Friday, September 18, 2009

Le Cheval de Retour

Will the carbon tax bring back the horse? It seems that in the field of trash collection, it already has. I'm not sure that the horse's carbon footprint relative to that of the garbage truck has been all that carefully calculated, however. Growing all those oats must be pretty carbon intensive. And what about the CO2 of all that fecal decay (to say nothing of the methane footprint). We need a full accounting.

Sarkozy, the G20, and the Banks

Nicolas Sarkozy is already collecting press clippings about his not-yet-achieved success in persuading the G20 to curb bankers' bonuses. The EU is already on board, and he has spoken to Obama by telephone. So we can expect that enough will come out of the conference to justify a brief song and dance in Paris. But the bankers aren't sitting idly by. Gillian Tett today describes what one bank, Barclay's, is doing to beautify its balance sheet while creating an offshore, non-bank entity in the Cayman Islands, where ex-bankers will be able to collect bonuses as executives of a non-bank investment vehicle that won't be subject to whatever regulations the G20 come up with. Here we have a perfect example of the difficulty of regulating global finance, even when national governments are willing to coordinate globally.

Which is not to say that Sarkozy doesn't deserve credit for trying. But what is needed here is a long-term effort to change the whole culture of banking. I'm not sure that persistence is Sarkozy's long suit, but his leadership here could be useful, since Obama, despite being snubbed by the very American bankers whom he so unstintingly bailed out earlier this year (they didn't even turn up for the mild tongue-lashing he administered on Wall Street this week), seems to have decided that changing the culture of banking is a job too big for the US government to tackle. Someone needs to hold Obama's feet to the fire, and Simon Johnson can't do it alone.