US Treasury Secretary Steve Mnuchin Mocks Greta, Says She Should Study Economics
“Steve Mnuchin thinks Greta Thunberg needs an economic education, where she can take courses like ‘strip-mining Sears assets 103’ and ‘forging signatures to take homes away from people 204′”
Treasury Secretary Steve Mnuchin mocked teenage climate activist Greta Thunberg on Thursday at the Davos World Economic Forum, arguing that she should study economics before calling for divestment from fossil fuels.
“Is she the chief economist? Who is she? I’m confused,” Mnuchin said. “After she goes and studies economics in college, she can come back and explain that to us.”
However, thousands of academics agree with Thunberg’s call for fossil fuel divestment. Nobel Prize winning economist Joe Stiglitz, the chief economist of the Roosevelt Institute and former chief economist at the World Bank, is one of many prominent economists who support the global divestment campaign:
“If you own fossil fuel assets, and the impact of any global agreement on climate change is going to push their value down, you are going to resist, using whatever tactics,” Stiglitz said in 2015. “But the interests of global society have to overcome these narrow special interests.”
Somebody should tell Mnuchin about the hundreds of Harvard faculty members – and thousands at other universities – who have called for fossil fuel divestment too. https://t.co/t3VhdYvQSE https://t.co/1aaGTUknRZ
— Naomi Klein (@NaomiAKlein) January 23, 2020
Steve Mnuchin thinks Greta Thunberg needs an economic education, where she can take courses like “strip-mining Sears assets 103” and “forging signatures to take homes away from people 204” https://t.co/DwSzfgxsg3
— David Dayen (@ddayen) January 23, 2020
Critics like American Prospect editor David Dayen argue that Mnuchin’s career represents the most parasitic elements of the U.S. economic system, casting doubt on his authority in matters of long-term economic sustainability.
Mnuchin was previously known as the “foreclosure king” for his time as CEO and chairman of mortgage lender OneWest, which displaced 36,000 homeowners from their homes in the years after the subprime mortgage crisis. According to a memo obtained by Dayen, OneWest, “rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.”
In 2012, prosecutors at the California Department of Justice urged the state’s then-attorney general Kamala Harris to file a civil enforcement action against OneWest, having found the bank responsible for over a thousand violations of foreclosure law and suspecting that further investigation would reveal thousands more, according to an internal memo published by the Intercept. However, Harris declined to prosecute OneWest or its CEO, Steve Mnuchin, despite her department’s description of “widespread misconduct” at the bank.
Mnuchin also served on Sears’ board of directors until his December 2016 nomination to the Trump cabinet, and he was named as a defendant in a suit filed by a committee of the defunct retailer’s creditors.The lawsuit alleges that Sears’ former CEO, Eddie Lampert, improperly stripped the company of its assets for personal gain, as his hedge fund ESL simultaneously served as Sears’ biggest shareholder, creditor and landlord. The suit alleges that Lampert siphoned off billions by selling Sears’ stores and real estate to himself before selling it back to Sears at a higher price. Mnuchin was Lampert’s roommate at Yale University.
Dayen and investigative reporter Rebecca Burns argue that like Trump, who inherited at least $413 million from his father, Mnuchin did not earn his position through merit:
“Luckily for Mnuchin, intelligence is no obstacle when you have massive, unearned privilege on your side. Mnuchin got his start out of college at Goldman Sachs. His father, Robert Mnuchin, was a legendary Goldman Sachs partner who headed up the firm’s trading division in the 1970s. His brother, Alan Mnuchin, was also a 12-year Goldman veteran, arriving at the firm a few years ahead of the younger Steven. Even going back another generation doesn’t do much to dial up the rags-to-riches factor: Mnuchin’s grandpa was an attorney who co-founded a yacht club in the Hamptons, New York.”
Mnuchin goes after Greta Thunberg and says she should study economics
Here’s what Mnuchin learned from economics studies: as the “foreclosure king,” he ran a company that booted elderly residents from their homes due to onerous loans and technicalities https://t.co/NrlufW3ZoO
— Chris Lu (@ChrisLu44) January 23, 2020
Other economists argue that the costs of not taking action to mitigate climate change far outweigh the costs of transitioning to clean energy.
“Climate change–induced extreme weather events (hurricanes, fires, flooding, etc.) can stress insured assets along coastlines, from mortgaged homes and commercial real estate, to small businesses and farms that borrow money,” wrote Dayen in November. “This is particularly threatening to insurers.” Dayen notes that at least 16 insurance companies failed after Hurricane Andrew devastated Florida in 1992, an example the financial system’s vulnerability to climate change.
Colombia University professor Jeffrey Sachs is another economist who believes that decarbonization is much more affordable than commonly portrayed:
“Contrary to some commentaries, decarbonization will not require a grand mobilization of the U.S. economy on par with World War II. The incremental costs of decarbonization above our normal energy costs will amount to 1 to 2 percent of U.S. GDP per year during the period to 2050. By contrast, during World War II, federal outlays soared to 43 percent of GDP from the prewar level of 10 percent of GDP in 1940.
“The key today is to redirect outlays now spent on fossil fuel–based technologies toward zero-carbon technologies instead. That redirection will require a serious increase in federal and state public infrastructure spending, but most importantly will depend on new federal and state regulations to redirect the energy-related spending. Carbon pricing (such as a carbon tax) will be one useful tool for redirecting the spending, but will be of less importance than regulations.”
Others pointed to Mnuchin’s comment as an indictment of the failures of mainstream economic theory commonly taught in universities, as metrics like GDP do not take into account environmental degradation and resource depletion.
Mnuchin, sadly, makes sense. If Greta were to study mainstream economics, she would spend several semesters studying models of markets in which neither a climate disaster nor an economic crisis is possible. Time to transform both econ policy AND economics!https://t.co/EYaRr60f46
— Yanis Varoufakis (@yanisvaroufakis) January 23, 2020