The title of Maggie Koerth-Baker’s article in the most recent New York Times Sunday Magazine caught my eye. It is Mutually Insured Destruction. The article explores the research work being done on the behalf, and the nickel, of the reinsurance industry. Firms in that industry insure the insurance companies. When it comes to paying for a natural disaster; to a great degree that is where the buck stops – or to be more accurate, comes from.
Obviously the reinsurance industry has a great interest in whether there will be more severe storms in the future or not. They are spending significant money to study the effects of climate change on the frequency and severity of major damage producing storms. Like any other business they want to maximize profits while minimizing their cost of doing business; which in their case is keeping their payouts on claims as low as possible. As their research continues to prove that climate change is increasing the frequency and severity of storms, they will start to pressure the insurance companies in the form of higher premiums. That will in turn adversely affect the insurance companies’ bottom line forcing them to accept lower profits and/or raise rates; none of those options are ones they like.
Republicans misleadingly label themselves as the Party of business. The truth is they are the Party of big business. There is a plethora of them running around Washington and various state capitals proclaiming that there is no such thing as climate change, or in the least that it is not man-made. The leader of this flat earth society in the United States Senate is Oklahoma’s Republican James Inhofe who calls climate change a, “Hoax,” and justifies it by saying, “God’s still up there.” All this is done to aid several deep pocketed industries that are major Republican financiers: primarily oil and coal. Those two industries are major polluters and don’t want to be constrained by any environmental regulations. They would rather deny reality and damn the long-term future of the planet. Their goals and only concerns in life are the next quarter’s and next fiscal year’s profitability. That is the biggest difference between big and small business in America. Generally speaking, big business thinks in terms of quarters and years; while small business thinks in terms of generations.
The fly in the Republican financier game is that the financial industry, of which insurance is a major component, is also a major source of campaign dollars. When you donate $50, $100 or $200 bucks to a candidate it is primarily because you believe in him or her. When big business, regardless of industry, writes a check it is significantly larger and it is much more of an investment than a donation. As a business investment the financier is looking for a return on that investment. In the case of these industries it is normally to stifle attempts at government regulation or to get/maintain tax breaks, both of which lower the cost of doing business.
A difference of objectives between the energy and the financial sectors is inevitable. When that feud comes the climate change deniers are either going to have to change their tune or chase the finance industry’s dollars to the Democrats. I simply cannot see the former happening. When it comes to the Republicans: follow the money. If today’s Republican Party was a masonry arch the keystone would be greed.
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