The Current Wisdom: ‘Dumb People’ Syndrome
The Current Wisdom is a series of monthly articles in which Patrick J. Michaels, director of the Center for the Study of Science, reviews interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press. Occasionally — as in this edition — we examine recent global warming perceptions that are at odds with reality.
“The habitability of this planet for human beings really is at risk.”
–Al Gore, July 18, 2007
The notion that people just can’t adapt to change (and therefore that governments must regulate change) is known as “Dumb People Syndrome” (DPS). Given the fact that the planet is “habitable” (meaning that there large numbers of people) over a mean annual temperature range of approximately 40°C , Gore’s statement—which is about a few degrees C, at best—is quintessential DPS.
DPS has its subtypes, such as “Dumb Farmer Syndrome”, in which there’s agricultural Armageddon as the world’s farmers fail to adapt to warming conditions. It’s not only preposterous, it’s inconsistent with history.
Farmers aren’t dumb, and there are incentives for their supply chain—breeders, chemical manufacturers, equipment companies, etc.—to produce adaptive technologies. Corn is already much more water-use efficient than it was, thanks to changes in genetics, tillage practices, and farm equipment. The history of U.S. crop yield bears strong witness (Figure 1).
A look at the horrible crop year of 2012 is instructive. Corn yield drops about 38 bushels per acre from what’s known as the “technological trend line.” Because the “expected” yield—thanks to technology—with good weather is so high (around 160 bushels/acre), that’s a drop of about 24%, which is simply unremarkable when compared to the other lousy weather years of 1901 (36%), 1947 (21%), 1983 (29%) and 1988 (30%). Did we mention that the direct fertilization effect of atmospheric CO2 has resulted in a corn yield increase of approximately seven per cent?
Most assessments of the impacts of climate change give some credence to DPS. Below is one of the “Key Findings” from the report Global Climate Change Impacts in the United States produced by the U.S. Climate Change Global Change Research Program (USGCRP), which was used as a major support for the U.S. Environmental Protections Agency’s “Endangerment Finding” that human carbon dioxide emissions are a threat to health and welfare. According to the USGCRP:
Climate Sensitivity Going Down
Global Science Report is a weekly feature from the Center for the Study of Science, where we highlight one or two important new items in the scientific literature or the popular media. For broader and more technical perspectives, consult our monthly “Current Wisdom.”
“Climate sensitivity” is the amount that the average global surface temperature will rise, given a doubling of the concentration of atmospheric carbon dioxide (CO2) in the atmosphere from its pre-industrial value. This metric is the key to understanding how much global warming will occur as we continue to burn fossil fuels for energy and emit the resultant CO2 into the atmosphere.
The problem is that we don’t know what the value of the climate sensitivity really is.
In its Fourth Assessment Report, released in 2007, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) had this to say about the climate sensitivity:
It is likely to be in the range 2°C to 4.5°C with a best estimate of about 3.0°C, and is very unlikely to be less than 1.5°C. Values substantially higher than 4.5°C cannot be excluded…
In IPCC parlance, the term “likely” means a probability of greater than 66% and “very likely” means a greater than 90% change of occurrence. The IPCC’s 90% range for the climate sensitivity includes values at the low end which, if proven true, would engender very little concern over our use of fossil fuels as a primary energy source, and values at the high end would generate calls for frantic efforts (which would likely fail) to lower carbon dioxide emissions.
While there has been a lot of effort expended to better constrain estimates of sensitivity over the past several decades, little progress has been made in narrowing the range. The IPCC’s First Assessment Report, released back in 1990, gave a range of 1.5°C to 4.5°C. It’s not that climate science hasn’t progressed since then, but just that the advanced understanding has not led to substantially better constraints.
But what has occurred over the past several decades is that greenhouse emissions have continued to rise (in fact, half of the total anthropogenerated carbon dioxide emissions have been since the mid-1980s), and global temperature observations have continued to be collected. We now have much more data with which to use to try to determine the sensitivity.
While global carbon dioxide emissions continue to rise year-over-year (primarily driven by the rapid growth in developing countries such as China), global temperatures have not kept up—in fact, there has been little to no overall global temperature increase (depending upon the record used) over the past decade and a half.
That doesn’t bode well for the IPCC’s high-end temperature sensitivity estimates. The scientific literature is now starting to reflect that reality.
Never mind that Pat Michaels and I published a paper in 2002 showing that the sensitivity lies near the low side of the IPCC’s range. This idea (and those in similar papers subsequently published by others) had largely been ignored by the “mainstream” scientists self-selected to produce the IPCC Assessments. But new results supporting lower and tighter estimates of the climate sensitivity are now appearing with regularity, a testament to just how strong the evidence has become, for such results had to overcome the guardians of the IPCC’s so called “consensus of scientists”, which the Climategate emails showed to be less than gentlemanly.
Figure 1 shows the estimates of the climate sensitivity from five research papers that have appeared in the past two years, including the recent contributions from Ring et al. (2012) and van Hateren (2012)—both of which put the central estimate of the climate sensitivity at 2°C or lower, values which are at or beneath the IPCC’s current “likely” range.
The IPCC is scheduled to release its Fifth Assessment Report in 2013. We’ll see whether these new, lower, and more constrained estimates of climate sensitivity that are increasing populating the literature result in a modification of the IPCC estimates, or whether the IPCC authors manage to wave them all away (or simply ignore them, as was the case with our 2002 paper).
Regardless of how the IPCC ultimately assesses climate science in 2013, the fact of the matter is that there is growing evidence that anthropogenic climate change from the burning of fossil fuels is not going to turn out to be as much as climate alarmists have made it out to be.
References:
Annan, J.D., and J.C. Hargreaves, 2011. On the generation and interpretation of probabilistic estimates of climate sensitivity. Climatic Change, 104, 324-436.
Lindzen, R.S., and Y-S. Choi, 2011. On the observational determination of climate sensitivity and its implications. Asia-Pacific Journal of Atmospheric Sciences, 47, 377-390.
Michaels, P.J., P.C. Knappenberger, O.W. Frauenfeld, and R.E. Davis, 2002. Revised 21st century temperature predictions. Climate Research, 23, 1-9.
Ring, M.J., et al., 2012. Causes of the global warming observed since the 19th century. Atmospheric and Climate Sciences, 2, 401-415, doi:10.4236/acs.2012.24035.
Schmittner, A., et al., 2011. Climate sensitivity estimated from temperature reconstructions of the Last Glacial Maximum, Science, 334, 1385-1388, doi: 10.1126/science.1203513.
Solomon, S., et al., (eds.), 2007. Climate Change 2007: The Physical Science Basis. Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, 996pp.
van Hateren, J.H., 2012. A fractal climate response function can simulate global average temperature trends of the modern era and the past millennium. Climate Dynamics, doi:10.1007/s00382-012-1375-3.
Tarullo: No Return to Glass-Steagall
Finally, a senior banking regulator has acknowledged the so-called repeal of Glass-Steagall had nothing to do with the 2008 financial crisis. In a recent speech, Fed governor Daniel Tarullo noted that most firms at the center of the financial crisis in 2008 were either stand-alone commercial banks or investment banks, and therefore would not have been affected by the repeal. Tarullo also expressed concern that a reinstatement of Glass-Steagall would be costly for banks and their clients and would result in less product diversification.
Of all the myths underpinning the response to the 2008 financial crisis, one of the most persistent is that the repeal of Glass-Steagall was a major contributing factor. So Tarullo’s comments are heartening. But still, he misses out one key piece of the puzzle, namely, that multifunctional, diversified financial firms are not just more efficient and cost-effective than their more specialized counterparts; they are frequently more stable.
The banks that got into trouble in 2008 did so because they concentrated their risk in one kind of asset. The firms that did comparatively well throughout the crisis avoided this particular mistake and were able to come to the rescue, admittedly with some government assistance, of their ailing counterparts—think Wells Fargo or JPMorgan. Firms fail when they make bad investment decisions, regardless of their structure.
The U.S. Postal Service vs. Greece
Postmaster General Michael Donahoe has occasionally remarked that the U.S. Postal Service will end up in a Greek-like crisis if Congress doesn’t allow it to reduce costs and operate with more flexibility. Michael Schuyler, now with the Tax Foundation, examines the analogy between Greece and the USPS in a paper that was released on Monday.
The “good” news for the USPS is that its fiscal situation isn’t as bad as what the Greeks are dealing with—at least not yet. Whereas previous Greek governments intentionally understated deficits and debt until it caught up to the country in 2009, the USPS hasn’t tried to hide the fact that its prospects are bleak. In addition, the USPS has been able to shed excess workers (through attrition) over the past several years, while recent attempts by the Greek government to cut its bloated workforce have been met with rioting.
The problem is that powerful interests maintain convenient opinions on some of biggest issues facing the USPS. Mike singles out for particular scrutiny the postal employee unions for continuing to pretend that the USPS would be alright if it didn’t have to make annual payments to “prefund” retiree health care benefits. Both of us have been critical of this claim, but I think Mike’s latest reality check is worth sharing in its entirety:
If Congress did not require the Service to put aside money to pay the costly health benefits it promises its workers after they retire, the deficits it reported in the last several years would have been substantially reduced and so would its reported deficits in the near future. Some stakeholders claim from this that the Service’s problems are artificial, the fault of a funding requirement Congress imposed in 2006 as part of the Postal Accountability and Enhancement Act (PAEA, P.L. 109-435). They assert that the Service is, in reality, in fairly good shape. For example, Fredric Rolando, president of the National Association of Letter Carriers, declared, “The Postal Service has performed well in operational terms, nearly breaking even despite the worst recession in 80 years.” It should be noted, however, that even if the RHBF is entirely ignored, the Service would have lost $4.8 billion in 2012, $5.1 billion in 2011, $3.0 billion in 2010, and $2.4 billion in 2009. Losses of $4.8 billion, $5.1 billion, $3.0 billion, and $2.4 billion caused by problems other than the RHBF do not equal performing well. No wonder Postmaster General Donahoe characterized as “irresponsible” the argument that the Service would be fine except for retiree health benefit contributions and said, “The idea that if we just eliminate the prefunding…we’ll be OK—wrong!”
Mr. Rolando and others also argue that because the RHBF “already has $45 billion [of assets], enough to pay for decades of future retiree health care,” Congress should not require the Service to make further contributions. The flaw in that argument is that although its projected assets in the fund were $45.7 billion at the end of 2012, its projected liabilities were $93.6 billion, leaving an unfunded liability of $47.8 billion. If Congress let it cease contributing to the retiree health fund without also enacting reforms to dramatically reduce projected liabilities, it would virtually guarantee a huge taxpayer bailout of the Service down the road. The call for a prolonged contribution holiday is reminiscent of the approach that has landed the Greeks in so much trouble.
North Korea’s Hyperinflation Legacy, Part II
Following North Korean supreme leader Kim Jong-il’s death last December, many around the world had high hopes that his successor (and son), Kim Jong-un, would launch much-needed economic and political change. Unfortunately, in the months since the new supreme leader assumed power, little has changed for North Koreans outside of the small, communist upper class. The failed communist state has not delivered on its advertised economic reforms.
One thing it has delivered, however, is weapons, which have flowed through its illegal arms-trafficking pipelines. And, if that’s not enough, North Korea is planning another missile test in the near future. But, as it turns out, the only thing that is certain to blast off is inflation.
In my recent blog post, I pointed out that one of North Korea’s communist legacies is hyperinflation (in addition to starvation). Indeed, hyperinflation may soon plague North Korea once again.
From what little data are available, it would appear that, in the span of six months, the price of rice has increased by nearly 130%. This is par for the course in North Korea, where the price of rice has increased by roughly 28,500% over the last three years (see the chart below).
While the North Korean government worries about rocket launches and how to supply Syria with weapons, and while its archaeologists “discover” ancient unicorn lairs, its citizens’ food bowls are becoming quite expensive to fill. The supreme leader’s priorities, it would seem, are supremely out of whack.
Obama Mulling Response to State Marijuana Initiatives
From today’s New York Times:
Senior White House and Justice Department officials are considering plans for legal action against Colorado and Washington that could undermine voter-approved initiatives to legalize the recreational use of marijuana in those states, according to several people familiar with the deliberations.
Even as marijuana legalization supporters are celebrating their victories in the two states, the Obama administration has been holding high-level meetings since the election to debate the response of federal law enforcement agencies to the decriminalization efforts.
Next week Cato will host a policy forum to explore the legal doctrine of federal supremacy, state prerogatives under the Tenth Amendment, and other issues related to drug policy reform. Asa Hutchinson, former head of the DEA and Vanderbilt University law professor Robert Mikos will be making presentations. Event details are here.
Richard Branson has some thoughts here. And check out the new film, “Breaking the Taboo.”
International Solidarity? Not So Much.
Trade unions and other workers’ rights groups often oppose trade liberalization, especially agreements with developing countries where labor is relatively cheap. To have any chance of securing organized labor’s support, preferential trade deals must, they insist, include references to International Labor Organization norms (which include things like the right to organize and the right to bargain collectively ).
The labor groups commonly give two plausible-sounding justifications for these demands: First, the requirements are supposed to protect American workers in import-competing industries from facing competition from “sub-standard” employers abroad. Second, they say that access to the U.S. market is a compelling incentive to encourage countries that would not normally sign up to ILO standards to do so. In other words, there is an element of international union solidarity in their insistence on enforceable labor standards.
But a telling quote in a story in today’s Inside U.S. Trade [paywall] exposes that explanation as being…shall we say…incomplete:
The International Brotherhood of Teamsters could oppose a final Trans-Pacific Partnership (TPP) deal if it grants more dairy market access and threatens the jobs of 31,000 dairy workers the union represents in the United States, Teamsters legislative representative Mike Dolan said in a Dec. 7 presentation to negotiators here.
He highlighted that the union has no “beef” with Fonterra [a New Zealand dairy cooperative] and recognizes it as a global leader on labor practices. Fonterra has adopted a “global labor agreement” that adheres to principles found in key International Labor Organization conventions, such as the right to freedom of association and collective bargaining, he said. In this respect, Dolan said Fonterra is a “model” for the U.S. dairy industry.
But Dolan stressed that opening the U.S. market to New Zealand, the largest dairy exporter in the world, could have a dramatically negative impact on an industry that is already being forced to sell much of its product well under the price of production. [emphasis added]
The TPP is being negotiated with a number of different countries, some of which are not as labor-friendly as New Zealand, so clearly the Teamsters’ opposition is more nuanced than the above quotes suggest (as the full article makes clear). But Dolan’s admission that his union opposes increased dairy imports from New Zealand even though it is “a model” of labor rights is telling. It suggests that trade negotiators wanting to appease the unions by more explicitly incorporating stronger labor protections are embarking on something of a Sisyphean task, at least so long as import competition is the real driver of organized labor’s opposition, as it appears to be here.
NJ Gov. Vetoes ObamaCare Exchange; SD Gov. Rejects Medicaid Expansion
On the same day he met with President Barack Obama (D) at the White House, New Jersey Gov. Chris Christie (R) vetoed a bill that would have implemented a key part of ObamaCare:
New Jersey Gov. Chris Christie (R) became the latest state chief executive to rebuff President Barack Obama’s health care reform law Thursday by vetoing a bill that would have created an online marketplace for uninsured residents to shop for health insurance.
For the second time this year, Christie rejected legislation passed by New Jersey’s Democratic-controlled legislature that would have established a state-run health insurance exchange under Obamacare.
Meanwhile, South Dakota Gov. Dennis Daugaard (R) said his state will not implement ObamaCare’s Medicaid expansion:
There are far too many unanswered questions for me to recommend adding 48,000 adults to the 116,000 already on our rolls.
The Huffington Post reports that 19 states have refused to establish an Exchange, and 9 states have refused to expand Medicaid. I’ve heard higher counts, though.
A Perfect Holiday Album for the Keynesians on Your Christmas List
I’m understandably partial to my video debunking Keynesian economics, and I think this Econ 101 video from the Center for Freedom and Prosperity does a great job of showing why consumer spending is a consequence of growth, not the driver.
But for entertainment value, this very funny video from EconStories.tv puts them to shame while also making important points about what causes economic growth.
The video was produced by John Papola, who was one of the creators of the famous Hayek v Keynes rap video, as well as its equally clever sequel.
Trade Will Do More than Sanctions for Russian Rights
The Senate will vote today to grant permanent normal trade relations to Russia. The House already voted overwhelmingly to do so last month by a vote of 365-43. The Senate vote, followed by certain presidential signature, will enable the United States to take advantage of Russia’s WTO membership, which it secured last December after 18 years of negotiation. I’ve written before about why it took Congress so long to act on something despite its wide bipartisan support. The culprits include self-defeating election year politics and foreign policy timidity.
Substantively, the debate has been about how best to sanction human rights abuses in Russia and/or elsewhere. Should the bill impose financial and travel sanctions on Russian officials who’ve mistreated their people or on all foreign officials from all countries who we think have done so? The sanctions have nothing to do with trade but they seem relevant because granting PNTR requires Congress to repeal the Jackson-Vanik Amendment that makes trade with the Soviet Union conditional on the latter not restricting Jewish emigration in 1970s.
But the bill would do more for human rights in Russia if it didn’t include any sanctions at all. Rather than cause trouble with Russia (which has said it will respond strongly to any sanctions), those in Congress wanting to look like they care about human rights could have simply and correctly pointed out the substantial benefits to the Russian people that come from freer trade with the United States.
Trade liberalization is, of course, not a panacea for corruption and official lawlessness in Russia, but it does actually and directly make the people of Russia more free. Moreover, a wealthier and more cosmopolitan population is more likely to demand accountability from its leaders. More trade on market terms will connect the Russian people with the world, increasing their expectations and exposing their plight.
WTO membership will require Russia to be more transparent and enable foreign countries to use law, rather than politics, to pressure Russia to further liberalize its economy. PNTR will ensure that the United States is a part of that effort. Poking Russian officials in the eye with sanctions is at best merely emotionally satisfying and at worst counterproductive to helping the Russian people hold their own officials accountable.
A SANE Immigration Reform Proposal
Arizona has been the source of immigration contention for years. Representative Jeff Flake (R) and Senator McCain (R) have been at the center of many recent immigration reform proposals before the firestorm over the Legal Arizona Workers Act and SB 1070. From former governor and now head of DHS Janet Napolitano (D) to current governor Jan Brewer (R) and Sheriff Joe Arpaio (R) of Maricopa County, Arizona is home to politicians who have made their careers in immigration.
It’s only fitting that now reform plans are coming from the state. Arizona Employers for Immigration Reform, a non-partisan immigration reform group, came out with just such a plan yesterday called SANE. It is similar to past immigration enforcement proposals and includes the 4 legs of the stool common to all such plans:
1. Security increases on the border.
2. Account for unauthorized immigrants here through earned legalization.
3. Necessary increases in lawful immigration and work visas.
4. Employment sanctions and other reforms.
This is merely the first plan of the new season and I predict there will be many more that are similar. Border security is already at historic heights, unauthorized immigration at lows, and employer sanctions and workplace identification requirements like E-Verify have reduced the liberty of American workers without reducing the size of the informal labor economy. However, increasing lawful immigration and a large and flexible guest worker visa, depending on the details, will be the most important components of any reform that will greatly diminish unauthorized immigration going forward.
Teachers — and Unions — Like Profits, Too
By now you’ve probably seen the economically ignorant, Ed Asner-narrated polemic from the California Federation of Teachers that “explains” how the rich hurt everyone because they are just so darn greedy. At one point in the original version the already loathsome Richy Rich actually goes so far as to relieve himself on the middle- and lower-class people above whom he rises on his pile of cash. Don’t look for that “trickle down” visual now, though. It seems the CFT has edited it out after getting, shall we say, less than positive reviews for it. The rest of the tedious allegory, however, isn’t much more subtle.
It’s the reality-denying hypocrisy of it all, though, that is so grating. You see, teachers and unions want to profit just as much as reviled “Wall Street fat cats.”
“What?!” I can hear the teachers reading this scream. “I don’t do this for the money! How dare you, sir!”
Mr. and Mrs. Teacher, please bear with me for a moment. I mean you no harm.
First, undertsand what profit is. Basically, it is making more from providing something than it costs to produce it. So if you are a teacher and use your earnings to buy food, housing, cable television, garden gnomes, airplane tickets, plastic surgery – anything — you are making a profit. And on an hourly basis likely a good profit, outpacing accountants and auditors, insurance underwriters, registered nurses, and other professionals. And that is without considering quite generous benefit packages public school employees often get.
Those concrete things, though, are not the compensation limits. There’s also substantial job security that comes with tenure, and in conjunction with teaching not being especially hard to break into, relatively little personal risk. Contrast that to entrepreneurs — you know, people who sometimes become fat cats — who often risk much of what they have to try new things that often end in failure. Such risk is a huge cost teachers simply don’t deal with.
In addition, while working with children is often very challenging, it can also be very rewarding. Who doesn’t get a kick out of the antics, questions, and comments of little kids? (I mean, they say the darndest things, right?) Or enjoy seeing their smiling faces. And when they get older, it can be very gratifying to guide them or inspire them as they contemplate what they want to do with their lives. In contrast, running a business involves often stultifying detail work such as running payroll, securing office space, keeping “the books,” dealing with detailed government regulations, etc.
Finally, and perhaps most importantly, there is nothing wrong with making a profit! Indeed, being profitable is generally the key to knowing that what you are doing is in demand — that you are providing something that makes other people better off — and, because you are earning more than the cost of production, you are doing something sustainable. So teachers, don’t disdain profits — embrace them!
Perhaps, though, be concerned about how you are getting them.
While there is far too much crony capitalism at work — businesses enriching themselves through government and politics — in general, companies can only make profits by earning the voluntary business of customers. In other words, they have to provide something people want, at a cost they are willing to pay. Payers have to feel they are better off.
Not so for public school teachers. Rather than getting paid by voluntary customers, they are ultimately paid with money extracted through government. Whether taxpayers like it or not, they are forced to pay for public schools. Which is, of course, why teachers’ unions are so deeply involved in politics. They want to take people’s money no matter what.
The real irony is that many teachers could probably get paid more — in Korea some get MUCH more – were free enterprise rather than socialism allowed to reign. But we have a government monopoly, which is ripe for union control. One system, without any real competition, is best suited to have one employee rep. Allow people to freely choose among autonomous schools, however, and schools would have big incentives to pay the best teachers well because providing a great service — not throwing around political weight — would be the key to success.
Teachers, ultimately, are human beings, and on the whole almost certainly enjoy profit as much as anyone else. That’s not a problem. The problem is how they — and much worse, their unions — make it.
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