I stumbled upon this article a long time ago and it was an extremely informative essay on what the national debt is and how it affects public policy. The general principles of that piece remain true even to this day, but the facts have changed and so have the numbers. So a new primer on the national debt is needed.
Whenever the Federal government wants to spend money, it can choose to pay for that spending with either tax revenue or borrowed money. It borrows money by issuing Treasury bonds. The initial buyers (the primary market) of Treasurys include primary dealers, various funds (mutual, pension, hedge, etc), individuals, foreign governments, and the Federal Reserve itself.
Because Treasury bonds have essentially no risk but can have long maturities, the initial buyers of Treasurys will sell them to other people and institutions at the market clearing price. This is known as the secondary market. When the maturity date on the issued bonds arrives, the Treasury is required to pay the bearer the full face value of the bond. Longer term Treasurys also carry a coupon payment, which are interim payments made to the bondholder as a form of interest payment.
The face value of all Treasury bonds outstanding represent the entire national debt. Interest paid on the debt is a line item in the Federal budget known as "net interest". At the time of this writing, the total national debt is 16.162 trillion dollars. However, not all national debt is created equal. There are two forms of debt: intragovernmental holdings and publicly held debt.
Publicly held debt represents the Treasury bonds that are in the hands of nongovernmental persons and institutions. This is the debt that the Federal government has to pay interest on.
The other category of national debt, intragovernmental holdings, represent the Treasury bonds that are held by various agencies, institutions, and organizations that make up the Federal government. The biggest holdings belong to the Social Security Trust, the Medicare Trust, and the Federal Reserve. The Federal government doesn't have to pay net interest on these debts, because it would represent the Federal government paying itself.
What taxpayers and politicians need to worry about is the publicly held debt. At the time of this writing, that amount is 11.122 trillion dollars, which is approximately 71% of GDP. Of those 11 trillion dollars worth of debt, foreign holders own about 5.348 trillion of it, which is approximately 48% of the publicly held debt.
Currently, real interest rates on Treasury debt are negative. That means anybody who buys Treasurys off the primary or secondary market will actually lose purchasing power during the time that they own the debt. In 2011, 98.8% of the public debt issued by the Federal government was bought either by the Federal Reserve or by foreign institutions. Because the Federal Reserve has the power to create money out of thin air, this means that the rest of the world is paying the US government to spend money.
Given the fact that the Federal Reserve has essentially committed itself to indefinite quantitative easing (until the economy looks like it can move on its own), it seems likely that the current environment of negative real interest rates will continue until the economy fully recovers. That means the Federal government has a blank check to spend to its hearts content. The majority of the money will be supplied by the Federal Reserve, while the rest gets picked up on a foreigner's tab.
So what's the policy prescription given this extraordinary state of affairs? People in the Democratic Party would likely argue that the Federal government should spend the money instead, but I simply don't think the government could effectively spend that much money. Most of it would probably go to state aid and I don't think they could spend that money effectively either.
So I bet you can guess what I'm going to recommend. Tax cuts. Put more money into people's pockets and let them do whatever with it. The Federal government should make it clear to people that these low tax rates will exist only until the economy picks up. And hopefully by then, the economy will have picked up and we can get some breathing room to tackle the long term fiscal challenges that Social Security and Medicare represent.
Sunday, October 7, 2012
Saturday, October 6, 2012
Real Time With Bill Maher: Counterpoints and Retrospective (10/5/12)
Excellent show on HBO tonight. Real Time lives and dies by its panel and tonight it had a good one. Well spoken and intelligent journalist, bog standard Republican, well spoken and intelligent actress. They meshed pretty well. So let's dive into what they got right and what they got wrong.
The Debates: Frankly, I'm surprised that Maher and Washington were so shocked on why President Obama performed poorly in the debates. Are memories that short? Because it was clear in the 2008 election cycle that Obama was not a good debater. He skated through because Clinton had a string of bad luck and McCain was a decidedly below average debater. This is what I remember most from that past election's debates:
Obama had pretty much the same style during these debates. He's not animated. He takes too long to formulate an answer. He looks down a lot. He speaks haltingly and hesitantly, as if he were trying to measure every word, and it shows. What the audience sees is an apparently lackadaisical effort.
The press let him get away with it too. They treated him with kid gloves during 2008 (just google "journolist 2008 obama") and continued to do so after he was elected President. He's not used to being severely challenged. And he was extremely lucky to fight Clinton to a draw in 2007.
In comes Romney in 2012, and there's no denying that the guy is extremely intelligent, very well spoken, and came in with the same type of energy and enthusiasm that belies his corporate consulting background. The difference was palpable and that's why everybody said Romney won. Because it would be blatantly biased to say otherwise.
You have to come to the conclusion that either a. people rarely express their real thoughts in public (I'm sure there were a number of Democrats who were extremely nervous going into the debates precisely because of the reasons I outlined above) or b. people have extremely short and inaccurate memories. Obama was never a good debater. Get over it. He'll be more "animated", "energetic", and "involved" in the 2nd and 3rd debates but he'll still be fighting uphill.
Republican Strategy: The pre-panel interview guest was Frank Luntz, a veteran Republican pollster and you could tell right away that Maher had an extremely grudging respect for him. Maher hates guys like Luntz because they are the strategists who manipulate stupid people into voting for a candidate that they "shouldn't" vote for. It's a feeling best summarized as the attitude behind "What's the Matter with Kansas?"
Of course, this ignores the very same dynamic with Democrats and segments of their own base. Low information voters (I hate how this term keeps popping up in liberal circles) vote for both parties and both parties do things to court them. There's a reason why the DCCC always puts up a black candidate in urban districts where the plurality of the electorate is black. There's a reason why they wanted Caroline Kennedy to run for a vacant Senate seat in New York.
To pretend one party is full of people who just know better is just plain wrong. The principal difference between the Republican Party and the Democratic Party is the makeup of their elites. Republican elites are businessmen and church leaders. The Democratic elites are lawyers, journalists, and rich people whose jobs aren't mentally or physically strenuous but pay really well so they feel subconscious guilt about their wealth.
There are dog whistle phrases used in both parties. Let's not try and pretend otherwise.
Global Warming: Washington said something to the effect of "even if global warming's effects might not be as severe as predicted, shouldn't we err on the side of caution?" Well the problem is that erring on the side of caution is economically ruinous. Higher energy costs means higher costs across the board. It takes cheap energy to run the modern economy. And the unwashed masses are not going to be happy with 8 dollar per gallon gasoline (the average price in Europe), 20 cents per kwh for electricity, and higher prices for consumer cyclicals and durables.
This is something that I wish Maher would actually talk about: his actual proposals. Let's pretend for a minute that the green lobby had its way. What is its way? The only problem with that is that it opens up those policies to criticism and that's the classic problem with the elites in the Democratic Party: they always complain about a problem but they never do anything about it. "And yet..." is the driving force behind the modern Democratic Party.
Affirmative Action: Make no mistake, the Supreme Court (probably via a 5-3 split decision, although I'm hoping it could be 6-2) is going to strike down Affirmative Action with its ruling on Fisher v. University of Texas. But when Washington defended Affirmative Action and spouted a bunch of platitudes on the wonders of (all kinds of) diversity, it just sickened me.
Affirmative Action seeks to remedy historic injustices (and just give a leg up to disadvantaged minorities in general) by giving something to somebody who didn't deserve it. I agree that we should help disadvantaged people, but I wouldn't do it based on the color of their skin. And I wouldn't "help" them in the manner that Affirmative Action does.
The key to the upper middle class in America is a good education. And a good education doesn't start at college. It starts in our K12 public schools. Most disadvantaged minorities attend public schools that are absolutely terrible. And that's where they fall behind.
If we want to help disadvantaged kids, let's do it where it matters the most. That means allowing kids access to the best primary and secondary schools. Instead of cramming poor blacks and Latinos into poor urban schools, allow them to attend the school of their choice via a voucher system.
We should be preaching equality of opportunity. Not equality of outcomes. We achieve the former by leveling the playing field. Not tilting it in a certain direction for arbitrary reasons.
The Debates: Frankly, I'm surprised that Maher and Washington were so shocked on why President Obama performed poorly in the debates. Are memories that short? Because it was clear in the 2008 election cycle that Obama was not a good debater. He skated through because Clinton had a string of bad luck and McCain was a decidedly below average debater. This is what I remember most from that past election's debates:
Obama had pretty much the same style during these debates. He's not animated. He takes too long to formulate an answer. He looks down a lot. He speaks haltingly and hesitantly, as if he were trying to measure every word, and it shows. What the audience sees is an apparently lackadaisical effort.
The press let him get away with it too. They treated him with kid gloves during 2008 (just google "journolist 2008 obama") and continued to do so after he was elected President. He's not used to being severely challenged. And he was extremely lucky to fight Clinton to a draw in 2007.
In comes Romney in 2012, and there's no denying that the guy is extremely intelligent, very well spoken, and came in with the same type of energy and enthusiasm that belies his corporate consulting background. The difference was palpable and that's why everybody said Romney won. Because it would be blatantly biased to say otherwise.
You have to come to the conclusion that either a. people rarely express their real thoughts in public (I'm sure there were a number of Democrats who were extremely nervous going into the debates precisely because of the reasons I outlined above) or b. people have extremely short and inaccurate memories. Obama was never a good debater. Get over it. He'll be more "animated", "energetic", and "involved" in the 2nd and 3rd debates but he'll still be fighting uphill.
Republican Strategy: The pre-panel interview guest was Frank Luntz, a veteran Republican pollster and you could tell right away that Maher had an extremely grudging respect for him. Maher hates guys like Luntz because they are the strategists who manipulate stupid people into voting for a candidate that they "shouldn't" vote for. It's a feeling best summarized as the attitude behind "What's the Matter with Kansas?"
Of course, this ignores the very same dynamic with Democrats and segments of their own base. Low information voters (I hate how this term keeps popping up in liberal circles) vote for both parties and both parties do things to court them. There's a reason why the DCCC always puts up a black candidate in urban districts where the plurality of the electorate is black. There's a reason why they wanted Caroline Kennedy to run for a vacant Senate seat in New York.
To pretend one party is full of people who just know better is just plain wrong. The principal difference between the Republican Party and the Democratic Party is the makeup of their elites. Republican elites are businessmen and church leaders. The Democratic elites are lawyers, journalists, and rich people whose jobs aren't mentally or physically strenuous but pay really well so they feel subconscious guilt about their wealth.
There are dog whistle phrases used in both parties. Let's not try and pretend otherwise.
Global Warming: Washington said something to the effect of "even if global warming's effects might not be as severe as predicted, shouldn't we err on the side of caution?" Well the problem is that erring on the side of caution is economically ruinous. Higher energy costs means higher costs across the board. It takes cheap energy to run the modern economy. And the unwashed masses are not going to be happy with 8 dollar per gallon gasoline (the average price in Europe), 20 cents per kwh for electricity, and higher prices for consumer cyclicals and durables.
This is something that I wish Maher would actually talk about: his actual proposals. Let's pretend for a minute that the green lobby had its way. What is its way? The only problem with that is that it opens up those policies to criticism and that's the classic problem with the elites in the Democratic Party: they always complain about a problem but they never do anything about it. "And yet..." is the driving force behind the modern Democratic Party.
Affirmative Action: Make no mistake, the Supreme Court (probably via a 5-3 split decision, although I'm hoping it could be 6-2) is going to strike down Affirmative Action with its ruling on Fisher v. University of Texas. But when Washington defended Affirmative Action and spouted a bunch of platitudes on the wonders of (all kinds of) diversity, it just sickened me.
Affirmative Action seeks to remedy historic injustices (and just give a leg up to disadvantaged minorities in general) by giving something to somebody who didn't deserve it. I agree that we should help disadvantaged people, but I wouldn't do it based on the color of their skin. And I wouldn't "help" them in the manner that Affirmative Action does.
The key to the upper middle class in America is a good education. And a good education doesn't start at college. It starts in our K12 public schools. Most disadvantaged minorities attend public schools that are absolutely terrible. And that's where they fall behind.
If we want to help disadvantaged kids, let's do it where it matters the most. That means allowing kids access to the best primary and secondary schools. Instead of cramming poor blacks and Latinos into poor urban schools, allow them to attend the school of their choice via a voucher system.
We should be preaching equality of opportunity. Not equality of outcomes. We achieve the former by leveling the playing field. Not tilting it in a certain direction for arbitrary reasons.
Thursday, October 4, 2012
Pundits Revel in Bias and Inattentiveness
Quick hit here. After the debate, many bloggers wrote how Romney got away with not being specific with which deductions he would eliminate to make his rate cut be revenue neutral.
Well he just came out and said he wants to limit the total amount of deductions, which essentially gives taxpayers a choice of how they spend their money. You can still, for example, deduct mortgage interest (up to a certain amount), but that means you wouldn't be able to deduct for improvements to your home office. Or vice-versa.
That effectively flattens the tax code and does precisely what Mitt Romney says he'd do, which is to make his rate cuts (more or less) revenue neutral. Only a small portion of households actually itemize deductions (because for most families, the standard deduction is greater than the amount they can deduct otherwise) and an even smaller portion of households deduct a ton on their returns (the richest households).
This keeps in place our progressive income tax system while limiting the tricks that accountants can use to minimize a high income household's tax bill.
Well he just came out and said he wants to limit the total amount of deductions, which essentially gives taxpayers a choice of how they spend their money. You can still, for example, deduct mortgage interest (up to a certain amount), but that means you wouldn't be able to deduct for improvements to your home office. Or vice-versa.
That effectively flattens the tax code and does precisely what Mitt Romney says he'd do, which is to make his rate cuts (more or less) revenue neutral. Only a small portion of households actually itemize deductions (because for most families, the standard deduction is greater than the amount they can deduct otherwise) and an even smaller portion of households deduct a ton on their returns (the richest households).
This keeps in place our progressive income tax system while limiting the tricks that accountants can use to minimize a high income household's tax bill.
Romney Crushes Expectations
In hindsight, I should have made another prediction. I knew going into the debate that people were expecting President Obama to decisively defeat Romney. And those expectations were going to greatly aid Romney.
It's safe to say now that Mitt Romney greatly aided Romney during the debate. He came across as well informed, intelligent, articulate, and Presidential. The post debate narrative (and instant polling) pretty much confirms it. All that's left to do is wait for the polls to come out today and tomorrow. And then wait for the BLS' labor report on Friday.
It's no surprise that Romney did very well during the first debate. The guy isn't a moron. He's hyper competent and extremely intelligent. What's telling is that the Democrats have portrayed him as ruthless, out of touch, and uncaring. What they can't do is say this guy isn't ready to be President.
One thing that I think greatly aided Romney was Obama's praise of Romney's governorship in Massachusetts. To hear it from the horse's mouth that his opponent is actually a reasonable and competent guy will be immensely reassuring to the electorate. This is something that Obama is going to have to work on for the next two debates.
Another issue, which was brought up a few times in the post-debate analysis on CNN (and probably other channels), was that there was so much negative ads directed at Mitt Romney himself. People were treated to a polite, intelligent, and concerned Romney who was focused on getting Americans back to work. It throws into relief a sharp contrast between what the Democrats say Mitt Romney is and what the electorate saw on Wednesday night.
There are three more debates after this. I think the Vice Presidential debate is going to be a win for Paul Ryan and the Republicans while the 2nd Presidential debate will be more or less a wash. The 3rd debate should break in Romney's favor as well.
What focus groups and internal polling probably suggest (although I don't have access to either) is that Americans are looking for an excuse to vote for the challenger. But the first thing voters need to know is that the challenger represents, at the very least, a plausible alternative. I think tonight, Romney showed that, not only is he a plausible alternative, he is an increasingly appealing alternative.
It's safe to say now that Mitt Romney greatly aided Romney during the debate. He came across as well informed, intelligent, articulate, and Presidential. The post debate narrative (and instant polling) pretty much confirms it. All that's left to do is wait for the polls to come out today and tomorrow. And then wait for the BLS' labor report on Friday.
It's no surprise that Romney did very well during the first debate. The guy isn't a moron. He's hyper competent and extremely intelligent. What's telling is that the Democrats have portrayed him as ruthless, out of touch, and uncaring. What they can't do is say this guy isn't ready to be President.
One thing that I think greatly aided Romney was Obama's praise of Romney's governorship in Massachusetts. To hear it from the horse's mouth that his opponent is actually a reasonable and competent guy will be immensely reassuring to the electorate. This is something that Obama is going to have to work on for the next two debates.
Another issue, which was brought up a few times in the post-debate analysis on CNN (and probably other channels), was that there was so much negative ads directed at Mitt Romney himself. People were treated to a polite, intelligent, and concerned Romney who was focused on getting Americans back to work. It throws into relief a sharp contrast between what the Democrats say Mitt Romney is and what the electorate saw on Wednesday night.
There are three more debates after this. I think the Vice Presidential debate is going to be a win for Paul Ryan and the Republicans while the 2nd Presidential debate will be more or less a wash. The 3rd debate should break in Romney's favor as well.
What focus groups and internal polling probably suggest (although I don't have access to either) is that Americans are looking for an excuse to vote for the challenger. But the first thing voters need to know is that the challenger represents, at the very least, a plausible alternative. I think tonight, Romney showed that, not only is he a plausible alternative, he is an increasingly appealing alternative.
Wednesday, October 3, 2012
Going For Broke
After working slightly later than usual, I left the office, got some dinner to go, walked into my apartment and flipped the TV to ESPN. Standard operating procedure. But SportsCenter wasn't on. ESPN was televising another one of its excellent 30 For 30 documentaries. This particular film was about professional athletes blowing away their fortune through a mix of outlandish spending, laughably corrupt "investment opportunities", parasitic friends and family, and gold digging girlfriends and wives.
People who follow sports know the most egregious examples. Mike Tyson, Terrell Owens, Evander Holyfield, Lawrence Taylor, Michael Vick. These athletes earned tens of millions of dollars in career earnings and endorsements and found themselves declaring bankruptcy after their careers ended.
Most of these athletes grew up in working class families, played sports at an early age, and by the time they were in their early 20s, signed contracts worth millions of dollars. The money they were dealing with were unfathomable sums of money that they weren't used to having. Giving that much money to a financially illiterate person is usually going to end poorly.
This is emblematic of a larger problem in society. I've harped on about it in multiple blog posts, but it's worth repeating: people are financially illiterate. The real tragedy is that it isn't hard to become financially literate. Skimming the financial section of any national daily and reading one book each on the stock market and the bond market can get anybody up to speed with what's really going on in the country.
Having a lot of money doesn't necessarily mean you're wealthy. When you use your money to make more money, that's when you're wealthy. Wealth is about making your money work for you. Not using your money to buy things that aren't necessary. It's fun to drive a Ferrari, own a ridiculously impractical mansion, or getting bottle service at the swankiest nightclub in town, but it isn't prudent.
One thing that you constantly see in media is the portrayal of an accountant or banker as an utterly boring and uninteresting person. I'll be the first to agree that staring at a balance sheet and trying to get the numbers to add up isn't the most thrilling thing in the world. But if that's the price for financial literacy, the world could use a lot more boring people.
People who follow sports know the most egregious examples. Mike Tyson, Terrell Owens, Evander Holyfield, Lawrence Taylor, Michael Vick. These athletes earned tens of millions of dollars in career earnings and endorsements and found themselves declaring bankruptcy after their careers ended.
Most of these athletes grew up in working class families, played sports at an early age, and by the time they were in their early 20s, signed contracts worth millions of dollars. The money they were dealing with were unfathomable sums of money that they weren't used to having. Giving that much money to a financially illiterate person is usually going to end poorly.
"A white man gets wealthy, he builds Wal-Marts and makes other white people have some motherfucking money. A brother gets rich, he buys some motherfucking jewelry, okay? Do you know what the fuck I'm talking about? I ain't talking about rich, I'm talking about wealth. Wealth is passed down from generation to generation. You can't get rid of wealth. Rich is some shit you could lose with a crazy summer and a drug habit."
Substitute "white man" with "financially knowledgeable person" and "brother" with "professional athlete" and you get a rough approximation of what the documentary is trying to convey. There's a very telling portion of the film in which one of the interview guests, a financial adviser, says something to the effect of "investing in mutual funds is not sexy. Turning 10 million dollars into 11.2 million dollars is not sexy. Owning bars, nightclubs, and strip clubs is sexy."- Chris Rock
This is emblematic of a larger problem in society. I've harped on about it in multiple blog posts, but it's worth repeating: people are financially illiterate. The real tragedy is that it isn't hard to become financially literate. Skimming the financial section of any national daily and reading one book each on the stock market and the bond market can get anybody up to speed with what's really going on in the country.
Having a lot of money doesn't necessarily mean you're wealthy. When you use your money to make more money, that's when you're wealthy. Wealth is about making your money work for you. Not using your money to buy things that aren't necessary. It's fun to drive a Ferrari, own a ridiculously impractical mansion, or getting bottle service at the swankiest nightclub in town, but it isn't prudent.
One thing that you constantly see in media is the portrayal of an accountant or banker as an utterly boring and uninteresting person. I'll be the first to agree that staring at a balance sheet and trying to get the numbers to add up isn't the most thrilling thing in the world. But if that's the price for financial literacy, the world could use a lot more boring people.
Tuesday, October 2, 2012
I don't normally do this...
I hate link dumps and I don't particularly like posting content on this blog that isn't my own writing, but I do love me some Megan McArdle. In my opinion, she's the most intelligent and well written person in the chattering class. And she came out with a pretty damn good post about the arrogant attitudes of people who aren't in the business of making and operating businesses.
I never created my own firm. But I know secondhand how hard it is to create and sustain a business. I used to work at a very small "branch" of a pretty small IT consulting firm. Our main account (which was more than 95% of our business) was a 6 person graphical design firm who had one main account (which accounted for over 90% of their business). Hearing my employers and clients stress over making payroll and trying to square away the numbers was a humbling experience.
We take a lot of things for granted today. And there is nobody less visible and unglamorous than a struggling small business owner. It's something I think most people don't think about. I do, which is why I have a vastly more sympathetic view toward business than most people. Because most people don't appreciate how hard it is to convince another person to give you money, let alone repeatedly.
I never created my own firm. But I know secondhand how hard it is to create and sustain a business. I used to work at a very small "branch" of a pretty small IT consulting firm. Our main account (which was more than 95% of our business) was a 6 person graphical design firm who had one main account (which accounted for over 90% of their business). Hearing my employers and clients stress over making payroll and trying to square away the numbers was a humbling experience.
We take a lot of things for granted today. And there is nobody less visible and unglamorous than a struggling small business owner. It's something I think most people don't think about. I do, which is why I have a vastly more sympathetic view toward business than most people. Because most people don't appreciate how hard it is to convince another person to give you money, let alone repeatedly.
Utility Maximization and the Welfare State
Bjorn Lomborg is an unusual kind of academic. He's unusual in the fact that political ideology means less to him than utilitarianism. For example, there are plenty of professors in the faculty lounges across the United States who will support faddish social causes that wouldn't promote as much social good as other causes, but they do so because they implicitly put their political ideology ahead of their ostensible purpose to maximize social welfare.
Anthropogenic climate change (global warming) is the most prominent example. It's almost exclusively the concern of the intelligentsia living in post-industrial markets. The reason why emerging markets are so opposed to global warming is because the policy prescriptions would disproportionately hurt their economies the most.
The reason is simple. The modern economy relies on cheap energy. And the cheapest forms of energy (coal) tend to be the most polluting. Developed markets like the United States and Western Europe already have the capital wealth in place to decrease their reliance on dirty forms of energy like coal power (albeit at extraordinary financial cost). But markets like China, India, and Brazil don't.
Ostensibly, the goal of the green lobby is to reverse global warming to create a sustainable environment that will benefit all of society. There is no doubt that clean energy is a public good. But it takes a lot of money to have clean energy. And that's money emerging markets don't have.
If the stated goal of the green lobby is to maximize the social welfare, then global warming shouldn't be their number one priority. This is where Bjorn Lomborg comes in. He posits that in a world of limited resources, we have to prioritize public policy that does the most good for the least amount of money.
Things like promoting increased food security through micronutrient supplementation/fortification (distributing mineral/vitamin tablets), increased access to high yield GMO crops, and nutrition education can greatly benefit humanity by preventing malnutrition and starvation in countries that are extremely poor.
Spending money on more expensive sources of energy provide very little benefit (which goes mostly to developed markets and the people who need it the least). Norman Borlaug, who pioneered GMO crop development, is estimated to have saved a billion people from starvation. Increasing electricity generation by solar from .01% to .5% would cost the US 1000 times as much money as was spent supporting Borlaug's research, but it wouldn't come close to saving even a thousandth of that number.
The bottom line is social welfare is about human lives. And saving human lives is vastly more beneficial than making human lives marginally more comfortable.
Anthropogenic climate change (global warming) is the most prominent example. It's almost exclusively the concern of the intelligentsia living in post-industrial markets. The reason why emerging markets are so opposed to global warming is because the policy prescriptions would disproportionately hurt their economies the most.
The reason is simple. The modern economy relies on cheap energy. And the cheapest forms of energy (coal) tend to be the most polluting. Developed markets like the United States and Western Europe already have the capital wealth in place to decrease their reliance on dirty forms of energy like coal power (albeit at extraordinary financial cost). But markets like China, India, and Brazil don't.
Ostensibly, the goal of the green lobby is to reverse global warming to create a sustainable environment that will benefit all of society. There is no doubt that clean energy is a public good. But it takes a lot of money to have clean energy. And that's money emerging markets don't have.
If the stated goal of the green lobby is to maximize the social welfare, then global warming shouldn't be their number one priority. This is where Bjorn Lomborg comes in. He posits that in a world of limited resources, we have to prioritize public policy that does the most good for the least amount of money.
Things like promoting increased food security through micronutrient supplementation/fortification (distributing mineral/vitamin tablets), increased access to high yield GMO crops, and nutrition education can greatly benefit humanity by preventing malnutrition and starvation in countries that are extremely poor.
Spending money on more expensive sources of energy provide very little benefit (which goes mostly to developed markets and the people who need it the least). Norman Borlaug, who pioneered GMO crop development, is estimated to have saved a billion people from starvation. Increasing electricity generation by solar from .01% to .5% would cost the US 1000 times as much money as was spent supporting Borlaug's research, but it wouldn't come close to saving even a thousandth of that number.
The bottom line is social welfare is about human lives. And saving human lives is vastly more beneficial than making human lives marginally more comfortable.
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