods battering the Midwest
—did most to form their views. Michael
Greenstone, who runs the institute, says
the Midwest is already affected by “hotter
summers, and it is more challenging for ag-
riculture”. The region’s farmers are already
at the sharp end of change.
Mr Greenstone’s current research, not
yet published, points to spikes in summer

temperature that could threaten the viabil-
ity of the region’s two staple crops, corn
and soyabeans, possibly even before mid-
century. Unless geneticists can develop
heat-resistant strains, planting will march
steadily northwards. Other researchers, at
Indiana University, warned late last year
that more frequent summer droughts, plus
the spread of pests in warmer winters, also
threaten agricultural productivity across
the Midwest. One summer drought, in
2012, cost the region an estimated $30bn.
Down by the river, there are some com-
pensations. At Riverdock Mrs Heffington
says a few tourists who come to gawp at the
floods stop for a meal. Downriver at Alton,
high-flood marks adorn white grain silos
opposite the tourist centre. Molly Price,
who runs it, says the floods at least provide
a lively topic of conversation. “And then
everyone talks about climate change.” 7

O


n june 1 stthe expansion will pass its
ten-year anniversary to match the lon-
gest on record. America’s unemployment
rate is just 3.6%. But as the Republican
Party basks in its good fortune in occupy-
ing the White House at such a time, econo-
mists—a doomy bunch—are suffering a
sense of dread. They fear that policymakers
are missing a wonderful opportunity to

prepare the country for the next recession.
No one knows when that will be. The
gaps in America’s economic defences are
not so hard to foresee, however. Normally,
when recession hits, monetary policymak-
ers slash interest rates in response to a
downturn. With interest rates as low as
they are today there is little room to do so.
Legislation to provide discretionary stimu-
lus, such as temporary tax cuts or spending
bumps, can help. This has become a more
important component of the response to
recession in America.
Agreeing and implementing tax cuts
and spending increases takes time,
though, and can be undermined by parti-
san politicking. In 2011, for example, Re-
publican politicians forced a fiscal policy
of severe contraction on an economy that
was still reeling from the deepest down-
turn in living memory, with the result that
the recovery was probably slower than it
otherwise would have been.
If politics were no obstacle, what would
be the best way to respond to recessions? A
group of policy wonks convened by the
Brookings Institution and the Washington
Centre for Equitable Growth, two think-
tanks, recently proposed an array of fixes
for Congress to consider. Rather than rely-
ing on politicians to do the right thing in
the heat of a crisis, they reckon that Ameri-
ca needs better automatic stabilisers,
which would kick in quickly when a reces-
sion occurred and which would gradually

WASHINGTON, DC
If politics were no impediment, how would America fight the next downturn?

Recession planning

Automatic for the people

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