The New Yorker Radio Hour

Episode: The Financial Crash and the Climate Crisis

Host: David Remnick
Date: November 9, 2018

Overview

This episode examines the profound and lasting ties between the 2008 financial crisis and the ongoing climate crisis. Host David Remnick and a series of guests—including financial journalist Adam Davidson, former Treasury Secretary Hank Paulson, risk professionals in Florida, and writers George Packer and Jill Lepore—explore how short-term thinking, flawed risk models, and political polarization connect these two epochal events. The hour features in-depth storytelling, on-the-ground reporting in Miami, and urgent discussion of what can and can't be done in a democracy focused on the next election rather than existential long-term risks.

Key Discussion Points and Insights

1. Parallels Between the Financial Crisis & Climate Change

(03:37–06:48)

• Hank Paulson (former Treasury Secretary) drew direct analogies between the debt bubble of 2008 and the current carbon emissions crisis:
  • Both result from flawed government policies.
  • Both risks build up “invisibly” and threaten catastrophic outcomes.
  • Both hit the most vulnerable hardest and impose massive fiscal costs that ultimately fall to taxpayers.
• Adam Davidson (financial journalist) connects the phenomena:
  • Both involve “prepayment for risk”—enjoying gains today, leaving the costs for the future.
  • Human and political myopia magnify these crises: “There’s this well-documented pattern of grabbing a benefit today and ignoring or underplaying the risks down the road.” (06:59, Adam Davidson)

Notable Quote:

"When there's a financial crisis as bad as it is, the government can come in again and clean it up, get rid of the bad debt. Right? Carbon dioxide: it's up there forever. It slowly strangles you." (05:33, Hank Paulson)

2. Regulatory Failure and Short-Termism

(08:42–09:24)

• Davidson emphasizes the need for “solid regulators” in markets and environmental policy, pointing out that lax oversight worsened both the financial and climate risks.
• Both crises demonstrate how policymakers respond only to immediate, visible threats, not slow-burning, systemic risks.

3. On the Ground in Miami: The Front Line of Combined Crises

(09:24–20:32)

• Field reporting in Miami (Steven Valentino with Tom Hudson & Victor Roldan):
  • South Florida, devastated by foreclosures in 2008, is also first in line for catastrophic climate effects like sea level rise.
  • Despite visible flooding and future risks, real estate booms persist—risk is transferred from developer to homeowner, to insurer, to taxpayer.
  • A reckoning is looming as insurance and lending models begin to account for climate risk.

Memorable Analogy:

“You're operating ultimately under the greater fool theory. There's somebody who's more of a fool than I that'll pay a little bit more for this.” (13:20, Tom Hudson)

On Risk Transfer:

"You transfer your risk, you build in three years, four or five years, then you're out... It's like a pyramid scheme, you know. Who's the last one? You don't want to be the last one." (20:15, Victor Roldan)

4. Populism, Political Distrust & Climate Denial

(21:51–29:40)

• George Packer (journalist, author of The Unwinding):
  • Draws a line from the collapse of middle-class faith post-2008 to the Trump presidency and its “climate denialism.”
  • Climate change is politically toxic because it means sacrifice and deferred gratification: “Climate change is just an entire loser for everybody. It just means you have to give things up.” (22:59, George Packer)
  • Political tribalism makes climate change a “wedge issue.”
• Remnick and Packer discuss the corrosion of public trust and rise of conspiracy thinking, linking doubt over climate science with fallout from failed economic and foreign policy “expertise.”

5. The Challenge of Political Action and American Governance

(29:40–35:32)

• Adam Davidson underscores that, for both crises, decisive action required a moment of “do this or it all collapses”—a clarity lacking in the incremental, cumulative threat of climate change:
  • "Politicians... are not good at taking important action about the future unless there is that kind of signal: Do it today, or we all die." (31:28, Adam Davidson)
• Jill Lepore (historian):
  • Explains America's structural inability to engage in long-term planning—except in rare cases (like the Constitution itself).
  • True, lasting policy change often comes from cumulative societal pressure, not electoral politics.
  • Advocates for a carbon tax, noting how income tax also required a national consensus: “A carbon tax doesn't require a constitutional amendment. It requires a sense of common purpose... our shared, if unequal, burden.” (35:18, Jill Lepore)

Important Timestamps & Segments

| Time | Segment | |------------|-----------------------------------------------------| | 00:10–01:43| Setting the 2008 financial crisis in context | | 03:37–06:48| Paulson & Davidson discuss crisis parallels | | 09:24–20:32| Miami field reporting; risk models & real estate | | 21:51–29:40| George Packer on populism, denial & politics | | 29:40–35:32| What can realistically be done; Lepore on policy |

Notable Quotes

• Hank Paulson:
  • “If we’d had one more institution go down [in 2008], we would have been looking into something... that could have rivaled or exceeded the Great Depression.” (01:44)
  • “Carbon dioxide, it’s up there. It’s essentially up there forever. It’s cumulative and so it doesn’t happen immediately. It slowly strangles you. But... there’s going to be sea rise, more storms, droughts, and forest fires... Here it is extremely important that we take steps to adapt and protect our economic security.” (05:33)
• Adam Davidson:
  • “There is this well documented... pattern of grabbing a benefit today and ignoring or underplaying the great risks down the road.” (06:59)
• George Packer:
  • “Climate change is just an entire loser for everybody. It just means you have to give things up. Wouldn’t it be wonderful if you could just convince yourself it was a hoax?” (22:59)
• Jill Lepore:
  • on long-term planning: “When there has been more long-term planning, it’s come from people who don’t hold elected office... It takes muckraking journalism, rallies, legislative acts... But it also takes a very big public conversation and a reckoning with the costs.” (32:40)
  • “A carbon tax doesn’t require a constitutional amendment. It requires a sense of common purpose, and it requires reaching across different political constituencies so that people can understand our shared, if unequal, burden.” (35:18)

Tone and Takeaways

Reflective, urgent, and informed by a sense of historical perspective, this episode highlights the danger of shortsighted risk-taking in both finance and environmental policy. Speakers blend the analytical with the personal, moving from Washington’s corridors of power to Miami’s flooding streets, always returning to the need for collective action and a shared national purpose. A recurring theme: without a cultural or political mechanism for confronting slow-building threats, society remains vulnerable to repeated catastrophe.

Final Thoughts

The episode closes by urging listeners to consider “common purpose and shared burden”—the bedrock of any effective response, whether to economic disaster or global warming. The convergence of political failure, market behavior, and physical reality leaves no quick fixes, but insists on the need for sustained, cross-sectoral engagement that rises above partisan divides.