Monthly Archives: February 2010

A Politician That Can Count

It’s refreshing to see a politician in Washington from either party that appears both able and willing to do basic arithmetic. Watch this video from the Blair House Health Care Summit.

As Investors Business Daily points out, neither President Obama or any Democrat offered any rebuttal to Paul Ryan’s facts and math.

Advertisements

3 Comments

Filed under Economic Policy, Health Care, Politics

Will Washinton Ever Get Serious About The Banks?

After the stagflation wrought by the oil shocks of the 1970’s and the misguided economic policies of the Nixon, Ford and Carter years, Paul Volker took serious measures to fix the economy. When we faced the savings and loan debacle a decade later,  William Black had real power to clean up the banks.

Today we have Ben Bernanke and Tim Geithner handing over our nations wealth and our children’s future prosperity to their patrons on Wall Street.

Check out this PBS interview with Bill Black.  After watching it, one has to wonder if President Obama really expects anyone to take him seriously on any economic matters.

Where are the indictments?  Is the whole Washington scene intended as just distracting entertainment while the plunder goes on?

Leave a comment

Filed under Economic Policy

No Wonder Unemployment Is Soaring

In Taxes and Small Business, Chris Edwards clarifies a frightening and distressing reality  for anyone with even a rudimentary understanding of economics:

President Obama plans to raise the top two individual income tax rates. That will not be good for business or the economy. A little more than half of all business income in the United States is reported on individual returns, not corporate returns. Of the business income reported on individual returns, 44 percent is in the top two income tax brackets.

My testimony pointed out that while Congress cut the top individual rate by 5 percentage points this past decade, the average top rate in the 30 OECD countries also fell by 5 percentage points, as shown in the chart below.

If the top federal rate rises to 40 percent next year, the United States will have the ninth highest top individual rate in the OECD, including state-level taxes. We’ve already got the second-highest corporate tax rate in the OECD.

A nation that has been a relative bastion of market capitalism and individual achievement has a tax code that is becoming very hostile to high-earners, entrepreneurs, and businesses of all types.

Leave a comment

Filed under Economic Policy

Climate Politics

To assure sustainable prosperity, we need the market place to account fairly for the long legacy of subsidy and economic externalities that distort energy markets in favor of incumbent polluting industries. We need to establish public policies that enable such accounting in a direct, transparent and dependable manner.

I have long been an advocate of a tax on incumbent energy resources. There are compelling national security, economic and environmental reasons for a revenue neutral tax that shifts taxation away from productive activities like creating jobs, and instead taxes polluting, non-renewable energy resources. Such a strategy could win broad based support across the political spectrum.

But I believe the focus on climate change, favored by many in the environmental movement, is a significant liability in the political effort to create sensible energy policy. Recently, my apprehensions regarding such focus have been proven well founded.

When it comes to addressing climate issues through public policy, there are a wide spectrum of views which, while not supporting the recent policy orthodoxy of climate politics, are not based on denial of the issue or its potential ramifications. Many people recognize that current politically favored solutions to climate change would not only be ineffective, but could potentially create worse problems then those they are intended to address.

Those advocating for complex convoluted public policy responses to the threats of climate change have seen serious setbacks over the last few months, not the least of which was the failure of the Copenhagen conference to achieve any meaningful results.

It is also becoming more clear recently that the science of climate change is being heavily influenced by political agendas. But contrary to the concerns of many in the environmental movement that it is “right wing” interests which are corrupting the science, it appears that it is largely those pushing an agenda of climate change alarmism who have had the most significant influence on the scientific reporting.  Crony capitalists have been more than willing to go along as the politics of climate have been co-opted by Wall Street interests and others who stand to benefit immensely from the convoluted economic distortions embedded in solutions to climate change now favored by many politicians.

Especially since the release of e-mails and other documents from the University of East Anglia Climate Research Unit in November, the press and public have become more skeptical on the issue and there have been increasing numbers of questions raised regarding the quality of the UN sponsored 2007 IPCC Fourth Assessment Report on Climate Change.

Respected conventional news outlets of all political persuasions, many of which have in the past been supportive of an aggressive climate policy agenda, have been publishing articles and editorials with titles like: Climate change: this is the worst scientific scandal of our generation ClimateGate: Was Data Faked? , How Climate-Change Fanatics Corrupted Science , The Death of Global Warming , UN wrongly linked global warming to natural disasters , Conning the climate: Inside the carbon-trading shell game , Alarmists’ credibility melting , How Wrong Is The IPCC? and What happened to global warming?

Though here in the US the traditional press has been less prone to cover the story than in Britain, Australia, India and elsewhere, there is increasing controversy regarding many of the core findings in the 2007 IPCC Fourth Assessment Report, which won its authors the Nobel Prize along with Al Gore. Of most concern in the report are elements of the Summary for Policy Makers.

It has been reported than when asked in advance of publication to review the draft of the summary for Chapter 9  which attributes global warming to man made causes, Dr. Andrew A. Lacis, a climate researcher at the NASA Goddard Institute for Space Studies had this to say:

“There is no scientific merit to be found in the Executive Summary. The presentation sounds like something put together by Greenpeace activists and their legal department. The points being made are made arbitrarily with legal sounding caveats without having established any foundation or basis in fact. The Executive Summary seems to be a political statement that is only designed to annoy greenhouse skeptics. Wasn’t the IPCC Assessment Report intended to be a scientific document that would merit solid backing from the climate science community – instead of forcing many climate scientists into having to agree with greenhouse skeptic criticisms that this is indeed a report with a clear and obvious political agenda. Attribution can not happen until understanding has been clearly demonstrated. Once the facts of climate change have been established and understood, attribution will become self-evident to all. The Executive Summary as it stands is beyond redemption and should simply be deleted.”

Dr. Lacis suggestion was unfortunately rejected. It is now coming out that significant portions of the IPCC report were not based on peer reviewed science at all and several findings of the report have been confirmed to be erroneous.

Public support for action on climate change is waning.  A study from Yale University offers an interesting analysis of attitudes on the subject. The Pew Research Center shows climate change being a very low public priority.

A good friend of mine and passionate advocate for climate change policy action suggested that:

“The surveys and editorials are interesting reflections of public opinion, but they don’t undermine the science.  Don’t forget that a little over half of Americans don’t believe in evolution either.”

But contrary to Al Gore’s proclamations and the views of many people I respect, the science is not settled. Some evidence of that is the Petition Project, which claims the signatures of 31,486 American scientists who have all endorsed a petition that states:

“There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gasses is causing or will, in the foreseeable future, cause catastrophic heating of the Earth’s atmosphere and disruption of the Earth’s climate. Moreover, there is substantial scientific evidence that increases in atmospheric carbon dioxide produce many beneficial effects upon the natural plant and animal environments of the Earth.”

Dr. Judith Curry, the Chair of the School of Earth and Atmospheric Sciences at the Georgia Institute of Technology recently wrote:

“No one really believes that the “science is settled” or that “the debate is over.” Scientists and others that say this seem to want to advance a particular agenda. There is nothing more detrimental to public trust than such statements.”

Personally I feel absolutely certain that humans must be having some influence on climate, just based on the scale of influence that 6.8 billion people have on everything on the planet. Very few people would disagree with that premise. But clarifying how the many human and natural factors impacting climate will interact, how those factors will manifest themselves in complex climate systems, how significant our human influence will be and whether changes will have positive or negative impacts on agriculture and other critical aspects of human society, are all determinations that unfortunately are outside any clear understanding or real consensus in the scientific community at this time.

Perhaps most significant of the recent clarifications regarding the science of climate change has been the BBC interview with Phil Jones, who was the director of the University of East Anglia Climate Research Unit.

When asked: Do you agree that from 1995 to the present there has been no statistically significant global warming: Dr. Jones answered a qualified “yes”.  In details supporting his answers, he showed that the warming trend from 1995 to 2009 of 0.12 degrees centigrade per decade is matched by the cooling trend of 2002 through 2009 of -0.12 degrees centigrade per decade.

In discussing the warming periods:1860-1880, 1910-1940, 1975-1998 and 1975-2009 Dr Jones states clearly that:

“the warming rates for all 4 periods are similar and not statistically significantly different from each other.”

When asked : when scientists say the debate on climate change is over, what exactly do they mean – and what don’t they mean? Dr. Jones answered:

“It would be supposition on my behalf to know whether all scientists who say the debate is over are saying that for the same reason. I don’t believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.”

His answer on the so called Medieval Warming Period from 800–1300 AD makes clear that current levels of scientific understanding of historic climate data can’t determine conclusively if warming trends since the industrial revolution are unique or unusual.

Recently, Tom Ward, the publisher of the Valley Breeze, a local newspaper here in Rhode Island, published an editorial entitled Inconvenient truth. In it, he suggested that:

“Climate change, formerly known as ‘global warming,’ is a fraud. The science is junk.”

One member of an environmental organization I am involved with issued a call to respond suggesting:

“Some might say its hopeless to answer such extreme positions, but the far right-wing repeats similar stuff every day on cable, talk radio and the like.”

I pointed out to the group that while his rhetoric is harsh, the important conclusion of his editorial is something we can all largely support when Mr. Ward suggests:

“As Americans, we must embrace energy conservation in the short term, and generate more home-grown nuclear, natural gas and wind power in the longer term, to keep our money here and create tens of thousands of well-paying jobs. With those goals achieved, we can power our cars and trucks with U.S.-made electricity and natural gas, and stop sending $800 billion a year overseas, money that funds our enemies.”

While I strongly disagree with Mr. Ward regarding nuclear power (a subject for another posting), I fully agree with him on conservation, wind energy and on using natural gas as the critical transition fuel on our way to a clean energy future.

If the environmental community embraced the energy independence, national security, economic development, employment and balance of trade arguments that Mr. Ward champions, we could be much further along in addressing the challenges of climate change than we are today.  Instead of condemning them, we should be reaching out to potential strong policy allies like Mr. Ward who, like most Americans, would favor rational energy policy.

As I have suggested here before, everything that Mr. Ward argues for could be achieved through a Pigouvian tax on non-renewable energy resources.  That solution would actually be effective in directly and immediately curbing carbon dioxide emissions, unlike the leading solutions being pushed in Congress. If we all embraced the idea that such tax should be 100% revenue neutral, offsetting payroll taxes and income taxes that discourage job creation and working,  Americans of all political persuasions would support such solutions as prudent economic, jobs  and tax policy.

It is not smart politics to be looking for enemies among our potential friends. Rather than blaming the “right wing” or “a well-funded disinformation machine” for the lack of progress, we should take responsibility for the narrow partisan political strategy of the environmental community on these issues.

If the climate change rhetoric from the environmental community were less extreme, it wouldn’t provide such tempting targets for ridicule and harsh criticism and we wouldn’t see the backlash we have. We don’t need to blow the scariest possible outcomes for climate change out of proportion in order to gain broad based political support for effective measures to curb carbon emissions. In fact, overblown climate rhetoric from the environmental community has significantly set back political prospects for sensible energy and climate policy.

The IPCC  has done significant disservice to those concerned with climate change by becoming an imprudent advocate rather than the professional scientific organization that it was chartered to be.

Environmental scientist, James Lovelock is the author of the original “Gaia Hypothesis”, the theory of how the earth’s interrelated feedback mechanisms act as an integrated single organism. He has been described as “The Prophet of Climate Change” . He offers some important perspective:

“I think you have to accept that the skeptics have kept us sane — some of them, anyway. They have been a breath of fresh air. They have kept us from regarding the science of climate change as a religion. It had gone too far that way. There is a role for skeptics in science. They shouldn’t be brushed aside. It is clear that the angel side wasn’t without sin.”

Phil Jones, Andrew Lacis, Judith Curry, James Lovelock and other reputable climate scientists have come to realize that it is best to clearly and honestly present known facts along with the uncertainties surrounding this very complex science. Its about time the rest the environmental community does too.  We should accept  the political reality that with current levels of actual scientific understanding and consensus, most rational people would be reluctant to totally transform the world economy or create the worlds largest derivatives game for Wall Street in convoluted schemes like Cap, Trade and Offset.

I expect that acknowledging the scientific uncertainties regarding the long held beliefs of many of my friends in the environmental movement may result in some calling my integrity and intentions into question. The best answer I can offer them is that unlike those supporting ineffective convoluted answers currently favored in Washington, I am serious enough in my concern on these issues to advocate for policy solutions like H.R. 2380, The Raise Wages, Cut Carbon Act that puts an immediate, real and dependable price on carbon emissions. That bipartisan legislation would also address our economic and unemployment problems as well as our energy and environmental concerns and it wouldn’t add a penny to our monstrous federal debt. That’s the kind of solution the vast majority of Americans would support and that credible politicians should also support if they are really more serious about solving problems than they are about handing out pork to their special interest benefactors.

All the reasons Tom Ward cites in encouraging our nation to move to a clean energy economy have been more than adequate inspiration to spend my career doing green building and renewable energy work for the last three decades. Terrorism funded by our exported petro-dollars, pollution, the economic mess our oil dependency has helped cause, the war in Iraq and our other military adventures to secure oil supplies,  and all the other symptoms of our fossil fuel dependency are plenty of inspiration for good policy.

Effective public policy response to climate change and all those other challenges would be clear, simple and easily understandable by everyone so that everyone participating in the economy can anticipate impacts and respond in rational ways.  All these inter-related issues are too important for the typical corrupt political horse trading between politicians and lobbyists we have come to expect from Washington. We need real leadership at the grass roots level advocating for sensible policy.

Rational climate policy wouldn’t be based on adding vast new convoluted complexities to the economy that are easily vulnerable to the distortions of Wall Street’s financial engineering manipulations. Nor would they be based on legislators and bureaucrats anointing winners and losers in the economy. Instead we need the kind of policy that directly puts a real and dependable price on the “economic externalities” that are currently hidden subsidies for incumbent energy industries – a revenue neutral carbon tax.

Its far past time for everyone concerned with potential climate change to seek out alliances around sensible energy policy by focusing on the issues that all Americans can readily agree on.  We should align our political agenda with those who are more concerned with other issues like the economy, jobs, trade deficits, national security, terrorism and our government’s unsustainable ballooning levels of debt and unfunded liabilities. Effective solutions to climate concerns can also address all those issues and should be politically framed to do so in a manner that appeals across traditional political boundaries. This shouldn’t be a partisan or politically divisive issue. We need a broad political coalition which will only be achieved by being far less dogmatic about our politics.

The most prudent and sensible advice I have seen regarding the politics of climate policy is from Mother Jones magazine, which quotes a perhaps unexpected ally, Republican pollster Frank Luntz:

“It doesn’t matter whether you call it climate change or global warming,” he said. “The public believes it’s happening, and they believe that humans are playing a part in it.” In fact, Luntz warned that if Republicans continue to dispute climate science it could hurt them politically. Instead, he said, the GOP should be engaging in the debate over how to solve America’s energy problems……….

Luntz suggests less talk of dying polar bears and more emphasis on how legislation will create jobs, make the planet healthier and decrease US dependence on foreign oil. Advocates should emphasize words like “cleaner,” “healthier,” and “safer”;  scrap “green jobs” in favor of “American jobs,” and ditch terms like “sustainability” and “carbon neutral” altogether. “It doesn’t matter if there is or isn’t climate change,” he said. “It’s still in America’s best interest to develop new sources of energy that are clean, reliable, efficient and safe.”

Luntz’s polling suggests  The First Rule of Fighting Climate Change: Don’t Talk About Climate Change.

1 Comment

Filed under Best Stuff, Climate Policy, Energy Policy, Environmentalism, Politics