Prof. Roger Pielke, Jr., at CU’s Center for Science and Technology Policy Research has testified numerous times before the U.S. Congress on climate change and its economic impacts. His 2013 Senate testimony featured the claim, often repeated, that it is “incorrect to associate the increasing costs of disasters with the emission of greenhouse gases.”
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Rajendra Pachauri’s hockey stick has a few problems, according to Mark Steyn. We noted some of the issues with this fine gentleman half a decade ago and more. Pull quote from 2007: “If there’s no action before 2012, that’s too late, there is not time.” Evidently the “action” he was talking about then was seriously misunderstood.
Greece and its lenders reached a temporary deal late Feb. 20. The agreement was carefully crafted to make both Athens and the reluctant governments of Northern Europe happy, but it comes at the price of postponing a resolution of the crucial issues. As a result, a “Grexit” from the eurozone will be deferred in the immediate term, but the crisis is far from over.
Greece and the Eurogroup agreed to extend Athens’ bailout program for four months. The agreement keeps Greece under the protective umbrella of the European Central Bank, the European Union and the International Monetary Fund. The ECB will continue to provide liquidity for Greek banks, while the European Union and the IMF will make funds available should Greece need them.
However, this deal has left many questions unanswered. First, Greece promised to present a list of economic reforms — probably focused on cracking down on tax evasion and corruption and reforming Greece’s public administration — by Feb. 23. This list will be further detailed and then agreed upon with the European Union and the IMF by the end of April. In order for Greece to receive the next tranche of the bailout, the European Union and the IMF will have to accept these proposals. (This is probably the part of the deal that made the agreement acceptable for Germany.) Still, the key source of conflict between Athens and Berlin — the specific reforms that Greece will apply in exchange for the bailout money — has only been postponed.
Second, the size of Greece’s primary surplus was also omitted in the agreement. The European Union and the IMF promised Greece to take its economic situation into account when setting a deficit target, a small victory for Athens. This issue will also become problematic again in April, when Athens is supposed to present the exact details of what it plans to do.
In the coming days, Greek Prime Minister Alexis Tsipras will have to sell the deal to the most radical members of his left-wing Coalition
Alan Greenspan: “I believe they will eventually leave. I don’t think it helps them or the rest of the eurozone — it is just a matter of time before everyone recognises that parting is the best strategy. The problem is that there there is no way that I can conceive of the euro of continuing, unless and until all of the members of eurozone become politically integrated — actually even just fiscally integrated won’t do it.” He’s right of course; it’s just a matter of time. It will be interesting to see if Tsipras can sell this mini-deal at home.
And February 22nd isn’t either. George Washington was born on February 11, 1731, according to the Julian calendar in use at the time. England and the colonies switched to the Gregorian calendar in 1752, which changed the DOB by a year and 11 days. The government moved the holiday to third Monday in the late sixties, around the time of other convenient scams. Will we ever learn?
Other matters include the enjoyable if very uneven and way too long SNL 40 show. Nice and sentimental to see the geezers. We recall that, if memory serves, NBC gave away tickets on the street for the first few shows, and we turned down tickets to show #2. That was a famous one with Paul Simon, but it seemed kinda late. Also, Jack Cashill notes what some of the now-geezers were doing back in the mid-70’s.
There’s a new book by Peter Wallison on the financial crisis of 2008. You know, Lehman Brothers and the expensive disaster that ensued. (We note in passing that Wallison seems to share our opinion of Dodd-Frank.) What’s very interesting is the range of views at Amazon. A lot of 5’s offset by a lot of 1’s. Most curious is that almost all of the 1’s come from people who have no other reviews of books or no other reviews at all, so they’re bogus. That in itself would seem to be a pretty good reason to buy the book. But here’s the question: who are the trolls???
Harvard study, page 21:
Dodd-Frank did not mitigate concerns over banking sector concentration: The top five bank-holding companies control nearly the same share of U.S. banking assets as they did in the fiscal quarter before Dodd-Frank’s passage. Meanwhile, community banks with $1 billion or less in assets have seen a significant decline, while large community banks have also suffered losses, albeit at a less drastic pace. The rapid rate of consolidation away from community banks that has occurred since Dodd-Frank’s passage is striking given that this regulatory overhaul was billed as an effort to end “too-big-to-fail.”
Well, it sure dealt well with the pressing issues of Congolese minerals and Chinese drywall.
By the end of the century, assuming current CO2 emissions trends continue until the end of the century, Helena, Mont, will see about 85 fewer freezing nights, which is comparable to Lubbock, Texas, today. Buffalo, NY, which currently experience about 124 freezing nights each year, will only see about 57 a year in 2100, making it more like Charlotte, NC. Ann Arbor, Mich, will see less than half its current number of nights below freezing (131), which is more like Huntsville, Ala(60). In fact, more than 80% of the cities we analyzed — 593 of the 697 — could see at least a 50% reduction in number of nights below freezing, and more than 20% — 145 of the 697 — could see at least a 75% reduction. There are even 28 cities, mostly those that currently experience between 10 and 20 nights below freezing, that may see at least a 90% reduction. For these cities, freezing nights will become a rare event that occurs about once a year, comparable to the current conditions in Brownsville at the southern tip of Texas.
Homewood has now turned his attention to the weather stations across much of the Arctic, between Canada (51 degrees W) and the heart of Siberia (87 degrees E). Again, in nearly every case, the same one-way adjustments have been made, to show warming up to 1 degree C or more higher than was indicated by the data that was actually recorded. This has surprised no one more than Traust Jonsson, who was long in charge of climate research for the Iceland met office (and with whom Homewood has been in touch). Jonsson was amazed to see how the new version completely “disappears” Iceland’s “sea ice years” around 1970, when a period of extreme cooling almost devastated his country’s economy.
Strong words from the Gallup CEO on the ridicuoulsly low labor force participation rate. Guy’s not with the program. What’s up with that? And the UN reports more horror from ISIS. Finally, China cut reserve requirements. That’s it. Things along the line of the UN report are so awful that words fail.
Gunmen shot and killed four health workers carrying out a polio vaccination drive Wednesday in the capital of Pakistan’s restive Baluchistan province, police officials said. The deadly shooting was the latest to target polio workers — whom Islamist militants accuse of conducting espionage in the guise of vaccination campaigns — in Pakistan, one of three countries where the disease has not been eradicated…Workers administering oral polio drops to the children are frequently attacked across Pakistan, particularly in Baluchistan, the province of Khyber Pakhtunkhwa, the port city of Karachi and the northeastern tribal areas. Gunmen shot at a polio worker outside Peshawar on Monday when he was visiting houses to administer the vaccine. Jamaat ul Ahrar, a splinter group of the Pakistani Taliban, claimed responsibility for the attack. The group later released a “policy statement” on polio saying that the vaccine is “dangerous to health and against Islam.”
it is absolutely true that I reject a notion that somehow that creates a religious war because the overwhelming majority of Muslims reject that interpretation of Islam. They don’t even recognize it as being Islam, and I think that for us to be successful in fighting this scourge, it’s very important for us to align ourselves with the 99.9 percent of Muslims who are looking for the same thing we’re looking for — order, peace, prosperity.
So vaccines are now controversial in the US as well as Pakistan? People are freaking out over 100 cases of measles? What a world! As a veteran of mumps, measles, chicken pox, German measles and similar things, our recollection is that they were no big deal, a few days off from school. We understand that there are rare acute problems, but those are the exception. Contrast that with polio, a devastating disease all of the time. The quality of a society can be measured by how well it deals with deadly or debilitating diseases. So far the US is not doing well.
Bonus fun: the cheap (and highly profitable) correlation between CO2 increases and a couple of degrees F is having significant problems. We need more witch doctors for more new things to frighten the great unwashed.
In our view, Microsoft hasn’t had a good idea since Office 97. Now we hear from Leo Laporte that tech reviewers whom he trusts say that HoloLens is great. Here’s some more info from Vox and Forbes and HBR. We don’t get it quite yet, but give us time. More interesting to think about than the low lifes stinking up the country.
Italy should consider leaving the single currency and reintroducing the lira, Welfare Minister Roberto Maroni said in a newspaper interview on Friday. Maroni, a member of the euro-skeptical Northern League party, told the Repubblica daily Italy should hold a referendum to decide whether to return to the lira, at least temporarily. He also said European Central Bank President Jean-Claude Trichet was one of those chiefly responsible for the “disaster of the euro.”
The euro “has proved inadequate in the face of the economic slowdown, the loss of competitiveness and the job crisis,” Maroni said. In this situation, the answer is to give the government greater power to defend national industry from foreign competition and “to give control over the exchange rate back to the government.”
The euro is crumbling faster than anyone thought. Oh, wait, the story above is 10 years old. Sorry, we’re just trying to be funny; actually we do think the euro is toast.
For another good laugh, check out Wretchard today. Ummm, maybe not so funny.
The company sold 74.5 million iPhones in its fiscal first quarter ended Dec. 27, while many analysts had expected fewer than 70 million. Revenue rose to $74.6 billion from $57.6 billion a year earlier.
Profit of $18 billion was the biggest ever reported by a public company, worldwide, according to S&P analyst Howard Silverblatt. Apple’s cash pile is now $178 billion, enough to buy IBM or the equivalent to $556 for every American.
Apple Chief Executive Officer Tim Cook said the Cupertino, California-based company would release its next product, the Apple Watch, in April.
The iPhone did not exist a decade ago. We wonder if official measures of productivity are way off today, much less than is actually happening. The instantaneousness of everything has its large downsides, but we think that historians may find that this current period of economic downturn and dislocation would have been far worse without the vast power and speed of these tiny talking computers.
Of course productivity is roughly defined as an increase in output when inputs remain constant. Most of the uses of the tiny computers in supply chain reductions, energy conservation and optimization, shorter and more accurate decision algorithms, etc. have yet to be discovered or implemented. Therefore, even with the ridiculousness of loons at the EPA etc., the economy might actually do well.
forecasters have projected a record snowstorm for the Northeast in the coming hours, which isn’t exactly the sort of thing that makes people think about global warming. But in declaring a state of emergency on Monday, New York Gov. Andrew Cuomo (D) noted that this type of monster storm is “part of the changing climate.”
“I’ve only been governor four years. I believe I’ve gone through more emergency disasters in four years than any governor in history has gone through,” said Cuomo. “There is a pattern of extreme weather that we have never seen before.” Cuomo cited Superstorm Sandy in 2012, which hit New York and New Jersey particularly hard, as well as the 7 feet of snow that fell on Buffalo this past November. “It’s something we have to adjust to, it’s something that’s very costly, and it’s also something that’s very dangerous,” said the governor.
Climate change deniers are gonna deny, but there is increasing evidence that ties atmospheric warming trends to heavier snowfall events.
The plan is an attempt to spur economic activity in Europe by increasing the amount of money available. It calls for governments to increase their borrowing for various projects designed to increase growth and decrease unemployment. Rather than selling the bonds on the open market, a move that would trigger a rise in interest rates, the bonds are sold to the central banks of eurozone member states, which have the ability to print new money. The money is then sent to the treasury. With more money flowing through the system, recessions driven by a lack of capital are relieved. This is why the measure is called quantitative easing.
The United States did this in 2008. In addition to government debt, the Federal Reserve also bought corporate debt. The hyperinflation that some had feared would result from the move never materialized, and the U.S. economy hit a 5 percent growth rate in the third quarter of last year. The Europeans chose not to pursue this route, and as a result, the European economy is, at best, languishing. Now the Europeans will begin such a program – several years after the Americans did – in the hopes of moving things forward again.
The European strategy is vitally different, however. The Federal Reserve printed the money and bought the cash. The European Central Bank will also print the money, but each eurozone country’s individual national bank will do the purchasing, and each will be allowed only to buy the debt of its own government. The reason for this decision reveals much about Europe’s real crisis, which is not so much economic (although it is certainly economic) as it is political and social – and ultimately cultural and moral.
The recent leaks have made it clear the European Central Bank is implementing quantitative easing in this way because many eurozone governments are unable to pay their sovereign debt. European countries do not want to cover each other’s shortfalls, either directly or by exposing the central bank to losses, a move that would make all members liable. In particular, Berlin does not want to be in a position where a series of defaults could cripple Europe as a whole and therefore cripple Germany. This is why the country has resisted quantitative easing, even in the face of depressions in Southern Europe, recessions elsewhere and contractions in demand for German products that have driven German economic growth downward. Berlin preferred those outcomes to the risk of becoming liable for the defaults of other countries.
The major negotiation over this shift took place between European Central Bank head Mario Draghi and German Chancellor Angela Merkel. Draghi realized that if quantitative easing was not done, Europe’s economy could crumble. While Merkel is responsible for the fate of Germany, not Europe, she also needs a viable free trade zone in Europe because Germany exports more than 50 percent of its gross domestic product. The country cannot stand to lose free access to Europe’s markets because of plunging demand, but it will not underwrite Europe’s debt. The two leaders compromised by agreeing to have the central bank print the money and give it to the national banks on a formula that has yet to be determined – and then it is every man for himself.
The European Central Bank is providing the mechanism for stimulating Europe’s economy, while the eurozone member states will assume the responsibility for stimulating it – and living with the consequences of failure. It is as if the Federal Reserve were to print money and give some to each state so that New York could buy its own debt and not become exposed to California’s casual ways.
When the European Central Bank’s (ECB) governing council meets on January 22nd, it will take a historic decision. Among the main central banks, the ECB alone has abstained from a big programme of quantitative easing involving the creation of money to buy sovereign bonds with the aim of spurring growth and inflation. The economic case for QE in the euro area is overwhelming: the feeble economic recovery that has followed Europe’s double-dip recession is faltering; headline inflation has turned negative and longer-term inflation expectations have also declined to a worrying extent. Mario Draghi, the ECB’s president, seems determined to adopt QE in some form, but he will have to compromise on the way that the risks are shared among the euro-zone national central banks in order to get the policy through.
Insiders expect a programme of sovereign-bond purchases of around €500 billion ($580 billion) to be announced on Thursday. Anything less would be likely to disappoint markets that have already been anticipating a move by the ECB to adopt QE, causing, for example, the euro to weaken. The need to purchase government bonds arises from the scale with which the ECB needs to intervene. The central bank wants to raise the balance-sheet of the Eurosystem (the ECB along with the euro zone’s 19 national central banks) from €2.2 trillion to €3 trillion. Since late last year it has been conducting a form of QE by buying private assets, mainly covered bonds, a particularly safe form of debt issued by banks, and also some asset-backed securities. Such purchases may reach around €200 billion over a year. But the amount of eligible and available covered bonds, of around €1 trillion, is dwarfed by the value of sovereign bonds, of over €6 trillion. At one time it seemed that the ECB might buy conventional corporate bonds, but it seems to have decided that the market is too illiquid for it to operate in at scale.
But a big bond-buying programme is tricky in a monetary union where there is not one federal government but 19 national ones, of widely varying creditworthiness, ranging from triple-A for Germany’s to junk for Greece’s. The indications are that Mr Draghi will have to bow to stipulations set by Jens Weidmann, head of the German Bundesbank, if he is to get QE approved. Most notably, purchases of sovereign debt will not be made under the usual risk-sharing arrangements at the ECB, whereby the 19 national central banks of the euro zone share any losses in rough proportion to the size of their economies. The Bundesbank would normally expect to shoulder a quarter of any losses incurred by the ECB. But in this instance, each central bank is likely to be largely responsible for buying the bonds of its own country and will have to bear any losses on them on its own.
That is a good deal for the Bundesbank, because German bonds are so safe. But it marks a big break in precedent and will be seen as unsatisfactory by many members of the governing council. The compromise is necessary because on this occasion Angela Merkel, Germany’s chancellor, is backing Mr Weidmann. That is in sharp contrast with the previous clash between Mr Weidmann and Mr Draghi, in 2012, over the (unused) policy of “outright monetary transactions”, a conditional commitment to buy bonds of countries under siege in the markets, which gave teeth to Mr Draghi’s pledge to do “whatever it takes” to save the euro. Mrs Merkel fears that QE will allow laggard governments, including those of Italy and France, to further delay indispensable structural reforms. The chancellor also worries that purchases made through the usual risk-sharing approach would in effect create by the backdoor “Eurobonds”, jointly issued bonds with the risk mutually shared among member states, to which she is strongly opposed.
Some way will also have to be found to deal with the problem of Greece, which in elections on January 25th may choose a new government that seeks some form of debt relief and tries to backtrack on reforms. One possible solution might be to stipulate that junk-rated sovereign bonds will be bought only if the country concerned is abiding by the terms of a euro-zone bail-out programme (Greece’s is due to expire at the end of February).
Markets may shrug off these messy details in their elation that QE is at long last under way, injecting money into the euro-zone economy and signalling the ECB’s commitment to arrest the fall in inflation. Most members of the ECB’s council will grudgingly take the view that it is better to get a big amount of QE along these lines than a much smaller dose with the usual risk-sharing arrangements. The effect of the QE that the council undertakes may also be stronger if, as is now expected, the bonds purchased will be held to maturity. But a package along these lines will set an unfortunate precedent, for it will embody the very fragmentation within the euro area that the ECB has been seeking to combat. That will add to the danger that the long-awaited QE programme may be coming too late to arrest the slide into a deflationary mindset.
In order to appease those who are worried that taxpayers across the Eurozone will end up carrying the can if one country defaults, the majority, if not all, of these purchases are likely to be undertaken by the national central banks. These will buy their own government’s debt in proportion to the size of the economy and will be limited to a maximum of about a quarter of outstanding debt. The ECB will provide the money for the purchases.
Man, this is hard to understand. It looks like the ECB will give Euros to the 19 other central banks, and those banks will buy their governments’ debt from banks and other institutions, up to 25% of that debt, which varies all over the place, depending on the fiscal discipline in the 19. Total sovereign debt is 6+ trillion Euros, so the program could be as large as 1.5 trillion Euros if all participated. Then the theory is that banks will lend the extra money and institutions will also invest or lend. Uh-huh.
We won’t bother quoting from the negative piece in the Telegraph on this, but this all doesn’t make too much sense to us. Aren’t the low-productivity countries with high debt just getting another kick at the can, another reason to spread more money around without any structural changes? It’s hard to see how this ends well.
Near term result, via WSJ: “Euro Slides to 11-Year Low Against Dollar.”
Eugene Robinson in WaPo:
scientists have had their debate. It’s over. Among climate scientists, there is consensus approaching unanimity that climate change is being driven by the rapidly increasing concentration of heat-trapping carbon dioxide in the atmosphere, which, in turn, is being caused by the burning of fossil fuels. It is known through direct observation that carbon dioxide levels have risen an astounding 40 percent since the beginning of the Industrial Revolution. The rise began after human society began burning coal and petroleum products on an unprecedented scale…”Hottest Year On Record” is a headline that encourages sanity on climate change.
Speaking to reporters aboard the plane taking him to Manila on Thursday, Francis said he believed that man was primarily responsible for climate change and that he hoped the U.N. climate meeting in Paris in November would take a courageous stand to protect the environment. “I don’t know if it is all but the majority is, for the most part, it is man who continuously slaps nature in the face,” he said.
Dr. Leslie H. Gelb is among America’s most prominent foreign policy experts. A Pulitzer Prize winner, former correspondent for the New York Times, and senior official in state and defense departments, he is currently president emeritus and board senior fellow at the Council on Foreign Relations (CFR). He served as president of the organization from 1993 to 2003. Prior to his tenure as president of CFR, Dr. Gelb established a distinguished career at the New York Times, where he was a columnist from 1991 to 1993, deputy editorial page editor from 1986 to 1990, and editor of the op-ed page from 1988 to 1990. He was national security correspondent for the Times from 1981 to 1986, where he won the Pulitzer Prize for Explanatory Journalism in 1986. He was diplomatic correspondent at the Times from 1973 to 1977. Dr. Gelb was a senior associate at the Carnegie Endowment for International Peace from 1980 to 1981, where he was a consultant to the German Marshall Fund of the U.S. From 1977 to 1979, he was an assistant secretary of state in the Carter administration, serving as director of the Bureau of Politico-Military Affairs, where he received the State Department’s highest award: the Distinguished Honor Award. He was a senior fellow at the Brookings Institution from 1969 to 1973, during which time he was also a visiting professor at Georgetown University. He was director of Policy Planning and Arms Control for International Security Affairs at the Department of Defense from 1967 to 1969, where he also served as director of the Pentagon Papers Project. While at the Defense Department, Dr. Gelb won the Pentagon’s highest award, the Distinguished Civilian Service Award. He was executive assistant to U.S. Senator Jacob K. Javits from 1966 to 1967, and an assistant professor at Wesleyan University from 1964 to 1966. Dr. Gelb currently serves on the Center for National Interest Board of Directors, the Iraq and Afghanistan Veterans of America Board of Directors, the Diplomacy Center Foundation Board of Directors, the Peter G. Peterson Foundation Board of Advisors, and the Truman National Security Project Board of Advisors. He is a former trustee for the Carnegie Endowment for International Peace, trustee emeritus for Tufts University, and the former Chairman of the National Security Network Advisory Board. He formerly served on the School of International and Public Affairs at Columbia University Dean’s Council, the James A. Baker III Institute for Public Policy at Rice University Board of Advisors, the Watson Institute for International Studies at Brown University Board of Overseers, and the Joan Shorenstein Center on the Press, Politics and Public Policy at the Harvard Kennedy School of Government Advisory Board. He is a member of the Council on Foreign Relations and the International Institute for Strategic Studies, and a fellow at the American Academy of Arts and Sciences. Dr. Gelb received his BA from Tufts University in 1959 and his MA in 1961 and PhD in 1964 from Harvard University. He is the author of Power Rules: How Common Sense Can Rescue American Foreign Policy (2009) and Anglo-American Relations, 1945–1950: Toward a Theory of Alliances (1988). He is also co-author of The Irony of Vietnam: The System Worked (1980), which won him the American Political Science Association’s Woodrow Wilson Award; Our Own Worst Enemy: The Unmaking of American Foreign Policy (1984), and Claiming the Heavens: The New York Times Complete Guide to the Star Wars Debate (1988). He is the recipient of an Emmy Award and an Alfred I. DuPont-Columbia University Award.
It’s pretty hard to get much nearer the peak of the media-government-university establishment than this. That’s why his list of things that are beyond-urgent-and-vital-but-are-never-gonna-happen is so tragicomic. And you know that things are only going to get worse from here. HT: PL