Archive for March 2016

California Creates Another Setback of Unskilled Workers -- And Possibly A Setback for Immigrant Integation

It appears that California is going to increase its state minimum wage to $15 in steps over the next five or six years.  This is yet another body blow for unskilled workers in the state.  As I wrote a while back, it is already overly difficult to build a business based on unskilled labor in that state, and increasing the price people have to pay for that labor by 50% is only going to make things worse.  It is possible low-skill workers in large wealthy cities like San Francisco will be OK, as service businesses are still going to want to be there to access all that wealth, and will just raise their prices even higher to account for the higher wages.   For laborers in rural areas that are already suffering from high unemployment, the prospects are not very bright.

As most readers know, we run a service business operating campgrounds across the country, including a number in California.  Over the last  years, due to past regulation and minimum wage increases, and in anticipation of further goofiness of this sort, we exited about 2/3 of our business in California.

Our problem going forward is that in rural locations, sometimes without even electricity or cell phone service on site, we have simply exhausted all the productivity measures I can think of.  There appears to be a minimum amount of labor required to clean a bathroom and do landscaping.  Which leaves us the options of exiting more businesses or raising prices.  Most of our customers in California are blue collar rural folks whose lot is only going to be worse as a result of these minimum wage increases, and so I am not sure how far they will be able to bear the price increases we will need to cover our higher costs.   Likely we will keep raising prices until customers can bear no more, and then exit.

By the way, the 5-6 year implementation time is a frank admission by the authors of the law, not matter what they say in pubic to the contrary, that they know there will be substantial negative employment effects from the minimum wage increase.   They are hoping that by spreading it out over several years, those negative effects will lost in the noise of economic fluctuations.  The Leftist playbook is to do something like this that trashes the earnings of the most vulnerable low-skilled workers, and then later point to the income inequality of those low-skilled workers as a failure of free markets.

On a related note, one of the more interesting things I have read lately is this comparison of successful integration of Muslim immigrants in the US vs. poor integration in Europe.  Alex Tabarrok raises the hypothesis that high minimum wages and labor market rigidity in Europe may be an important factor in reducing immigrant integration.  He quotes from the OECD:

Belgian labour market settings are generally unfavourable to the employment outcomes of low-skilled workers. Reduced employment rates stem from high labour costs, which deter demand for low-productivity workers…Furthermore, labour market segmentation and rigidity weigh on the wages and progression prospects of outsiders. With immigrants over-represented among low-wage, vulnerable workers, labour market settings likely hurt the foreign-born disproportionately.

…Minimum wages can create a barrier to employment of low-skilled immigrants, especially for youth. As a proportion of the median wage, the Belgian statutory minimum wage is on the high side in international comparison and sectoral agreements generally provide for even higher minima. This helps to prevent in-work poverty…but risks pricing low-skilled workers out of the labour market (Neumark and Wascher, 2006). Groups with further real or perceived productivity handicaps, such as youth or immigrants, will be among the most affected.

In 2012, the overall unemployment rate in Belgium was 7.6% (15-64 age group), rising to 19.8% for those in the labour force aged under 25, and, among these, reaching 29.3% and 27.9% for immigrants and their native-born offspring, respectively.

Wow, I guess it is sure lucky California does not have a very large immigrant population.  Oh, wait....

World's Current Worst Malware Threat Is Windows 10 Upgrade Code

I just found that my guest computer in the lobby of my office has a screen that said "Welcome to Windows 10".   I never asked for or initiated such this operating system switch.  It was done entirely without my permission by a bit of malware Microsft has introduced to Windows 7 computers.   I have had malware issues in the past, but never have I had one that A) put unwanted advertisements on my desktop every day and B) changed my entire operating system without my intervention or approval.

Thank goodness I read somewhere that one can avoid even this seeming fait accompli by declining the terms and conditions.  Which I did -- hopefully the computer is rolling back right now.

I am very worried that my 30 or so field managers, who have poor computer skills on average, will get their computer upgraded without knowing it.  I do all the tech support in the company and have no desire (and since I don't know windows 10, no ability) to support another operating system right now other than Windows 7.

I will double down on my recommendation of the free GWX control panel to remove this windows 10 upgrade malware from computers.  It has worked fine for me (except of course of computers like the one above I did not even think about).

The Administrative State

This is eye-opening:

In one recent year alone, Congress passed 138 laws—while federal agencies finalized 2,926 rules. Federal judges conduct about 95,000 trials a year, but federal agencies conduct nearly 1 million. Put all that together and you have a situation in which one branch of government, the executive, is arrogating to itself the powers of the other two.

This probably understates the case.  Most of the laws were probably brief fixes or extensions or for national _____ day declarations.  The administrative rules can be thousands of pages long and create nightmarish compliance issues.  Already, most of our businesses compliance efforts (which seem to be rising exponentially in time and cost) are due to administrative rules changes rather than new laws per se.

I find the judicial issue potentially even more concerning.  While we have pretty well-protected due process rights in court, most of these get tossed aside in administrative hearings and trials.

Denying the Climate Catastrophe: 3. Feedbacks

This is the third chapter of an ongoing series.  Other parts of the series are here:

  1. Introduction
  2. Greenhouse Gas Theory
  3. Feedbacks (this article)
  4.  A)  Actual Temperature Data;   B) Problems with the Surface Temperature Record
  5. Attribution of Past Warming:  A) Arguments for it being Man-Made; B) Natural Attribution
  6. Climate Models vs. Actual Temperatures
  7. Are We Already Seeing Climate Change
  8. The Lukewarmer Middle Ground
  9. A Low-Cost Insurance Policy

We ended the last chapter on the greenhouse gas theory with this:

So whence comes the catastrophe?  As mentioned in the introduction, the catastrophe comes from a second, independent theory that the Earth's climate system is dominated by strong positive feedbacks that multiply greenhouse warming many times into a catastrophe.


In this chapter, we will discuss this second, independent theory:  that the Earth's climate system is dominated by positive feedbacks.  I suppose the first question is, "What do we mean by feedback?"


In a strict sense, feedback is the connection of the output of a system to its input, creating a process that is circular:  A system creates an output based on some initial input, that output changes the system's input, which then changes its output, which then in turn changes its input, etc.

Typically, there are two types of feedback:  negative and positive.  Negative feedback is a bit like the ball in the trough in the illustration above.  If we tap the ball, it moves, but that movement creates new forces (e.g. gravity and the walls of the trough) that tend to send the ball back where it started.  Negative feedback tends to attenuate any input to a system -- meaning that for any given push on the system, the output will end up being less than one might have expected from the push.

Positive feedback is more like the ball sitting on top of the hill.   Even a small tap will send it rolling very far away, because the shape of the hill and gravity tend to push the ball even further in the direction of the tap.  Positive feedback amplifies or multiplies any input to a system, meaning that even small pushes can lead to very large results.

The climate temperature system has a mix of positive and negative feedbacks.

For example, consider cumulus clouds.  If the Earth warms, more water tends to evaporate from the oceans, and some of that water will form big fluffy white clouds.  These clouds act as an umbrella for the Earth, reflecting heat back into space.  So as more clouds form due to warming, there is a net new cooling effect that offsets some of the original warming.  The amount of warming we might have expected is smaller due to the negative feedback of cloud formation.

On the other side, consider ice and snow.  Ice and snow reflect sunlight back into space and keep the Earth cooler than it would be without the ice and snow cover.  As the world warms, ice and snow will melt and thus reflect less sunlight back into space, having the effect of warming the Earth even more.  So an initial warming leads to more warming, amplifying the effect of the initial warming.

Since we know both types of feedback exist, what we care about is the net effect -- does negative or positive feedback dominate?  In every catastrophic forecast you have seen for global warming, in nearly every climate model the IPCC uses, the authors have assumed that the climate is dominated by strong positive feedbacks that multiply incremental warming from greenhouse gasses many times.

This is the result:


As a reminder, the green line is the warming from increases in atmospheric CO2 concentration solely from the greenhouse gas effect, without any feedbacks taken into account.  It is generally agreed to be a warming rate of about 1.2C per doubling of CO2 concentrations, with which I and many (or most) science-based skeptics agree.  The other lines, then, are a variety of forecasts for warming after feedbacks are taken into account.  You can see that all these forecasts assume positive feedback, as the effect is multiplicative of the initial greenhouse gas warming (the pink, purple, and orange lines are approximately 3x, 5x, and 10x the green line, implying very high levels of positive feedback).

The pink line is the mean forecast from the 4th IPCC, implying a temperature sensitivity to CO2 of about 3C.  The purple line is the high end of the IPCC forecast band, implying a temperature sensitivity of 5C.  And the highest is not from a mathematical model per se, but from the mouth of Bill McKibben (sorry for the misspelling in the chart) who has on several occasions threatened that we could see as much as 10C of warming from CO2 by the end of the century.

Skeptics have pointed out a myriad of issues with the climate computer models that develop these forecasts, but I will leave those aside for now.  Suffice it to say that the models exclude many important aspects of the climate and are subject to hand tuning that allows modellers to produce pretty much any output they like.

But I do want to say a few words about computer models and scientific proof.  Despite what you will hear from the media, and even from the mouths of prominent alarmist scientists, computer models do not and cannot constitute "proof" of any sort.  Computer models are merely tools we use to derive the predicted values of physical parameters from complex hypotheses.  They are no different than the pen and paper computations an 18th century researcher might have made for the position of Saturn from Newton's celestial mechanics equations.  The "proof" comes when we take these predicted values and compare them against actual measurements over time and find that they are or are not accurate predictions.  Newton's laws were proved as his equations'  outputs for Saturn's position were compared to Saturn's actual measured position  (and in fact they were disproved, to a small extent, when Mercury's position did not accurately match and Einstein has to fix things a bit).  Similarly, hypotheses about global warming will be proved or disproved when the predictions of various models are compared to actual temperatures.

So we can't really get much further until we get to actual observations of the climate, which we will address in the next several chapters.  But I want to make sure that the two-part theory that leads to catastrophic global warming is clear.

This is the portion of the warming due to greenhouse gas theory:


As you can see, the portion due to greenhouse gas theory is relatively small and likely not catastrophic.  The catastrophe comes from the second independent theory that the Earth's climate system is dominated by strong  (very strong!) positive feedbacks.



It is the positive feedback that causes the catastrophe, not greenhouse gas theory.  So in debating catastrophic man-made global warming theory, we should be spending most of our time debating the theory that the climate is dominated by strong positive feedbacks, rather than debating the greenhouse gas theory.

But in fact, this does not happen in the mainstream media.  If you are an average consumer of climate news, I will be you have never heard a discussion in the media about this second theory.

And this second theory is far from settled.  If on the "settled" scale from 1-10, greenhouse gas theory is an 8 or 9, this theory of strong positive feedbacks dominating the climate is about a 2.   In fact, there is plenty of evidence that not only are scientists estimating feedbacks incorrectly, but that they don't even have the sign right and that net feedbacks may be negative.

This is a bit hard to communicate to a layman, but the positive feedbacks assumed by the most alarmist and catastrophic climate forecasts are very, very high.  Way higher than one might expect in advance upon encountering a new system.  This assumption of strong positive feedbacks is one that might even offend the sensibilities of the natural scientist.  Natural systems that are long-term stable (and certainly for all its variation the climate system has remained in a pretty narrow range for millions and millions of years) are typically not dominated by positive feedbacks, they are dominated by negative feedbacks.

If in fact our climate temperature system is dominated by negative feedbacks, the future warming forecast would actually be below the green line:



OK, without getting in and criticizing the details of these models (which would by the way be a pointless wack-a-mole game because there are dozens of them) the best way to assess the validity of these various forecasts is to now consult actual observations.  Which we will begin to do in our next chapter, part 4a on actual temperature measurements.

Before There Was Green Screen

People act as if it is something new and different when actors shoot scenes and 95% of the space on the screen is later filled in by CGI.  This has actually been going on for decades with matte paintings on glass.  Movie scenes were either filmed directly through the glass (there are some great examples in the linked article with Disney artists painting sailing ships on a bay for filming) or reshot later by projecting the original film and reshooting it with the matte art.

Here is a an example before and after the painted matt.  Just like CGI, only CGI can add movement and dynamic elements

Sword-window view

I had thought all this stuff was done in post production but apparently Disney at least shot a lot of scenes straight through a matte.  I love this guy, sitting on the beach painting ships on glass so they would be sitting on the bay in the scene.  You can almost imagine the actors tapping their feet waiting for him to be finished.


Much of the beauty of the original Star Wars movie was in its great matte paintings, not only of planets but of the large Death Star interior scenes.

Democratic Socialism

Not sure where this came from:

bernie sanders democratic socialism

Thomas Sowell writes:

What President Obama has been pushing for, and moving toward, is more insidious: government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private sector.

What President Obama has been pushing for, and moving toward, is more insidious: government control of the economy, while leaving ownership in private hands. That way, politicians get to call the shots but, when their bright ideas lead to disaster, they can always blame those who own businesses in the private sector.Politically, it is heads-I-win when things go right, and tails-you-lose when things go wrong. This is far preferable, from Obama's point of view, since it gives him a variety of scapegoats for all his failed policies, without having to use President Bush as a scapegoat all the time.

Back in the 1920s, however, when fascism was a new political development, it was widely -- and correctly -- regarded as being on the political left. ....Mussolini, the originator of fascism, was lionized by the left, both in Europe and in America, during the 1920s. Even Hitler, who adopted fascist ideas in the 1920s, was seen by some, including W.E.B. Du Bois, as a man of the left.

People get blinded (probably for good reason, given the heinousness) by Hitler's rounding people up in camps and can't really get beyond that in thinking about fascism.  Which is why I sometimes find it helpful to use the term "Mussolini-style fascism".   And the US Left, led by FDR, was very much in thrall with portions of Mussolini-style fascism, so much so that the National Industrial Recovery Act was a modelled on Mussolini's economic management of command and control by corporatist boards.   Here is one description:

The image of a strong leader taking direct charge of an economy during hard times fascinated observers abroad. Italy was one of the places that Franklin Roosevelt looked to for ideas in 1933. Roosevelt's National Recovery Act (NRA) attempted to cartelize the American economy just as Mussolini had cartelized Italy's. Under the NRA Roosevelt established industry-wide boards with the power to set and enforce prices, wages, and other terms of employment, production, and distribution for all companies in an industry. Through the Agricultural Adjustment Act the government exercised similar control over farmers. Interestingly, Mussolini viewed Roosevelt's New Deal as "boldly... interventionist in the field of economics." Hitler's nazism also shared many features with Italian fascism, including the syndicalist front. Nazism, too, featured complete government control of industry, agriculture, finance, and investment.

The NRA has to be in the top 10 best overturn decisions by the Supreme Court.  Thought experiment -- do you think you could buy a Honda, Toyota, Tesla, Nissan or Kia in the US today if GM and the UAW were running the automotive board?

Hey! Don't Overreact to That Issue, Overreact to My Issue

Nicholas Kristof urges us not to exaggerate or overreact to the risk of terrorism based on a few high-profile but isolated and nearly-impossible-to-control events, particularly since there is no upward trend in terrorism deaths.

He urges us instead to exaggerate and overreact to the risk of catastrophic man-made climate change based on a few high-profile but isolated and nearly-impossible-to-control weather events for which data show there is no actual upward trend (e.g. hurricanes, tornadoes, droughts, heat waves, etc).

Everyone today seems to be trying to stampede everyone else into some kind of fear based on overblown risks, whether it be to terrorism or climate change or immigrant-related crime or vaccine-caused autism or, uh, whatever is supposed to be bad that is caused by GMO's.  It is all a quest for power.  They hope that fear will cause you to write them a blank check for exercising power over you.  Don't give it to them.

Are You In Control of Electronic Payments from Your Checking Account?

If your business is like mine, a lot of folks to whom I owe money are insisting on the ability to automatically remove the money I owe them each month from our checking account (via an electronic process known as ACH, which is slower but much cheaper and easier to use than the old wire transfer method).  At first, any loan I took out insisted that the lender be able to automatically withdraw my payments.  Then my workers compensation company.  Then certain vendor accounts.  And of course my merchant processing companies are constantly shoving money in and out of my bank accounts.

In retrospect, I was far too sanguine about this situation.  What finally caused me to abandon my sense of security was a libel lawsuit filed by one of my vendors over a bad review I wrote of their product [I won't mention the name here but I am sure anyone can figure it out with a simple search].  Anyway, I realized that this company, who was suing me for untold bazillions of dollars, actually had the right to freely jack whatever they wanted out of my checking account.  What is worse, this same company is being sued by many companies for trying to take an arbitrarily high final payment out of their accounts at contract termination.  Eeek!  And this does not even include the possibility of outright fraud.  I have ACH tools where if I have your bank's name and your account number, I could pull out money from your account without your ever knowing about it until you see it missing.  I presume criminals could do the same thing.

Something had to be done, and it turned out that my bank, Bank of America, has something called ACH positive pay wherein nothing gets ACH'ed out of my accounts without my first approving the payments.   I check a screen each morning and in 60 seconds can do the approvals for the day.  They also have a very easy to use rules system where one can set up rules such that payments to certain vendors or for certain amounts don't need further daily approvals.

I presume most major banks have a similar product.  It cost me some money but I feel way safer and encourage you to look into it if you are in the same situation.

The Trade Deficit is Not A Debt

If you search Coyoteblog for the title of this post, you will see a number of others with the same title.  It seems to be a theme we keep having to come back to.  Here is one example of where I tried to explain why the trade deficit is not a debt.

Take the Chinese for example.  One thing that people often miss is that the Chinese buy a LOT more American stuff than the trade numbers portray.  The numbers in the balance of trade accounts include only products the Chinese buy from the US and then take back to China to consume there.  But the Chinese like to buy American stuff and consume it here, in the US.  They buy land and materials to build factories and trade offices.  They buy houses in California.  They buy our government bonds.  None of this stuff shows up in the trade numbers.  Is it somehow worse that the Chinese wish to consume their American products in America?  No.  How could it be.  In fact, its a compliment.  They know that our country is, long-term, a safer and more reliable place to own and hold on to things of value than their own country.

Dollars paid to a Chinese manufacturer have to get recycled to the US -- they don't just build up in a pile.   If I am a construction contractor in LA and build that manufacturer a new office or a local home and get paid with those recycled dollars, I am effectively exporting to the Chinese, only the goods and services I sold them never leave the country and so don't show up in the trade numbers.  So what does this mean?   In my mind, it means that the trade deficit number is a stupid metric to obsess over.

Another way I think about it is to observe that the US is winning the battle of stuff.   Money as money itself does not improve my well-being -- only the stuff (goods and services) I can purchase with it can do so.   So i t turns out that other countries ship far more stuff to the US than we ship out. And then these folks in other countries take the money they earn from this trade and buy more stuff in the US and keep keep that stuff here!

I am reminded of all this because several other folks are taking a swing at trying to make this point to the economically illiterate.   Don Boudreaux does so here, and Dan Ikensan here.  And here is Walter Williams as well.

Batman v. Superman

Denying the Climate Catastrophe: 2. Greenhouse Gas Theory

Other parts of the series are here:

  1. Introduction
  2. Greenhouse Gas Theory (this article)
  3. Feedbacks
  4.  A)  Actual Temperature Data; B) Problems with the Surface Temperature Record
  5. Attribution of Past Warming;  A) Arguments for it being Man-Made;  B) Natural Attribution
  6. Climate Models vs. Actual Temperatures
  7. Are We Already Seeing Climate Change
  8. The Lukewarmer Middle Ground
  9. A Low-Cost Insurance Policy

We continue our multi-part series on the theory of catastrophic man-made global warming by returning to our framework we introduced in the last chapter.

Click to Enlarge

In the introduction, we discussed how catastrophic man-made global warming theory was actually made up of two independent parts.  In this section, we will discuss the first of these two parts, the greenhouse gas effect, which is the box in the upper left of our framework.

For those unfamiliar with exactly what the greenhouse effect is, I encourage you to check out this very short primer.  Essentially, certain gasses in the atmosphere can absorb some of the heat the Earth is radiating into space, and re-radiate some of this heat back to Earth.  These are called greenhouse gasses.  Water vapor is a relatively strong greenhouse gas, while CO2 is actually a relatively weak greenhouse gas.

It may come as a surprise to those who only know of skeptics' arguments from reading their opponents (rather than the skeptics themselves), but most prominent skeptics accept the theory of greenhouse gas warming.  Of course there are exceptions, including a couple of trolls who like to get attention in the comments section of this and other blogs, and including a few prominent politicians and talk-show hosts.  But there are also environmental alarmists on the other side who have signed petitions to ban dihydrogen monoxide.  It is always tempting, but seldom intellectually rewarding, to judge a particular position by its least capable defenders.

There is simply too much evidence both from our and other planets (as well as simple experiments in a laboratory) to deny that greenhouse gasses in the atmosphere have a warming effect on planets, and that CO2 is such a greenhouse gas.   What follows in the rest of this section represents something of a consensus of people on both sides of the debate.

To investigate the effect of CO2 on Earth's temperature, we are going to use this chart:

Click to Enlarge

On the X axis is the atmospheric concentration of CO2 in parts-per-million (ppm).  Frequently, forecasts of CO2 warming are shown as a relationship over time.  I prefer this view, because it separates the assumption of CO2 emissions rates from assumptions about the sensitivity of temperatures to CO2.

Note that the concentrations we are talking about are remarkably small.  Currently the Earth is just over 400 ppm, which is 0.04%.  Only one in 2500 molecules in air is CO2.

Click to Enlarge

On the Y-axis we then have the incremental warming we might see, on average, across the surface of the Earth from increased concentrations of CO2.  Unless I point it out explicitly, we will use Celsius throughout this and later chapters.

What we now want to do is graph the relationship between the concentrations of CO2 in the atmosphere and the temperature increase of the Earth.  We will use 400 ppm and 0C increase as our starting points.  For now (and we will come back to this assumption) we will look at just the direct effect of warming from the greenhouse gas effect of CO2 and leave out any other complicated, 2nd order interactions with the Earth and its climate.

The estimate I will use comes from Dr. Michael Mann and was first cited in the early IPCC reports.  A quick note on the IPCC -- the IPCC is a body that meets every 5 years or so under the auspices of the United Nations to try to summarize the current state of climate science.  Many skeptics, including myself, would argue that the IPCC process is flawed and overly politicized, but as much as possible in this series I will try to use the IPCC position, making it explicit when I differ.  But what follows is very much IPCC canon.  In fact, I like using Michael Mann's work here because, as author of the hockey stick, he is a vocal and prominent advocate on the alarmist end of the debate and certain not in the tank for the skeptic side.

Click to Enlarge

The relationship is shown in the equation at the top (where delta T is the temperature increase and c is the atmospheric concentration in ppm).  I have graphed the equation in green because most of us do not have a good intuition for what this equation might look like.

The first thing you might note is that the line is curved, and represents a diminishing return relationship, which means that each incremental molecule of CO2 in the atmosphere has less warming effect than the last (see my short presentation on the greenhouse gas effect here).  Thus a constant rate of growth in CO2 concentrations would yield a slowing growth rate in temperatures.  This is a well-understood relationship, so much so that the sensitivity of temperature to CO2 is generally written not as degrees per ppm but as degrees per doubling of CO2 levels.  This means that the increase from 400-800 ppm would be expected to have about the same impact on temperature as the increase from 800 to 1600 ppm.

Of course, without any sense of CO2 growth rates, it's hard to relate this line to our lives.  So as a next step, we will overly some CO2 forecasts for the atmospheric levels of CO2 by 2100. [As an aside, there is a group of skeptics that think that most CO2 increases are coming from warming itself, flipping the arrow of causality, rather than from man.  There is some evidence for this proposition in ice core analysis, but I will leave it aside and for our purposes assume most CO2 increases in this century are coming from hydrocarbon combustion].

Though I think that their forecasts are exaggerated, I have taken the UN IPCC's 4 most likely CO2 cases for the year 2100 and overlayed them on the chart below:


Click to Enlarge

Taking the midpoint of these forecasts, we arrive at about 1C of warming between now and the end of the century.

So now, if you are paying attention, you may be ready to call bullsh*t on me.  Coyote, you say, every catastrophic forecast I have ever seen in the media is for WAY more than 1C of warming!  Bill McKibbon says its going to be 10 degrees of warming (and if you can't trust Harvard journalism majors on scientific issues, who can you trust?)  You are obviously lying, you evil denier.

Actually, not.  Everything in this chapter has been pretty much canon in the global warming world.  The direct, first order contribution of CO2 via the greenhouse effect is expected to be around a degree over the next century.  So whence comes the catastrophe?  As mentioned in the introduction, the catastrophe comes from a second, independent theory that the Earth's climate system is dominated by strong positive feedbacks that multiply greenhouse warming many times into a catastrophe.

If you have never heard of this second theory, don't be surprised.  In many years of reading press articles on global warming, I can't remember one that adequately explained the two-part nature of the theory that is embedded in most global warming forecasts and climate models.  But, perhaps not coincidentally, it is this second theory with which we skeptics have the most issues.  We will take this up in our next installment.

Part 3 on feedbacks can be found here.

Government Web Site Actually Closes Down After Business Hours

from my Twitter account:

Warren Meyer Climate Presentation at Claremont-McKenna Athenaeum

When You Give Up On Allocating Resources via Markets and Prices, All That is Left is Interest Group Politics

One of the ugly facts about how we manage water is that by eschewing markets and prices to allocate scarce water, all that is left is command and control allocation to match supply and demand.  The uglier fact is that politicians like it that way.  A golf course that pays a higher market rate for water doesn't help a politician one bit.  A golf course that has to beg for water through a political process is a source of campaign donations for life.

In a free society without an intrusive government, it would not matter whether California almond growers were loved or hated.  If people did not like them, then they just wouldn't buy their product.  But in California, the government holds the power of life or death over businesses through a number of levers, not least of which is water.

Almonds have become the Left's] new bête noir. The nut is blamed for exacerbating the California drought, overtaxing honeybee colonies, starving salmon of river water, and price-gauging global consumers. Almonds may be loved by consumers, but almond growers, it seems, are increasingly despised in the media. In 2014, The Atlantic published a melodramatic essay, “The Dark Side of Almond Use”—with the ominous subtitle, “People are eating almonds in unprecedented amounts. Is that okay?” If no one much cared that California agriculture was in near depression for much of the latter twentieth century—and that almonds were hardly worth growing in the 1970s—they now worry that someone is netting $5,000 to $10,000 per acre on the nut.

It is almost too much to bear for a social or environmental activist that a corporate farm of 5,000 acres could in theory clear $30 million a year—without either exploiting poor workers or poisoning the environment, but in providing cool people with a healthy, hip, natural product. The kind of people who eat almond butter and drink almond milk, after all, are the kind of people who tend to endorse liberal causes.

As for almonds worsening the drought: The truth is that the nut uses about the same amount of water per acre as other irrigated California crops such as pasture, alfalfa, tree fruit, pistachios, cotton, or rice. In fact, almonds require a smaller percentage of yearly irrigation use than their percentage of California farmland calls for. Nonetheless, the growth of almond farming represents to many a greedy use of scarce collective resource.

Mark Perry's "Best of Venn Diagrams" .... But Where Did They Start?

Mark Perry loves to use the Venn diagram format to point out hypocrisy or inconsistent arguments.  He has a sort of best-of post with 12 of them here.

I am actually fairly certain the first one of these actually appeared here, on Coyote Blog.  This was the chart I made:

click to enlarge


Update:  Good lord I wrote Rick Perry instead of Mark Perry.  I am officially going senile.  Sorry Mark.

Why You Shouldn't Give the Government Backdoor Keys to Your Encrption

The Federal government insisted that every luggage maker give the government a backdoor key to their luggage locks -- and the government promptly released the keys to the public so no ones' luggage is secure any more.

Another Trump Triumph -- He Has The Left Defending the American Economic System

The American Left generally spends most of its time telling us how much better things are in Denmark or France.  I can't find a lot of reasons to like Trump, but he has apparently convinced the Left that they need to defend the American economic model against other countries.  This post by Kevin Drum at Mother Jones reasd more like what one might expect from Mark Perry at AEI.

"We're a poor country now." I wonder how many people believe that just because Donald Trump keeps saying it? In case anyone cares, the actual truth is in the chart on the right. There's not a single country in the world bigger than 10 million people that's as rich as the US.

I agree!   In fact, not only are American rich richer, but the American middle class is richer and the American poor are richer.  From an earlier post, here is the purchasing power of individuals across the income spectrum in the US vs. Denmark

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This is the Basic Idea Behind Opening Up Cuba to American Business... Though It Would Be Nice to See Internet Access from a Company That Doesn't Roll Over to Authoritarian Censorship

The idea of opening up Cuba is NOT to somehow reward or even ignore their bad behavior but to open them up to the world.  Google wants to be in the forefront of providing Internet access, but given their history of rolling over on censorship to the Chinese, it would be nice to see someone less evil in the vanguard.

I meant to post this a while back, but Jeff Flake totally gets it on Cuba, and I appreciate his leadership among the Republicans on this.  I absolutely loved this quote:

Flake has long said that Americans should be free to see for themselves the stunted fruit of socialist policy. He tells the story of meeting with Lech Walesa, the great activist who challenged Soviet domination of Poland. "I have no idea," Walesa complained, "why you guys have a museum of socialism 90 miles from your shore and you won't let anybody visit it."

After three generations, I think one can safely call a policy like our embargo "failed" and try something else.

Fifteen Great Swimming Holes

I had to highlight this article on 15 great swimming holes in the US because our company operates two of them, #8 and #9.  As an added bonus, they actually list all 15 on the same page rather than in that clickbait format where you have to press next like 20 times to see the top 15.

The Miracle of Oil Production

Gasoline costs less than bottled water at your local service station, but look at what it takes to produce it:

Here is an offshore oil platform being towed out to sea.  As huge as it is, its height is nothing compared to the depth and reach of the network of wells that were drilled from it.


And here is a refinery where the oil is processed into gasoline and other products.  This happens to be the Exxon refinery in Baytown, where I had my first job out of college


I am pretty sure this is Pipestill (distillation tower) #8.   If so, I have climbed through every inch of the tall tower on the left


Here is bottled water production in comparison

Home Ownership and Labor Mobility

Alex Tabarrok discusses some academic work that shows a declining inter-regional mobility in the United States which is causing local economic declines to last much longer than they used to last.

In a new paper, also cited by Leubsdorf, Danny Yagan at Berkeley suggests that reduced migration is only part of the problem. What has made the aftermath to the 2008-2009 recession so bad is that migration is low at the same time that it has become more necessary than ever. The 2008-2009 recession was especially localized, it hit some places harder than others and in a way that appears to be permanent. But migration has been too slow to solve the problem.

The usual story is that in-and-out migration equalizes wage, unemployment and employment rates across the nation. Some places may be harder hit than others but movement quickly makes the US into one labor market. In the aftermath of this recession, however, that isn’t happening for employment rates. Using a clever research design that looks at workers with similar education and skills doing the same jobs at the same large firms but in different locations, Yagan finds that location continues to matter years after the recession has ended. Workers who worked in the places hardest hit in the 2007-2009 recession have employment rates today that are 1% lower than similar workers in regions that were less hard hit.

It is probably unfair for me to comment on this because I have been highly mobile in  my life, having lived and worked in about 10 places as diverse as Houston, Dallas, Boston, Boulder, Seattle, Phoenix, St. Louis.  However, I will take  a shot at this.  Some of my hypotheses:

  1. Government programs to encourage home ownership have reduced mobility.  It is simply harder to move if one has a house to sell, and this was worse in the last recession, which was driven in large part by falling home prices, which made it even harder to move when one has an underwater home to sell.
  2. Political/Cultural redlining reduces mobility.  As an example, certain millennials want to be nowhere else but San Francisco, despite how absurdly hard it is to live there.  They will starve in poverty there before going to, say, Houston, which is an easy place to live when one is young but which many consider to be a evil redneck backwater.
  3. Use of Communication technology causes people to think they can reduce mobility when they perhaps can't.  I think a lot of folks with modern communication technology assume that location is irrelevant and that they should be able to do X work anywhere they want.   I think they are overestimating where many industries and companies are right now (though they may be correct in the future).  Just from tax compliance and regulatory perspectives, it is pure hell for a company in, say, Texas to have an employee in, say, California.  Plus I think there are still real networking and management reasons for employees to be concentrated in facilities.


Denying the Climate Catastrophe: 1. Introduction

Last month I outlined my position on global warming to a fabulous audience at the Athenaeum at Claremont-McKenna College.  In doing so, I had a chance to substantially update my presentation materials.  I realized that it had been years since I had posted this presentation as anything but a video, and so I embark over the next several weeks to lay my position out in a multi-part written series.

Table of Contents (updated as new chapters are added)

  1. Introduction (this article)
  2. Greenhouse Gas Theory
  3. Feedbacks
  4.  A)  Actual Temperature Data; B) Problems with the Surface Temperature Record
  5. Attribution of Past Warming;  A) Arguments for it being Man-Made;  B) Natural Attribution
  6. Climate Models vs. Actual Temperatures
  7. Are We Already Seeing Climate Change
  8. The Lukewarmer Middle Ground
  9. A Low-Cost Insurance Policy

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I suppose the first question I need to answer is:  why should you bother reading this?  We are told the the science is "settled" and that there is a 97% consensus among scientists on .... something.  Aren't you the reader just giving excess credence to someone who is "anti-science" just by reading this?

Well, this notion that the "debate is over" is one of those statements that is both true and not true.  There is something approaching scientific consensus for certain parts of anthropogenic global warming theory -- for example, the fact that CO2 is a greenhouse gas and that concentrations of it in the atmosphere have a warming effect on the Earth is pretty much undisputed in all but the furthest reaches of the scientific community.

But it turns out that other propositions that are important to the debate on man-made global warming are far less understood scientifically, and the near certainty on a few issues (like the existence of the greenhouse gas effect) is often used to mask real questions about these other propositions.  So before we go any further , it is critical for us to get very clear what exact proposition we are discussing.

At this point I have to tell a story from over thirty years ago when I saw Ayn Rand speak at Northeastern University (it's hard to imagine any university today actually allowing Rand on campus, but that is another story).  In the Q&A period at the end, a woman asked Rand, "Why don't you believe in housewives?" and Rand answered, in a very snarky fashion, "I did not know housewives were a matter of belief."   What the woman likely meant to ask was "Why don't you believe that being a housewife is a valid occupation for a woman?"  But Rand was a bear for precision in language and was not going to agree or disagree with a poorly worded proposition.

I am always reminded of this story when someone calls me a climate denier.  I want to respond, in Rand's Russian accent, "I did not know that climate was a matter of belief?"

But rather than being snarky here, let's try to reword the "climate denier" label and see if we can get to a proposition with which I can agree or disagree.

Am I, perhaps, a "climate change denier?"  Well, no.  I don't know anyone who is.  The world has had warm periods and ice ages.  The climate changes.

OK, am I a "man-made climate change denier?"  No again.  I know very few people, except perhaps for a few skeptics of the talkshow host variety, that totally deny any impact of man's actions on climate.  Every prominent skeptic I can think of acknowledges multiple vectors of impact by man on climate, from greenhouse gas emissions to land use.

If you have to slap a label on me, I am a "catastrophic man-made climate change denier."  I deny the catastrophe.   Really, I would prefer "catastrophic man-made global warming denier" because there is no mechanism by which man's CO2 emissions can affect climate except through the intermediate step of warming.   The name change from "global warming" to "climate change" was, to my mind, less about science and more about a marketing effort to deal with the fact the temperatures had plateaued over the last 10-20 years and to allow activists to point to tail of the distribution weather events and call them man-made.    But we get ahead of ourselves.  We will discuss all of this in later sections.

In this series I will therefore be discussing what I will call the "Catastrophic Man-Made Global Warming Theory."   There are a lot of moving parts to this theory, so I will use the following framework as a structure for my discussion.

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This framework follows the work of the UN IPCC, an international panel that meets every 5 years or so to summarize the state of climate science in general and catastrophic man-made global warming in particular.  While I will obviously disagree with the IPCC canon from time to time, I will try to always point out when I do so.  However, I don't think any climate scientists would argue with the framework I am using here to describe their theory.

The first thing you will see, and perhaps the most important single point you should take away from this discussion, is that the core theory of catastrophic man-made global warming is actually a two part theory.  In part one, which is essentially greenhouse gas theory, a doubling of CO2 warms the Earth by a bit over 1 degree Celsius.  But there is a second part of the theory, a theory that is entirely unrelated to greenhouse gas theory.  That theory states that the Earth's climate systems are dominated by positive feedbacks which multiply the initial warming from CO2 by 3- 5 times or more.

It is this two-part theory that causes me, and many other skeptics, the most frustration in the climate debate.  For when advocates say the science is "settled," they really mean that greenhouse gas theory is pretty well accepted.  But this is only one part of a two-part theory, and in fact the catastrophe actually comes from the second theory, the theory that the climate is dominated by positive feedbacks, and this second theory is far from settled.  But again, I get ahead of myself, we will cover this all in great depth in later sections.

No theory in science has any meaning until it is confirmed by observations, so the bottom half of our framework deals with observational evidence for the theory.   The IPCC claims that the Earth has warmed about 0.8C over the last century, and that [much/substantial/most/all/more than 100%] of this warming is due to man.  The IPCC and many scientists have played with the wording of the amount of warming attributable to man over the years, and rather than deal with that complexity here, we will wait until we get to that section.  But it is fair to say that IPCC canon is that man's contribution to the warming is probably not less than half and could be more than 100%.

Finally, on the right of our framework, this man-made warming has the potential to cause all sorts of changes -- to weather patterns, to animal species, to disease vectors -- you name it.  Pick any possible negative effect -- more hurricanes, more tornadoes, more heat waves, more snow, less snow, lower crop yields, more malaria, more rain, less rain, more terrorism, rising sea levels, displaced persons, more acne, etc. etc. -- and someone has been quoted in the media claiming the link to warming.  When something bad happened in Medieval Europe, it was typically blamed on Jews or marginalized women (via witchcraft accusations).   Today, global warming is the new all-purpose target of blame.

Over many installments and several weeks, I hope to walk through this framework and discuss the state of the science (for those who can't wait, I wrote a much shorter overview here several years ago).  We will discuss parts of the science that are well-grounded -- such as man-made warming from greenhouse gas theory and the fact that the Earth has warmed over the last century.  We will discuss parts of the science I consider exaggerated -- such as the claim of large positive feedback multipliers of future warming and attribution of all past warming to man.  And we will discuss parts of the theory which, despite constant repetition in the press, have absolutely no evidence behind them whatsoever -- such as the claim that we are already seeing negative effects from warming such as more hurricanes and tornadoes.

Part 2 on the greenhouse gas theory continues here.

Continuing Solar Fail

I have written a number of times about Ivanpah, the massive solar plant in California.  The plant was funded with a $1.6 billion taxpayer loan, which the company that owns it has since petitioned to be turned in part into a complete giveaway.  The plant is a like a giant bird microwave oven, and its owners would owe literally hundreds of millions of dollars a year in fines if they were fined for bird kills at the same rate as a company like Exxon is.

Now, apparently the plant is in danger of being cut off by PG&E, who contracted to buy its power, because it is substantially under-producing its commitments.  The other day it got a temporary reprieve.  But Anthony Watt notices from recent filings:

Nameplate capacity = 370 MW.
Expected average energy generation per year = 1,000,000 MWh.
This means average power output is 114 MW (about 1/10th of a new nuclear plant).
Capacity factor is 31%.
Cost = US $2.2 billion = $19/Watt average power delivered.

This is around 3x the cost of some recent nuclear power plant builds that most environmentalists have accused of being prohibitively expensive.....

The power plant area that had to be bulldozed over is 20x larger than a nuclear reactor of equivalent average (real) capacity.

The Fed Wins!

I have observed before that the central bank of every major industrialized country is trying to devalue its currency.  Since in some sense this is a zero sum game, they are all locked into a race to the bottom, a competition to see who can be most successful in hammering their consumers and individual savers in order to boost sales of their domestic companies dependent on export markets.

It looks like the US is winning!  Yay for us, we have destroyed our currency the fastest!  Our government has been most successful in making our domestic consumers relatively poorer vs. those of other nations.  Who says the Obama Administration can't do anything right?

The article goes on to point out something I have been saying for years -- that the unprecedented monetary and fiscal stimulus steps that governments are taking today at the peak of the economic cycle (though admittedly a relatively weak peak) is going to leave the tank completely empty when it comes to the next downturn.

While the ECB’s initial move to cut interest rates into negative territory in June 2014 sparked a sharp plunge in the euro, further cuts last December and last week have had little effect on the currency.

“The ECB’s hand has been played out,” said Alan Ruskin, head of G-10 foreign-exchange strategy at Deutsche Bank AG. “The currency market isn’t as responsive to the ECB anymore.”

Similarly, markets have ignored the Bank of Japan’s hints at its monetary-policy meeting this week of more rate cuts to come. Not only has the mechanism transmitting ultraloose policy into the real economy appeared to be broken, but some unconventional policy tools—such as negative interest rates—have been deleterious to banks and rattled financial markets.

And maybe that's OK - maybe at some point some government starts thinking about fixing structural regulation, taxation, and government resource reallocation policies that are the true source of economic weakness.

Probability of A Stock Market Correction

The Wall Street Journal has a good article on investor sentiment, relying heavily on the work by Robert Shiller.  He argues that investor sentiment looks much more like a hindcast than a forecast.  In other words, investors tend to be optimistic after the market just rose, and pessimistic after the market just fell.

The more stocks go up and the faster they rise, the more likely you become to expect more of the same. And when they go down, your expectations fall with them. Investors are often told not to get caught up in other people’s emotions — but it’s at least as important not to get swept away by your own.

New research hammers that point home. Finance professors William Goetzmann and Robert Shiller of Yale, along with Dasol Kim of Case Western Reserve University, have analyzed the Yale surveys and found that investors’ forecasts regularly look more like aftercasts — simple projections of the recent past into the future.

I have no reason not to believe this to be true.

But I think there is something a little wrong with this logic:

You can ask yourself one of the key questions: What are the odds of a one-day crash of at least 12% in the U.S. stock market over the next six months?

You probably answered at least 10% — even though that is roughly 10 times the likely chance of a disastrous daily crash in the coming six months, based on the historical record. (The 87 years from 1929 through 2015 consisted of 174 six-month periods. But, with only two single-day crashes of at least 12% over that span, such declines occurred in just over 1% of the half-year periods.)

Remarkably, professional investors exaggerate the odds almost as badly as individual investors do. Over time, both groups overall have tended to put the odds of a crash at around 20%, with the institutional investors’ estimates ranging only about one to three percentage points below that.

Again, I have no problem with the statement that most people, in a given year, overestimate the chance of a stock market crash.  20%, for any random year, is likely a high estimate.   But that is not the same as saying it is a high estimate for this year.  One could argue that we know more about our current year than to treat it simply as a random year.  For example:

  • We are in the midst of what is soon to be the 2nd longest bull market in the market's history.  Are the odds of a significant correction higher on a particular day 2500 days into a bull market than on a random day in history?
  • Stock prices have risen faster than earning for 5 years.  Is a market correction more likely in that environment than on a random day?
  • Shiller's CAPE is close to the third highest it has ever been, and at a level that has nearly always been followed by a large correction.  Should I treat today's risk of correction as just the last century's average or is it realistically higher?

I don't think 10-20% is a bad estimate given where we are.