As Climategate unfolds and the importance of the hacked emails is debated, another interesting and complementary story goes on and on. Or more importantly, remains entirely below the radar of the mainstream media. That's the extremely quiet behavior of the Sun.
There are actually three stories. The first two are about science in the abstract. About 3.5 years ago, research was reported at a major scientific conference and published in peer-reviewed literature that purported to show a sound basis for predicting the timing and size of peak sunspot activity. The prediction was made for Cycle 24 and, remarkably, the authors announced their intent to forecast Cycle 25 within a few years, more than a decade before its expected peak.
In the event, the predicted strong cycle did not materialize. Official predictions went down and down, until last May the official pronouncement was that Cycle 24 would be the weakest since the early 20th century. Soon thereafter, the second event took place. NASA, having prominently supported the early predictions, seized the fact that "new" research explained the slow start of Cycle 24, and combined that with some solar activity in June to announce with considerable fanfare that all was now clear and Cycle 24 was beginning is predictable rise.
On closer examination, the new research developed a trend based on one data point, plus another that was, at best, not inconsistent. To NASA's dismay, June did not foretell the onset of more activity. The summer was extremely quiet. The importance of NASA's PR barrage in June was not whether it was wrong, as it was, but the transparently self-serving opportunism. There was no science beyond speculation, which albeit a component of the scientific process is not to be confused with results. The purpose was to try to catch a break, announcing science which might with good fortune happen to correspond to the trend. Nobody seems to be criticizing NASA for this.
Finally, there's the possibility that this is important, so it's very odd that it gets no press. Being about half the activity that was predicted in May, a reasonable person would project that the peak will in turn be around half, which would put 24 in the range of the Dalton Minimum, which in turn corresponded with some very cold weather. But when I look at news.Google.com for that phrase, I get only two articles in the past two weeks, worldwide in English.
We can't really say what terrestrial effects a quiet sun will cause, but we can say definitely that it's too early to say it will be nothing. So it irks me when people who say that CO2's future impact is known, when it isn't, and that a quiet sun is known to have no impact, when they don't know.
The solar scientists are in a double bind. Their predictions have been wrong, making it seem that we're spending a lot on useless research. I don't think it's useless because I support basic research, but it's a public relations problem. The second is that the actual developments could cause at least a distraction from the onward march of AGW. Scientists who value their standing as team players don't want to appear to cast doubt on the most important principle (economics-wise) of modern science. So they don't, even though they clearly should. Their conduct is almost as ugly as the climate scientists.
Sunday, December 06, 2009
Wednesday, July 08, 2009
The phony climate debate over smoothed trends
There are a number of numbers that people compute which appear to be due solely to the fact that with so much computing power at people's fingertips, the urge to calculate cannot be restrained. Thus people calculate for every stock in the stock market its "200-day moving average." The point eludes me. You can't sell for the 200-day average. That 200 days is significant suggests that the dynamics of the stock market are somehow driven by base-10 arithmetic. Why not a 128-day (200 in octal) average?
But I digress. The ability to compute has led climatologists to calculate smoothed trends for climate changes. A well known German named Stefan Rahmstorf has determined that with his secret smoothing technique, a long-term global warming trend is obvious. Steve McIntyre at Climate Audit is arguing that Rahmstorf's method is actually a 15-year triangular filter with some serious defects.
I have a more fundamental point. A 15-year smoothed trend isn't anything real. It's a construct. If it were a construct that helped, it would be one thing. Kinetic energy is defined as one half mass times speed squared. Why not the whole shebang? Because at one half, and with a well chosen definition of potential energy, you get an extremely valuable principle of conservation.
So artificial constructs are not automatically to be discarded, but one has to wonder what value there is in an oddly weighted 15-year average of temperature. Temperature at a given moment is a valuable piece of knowledge. Temperature over a 24-hour period can give a reasonable estimate of the need for heating a home, for instance. There may be some physical significance to the average of a year, but I'm not sure.
But a weighted number over 15 years? It's gibberish. The granularity becomes 15 years. You can do the computation once and then repeat 15 years later, although it's then no clear why you wouldn't just do an equal weight average.
But to get an annual trend out of a 15-year smoothing, as climatologists now do and announce breathlessly to the press, is preposterous. There is no physical reason, no theoretical formula, that depends on the period or the smoothing method. It's a construct without purpose except to impress the ignorant reporters of the mainstream media.
But I digress. The ability to compute has led climatologists to calculate smoothed trends for climate changes. A well known German named Stefan Rahmstorf has determined that with his secret smoothing technique, a long-term global warming trend is obvious. Steve McIntyre at Climate Audit is arguing that Rahmstorf's method is actually a 15-year triangular filter with some serious defects.
I have a more fundamental point. A 15-year smoothed trend isn't anything real. It's a construct. If it were a construct that helped, it would be one thing. Kinetic energy is defined as one half mass times speed squared. Why not the whole shebang? Because at one half, and with a well chosen definition of potential energy, you get an extremely valuable principle of conservation.
So artificial constructs are not automatically to be discarded, but one has to wonder what value there is in an oddly weighted 15-year average of temperature. Temperature at a given moment is a valuable piece of knowledge. Temperature over a 24-hour period can give a reasonable estimate of the need for heating a home, for instance. There may be some physical significance to the average of a year, but I'm not sure.
But a weighted number over 15 years? It's gibberish. The granularity becomes 15 years. You can do the computation once and then repeat 15 years later, although it's then no clear why you wouldn't just do an equal weight average.
But to get an annual trend out of a 15-year smoothing, as climatologists now do and announce breathlessly to the press, is preposterous. There is no physical reason, no theoretical formula, that depends on the period or the smoothing method. It's a construct without purpose except to impress the ignorant reporters of the mainstream media.
Tuesday, June 23, 2009
Joseph Romm, Zealot Extraordinaire
My first, and evidently only, encounter with Dr. Joseph Romm of the Climate Progress blog ended on Sunday with my being banned. For the record, I ran across an old posting from last December where Dr Romm, in separate places, first proposed a $1000 bet that the second decade of the millenium would be warmer than the first and later said that it was "certainly likely" that the increase would be .25C. I challenged him to make the bet at .25 C rather than .1 C, which was his formulation.
When I realized that I had posted to something that nobody was watching any longer, I switched the comment to a current subject. Romm replies that I was making up his statement. I clarified several times but he just got angrier and finally banned me at the end of an irrational rant. You may still be able to read it. It's been there for two days so I guess it doesn't embarrass him.
Reading the blog extensively, I've been struck by how much Joe Romm sounds like the Reverend Billy Bob at the Saturday night tent revival. They have a book, which I can't remember, in which everything is explained. Anyone who doubts the absolute certainty of AGW should simply read The Book. Switch AGW for the Second Coming of Christ and there's an eerie parallel.
Ordinary people can make mistakes. Romm made a mistake by remarking that .25 C in the next decade is certainly likely. In the end, he effectively retracted the statement by criticizing it, but in such a way that it seemed as though I had made the claim rather than him.
Romm is plainly in the hysterical wing of AGW enthusiasts, and he's probably making a good living at it. He's a zealot. Zealotry isn't always bad. Zealots brought about the American Revolution. However, they also brought about the French, Russian and (perhaps first) Iranian revolutions, along with the Spanish Inquisition. On balance, they are to be feared.
Romm and his crowd need to start delivering, or the rabble will grow unruly. We are seeing very little actual warming, none for a few years. The oceans are rising but they have been rising on a geologic time scale and the current increase is minimal. There have been no tropical islands disappearing under the waves. There has been no outbreak of tropical disease in northern climes. Crops are not failing. Hurricanes are not becoming more common.
Maybe this will all happen. Most rational skeptics agree that the basic physics favors some degree of AGW, and since this is a poorly understood process, it's possible that everything claimed for it is true and the current slow progress is a long term trend masked by a short term anomaly. All this is possible.
But it's not certain, and it's bad science to claim that science knows more than it does. It's also bad for science to risk its long-established reputation for sober and non-political investigations. If in a few years, Rush Limbaugh and his ilk will be able to accurately portray the scientific community as having abandoned objectivity for activism, it will be a sad day.
When I realized that I had posted to something that nobody was watching any longer, I switched the comment to a current subject. Romm replies that I was making up his statement. I clarified several times but he just got angrier and finally banned me at the end of an irrational rant. You may still be able to read it. It's been there for two days so I guess it doesn't embarrass him.
Reading the blog extensively, I've been struck by how much Joe Romm sounds like the Reverend Billy Bob at the Saturday night tent revival. They have a book, which I can't remember, in which everything is explained. Anyone who doubts the absolute certainty of AGW should simply read The Book. Switch AGW for the Second Coming of Christ and there's an eerie parallel.
Ordinary people can make mistakes. Romm made a mistake by remarking that .25 C in the next decade is certainly likely. In the end, he effectively retracted the statement by criticizing it, but in such a way that it seemed as though I had made the claim rather than him.
Romm is plainly in the hysterical wing of AGW enthusiasts, and he's probably making a good living at it. He's a zealot. Zealotry isn't always bad. Zealots brought about the American Revolution. However, they also brought about the French, Russian and (perhaps first) Iranian revolutions, along with the Spanish Inquisition. On balance, they are to be feared.
Romm and his crowd need to start delivering, or the rabble will grow unruly. We are seeing very little actual warming, none for a few years. The oceans are rising but they have been rising on a geologic time scale and the current increase is minimal. There have been no tropical islands disappearing under the waves. There has been no outbreak of tropical disease in northern climes. Crops are not failing. Hurricanes are not becoming more common.
Maybe this will all happen. Most rational skeptics agree that the basic physics favors some degree of AGW, and since this is a poorly understood process, it's possible that everything claimed for it is true and the current slow progress is a long term trend masked by a short term anomaly. All this is possible.
But it's not certain, and it's bad science to claim that science knows more than it does. It's also bad for science to risk its long-established reputation for sober and non-political investigations. If in a few years, Rush Limbaugh and his ilk will be able to accurately portray the scientific community as having abandoned objectivity for activism, it will be a sad day.
Sunday, June 21, 2009
Encounters with the radical wing of AGW
I chanced on a Web site about climate change through a link at a blog that I pay a lot of attention to. It's Climate Progress and the guru is Joe Romm. After running through some links, I found a posting from December that included the following two items:
So for all the deniers and delayers touting the coolest year of the decade (if the decade starts in 2001) meme, I stand by my offer to bet $1000 that the decade from 2010 to 2019 will be warmer than the decade from 2000 to 2009. I’ll even give you 2-to-1 odds or spot you 0.1°C. And I’ll even agree to use the HadCRUT3 global mean surface temperature data set (but, no, I can’t agree to use the satellite data, since it covers parts of the atmosphere that are projected to cool).
Any takers?
And later, "JR" made a response to "Charlie":
Lots of things tweak warming, but barring another major volcano soon, the next decade is certainly likely to be above 0.25°C warmer than this decade.
So I posted a comment, and JR replied:
"“Denier” is a loaded word, bringing to mind the phrase “holocaust denier.” A good many of us are simply skeptical. The physics looks promising and it’s possible to dismiss the less than stellar correlation between CO2 and global temperature as noise, but there is an awfully poor signal-to-noise ratio here for the sort of pompous dogmatism that I read.
I’m not a physicist but I’ve got a good grip on math and I’d be quite willing to take up the offer of a $1000 bet on the second decade versus the first that was proposed back in December. I posted that response to what I then discovered was a December posting, so probably nobody has noticed. I’ll repeat it.
In December, the statement was made that it was “certainly likely” that the second decade would be warmer by .25 C than the first. I’d be happy to take that as a bet, $1000 straight up odds. It seems that $1000 is an acceptable amount to risk, and the statement implies that the odds strongly favor the hotter temperature. If that’s the case, this should be acceptable. If it isn’t, the statement should be withdrawn.
[JR: You deniers kill me -- or at least future generations. That statement was never made -- to clarify, you wrote "I'd be quite willing to take up the offer of a $1000 bet on the second decade versus the first that was proposed back in December." That statement of yours refers to a bet offer that was never made. I just can't waste time with people who misstate what is easily read on this blog.
Since you all think it's cooling, then the fair bet is whether the next decade (starting in 2010) will be warmer than this one. I'll bet $1000 it is and I'll give you 2-to-1 odds, and I'll even give you the Hadley data, even though the NASA data is probably more accurate. I'll also give you a straight up $1000 bet that the next decade will be 0.1°C warmer, with an extra $100 to the winner for each 0.01°C above or below that. If that isn't acceptable, you really should stop with your disinformation spreading.]"
You do not see part of the exchange, because I immediately responded that I was challenging him to bet at .25C, not that he had done so. He suppressed my comment and edited his own, reiterating that I was suggesting that he had already made the bet.
So I responded again, and so did he:
"JR, since you are now editing my posts before anyone gets to see what I say, this is probably a waste of time, but let me make myself unamiguously clear. You said in December that you would take a bet based on the second decade versus the first. You offered to wager $1000. In the same post, you said that it was “certainly likely” (with the caveat about a volcano) that the rise would be at least .25 C.
I don’t intend to take your bet as offered. I’m just saying that if you have $1000 to risk and think this is an odds on proposition, why aren’t you accepting it?
[JR: Shame on you. Let me make myself unambiguously clear. You are banned. I offered two wagers for deniers. Later on, I made a statement that I believe it is certainly likely that the rise next decade would be 0.25 C warmer than this one. The fact that you refuse to take a two-to-one bet that the next decade will be warmer than this one, or an even money bet that the next decade will be 0.1°C warmer than this, but are fabricating a claim that I offered a wager that the next decade would be 0.25 °C than this one, which is of course beyond the very upper end of recent decadal warming or most GCM predictions -- is proof that you are conceding that the planet is warming much faster than the models suggested and that your denial-oriented posts are pure B.S. Please go elsewhere to post comments. I'm only interested in people here who actually believe what they are posting, even if it is crap.]"
I said once, I thought, and then clarified twice that I did not claim that he had already made the bet, only that he should. For this he restates for the third time that I have misrepresented him and so he bans me.
It certainly seems that climateprogress.org is interested in "deniers," as they call all who disagree with them, but only the idiots. There are plenty of idiots who don't believe in AGW and if you're selective, you can swat away the straw men that they set up by the dozen.
However, when someone calls you on the fact that you have both said that a .25C rise is "certainly likely" and later that it is higher than even his most supportive science claims, he kicks me off the site. I think even Rush Limbaugh, someone I personally loath, has more integrity.
So for all the deniers and delayers touting the coolest year of the decade (if the decade starts in 2001) meme, I stand by my offer to bet $1000 that the decade from 2010 to 2019 will be warmer than the decade from 2000 to 2009. I’ll even give you 2-to-1 odds or spot you 0.1°C. And I’ll even agree to use the HadCRUT3 global mean surface temperature data set (but, no, I can’t agree to use the satellite data, since it covers parts of the atmosphere that are projected to cool).
Any takers?
And later, "JR" made a response to "Charlie":
Lots of things tweak warming, but barring another major volcano soon, the next decade is certainly likely to be above 0.25°C warmer than this decade.
So I posted a comment, and JR replied:
"“Denier” is a loaded word, bringing to mind the phrase “holocaust denier.” A good many of us are simply skeptical. The physics looks promising and it’s possible to dismiss the less than stellar correlation between CO2 and global temperature as noise, but there is an awfully poor signal-to-noise ratio here for the sort of pompous dogmatism that I read.
I’m not a physicist but I’ve got a good grip on math and I’d be quite willing to take up the offer of a $1000 bet on the second decade versus the first that was proposed back in December. I posted that response to what I then discovered was a December posting, so probably nobody has noticed. I’ll repeat it.
In December, the statement was made that it was “certainly likely” that the second decade would be warmer by .25 C than the first. I’d be happy to take that as a bet, $1000 straight up odds. It seems that $1000 is an acceptable amount to risk, and the statement implies that the odds strongly favor the hotter temperature. If that’s the case, this should be acceptable. If it isn’t, the statement should be withdrawn.
[JR: You deniers kill me -- or at least future generations. That statement was never made -- to clarify, you wrote "I'd be quite willing to take up the offer of a $1000 bet on the second decade versus the first that was proposed back in December." That statement of yours refers to a bet offer that was never made. I just can't waste time with people who misstate what is easily read on this blog.
Since you all think it's cooling, then the fair bet is whether the next decade (starting in 2010) will be warmer than this one. I'll bet $1000 it is and I'll give you 2-to-1 odds, and I'll even give you the Hadley data, even though the NASA data is probably more accurate. I'll also give you a straight up $1000 bet that the next decade will be 0.1°C warmer, with an extra $100 to the winner for each 0.01°C above or below that. If that isn't acceptable, you really should stop with your disinformation spreading.]"
You do not see part of the exchange, because I immediately responded that I was challenging him to bet at .25C, not that he had done so. He suppressed my comment and edited his own, reiterating that I was suggesting that he had already made the bet.
So I responded again, and so did he:
"JR, since you are now editing my posts before anyone gets to see what I say, this is probably a waste of time, but let me make myself unamiguously clear. You said in December that you would take a bet based on the second decade versus the first. You offered to wager $1000. In the same post, you said that it was “certainly likely” (with the caveat about a volcano) that the rise would be at least .25 C.
I don’t intend to take your bet as offered. I’m just saying that if you have $1000 to risk and think this is an odds on proposition, why aren’t you accepting it?
[JR: Shame on you. Let me make myself unambiguously clear. You are banned. I offered two wagers for deniers. Later on, I made a statement that I believe it is certainly likely that the rise next decade would be 0.25 C warmer than this one. The fact that you refuse to take a two-to-one bet that the next decade will be warmer than this one, or an even money bet that the next decade will be 0.1°C warmer than this, but are fabricating a claim that I offered a wager that the next decade would be 0.25 °C than this one, which is of course beyond the very upper end of recent decadal warming or most GCM predictions -- is proof that you are conceding that the planet is warming much faster than the models suggested and that your denial-oriented posts are pure B.S. Please go elsewhere to post comments. I'm only interested in people here who actually believe what they are posting, even if it is crap.]"
I said once, I thought, and then clarified twice that I did not claim that he had already made the bet, only that he should. For this he restates for the third time that I have misrepresented him and so he bans me.
It certainly seems that climateprogress.org is interested in "deniers," as they call all who disagree with them, but only the idiots. There are plenty of idiots who don't believe in AGW and if you're selective, you can swat away the straw men that they set up by the dozen.
However, when someone calls you on the fact that you have both said that a .25C rise is "certainly likely" and later that it is higher than even his most supportive science claims, he kicks me off the site. I think even Rush Limbaugh, someone I personally loath, has more integrity.
Wednesday, June 03, 2009
Government Motors is Inaugurated
God, that was fast! Hardly had David Brooks' words about why the auto bailout will lead to lousy auto companies died away when Congress announces it will interfere in the management of its newly nationalized subsidiaries.
Is this going to be just the first instance? Probably. Certain Brooks thinks so and he is a pretty smart guy. The logic is strong. So here's a prediction. We have not seen the last bailout money. Once the taxpayers own most of GM, it becomes nearly impossible to let it actually die.
Since GM has spent half a century assiduously driving away innovators and risk takers, who exactly is now going to lead the innovation and risk taking that the company needs if it hopes to compete? We now own the equivalent of a manufacturing post office. Good luck to us!
Is this going to be just the first instance? Probably. Certain Brooks thinks so and he is a pretty smart guy. The logic is strong. So here's a prediction. We have not seen the last bailout money. Once the taxpayers own most of GM, it becomes nearly impossible to let it actually die.
Since GM has spent half a century assiduously driving away innovators and risk takers, who exactly is now going to lead the innovation and risk taking that the company needs if it hopes to compete? We now own the equivalent of a manufacturing post office. Good luck to us!
The soot is falling, the soot is falling!
The following two paragraphs appear in a NYT article by Felicity Barringer on soot and mortality:
"A new appraisal of existing studies documenting the links between tiny soot particles and premature death from cardiovascular ailments shows that mortality rates among people exposed to the particles are twice as high as previously thought." and ...
"The review found that the risk of having a condition that is a precursor to deadly heart attacks for people living in soot-laden areas goes up by 24 percent rather than 12 percent, as particle concentrations increase."
The mortality did not double. The estimate of "health risk," i.e. precursor conditions, increased from 112% of normal to 124% of normal, a rise of 11% not 100%. I've scanned the actual report and I can't find a direct correlation between HR and mortality, although it's a long report and I haven't read it all. However, the precursor condition is definitely not the same as mortality.
Furthermore, buried deep within the research paper is a statement that did not make its way into the New York Times. It seems that the particulates in question have declined by a third since the oldest part of the study, so that while it is true that the EPA hasn't lowered its standards for particulates, they are falling anyway. That the story gives the impression that the risk is seen as greater and nothing is ameliorating it is scandalous.
Researchers need headlines to maintain funding, so it's no use to say that you're studying an issue that is taking care of itself. Also, the New York Times is always inclined to favor more regulation of anything, so even if it's a declining problem, they think we should hire more EPA bureaucrats to harass American businesses. Judge for yourselves.
"A new appraisal of existing studies documenting the links between tiny soot particles and premature death from cardiovascular ailments shows that mortality rates among people exposed to the particles are twice as high as previously thought." and ...
"The review found that the risk of having a condition that is a precursor to deadly heart attacks for people living in soot-laden areas goes up by 24 percent rather than 12 percent, as particle concentrations increase."
The mortality did not double. The estimate of "health risk," i.e. precursor conditions, increased from 112% of normal to 124% of normal, a rise of 11% not 100%. I've scanned the actual report and I can't find a direct correlation between HR and mortality, although it's a long report and I haven't read it all. However, the precursor condition is definitely not the same as mortality.
Furthermore, buried deep within the research paper is a statement that did not make its way into the New York Times. It seems that the particulates in question have declined by a third since the oldest part of the study, so that while it is true that the EPA hasn't lowered its standards for particulates, they are falling anyway. That the story gives the impression that the risk is seen as greater and nothing is ameliorating it is scandalous.
Researchers need headlines to maintain funding, so it's no use to say that you're studying an issue that is taking care of itself. Also, the New York Times is always inclined to favor more regulation of anything, so even if it's a declining problem, they think we should hire more EPA bureaucrats to harass American businesses. Judge for yourselves.
Sunday, May 31, 2009
Sotomayor the opening step in a Latina Woman majority
The right wing press seems to be in a great huff over Sotomayor's comments about the positive impact of a wise Latina woman on the U.S. Supreme Court. Let me make her defense for her, although she'll probably work this out in time for her testimony before the Senate. She was noting that one wise Latina woman on a bench with a bunch of old white guys might bring a perspective not otherwise available.
If there were already eight such and she was saying that only another wise Latina woman would work, I think we would have reason to criticize her. But that is not the case now and the likelihood that it will ever be a concern is minimal.
What we should be concerned about is that this will make six Catholics out of nine. Salon seems quite complacent, noting that we have had a majority of white Protestant men almost all the time since the founding of the Republic. Perfectly OK, except that I might note that until recently law schools graduated virtually no women so it would have been remarkable to have seen any on the Supreme Court, and that the country has always had a Protestant majority. Hardly surprising that this group formed a constant majority.
Frankly, I think the group most unrepresented is the unchurched. There are nine justices and, going by strict proportionality, you'd expect one of the justices to coincide with the number who publicly deny any religious affiliation. If you went further and accounted for the number who in practice have none, you'd expect a far larger number.
But it's impossible to get to the top of the judiciary, any more than to get elected to high office in this country, unless you publicly profess your faith. Any faith, it seems, is better than none, even though this is logically contradictory for those who seriously believe in the infallibility of their own inspiration.
Someday, a candidate for something important will state, when queried about his faith, "None. It's all rot and poppycock." But I'm not holding my breath.
One final point. English has no inflections for gender. If we're going to go beyond English, should we be saying "Latinas women?" Do we say "francaises women?" What do we do with languages we can't transcribe?
I don't mind importing words, but when they come ashore they should follow the rules. Latino is an English noun/adjective for people, primarily from this hemisphere, who speak or whose ancestors spoke, Spanish. It's the only word we need.
If there were already eight such and she was saying that only another wise Latina woman would work, I think we would have reason to criticize her. But that is not the case now and the likelihood that it will ever be a concern is minimal.
What we should be concerned about is that this will make six Catholics out of nine. Salon seems quite complacent, noting that we have had a majority of white Protestant men almost all the time since the founding of the Republic. Perfectly OK, except that I might note that until recently law schools graduated virtually no women so it would have been remarkable to have seen any on the Supreme Court, and that the country has always had a Protestant majority. Hardly surprising that this group formed a constant majority.
Frankly, I think the group most unrepresented is the unchurched. There are nine justices and, going by strict proportionality, you'd expect one of the justices to coincide with the number who publicly deny any religious affiliation. If you went further and accounted for the number who in practice have none, you'd expect a far larger number.
But it's impossible to get to the top of the judiciary, any more than to get elected to high office in this country, unless you publicly profess your faith. Any faith, it seems, is better than none, even though this is logically contradictory for those who seriously believe in the infallibility of their own inspiration.
Someday, a candidate for something important will state, when queried about his faith, "None. It's all rot and poppycock." But I'm not holding my breath.
One final point. English has no inflections for gender. If we're going to go beyond English, should we be saying "Latinas women?" Do we say "francaises women?" What do we do with languages we can't transcribe?
I don't mind importing words, but when they come ashore they should follow the rules. Latino is an English noun/adjective for people, primarily from this hemisphere, who speak or whose ancestors spoke, Spanish. It's the only word we need.
Monday, May 18, 2009
What now in Sri Lanka
It has been announced that Vellipulai Prabhakaran is dead. The LTTE is finished as a semi-conventional military force.
In 1864, Lincoln ordered Sherman to march through Georgia to the sea. In 1865, after victory of the Confederacy, he aimed for reconciliation although he didn't live to achieve it.
In 2005, Mahinda Rajapaksa became leader of Sri Lanka with a hard-line view towards the LTTE. Now in 2009, he has succeeded in his own march to the sea. Will he take this opportunity to look on his devastated and divided country as Lincoln did in 1865? We can hope, but history has provided us with very few Lincolns.
In 1864, Lincoln ordered Sherman to march through Georgia to the sea. In 1865, after victory of the Confederacy, he aimed for reconciliation although he didn't live to achieve it.
In 2005, Mahinda Rajapaksa became leader of Sri Lanka with a hard-line view towards the LTTE. Now in 2009, he has succeeded in his own march to the sea. Will he take this opportunity to look on his devastated and divided country as Lincoln did in 1865? We can hope, but history has provided us with very few Lincolns.
Monday, May 11, 2009
The Error of Peak Oil
There is a lot of worry that the world has reached its maximum petroleum production level and will now, or soon, begin to reduce the annual production. Given the assumed increase in world demand, led by China and India, this produces an alarming scenario.
First, of course, if production drops, prices will rise, and demand will fall. As prices rise, production sources that were previously uneconomical are brought online, although not immediately. To a considerable extent, this is a self-liquidating problem.
But more than that, there would be no tight supply situation except that Americans have been allowed to buy more than half their requirements on credit from foreigners. We have just about maxxed out that credit card. It's been a great run for people like the Chinese, as they have used America's feckless disregard for its own interests to excise most of our manufacturing capacity, but pretty soon, they're going to realize that they are taking worthless paper in exchange. The United States and Zimbabwe have more in common than we like to admit.
For years, we lived high by liquidating our capital. The capital is gone and we owe foreigners much more than they owe us. We are now living on their forbearance. With the federal deficit now above 10% of GDP, the myth that the federal government takes its debt obligations seriously isn't going to wash. When that bubble bursts, the greenback is heading sharply south and Americans will be paying record oil prices even if the rest of the world isn't. When Americans only consume the oil they can pay for, there won't be a peak oil problem.
First, of course, if production drops, prices will rise, and demand will fall. As prices rise, production sources that were previously uneconomical are brought online, although not immediately. To a considerable extent, this is a self-liquidating problem.
But more than that, there would be no tight supply situation except that Americans have been allowed to buy more than half their requirements on credit from foreigners. We have just about maxxed out that credit card. It's been a great run for people like the Chinese, as they have used America's feckless disregard for its own interests to excise most of our manufacturing capacity, but pretty soon, they're going to realize that they are taking worthless paper in exchange. The United States and Zimbabwe have more in common than we like to admit.
For years, we lived high by liquidating our capital. The capital is gone and we owe foreigners much more than they owe us. We are now living on their forbearance. With the federal deficit now above 10% of GDP, the myth that the federal government takes its debt obligations seriously isn't going to wash. When that bubble bursts, the greenback is heading sharply south and Americans will be paying record oil prices even if the rest of the world isn't. When Americans only consume the oil they can pay for, there won't be a peak oil problem.
Thursday, February 05, 2009
Fixing California, along with much of the U.S.A.
An interesting article in the L.A. Times talks about the destruction of a former drug house in an L.A. neighborhood. They talked about the amount of crime and violence that had surrounded it and how the neighborhood had become safer. Of course, the crime probably moved about five blocks, but it looks good on a bar chart.
It did get me to thinking about the California state budget crisis. If not completely balanced, the California budget would be much closer if the federal government were today to legalize marijuana and assign to the states the franchise for selling it legally at a moderate profit.
At a stroke, a massive amount of state, county, and local spending would be eliminated. Everybody gets paid in this futile "war on drugs," launched by Richard Nixon with a promise that it would be over in a few years. The snitches get paid, as do the cops, the public defenders, the prosecutors, the judges, and the prison guards, all for preventing the use of a substance less lethal than tobacco or alcohol.
In addition to the money saved, there is the money earned by selling it. The stuff is sold now, but the public sees no revenue. Billions would flow into state treasuries that now go to Mexican drug lords, who hire people to kill Mexican public officials. The feds wouldn't need to keep shipping our cash to Mexico and Colombia to fight the effects of the illegal cash we are shipping there.
While we're at it, we could legalize and tax prostitution. I notice that Eliot Spitzer's pimp in New York may go to jail for two years. At a cost of tens of thousands of dollars to achieve exactly what?
As the great thinker Lysander Spooner wrote in the 19th century, vices are not crimes.
It did get me to thinking about the California state budget crisis. If not completely balanced, the California budget would be much closer if the federal government were today to legalize marijuana and assign to the states the franchise for selling it legally at a moderate profit.
At a stroke, a massive amount of state, county, and local spending would be eliminated. Everybody gets paid in this futile "war on drugs," launched by Richard Nixon with a promise that it would be over in a few years. The snitches get paid, as do the cops, the public defenders, the prosecutors, the judges, and the prison guards, all for preventing the use of a substance less lethal than tobacco or alcohol.
In addition to the money saved, there is the money earned by selling it. The stuff is sold now, but the public sees no revenue. Billions would flow into state treasuries that now go to Mexican drug lords, who hire people to kill Mexican public officials. The feds wouldn't need to keep shipping our cash to Mexico and Colombia to fight the effects of the illegal cash we are shipping there.
While we're at it, we could legalize and tax prostitution. I notice that Eliot Spitzer's pimp in New York may go to jail for two years. At a cost of tens of thousands of dollars to achieve exactly what?
As the great thinker Lysander Spooner wrote in the 19th century, vices are not crimes.
Sunday, February 01, 2009
Lane Community College is toast
I've run for the LCC Board three times now, all unsuccessfully. In all three, in varying degrees, I've argued that the college spent money on grand gestures, such as KLCC and the boutique Women's Program, which could be better spent on getting larger numbers of students an education they could afford.
It doesn't matter now. The Oregon Public Employee Retirement System (PERS) has sunk the ship. Or is slowly sinking the ship in a process that will continue for years. Retrenchment will be the order of the day for the next twenty years. Those things I said should be replaced by more effective operations will gradually die off, not to be replaced by better options. There is no money left for good options.
This may seem grim, and far beyond anything yet appearing in the news, but it's all online, waiting for anyone who wants to check the numbers and consider the implications. PERS posts its monthly returns online. A year ago, PERS will roughly fully funded, not including the side accounts (more about them later). It shows a loss of 27% for 12 months on its investments. Since the actuarially assumed ROI is 8%, this puts it down by a third compared with where it needed to be.
But it's much worse than that. Two asset classes -- private equity and real estate -- have done so badly that they can't be properly valued. So PERS is carrying those investments at cost, which is reports to the last thousand dollars even though the market is not known within a billion dollars. Those two classes at the end of December represented a third of the PERS regular fund, $15 billion out of $45 billion. Knowing what highly leveraged positions have done in the past year, it seems certain that they have lost most of that money. It would be odds on that they've lost 80% of it.
January was another bad month in the market, and PERS probably dropped two billion more. A proper valuation would probably be between $30 billion and $35 billion on January 31. If the total PERS UAL is under $25 billion, it would be surprising.
Bringing us back to LCC. In 2003, LCC floated a $53 million bond and created a PERS side account. The theory was simple, borrow at a little over 5% and let PERS invest it at 8%. Unfortunately, after several good years, PERS has had an awful year and wiped out all the earlier returns. LCC has paid nothing on the principal and consequently now has a $55 million debt and a $30 million side account. Again, this is pending an honest valuation by PERS.
The LCC portion of the PERS UAL is hard to know, but I think half a percent is reasonable. That would make it $125 million. Add the $25 million shortfall resulting from the bond, and PERS represents a $150 million hole for LCC.
I suppose it could be as low as $100 million, although I'd be really surprised if it were less than $120 million. Whatever the figure, it's a colossal sum and will require contributions that would average $10-15 million (principal and interest) if spread out over 20 years. Since LCC won't even begin to dent the problem for several years, until the issue hits the board upside the head and even not then immediately, the cost is eventually going to reach $15-20 million/year.
If anyone can tell me where this will come from, I'd be interested to hear.
It doesn't matter now. The Oregon Public Employee Retirement System (PERS) has sunk the ship. Or is slowly sinking the ship in a process that will continue for years. Retrenchment will be the order of the day for the next twenty years. Those things I said should be replaced by more effective operations will gradually die off, not to be replaced by better options. There is no money left for good options.
This may seem grim, and far beyond anything yet appearing in the news, but it's all online, waiting for anyone who wants to check the numbers and consider the implications. PERS posts its monthly returns online. A year ago, PERS will roughly fully funded, not including the side accounts (more about them later). It shows a loss of 27% for 12 months on its investments. Since the actuarially assumed ROI is 8%, this puts it down by a third compared with where it needed to be.
But it's much worse than that. Two asset classes -- private equity and real estate -- have done so badly that they can't be properly valued. So PERS is carrying those investments at cost, which is reports to the last thousand dollars even though the market is not known within a billion dollars. Those two classes at the end of December represented a third of the PERS regular fund, $15 billion out of $45 billion. Knowing what highly leveraged positions have done in the past year, it seems certain that they have lost most of that money. It would be odds on that they've lost 80% of it.
January was another bad month in the market, and PERS probably dropped two billion more. A proper valuation would probably be between $30 billion and $35 billion on January 31. If the total PERS UAL is under $25 billion, it would be surprising.
Bringing us back to LCC. In 2003, LCC floated a $53 million bond and created a PERS side account. The theory was simple, borrow at a little over 5% and let PERS invest it at 8%. Unfortunately, after several good years, PERS has had an awful year and wiped out all the earlier returns. LCC has paid nothing on the principal and consequently now has a $55 million debt and a $30 million side account. Again, this is pending an honest valuation by PERS.
The LCC portion of the PERS UAL is hard to know, but I think half a percent is reasonable. That would make it $125 million. Add the $25 million shortfall resulting from the bond, and PERS represents a $150 million hole for LCC.
I suppose it could be as low as $100 million, although I'd be really surprised if it were less than $120 million. Whatever the figure, it's a colossal sum and will require contributions that would average $10-15 million (principal and interest) if spread out over 20 years. Since LCC won't even begin to dent the problem for several years, until the issue hits the board upside the head and even not then immediately, the cost is eventually going to reach $15-20 million/year.
If anyone can tell me where this will come from, I'd be interested to hear.
Tuesday, January 27, 2009
Consider Gillibrand Carefully
It seems that the new Senator Gillibrand of New York is not entirely appreciated within her own party in her own state. That may be a good thing.
She's catching flak for her opposition to illegal immigration, for which she has earned the term "xenophobe." Note that senators are sworn to uphold the laws of the country.
I'm not going to defend her extreme enthusiasm for personal weaponry, but it's a fair statement that few of America's crime problems are due to people with properly licensed guns. Some deranged people have gunned down people on campuses, but I'm not aware of any of them who had a concealed weapons permit. Statistically, it would make more sense to require everyone attending classes to pass the test of earning such a permit.
But I digress. More important is Ms Gillibrand's opposition to the bailout last fall. Representative Peter DeFazio (D-Oregon) also opposed it, and he's fairly well established in the progressive wing of his party. We're used to Peter being an heir to the maverick Oregonian tradition, a much longer established theme than that of Arizona or Alaska. New York should be able to tolerate some dissent, even with their dependence on the financial industry that was bailed out. After all, Gillibrand and DeFazio lost and the bailout passed.
And interestingly, the consequences that it was supposed to prevent just seem to keep on coming down the pike. The taxpayers have forked over hundreds of billions, hundreds of billions are to follow, and yet bank lending is tight, bank solvency is questionable, the stock market has dropped to the area that people were fretting about, and generally everything stinks.
I'll be interested to hear her position on the stimulus, a much more benign word than "bailout." I'm getting very skeptical myself. It all seems like a Ponzi scheme, where we keep borrowing money to pay interest on what we borrowed before while distributing bread and circuses to the mob.
Rather than being a formula for recovery, it looks a lot more like a guarantee that there will never be one. Because we're only able to sell all this federal paper because people are so loath to invest in anything else. But if things once start to go back up, there's going to want their money back in order to invest in alternatives, and the treasury won't be able to handle it.
Some day we're going to have a run on the people we've designated to prevent runs on banks. I have no idea what happens next.
She's catching flak for her opposition to illegal immigration, for which she has earned the term "xenophobe." Note that senators are sworn to uphold the laws of the country.
I'm not going to defend her extreme enthusiasm for personal weaponry, but it's a fair statement that few of America's crime problems are due to people with properly licensed guns. Some deranged people have gunned down people on campuses, but I'm not aware of any of them who had a concealed weapons permit. Statistically, it would make more sense to require everyone attending classes to pass the test of earning such a permit.
But I digress. More important is Ms Gillibrand's opposition to the bailout last fall. Representative Peter DeFazio (D-Oregon) also opposed it, and he's fairly well established in the progressive wing of his party. We're used to Peter being an heir to the maverick Oregonian tradition, a much longer established theme than that of Arizona or Alaska. New York should be able to tolerate some dissent, even with their dependence on the financial industry that was bailed out. After all, Gillibrand and DeFazio lost and the bailout passed.
And interestingly, the consequences that it was supposed to prevent just seem to keep on coming down the pike. The taxpayers have forked over hundreds of billions, hundreds of billions are to follow, and yet bank lending is tight, bank solvency is questionable, the stock market has dropped to the area that people were fretting about, and generally everything stinks.
I'll be interested to hear her position on the stimulus, a much more benign word than "bailout." I'm getting very skeptical myself. It all seems like a Ponzi scheme, where we keep borrowing money to pay interest on what we borrowed before while distributing bread and circuses to the mob.
Rather than being a formula for recovery, it looks a lot more like a guarantee that there will never be one. Because we're only able to sell all this federal paper because people are so loath to invest in anything else. But if things once start to go back up, there's going to want their money back in order to invest in alternatives, and the treasury won't be able to handle it.
Some day we're going to have a run on the people we've designated to prevent runs on banks. I have no idea what happens next.
Sunday, January 18, 2009
Statistics and rare events
People with a fondness for statistical foolishness should check out Statistics.org for a regular dose of the follies perpetrated in the media. Sometimes ESPN serves the same purpose. A writer there commented that in a match between two pro teams, one of them was coming up against the "law of averages" because they'd already won the previous two games.
But in addition to the general misuse of statistics, there is also the problem of a general disregard for the wings of a normal distribution. Unlikely events happen, or to put it another way, the law of averages says that sooner or later, things that seem unlikely do in fact happen. Maybe not often, maybe not soon, but they will happen.
The problem with public fiscal policy is that it's impossible to impress that fact on the voting public. They will always favor the solution that discounts what they deem to be unlikely if there are short-term rewards. Such as having happy public employees, who are promised secure pensions at a rate that presumes no evil economic periods in the future, without enough taxpayer contributions to ensure the result.
All across America, there are public entities who made big promises that they now can't keep. Not the feds, of course, who simply print whatever they need, but at the state, county, and local levels, disaster looms. It's one thing to hope for an 8% ROI on pension assets, quite another to bet the taxpayers' future on it.
There's going to be a lot of resistance from public unions, with a lot of "but you promised ..." They are right that we made the promises and hired politicians on the basis of easy answers. On the other hand, we simply can't fulfill those promises and compromises are going to be made or bankrupcies will occur.
But in addition to the general misuse of statistics, there is also the problem of a general disregard for the wings of a normal distribution. Unlikely events happen, or to put it another way, the law of averages says that sooner or later, things that seem unlikely do in fact happen. Maybe not often, maybe not soon, but they will happen.
The problem with public fiscal policy is that it's impossible to impress that fact on the voting public. They will always favor the solution that discounts what they deem to be unlikely if there are short-term rewards. Such as having happy public employees, who are promised secure pensions at a rate that presumes no evil economic periods in the future, without enough taxpayer contributions to ensure the result.
All across America, there are public entities who made big promises that they now can't keep. Not the feds, of course, who simply print whatever they need, but at the state, county, and local levels, disaster looms. It's one thing to hope for an 8% ROI on pension assets, quite another to bet the taxpayers' future on it.
There's going to be a lot of resistance from public unions, with a lot of "but you promised ..." They are right that we made the promises and hired politicians on the basis of easy answers. On the other hand, we simply can't fulfill those promises and compromises are going to be made or bankrupcies will occur.
Fixing Derivatives and Short Selling
I'm not a big fan of government regulation. It's a necessary evil at times, but it should be a last resort.
We've been through a vast problem with derivatives, those arcane financial instruments through which people "invest" in anticipation of certain financial results. The problem is that supposedly conservative financial institutions got involved and wound up betting that certain outcomes were statistically insignificant. Those improbable events have come to pass and the banks and brokerages who became entangled are dragging down a system that the economy actually needs.
I think there's a simple way out. The IRS has a simple policy on gambling income. If you make money gambling, you must report it as income. If you win some and lose less, you're only taxed on the net that you win. But you have net losses, don't come crying to the IRS. There's no offset against other income for gambling losses.
Certain types of financial trades smell of speculation but can be reasonably included in regular economic activity. I may buy oil futures without actually wanting to take delivery. I may buy shares in a company I don't believe will ever make a profit, but which I think will look good enough that I can sell for a gain after three months.
But these are still legitimate, since the economy depends on people buying and selling oil and shares in companies. Other types of trades have no such cover. Consider futures trading on the Dow Jones Industrial Index. It's a simple gamble, entered into by two parties, about a future number. Not all that much different from the numbers racket that the Mafia used to run.
Or short selling. People who buy stocks may have different motivations, but the original issurance of shares and the subsequent trading of those shares is a vital part of capitalism. Short selling has no such purpose. The economy needs people to take chances that a company will succeed, but not that it will fail.
Without any government regulation, the entire problem could be fixed by having the IRS treat all gambling the same. It's much simpler than a transaction tax and avoids putting penalties on legitimate activity. But if I invest in DJIA futures or I sell Bank of America short, that's gambling and the normal IRS rules should apply.
It's always been obvious that when people say they are against drugs, they only mean drugs not manufactured by people with shares trading on Wall Street. The two most dangerous drugs in America are alcohol and nicotine. The worst form of gambling is derivatives. In both cases, Wall Street gets preferential treatment over the common man. We should level the playing field.
We've been through a vast problem with derivatives, those arcane financial instruments through which people "invest" in anticipation of certain financial results. The problem is that supposedly conservative financial institutions got involved and wound up betting that certain outcomes were statistically insignificant. Those improbable events have come to pass and the banks and brokerages who became entangled are dragging down a system that the economy actually needs.
I think there's a simple way out. The IRS has a simple policy on gambling income. If you make money gambling, you must report it as income. If you win some and lose less, you're only taxed on the net that you win. But you have net losses, don't come crying to the IRS. There's no offset against other income for gambling losses.
Certain types of financial trades smell of speculation but can be reasonably included in regular economic activity. I may buy oil futures without actually wanting to take delivery. I may buy shares in a company I don't believe will ever make a profit, but which I think will look good enough that I can sell for a gain after three months.
But these are still legitimate, since the economy depends on people buying and selling oil and shares in companies. Other types of trades have no such cover. Consider futures trading on the Dow Jones Industrial Index. It's a simple gamble, entered into by two parties, about a future number. Not all that much different from the numbers racket that the Mafia used to run.
Or short selling. People who buy stocks may have different motivations, but the original issurance of shares and the subsequent trading of those shares is a vital part of capitalism. Short selling has no such purpose. The economy needs people to take chances that a company will succeed, but not that it will fail.
Without any government regulation, the entire problem could be fixed by having the IRS treat all gambling the same. It's much simpler than a transaction tax and avoids putting penalties on legitimate activity. But if I invest in DJIA futures or I sell Bank of America short, that's gambling and the normal IRS rules should apply.
It's always been obvious that when people say they are against drugs, they only mean drugs not manufactured by people with shares trading on Wall Street. The two most dangerous drugs in America are alcohol and nicotine. The worst form of gambling is derivatives. In both cases, Wall Street gets preferential treatment over the common man. We should level the playing field.
Is The Stimulus Another Bubble?
It seems that more Americans favor the big burst of federal spending to regenerate the U.S. economy when tax cuts are included. The number of opponents falls by about one third under those conditions.
I'm starting to think we're looking at the third bubble in a decade. When the dot com mania was peaking, I noticed that Amazon was valued at more than the total revenue of all bookstores in America from 1776 to date. Forget profit, just revenue.
Then after the stock market crashed, we saw people shifting their assets into real estate. It became a retirement plan for many Americans to buy a larger house than they could realistically afford, live in it for a decade, and sell it to someone else for enough money to retire on.
That's a plan that may work for an individual, but it doesn't work for the economy as a whole. Eventually, we learned that what the economy can't afford, huge numbers of individuals can't benefit from.
So here we are in the wreckage of that insanity and a third bubble seems to be developing. We've screwed up and lost much of our wealth as well as personal income. So we'll have the government print a bunch more money and everything will turn out fine.
Of course, we're dressing this up and not calling it printing money, but it works out the same. The government acts on our behalf and we pay an even smaller portion of it. President Bush refers to the aftermath of the immediate past bubble as a hangover. Nobody is talking about what the aftermath of printing a few trillion extra dollars and injecting them into the economy will be.
In September when TARP was proposed, commentators were speaking darkly of future years in which our taxes would rise or government services would fall as a result. Nobody says that anymore. We are bailing out segments of the economy, maintaining government services, and reducing taxes now. Maybe later, we'll increase them, but only back to where they were.
Are we thinking that this stimulus will put the economy back above its old trend line, so that future tax revenues, at old rates, will generate the cash to repay all this borrowing? Not likely.
I've long held the view that inflation is God's way of restoring reality when people insist on doing things on a large scale that just don't compute. This is one of those cases, leading me to the following bold prediction. The stimulus won't work well. We are headed further down and government spending won't do much to reverse it.
Eventually, people who are loaning money to the government at trivial rates will calm their nerves and want to do something different. At that point, interest rates will soar. I don't have a crystal ball, but 2010 is not going to be one of those spiffy, zippy recoveries from a recession that people are so hoping for.
I'm starting to think we're looking at the third bubble in a decade. When the dot com mania was peaking, I noticed that Amazon was valued at more than the total revenue of all bookstores in America from 1776 to date. Forget profit, just revenue.
Then after the stock market crashed, we saw people shifting their assets into real estate. It became a retirement plan for many Americans to buy a larger house than they could realistically afford, live in it for a decade, and sell it to someone else for enough money to retire on.
That's a plan that may work for an individual, but it doesn't work for the economy as a whole. Eventually, we learned that what the economy can't afford, huge numbers of individuals can't benefit from.
So here we are in the wreckage of that insanity and a third bubble seems to be developing. We've screwed up and lost much of our wealth as well as personal income. So we'll have the government print a bunch more money and everything will turn out fine.
Of course, we're dressing this up and not calling it printing money, but it works out the same. The government acts on our behalf and we pay an even smaller portion of it. President Bush refers to the aftermath of the immediate past bubble as a hangover. Nobody is talking about what the aftermath of printing a few trillion extra dollars and injecting them into the economy will be.
In September when TARP was proposed, commentators were speaking darkly of future years in which our taxes would rise or government services would fall as a result. Nobody says that anymore. We are bailing out segments of the economy, maintaining government services, and reducing taxes now. Maybe later, we'll increase them, but only back to where they were.
Are we thinking that this stimulus will put the economy back above its old trend line, so that future tax revenues, at old rates, will generate the cash to repay all this borrowing? Not likely.
I've long held the view that inflation is God's way of restoring reality when people insist on doing things on a large scale that just don't compute. This is one of those cases, leading me to the following bold prediction. The stimulus won't work well. We are headed further down and government spending won't do much to reverse it.
Eventually, people who are loaning money to the government at trivial rates will calm their nerves and want to do something different. At that point, interest rates will soar. I don't have a crystal ball, but 2010 is not going to be one of those spiffy, zippy recoveries from a recession that people are so hoping for.
Friday, January 16, 2009
Fighting the Great Depression Again
There's a quip about military thinking that says that every general staff devotes itself to preparing to fight the last war. As the government piles on more experts on the Great Depression, Bernanke at the Fed and now Christina Romer for the Council of Economic Advisors, I can't escape the feeling that the government is assiduously preventing the events of 1932.
But while it's possible to criticize Hoover and his ilk for making the situation worse through fiscal policy, there is no established method for doing any better. There's a lot of theory, but nobody has actually headed off a Depression through government action.
So when folks say that they'll do as much as it takes, they assume that what they are doing is what it takes. But I see the economy as the equivalent of a couch potato, waking up one day fat and unfit and having trouble just walking around. The cure would be diet and exercise. A temporary substitute would be meth, but sooner or later, you either crash from your meth high or die.
Only a little while ago, everyone would have agreed that running trillions of dollars into debt would not be good. Now it can be discussed almost nonchalantly. When interest rates start back up, with the extra few trillion of debt obligations, the feds may find themselves spending a trillion a year on interest. Does nobody else worry?
But while it's possible to criticize Hoover and his ilk for making the situation worse through fiscal policy, there is no established method for doing any better. There's a lot of theory, but nobody has actually headed off a Depression through government action.
So when folks say that they'll do as much as it takes, they assume that what they are doing is what it takes. But I see the economy as the equivalent of a couch potato, waking up one day fat and unfit and having trouble just walking around. The cure would be diet and exercise. A temporary substitute would be meth, but sooner or later, you either crash from your meth high or die.
Only a little while ago, everyone would have agreed that running trillions of dollars into debt would not be good. Now it can be discussed almost nonchalantly. When interest rates start back up, with the extra few trillion of debt obligations, the feds may find themselves spending a trillion a year on interest. Does nobody else worry?
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