Northwest Herald / NWHerald.com • Monday, March 14, 2016
22
OPINIONS
Kate Weber Publisher
Dan McCaleb Editorial Director
Jason Schaumburg Editor
ANOTHER VIEW
Canada, U.S. have a lot to do When the U.S. and Canada get together to fight climate change, they ought to be able to make a difference. They’re not only neighbors, after all, but also among the world’s top 10 producers of greenhouse gases. So why did this week’s announcement of a joint effort to reduce methane emissions feel so underwhelming? Because it was. The best hope, for the climate and for both countries, is that it presages a new era of action and cooperation. Methane emissions from oil and gas production – which the two countries agreed to cut by as much as 45 percent in a decade – make up less than 3 percent of total U.S. greenhouse gas emissions, and only about 6 percent for Canada, according to figures compiled by Bloomberg Intelligence. While both countries set much bigger goals in Paris last year – the U.S. pledged to cut carbon emissions by 26 percent in a decade; Canada promised a 30 percent reduction in 15 years – neither one has yet put in place a full set of policies needed to meet them. Even if they did, the reductions would fall far short of what’s needed to prevent devastating climate change. So what could the two countries do to make more of a difference? In the U.S., the best policy would be to impose a revenue-neutral carbon tax. Yet the current Congress would make this all but impossible. President Barack Obama’s workaround is the Clean Power Plan, which moves the energy sector toward low-carbon fuel sources. Ideally, his successor will endorse this strategy and expand on it – for example, by investing more in nuclear power. Canada has even further to go. It has made less progress than the U.S. in cutting emissions, and the declining fortunes of its oil and gas industry have hurt its economy, limiting public appetite for ambitious change. Yet Prime Minister Justin Trudeau enjoys two distinct advantages: Canada’s political system allows a government with a majority of seats in Parliament to pass legislation with no support from the opposition, and Canada’s most populous provinces already have adopted or announced plans to put a put a price on carbon. The challenge is to combine those initiatives into a national approach that generates meaningful greenhouse-gas reductions. At their meeting Thursday, Obama and Trudeau renewed their countries’ friendly rivalry, identifying shared goals and core differences. They even talked about more important things – such as action on climate change. If their announcement on methane emissions marks the start of a new competition, it’s a contest that will benefit both countries and the world. Bloomberg View
THE FIRST
AMENDMENT
VIEWS
It’s really time to stop bashing Wall Street By MATTHEW WINKLER Bloomberg View
There’s a perverse competition among some presidential candidates: Who can most loudly blame Wall Street for the problems of Main Street. They’ve got it wrong. Financial firms are doing more to help consumers, business and industry in America than they have in decades. And for the first time since the early years of the 21st century, global investors consider U.S. banks among the world’s best. One of the reasons the American economy is performing better than any of the largest in Asia and Europe is that its regulators have repaired the damage of the financial crisis and the worst recession since the Great Depression. Led by the Federal Reserve, they replaced incentives for reckless speculation with catalysts for old-fashioned credit creation backed by levels of capital that are unprecedented in modern times. Banks today are most willing to lend money since at least 1990. Perhaps the best measure of restored confidence
in the financial system is the 63 percent of Americans who are within 7 percentage points of the all-time-high valuation of their homes in 2006. All but ignored in the presidential debates this year is the record $1.06 trillion of loans to commercial and industrial firms by the largest U.S. banks, an amount that has increased for 21 consecutive quarters. That’s a streak unequaled since 1985, when Ronald Reagan occupied the White House (and Bloomberg began compiling such data). In its quarterly survey of senior loan officers, the Fed in January reported that banks have been willing lenders for 25 consecutive quarters, the longest period of commitment since President George H.W. Bush was president 26 years ago, according to data compiled by Bloomberg. That helps explain why investors for the first time since 2004 are paying a premium to purchase the shares of U.S. banks compared with their global peers on a price-to-book-value basis, according to Bloomberg data. The price-to-book ratio of the 24 major U.S. banks in the KBW Bank
Index exceeded the comparable measure of 157 banks worldwide for the first time since President George W. Bush was re-elected. Home mortgages now total $9.95 trillion after bottoming in 2014 after the recession. That amount is comparable to the easy-credit days of 2006, before the financial crisis. Today, in contrast, the mortgage market shows no signs of the leveraged lending that precipitated the housing bust and, if anything, is poised to keep growing. Warren Buffett, whose Berkshire Hathaway has increased its holdings of Wells Fargo, Visa and U.S. Bancorp the past several years, recently told his shareholders they should ignore much of what they’re hearing from presidential candidates. “As a result of this negative drumbeat, many Americans now believe that their children will not live as well as they themselves do,” Buffett wrote. “That view is dead wrong: The babies being born in America today are the luckiest crop in history.” Buffett should know. It can only happen when Wall Street is backing Main Street.
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