Archive for April, 2009

Global Warming Contradictions

April 24, 2009

Copy of a letter sent to the Editor; Wall Street Journal.

 

Today’s editorial, “Reckless ‘Endangerment’” speaks to President Obama’s global warming agenda. It seems evident to me that a reasonable analysis of global warming just might include some historical data. For example, the Viking settlements in Greenland, circa 800-1200 AD bear witness to significant historical episodes of global climate change and global warming. A quick search of the internet turns up a wonderful web site by Professor Scott A. Mandia.

 

Scott A. Mandia
Professor – Physical Sciences
T-206 Smithtown Sciences Bldg.
S.C.C.C.
533 College Rd.
Selden, NY 11784
(631) 451-4104
mandias@sunysuffolk.edu
http://www2.sunysuffolk.edu/mandias/

 

 On the web site Professor Mandia provides a very readable history of the Vikings in Greenland and the climate conditions that made it possible. However, the professor also feels obliged to include a disclaimer. 

Note to general public:

My position on the current global warming is the same as the overwhelming majority of international climate scientists: the current rate of global warming is unprecedented and is being caused by humans. In no way should my summary of the research regarding climate change and the Viking civilization/Little Ice Age be used to “prove” the current global warming is due to a natural cycle. Human forcing (output of greenhouse gases) was just not as large a factor before the 1900s as natural forcing mechanisms. That would be like comparing the number of traffic fatalities today vs. a time when there were no cars!  

I highly recommend that you read the information being presented by the Intergovernmental Panel on Climate Change (IPCC) at http://www.ipcc.ch/. Please view my two .PDF files Global Warming: Man or Myth? and IPCC WGI FAQ which address many of the questions asked about the human impact on the current climate change in a very simple format.  

It is true that there are natural climate change cycles but most of these are on the order of thousands of years to millions of years. The current global warming is not a natural cycle and is of utmost importance because modern-day humans live on time scales much smaller than the natural cycles. Therefore, mankind cannot just simply wait thousands of years for a natural cooling to occur.  

It is my opinion that those who still proclaim that “the jury is still out” or that modern-day climate change is natural, are either ignorant about the scientific evidence or are politically motivated to ignore it.  

It is not possible for me to tell if the disclaimer is aimed at the professor’s job security, is an attempt at dry humor or is inexplicably false based on his own research. Note the sentence below: (emphasis added)

 

It is true that there are natural climate change cycles but most of these are on the order of thousands of years to millions of years.

 

On a separate page of his web site Professor Mandia describes the cycle of climate change affecting Greenland.  

 

A careful examination of the climate record reveals that Europe experienced a prolonged warm period known as the Medieval Warm Period (hereafter referred to as MWP) between the years 600 and 1150, cooling of the climate between the years 1150 and 1460, a brief warming between the years 1460 and 1560, followed by dramatic cooling known as the Little Ice Age (hereafter referred to as LIA) between the years 1560 and 1850.

 

Unless my math is grossly incorrect this process of warming (600-1150), cooling (1150-1460), warming (1460-1560) and ultimately the “Little Ice Age” (1560-1850) all occurred over time periods ranging from decades to hundreds of years. The entire, warm, cool, warm, freeze was all of 1250 years. This hardly constitutes “… thousands of years to millions of years.” What’s going on? How can such historical evidence be denied by the very researcher who describes it?

 

The professor also considers possible causes of this climate change, notably sun spots. Again, from the Professor’s web site. 

 

Sunspot Variation

Because the sun is Earth’s greatest source of energy and is the driving force behind its atmospheric circulation, any variation in solar output will influence the weather. Scientists have observed that the number of sunspots on the surface of the sun has been determined to correspond to solar output variability. More sunspots correspond to a higher solar energy output while fewer sunspots correspond to a lower solar output. A record of sunspot numbers has been recorded through time by various indicators including naked eye observations, auroral reports, and C14 isotope concentrations in tree rings (Schaefer, 1977.) Fig. 8 shows that during the MWP there was a high number of sunspots referred to as the Medieval Maximum, while during the LIA there were two periods of very low sunspot numbers called the Spörer Minimum and Maunder Minimum. Although a direct link has not yet been established between sunspot variability and climate change, the data is highly suggestive.

 

But the professor points us to the United Nations Intergovernmental Panel on Climate Change (IPCC) for more information on global climate change/warming. Presumably why humans are solely responsible for same? Also, Professor Mandia provides two additional pieces of information “explaining” his take on the human responsibility for the current global climate change/warming versus his own historical research. Note: I haven’t bothered to read them. What’s the point when the good professor disclaims his own evidence.

 

I believe this attitude is the driving force behind the push for government regulation of economic activity under the guise of an environmental – read global climate change/warming/whatever – emergency. In short, Professor Mandia, the eco-regulators (EPA, Obama, Congress, liberals and environmentalists) all choose to ignore the historical evidence plainly available. I believe they choose to ignore it because it contradicts their ideology. America’s economy will be held hostage to such ideologically scrubbed environmental evidence.

 

Regulatory Failure

April 22, 2009

In a post on “Economist’s View“, Mark Thoma wrote:
“Every market that was supposed to self-regulate failed?” … “So more and more I’m starting to think there may be a single explanation after all, that the regulators of these markets were captured by powerful forces that wanted the game to continue.”

Well, which is it? Did self-regulation fail or did government regulators fail to do their job? Which of the steps Mark has noted was wholly self-regulated? Mortgage brokers, realtors, appraisers, and rating agencies, are all licensed and regulated! Truly the only players not regulated by the government are homeowners and the government. Corporations being a mixed bag of limited regulatory oversight.

Everyone has some aspect of self-regulation. Don’t rob customers. Don’t cheat on taxes. And all of us have layers of regulations. If self-regulation failed then put the miscreants in jail. But if regulatory agencies failed what do we do then?

Mark and the commenter’s seem determined to paint the regulatory failure as a Republican failure – usually Reagan or Bush (43) or both. Granted this is a liberal blog with a liberal author and most commenter’s seem to also be liberals (judging from the comments). I assume therefore all are Democrat. You don’t like Republicans in general and Reagan and Bush (43) in particular. Peachy.

But for all your dislike (and I’m being kind) the regulatory failure that is at the heart of this morass has been and continues to be a massive bi-partisan affair. One clear example: the failure of Congress and regulators alike to label a Credit Default Swap (CDS) as an insurance policy. Doing so would have put every CDS under the insurance regulator. Not doing so let every bank, hedge fund, pension fund, et.al. go wild.

That simple act was/is a key factor in this economic maelstrom. That act was totally bi-partisan and totally intentional on the part of Congress and the various agencies. If it wasn’t for the CDS all the MBS and CMBS would not have had their AAA ratings and would not have been such “good” investments.

Get over your disklike of Reagan and Bush (43) if you really want to truly reform our economy. Shove your anti-Republican rants over to Wonkette. It’s a sport over there.

Is the tax system progressive?

April 14, 2009

A recent article on “Economists View” suggested – I think – that it was not progressive or at least not progressive enough. The most cogent response was from ‘Irreverent Comment’ who rightly bemoaned the paucity of debate. While I heartily agree with that notion I found a few of the ideas lacking. My comment is listed below.

Is the tax system progressive? BJ Feng, cynicalone and rbm411 all directly make my point (and better said no less). This graph and paper use one set of distinct numbers in an attempt to disprove a second set of distinct numbers. At best it is disingenuous, more likely it is an intentional use of disinformation in a political polemic.

Irreverent Comment provides the most incise criticism. That is, for so rich a topic the debate is incredibly poor. One critique however, is the use of utility of incremental income/wealth as a justification for a specific tax policy. I have no clue what the income utility is for someone transitioning from a deca-millionaire to a centi-millionaire. I do know what it was for my wife and I to transition to millionaire (very singular) status. Visually it was transitioning from an 8 year old 19 foot center console boat to a brand new 35 foot flybridge sportfisher. The incremental utility was incredible. At the same time our taxation rate and tax monies paid were incredible as well.

A second critique is the dismissal of a flat tax by (a) defining it as the so-called “fair tax” and then (b) suggesting that if absolute equality is the goal then it is fair to “give” the same income to everyone as it is to “take away” the same income. This concept fails on multiple levels. First of course, government does not “give” income but government does take taxes. The former is ostensibly based on individual effort while the latter is based on the police powers of the state.

I also take great issue with arbitrarily defining “flat tax” as the mis-labeled “fair tax”. My definition of a “flat tax” is a flat tax rate applied equally to all income. Thus a 10% flat tax rate for the $50,000 earner is a $5,000 tax while for a $1,000,000 earner it is $100,000. The tax rate is the same (e.g., flat) but the taxes paid could be considered progressive.

But to the biggest issue raised, why is there such a paucity of ideas in the debate? As a “RedSt8r” I’m as tired of tax cuts as the Republican solution as I am of tax hikes as the Democratic solution. This could and should be a debate rich in ideas. One highly suited to an economics blog but which is sadly lacking.

My first question is: what is the purpose of a tax system? Is it strictly to raise public monies to be used for constitutional purposes (national defense, highways, etc.)? Or is the purpose of a tax system to correct whatever issue(s)- economic, social or otherwise – the political majorities feel need correction? Are both purposes valid? Why?

What is a progressive tax system? Is it limited to an increasing tax rate dependent on income? Would a fixed tax rate that raised increasing amounts of tax monies based on income be considered progressive? Should a progressive system consider earned versus unearned incomes differently?

Should “wealth” be taxed in lieu of or in addition to income? Why do Warren Buffett and Bill Gates support an estate tax (a wealth tax) while simultaneously moving almost all of their wealth outside the reach of an estate tax? Do their actions conflict with their speech regarding the political validity of a progressive tax system applied to wealth?

Can a flat tax be progressive? Yes, in the sense that it takes a progressively larger amount of money from those with larger incomes. No, in the sense that “X%” is the same regardless of income. Which is the correct view? I posit that there isn’t one. The issue can only be resolved in a political debate. When will the economists start the debate?

Anarchists Organize – An oxymoron about morons

April 11, 2009

Anarchists Organize …”; I love this headline. This article from the Wall Street Journal (4/2/2009 by Jennifer Martinez) describes the so-called anarchists protesting the G20 meeting in London getting together to organzie their protests. Most of the WSJ readers who commented also enjoyed the headline. I believe the oxymoronic headline aptly describes how childish and moronic these people are who use the anarchist lable as an excuse to destroy private property just because they’re bored.