Current Affairs & Politics

Coming Off the Junk

Remember “Change You Can Believe In?”

Remember how we were going to do away with earmarks?  Toss out the lobbyists?  Get away from old-school politics-as-usual?

“Hope” – remember?  Isn’t that why you voted for Obama?

Still feel that way?

Charles Krauthammer sums it up nicely:

It’s not just pages and pages of special-interest tax breaks, giveaways and protections, one of which would set off a ruinous Smoot-Hawley trade war. It’s not just the waste, such as the $88.6 million for new construction for Milwaukee Public Schools, which, reports the Milwaukee Journal Sentinel, have shrinking enrollment, 15 vacant schools and, quite logically, no plans for new construction.

It’s the essential fraud of rushing through a bill in which the normal rules (committee hearings, finding revenue to pay for the programs) are suspended on the grounds that a national emergency requires an immediate job-creating stimulus – and then throwing into it hundreds of billions that have nothing to do with stimulus, that Congress’ own budget office says won’t be spent until 2011 and beyond, and that are little more than the back-scratching, special-interest, lobby-driven parochialism that Obama came to Washington to abolish. He said.

Right.  He continues:

After Obama’s miraculous 2008 presidential campaign, it was clear that at some point the magical mystery tour would have to end. The nation would rub its eyes and begin to emerge from its reverie.

The hallucinatory Obama would give way to the mere mortal. The great ethical transformations promised would be seen as a fairy tale that all presidents tell — and that this president told better than anyone.

I thought the awakening would take six months. It took two and a half weeks.

I don’t blame you if you voted for Obama.  He’s young, smart, charming and progressive.  John McCain is old and Republican and uninspiring.

Let’s face it.  Obama’s message was like a shot of smack to a nation full of people junked out on the drug of mass media messages.  We, as a nation, don’t want to deal with our nation’s problems.  Obama promised that, if elected, we wouldn’t have to.  We got high on that message.

And now we gotta come down from the high.  Because like any drug, it’s a false reality.  The real one is still out there waiting for us.

Look, don’t get me wrong.  I don’t know that McCain would have been any better.  The ruling class in Washington – Republicans and Democrats alike – are all dead-set on one task: aggregating as much power as possible in the hands of the Federal government.

And they’re using the financial crisis as an excuse for immediate action.  We had choices.  There are other ways we could have stimulated the economy.  There were other alternatives.

None were heard.  There just wasn’t time.

So, from all the possible alternative solutions, we just happened to get the one alternative that most grows the size and scope of the Federal government.

Somehow, this country must wake up.  We’re entering a doomsday scenario:

  • a bankrupt government
  • using borrowed money
  • to bail out bankrupt companies
  • who lent borrowed money
  • to bankrupt borrowers.

It’s positively Escherian.

What $1T Could Buy

The recently passed “Spendulus” package has left me totally aghast.

I’m pretty (small-L) libertarian, so when I hear of the federal government taking on this kind of authority and power I naturally pucker up pretty tight.

A lot of my friends – Obama supporters from the go – are big supporters of the plan.  They see good intentions everywhere.  Helping the poor with increased Medicaid funding.  Helping the middle class with more tax rebates.  Building roads and bridges.

Motherhood.  Apple pie.  Who can argue with that?

Well, me, for one.  Because it isn’t our money we’re spending.  We’re not paying for this.  We don’t have the money.  Remember?  We’re ass-over-head in debt.  No, it’s a big loan from our children to us.  They’re the ones who’ll be footing the bill for this.  It’s stated to be about $800B.  In my experience, most government spending runs wildly overbudget.  I would expect this to cost $2T.  Maybe more.  For the sake of nice round numbers, I’ll say $1T.

I could dispute the wisdom of borrowing $1T to stimulate the economy by pointing out that it is excessive debt that has caused the economic meltdown.  How do we think that a nation that is overwhelmed by debt – personal, corporate, and governmental – can borrow its way to prosperity?  Isn’t that like trying to drink yourself sober?

Or I could tear the plan apart on the merits of its proposals.  Does it really make sense for the government to spend $8B on Healthcare Information Technology?

Instead, I just want to ask the question: what else could we do with this money we’re borrowing?

Here are a few ideas that just come randomly to mind.

  1. Divide the $1T evenly among the approx. 110M households in the US.  That’s about $9K for each one – enough for the poorest households to pay rent for a year and buy a small used car.
  2. Feeling progressive? Divide the $1T among the poorest 20M households in the US.  That’s a one-time payment of $50K for each one – enough to permanently lift them out of poverty, if spent wisely.
  3. Feeling libertarian?  How about a 50% reduction in all federal personal taxes (income, payroll, etc.) for 2009?
  4. Feeling progressively libertarian?  How about eliminating the 2009 tax for the bottom 95% of taxpayers?
  5. Feeling spontaneous?  How about dropping all of it in $20s from the back of a C-17?

You may think I’m being silly, but I’m not.  Even option #5 has something that the Spendulus package doesn’t have: it puts more money into the hands of the people, and it avoids creating Byzantine federal bureaucracies that waste money and take jobs out of the private sector – bureaucarcies that will cost tens of billions to implement and fund.  Money our children will have to cough up.

Realize that the government is already talking about dropping another $500B – $1T next year for additional “stimulus”.  If we spent it using option 2, that means that the poorest class in our society would all receive a $100K income from the government over the next 24 months.

There are various ways we could have chosen to stimulate the economy.  There’s a reason why the proposal looks like a massive increase in government programs.  It is because its proponents are class of people who think that the government can better allocate our nation’s resources than can the people it governs.

Sound familiar?

Dow 1500?

Are we living in a new Depression era?

A few years ago I was working in the IT shop of a national US homebuilder.  Even though the world was chanting “there is no housing bubble” it seemed obvious to me that we were in a major housing bubble.  This company couldn’t build houses fast enough.  Growth was astronomical.  Folks, this is housing we’re talking about.  If housing typically grows at a rate of 2% a year, and you see it growing at 20%+ for several years, you can bet your sweet bippy it’s a bubble.

The burst of a housing bubble set off the Great Depression.  But, like the Depression of the 30s, the burst of a housing bubble is only a symptom of the problem.  It isn’t the problem itself.  The problem was – and is – runaway borrowing and lending.

Check out this chart showing the ratio of consumer debt to GDP.  What was the situation in the late 20s?  People assumed that the market was invincible and bought in ravenously, often going deeply into debt to cover their speculation.  Likewise in the last 10 or so years.

I am not sure what is a healthy, sustained lending rate (expressed as the lending / GDP ratio), but it must be below 100%.  Let’s say that a healthy or stable rate of lending is approximately 50-70% of GDP.  If that’s so, then the banking system is going to have to contract the amount of lending by roughly 30-50% in order to regain a stable aggregate lending rate.

What macroeconomics teaches us is that inreases in lending results in an increased money supply.  And decreases in lending result in a decreased money supply.  When the money supply decreases, we call that deflation. Without aggressive efforts to bolster the money supply, we are going to enter a sustained deflationary period.

Contractions in the money supply from 1929-1933 drove the Dow down 89%.  If the current recession / deflation were to take a similar course, the Dow would bottom out around 1500, roughly erasing the last 25 years of growth.

That doesn’t have to happen.  What is required is twofold:

  1. Banks must be supported by all means necessary.  They must not be allowed to fail.
  2. The money supply must be bolstered through monetary and fiscal policy.

The problem with aggressive monetary policy is that the lowest interest rate available is 0%.  And during a deflation, even a 0% loan is bad for the borrower: deflation causes the money I’m paying back (later in time) to be worth more than it is today.  We already are approaching a 0% federal funds rate.  We can’t be significantly more aggressive than that.

And the problem with fiscal policy is that it’s fiscal policy.  First off, we have to borrow in order to spend aggressively.  Our national debt is already out of control.  It’s inconceivable that we can keep borrowing at an increased rate – especially from other economies who may be even worse off than ours.  Then we have to spend the money internally, which looks like huge inefficient government service programs.

It’s going to get interesting, folks.  We are likely heading into a deflationary spiral – one of the most intractible economic problems that can be faced.  There have only been three significant deflationary spirals in US history: one in the early 1800s, one after the Civil War, and the Great Depression.

Deflationary spirals are economic contractions caught in a self-reinforcing feedback loop.  The logic is this: people believe that times are going to get tougher, so it makes sense to contract (spend less).  Decreased spending causes times to get tougher:  prices drop, and, facing dropping prices and scarce revenue, it makes sense to spend less.

Andrew Muse agrees, and points out

I think the important thing to realize is that people are saying things like “capitalism as we know it may be over” and “the DOW might drop to 3,500? – it doesn’t matter if they are true, it only matters that some people believe they might be true.

I hope 3500 is the floor, Andrew.  If 1933 repeats itself, we’ll all be wishing for 3500.

More Than 650 Scientists Protest Global Warming Claims

A new Senate report is poised to present a major challenge to the dogma of global warming.  The preview, made available today, provides some tasty hints as to what the full report will contain.  Here’s my favorite quote:

“Since I am no longer affiliated with any organization nor receiving any funding, I can speak quite frankly….As a scientist I remain skeptical.” – Atmospheric Scientist Dr. Joanne Simpson, the first woman in the world to receive a PhD in meteorology and formerly of NASA who has authored more than 190 studies and has been called “among the most preeminent scientists of the last 100 years.”

My favorite part of the quote: “Since I am no longer affiliated with any organization nor receiving any funding, I can speak quite frankly.”  The unspoken implication is deafening.

The article made another interesting point: since 1980, almost half of the land temperature monitoring points have vanished as the old Soviet Union’s science infrastructure has been dismantled.  Their location?  Siberia.  Hmmmm…

Meanwhile, the National Snow and Ice Data Center presents an interesting picture: arctic ice buildup is rapidly increasing to its 30-year average level, while Antarctic ice is ahead of its 30 year average.  I thought that the Antarctic was a goner?   Hmmmm…

And the voices of reason are raising in unison.  The fact is that the IPCC, the organization most responsible for elevating the climate change issue, bases its conclusions not on historic data but on computer models that, among other flaws, do not take into account solar activity. This alone should be sufficient to completely disregard their findings since solar activity vastly overwhelms any man-made factors in determining global climate.  Solar activity is a greater issue because data are showing that we are at a historic low for sunspot activity.  Fewer sunspots means a hotter solar output.

Climate models wildly disagree with one another as well and do not agree on extraordinarily powerful factors such as clouds.  When data are presented which challenge the model, the data are adjusted to fit the model, not the other way around.

I was Googling to find the original NASA report regarding ocean cooling, and learned that NASA has changed its report so that now the oceans aren’t cooling.  Perhaps an improvement in the methodology, perhaps political conformism.  Who can say?

In the meantime I found this article by Lorne Gunter that deserves a little homage:

In fact, “there has been a very slight cooling,” according to a U.S. National Public Radio (NPR) interview with Josh Willis at NASA’s Jet Propulsion Laboratory, a scientist who keeps close watch on the Argo findings.

Willis was reporting on his findings that have since been adjusted.  Gunter goes on to add:

Just look how tenaciously some scientists are prepared to cling to the climate change dogma. “It may be that we are in a period of less rapid warming,” Dr. Willis told NPR.

Yeah, you know, like when you put your car into reverse you are causing it to enter a period of less rapid forward motion. Or when I gain a few pounds I am in a period of less rapid weight loss.

The big problem with the Argo findings is that all the major climate computer models postulate that as much as 80-90% of global warming will result from the oceans warming rapidly then releasing their heat into the atmosphere.

Keep looking, guys.  I’m sure that the evidence is out there.

Global Warming, R.I.P.

Is global warming dead?

Last March, NASA reported the oceans have been cooling for the last five years. Sea level has stopped rising, and Northern Hemisphere cyclone and hurricane activity is at a 24-year low.

Environmental extremists and global warming alarmists are in denial and running for cover. Their rationale for continuing a lost cause is that weather events in the short term are not necessarily related to long-term climatic trends. But these are the same people who screamed at us each year that ordinary weather events such as high temperatures or hurricanes were undeniable evidence of imminent doom.

I wonder how long it will be before this guy gets shot?

To the extent global warming was ever valid, it is now officially over. It is time to file this theory in the dustbin of history, next to Aristotelean physics, Neptunism, the geocentric universe, phlogiston, and a plethora of other incorrect scientific theories, all of which had vocal and dogmatic supporters who cited incontrovertible evidence.

Couldn’t agree more.


image I’m not particularly interested in reviewing Malcolm Gladwell’s latest pop-sociology treatise, Outliers.  Who needs another review when such outstanding writers as Stephen Kotkin, Michiko Kakutani, and our buddy Joel Spolsky have all weighed in?

Instead, I thought I might critique the critics.

In order to critique the critics, however, I will have to at least briefly review the book.  So, here goes.

I read Outliers.  It was a fun and insightful read.  The author’s thesis is that innate talent isn’t sufficient to create success, but instead hard work and good fortune are also required.  Gladwell points out and refutes two common misconceptions: that the gifted rise effortlessly to the top, and that if you aren’t the very best and brightest you have no chance of success.

Through anecdotes and some simple statistics, Gladwell demonstrates that the Beatles and Bill Gates weren’t just born lucky and brilliant, but had to work really hard as well; that the best educated and “most likely to succeed” attorneys in New York didn’t rise to the top; and that the most intelligent man in the world couldn’t finish college and worked for years as a bouncer.

Outliers didn’t purport to be a piece of scientific research.  However, reading the reviews, you’d think that Gladwell had published this work in the Journal of the International Neuropsychological Society.  Kotkin, Kakutani, and Spolsky all tear the book to shreds for failing to scientifically prove its thesis, and for relying overmuch on anecdote.

Kakutani concludes that Gladwell is postulating a “theory of social predestination” which turns “individuals into pawns of their cultural heritage” when he describes the failure of Columbian airline pilots to challenge the air traffic control in New York or a Korean pilot to challenge his captain.  But Gladwell didn’t arrive at that conclusion.  He merely quotes the exhaustive research done by airline safety professionals who arrived at precisely that conclusion.

Kotkin writes:

If some points border on the obvious, others seem a stretch. Asian children’s high scores at math, Mr. Gladwell would have us believe, derive from work in rice paddies. Never mind that few of the test takers or their urban parents in Hong Kong, Singapore or Tokyo have ever practiced wet-rice agriculture. Noting that math test scores correlate with how long students will sit for any kind of exam, Mr. Gladwell points to an Asian culture of doggedness, which he attributes to cultural legacies of rice cultivation.

Having grown up close to a couple of Asian families, I can assure the reader and Mr. Kotkin that there is indeed a “culture of doggedness” to be found in many Asian families.  I found Gladwell’s arguments very compelling: rice farming, unlike all other forms of farming or hunting / gathering, requires a stupendous amount of work, encouraging a work ethic that, after thousands of years, has permeated the culture even though “few of the test takers or their urban parents in Hong Kong, Singapore or Tokyo have ever practiced wet-rice agriculture”.

Is such a thesis even provable?  Is proof even the point of a book like Outliers?

Joel Spolsky seems to think so.  Even though he admits that

I am not one to throw stones. Heck, I practically invented the formula of ‘tell a funny story and then get all serious and show how this is [sic] amusing anecdote just goes to show that (one thing|the other) is a universal truth’

Spolsky can’t help himself, and throws a handful of stones anyway, calling Gladwell’s theories “weak”, “crazy”, and “utterly lunatic.”  He calls Gladwell’s book “anecdotes disguised as science”.  But Gladwell isn’t trying to position his book as science at all.  It’s informational entertainment.  Like Discovery Channel or Mythbusters.

For that matter, what has science to tell us about the way that human culture works anyway?  Have you read any compendia on sociology?  Do I really care that it can be shown that the Mayan style of basket weaving began in Guatemala and progressed into South America?  Will it help me one iota in my day-to-day experience to learn about the parenting style of Ugandan peasants?  Probably not.

Outliers isn’t science.  It doesn’t purport to be science.  Which is why it wasn’t presented as a Ph. D. thesis or published in a scientific journal.  I found it stimulating and thought provoking.  It isn’t supposed to form the basis of my beliefs.  It’s supposed to cause me to challenge beliefs I might mistakenly hold.  And, yes, Joel, the world needs more of these books.

My suspicion is that the reviewers failed to read the book with sufficient thoroughness to actually understand how Gladwell makes his arguments.  Sure, on the surface, the idea that a person’s cultural heritage makes him more likely to run a plane into the ground is potentially insulting.  But years of analysis by experts in flight safety points to precisely that explanation.  Yeah, to say that Chinese are better at math because seventy generations of Chinese farmed rice paddies sounds absurd.  On the other hand, to say that they’re better at math because their cerebral cortex is so much more “mathematical” (the typical reason) is pretty unscientific as well.  Gladwell is able to draw a line between the kind of dogged determination a society needs in order to be really good at farming rice and demonstrates how exactly that sort of determination and patience alone is sufficient to explain the difference in math test scores.  That’s some good thinking as far as I’m concerned.  Kudos, not criticism, is in order.

I didn’t criticize Joel on Software for being “unscientific” because I recognized that his charming collection of more-or-less well-informed anecdotes paints a good picture of how a good software manager ought to think.  Never mind the fact that he never – not once – conducted any rigorous testing of any of his management hypotheses.  It wasn’t supposed to be science.  It was supposed to make me think about software product management, and it succeeded.  I’ve recommended or gifted that book to dozens of people.

Likewise, Outliers is a great book with big ideas – ideas which may not be scientifically provable, but which nevertheless deserve consideration and examination.  If Gladwell has chosen a fluffy, tasty, digestible medium for his ideas instead of the cardboard-dry, unpalatable forms preferred by hard science and academia, well, who can blame him?  Someone else can earn their Ph. D. proving – or disproving – one of his points.  He’s content to just rake in the profits.

As well he should be.

The Science is Unsettled

Last night, Joe Biden said of global warming, “I think it’s clearly man-made,” while his opponent, Sarah Palin, said that she believes that the evidence shows that both human and cyclical changes account for climate change.

So, which one is the scientist, and which is the religious fanatic?

But before I get into the question of climate change orthodoxy, the exchange between the two caused me to reflect on my observations of pollution in Europe.  It seems to me that many in this country think that Europe must lead the way in cleaning the planet, and the the US is lagging hopelessly behind.


Over There

I witnessed a lot of industrial pollution going on over there – a lot more than one sees in America.  Here in the USA, you see a lot of tailpipe pollution – a problem that needs to be solved – but almost never do you see smokestack pollution – a problem that seemed to abound in France, Spain, and Italy.  Europe also abounds with automobiles that couldn’t pass American emissions standards (much less California standards).

Qualitatively, I also saw quite a bit more waste pollution – trash and graffiti – in Europe than in almost any American city, specifically in France and Italy.  Several stops reminded me of Brooklyn circa 1988.

Of course, Europe is pristine compared to developing areas in Africa and the Pacific.  And, don’t get me wrong – I love Europe.  It’s beautiful.  But it ain’t perfect.  And it should remind us, when questioning why we didn’t sign the Kyoto protocol, that we don’t need to sign an agreement in order to clean up the planet.  We just need to do it.  Apparently, we are.

Climate Change

I’ve posted about this many times on CWSS.  The key article is Global Warming, which summarizes the five key points that must be addressed before we can agree to take action to combat climate change.  In addition are several other supporting articles:

Are Sea Levels Really Rising? discusses the fact that although experts “agree” that sea levels are rising, in fact, they are not rising worldwide, and the data require “adjustment” in order to show a trend.  The raw data do not show a rising trend.

More on Sea Level Change explains how a longer view of sea level shows that the Earth has periodically experienced far more radical changes in sea level than the current 30 year “trend” and asks the question: what are we going to do the next time the Earth goes on a cooling binge?

Climate Change: it Just Gets Better points out that the IPCC (the agency responsible for much of the current science on climate change) does not make predictions nor takes into account many obvious scenarios when it presents the doomsday what-if dramas that have made it famous.

Global Warming (on Mars) posits that the increase in surface temperature on Mars could only be caused by some kind of interspatial leakage of carbon emissions from Earth to Mars, since clearly, climate change is always man-made.  The article then goes on to discuss the climate change orthodoxy which resists debate.

The Science is Settled (or Not) links to an outstanding article listing some of the key detractors to the climate change orthodoxy.

Science vs. Orthodoxy

And that gets to the topic of orthodoxy.  Don’t get me wrong.  I think it’s quite conceivable that the Earth is warming.  I think it’s even plausible that there’s a human component.  But I don’t think the science is settled.  Not by a long shot.  Science is never settled.

Recalling last night’s debate, Palin gave a much more reasoned scientific answer to the climate change question than did Biden.  Where she demonstrated rationality, Biden demonstrated a knee-jerk towards the politically correct viewpoint that climate change is simply due to human carbon emission.

Political correctness.


I’m cringing already, because people I know are going to read this article and know that (1) I don’t automatically think that Sarah Palin is a raving lunatic, and (2) I’m totally unconvinced of the theory of man-made climate change.

That’s a very unpopular pair of views in my crowd.  A crowd that prides itself on openmindedness, while at the same time rejecting out of hand any dispute on the views they hold dear.  The Science is Settled.  Nothing To See Here, Please Move Along.  I’M NOT LISTENING LA LA LA LA LA.

Orthodoxy: how to turn any science into a religion.  For more information on how to use orthodoxy to turn the science of the day into a religion, see Leviticus.

Orthodoxy: Good enough for Moses.  Good enough for Al Gore.  Good enough for you.