Economics 05/01/2009

• Top Senate Democrat: Bankers ‘Own’ the US Congress | CommonDreams.org

  tags: Economics

  • Sen. Dick Durbin, on a local Chicago radio station this week, blurted out an obvious truth
    about Congress that, despite being blindingly obvious, is rarely
    spoken:  “And the banks — hard to believe in a time when we’re facing
    a banking crisis that many of the banks created — are still the most
    powerful lobby on Capitol Hill. And they frankly own the place.”  The
    blunt acknowledgment that the same banks that caused the financial
    crisis “own” the U.S. Congress — according to one of that
    institution’s most powerful members — demonstrates just how extreme
    this institutional corruption is.
  • So:  Paese went from Chairman Frank’s
    office to be the top lobbyist at Goldman, and shortly before that,
    Goldman dispatched Paese’s predecessor, close Tom Daschle
    associate Mark Patterson, to be Chief of Staff to Treasury Secretary
    Tim Geithner, himself a protege of former Goldman CEO Robert Rubin and
    a virtually wholly owned subsidiary of the banking industry.
     That’s all part of what Desmond Lachman — American Enterprise
    Institute fellow, former chief emerging market strategist at Salomon
    Smith Barney and top IMF official (no socialist he) – recently described as “Goldman Sachs’s seeming lock on high-level U.S. Treasury jobs.”
  • Here’s
    Jane Hamsher, with Rachel Maddow, in February, assessing the motives of
    people like Evan Bayh and analyzing who owns and controls them (begins
    at the 3:00 minute mark):

• Think Progress » Banking lobby successfully defeats mortgage cram-down provision.

  tags: Economics

  • Today, a proposal to change bankruptcy law and allow bankruptcy judges to cram-down mortgage payments for troubled homeowners failed in the Senate by a vote of 45-51. The provision, which was introduced as an amendment by Sen. Dick Durbin (D-IL), required 60 votes to pass. In recent weeks, support for the measure evaporated in the face of furious lobbying by the banking and mortgage industries. Prior to the vote, Durbin — who this week said that bankers “are still the most powerful lobby on Capitol Hill” — took to the floor to decry the banking industry’s influence in the cram-down debate:

    At some point the senators in this chamber will decide the bankers shouldn’t write the agenda for the United States Senate. At some point the people in this chamber will decide the people we represent are not the folks working in the big banks, but the folks struggling to make a living and struggling to keep a decent home.

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Sustainability 04/29/2009

• EzraKlein Archive | AND THEN THEY CAME FOR THE YUPPIES.

  tags: Sustainability

  • when i drink milk, if it is not organic, i think that the hormones and antibiotics are getting into my system cumulatively, and i cant imagine that would be a good thing.
    i dont like to take any medications unless absolutely necessary, so i dont want to take them gratuitously in the milk i use.
    i dont know if that is foolish thinking or common sense, but that is how i feel.
    i know there is nothing scientific in this, but when i bite into a crunchy and unpolished apple that is organic, it really tastes better to me.
    i am not imagining that.
    when i bite into a red, delicious apple that looks like it has been polished with armor-all, it just seems to lack taste. i feel sorry for it.
    it looks like they cant breathe in their own skins.
    the lustre on it looks unnatural and makes me uncomfortable.
    i confess that i have no real data, so i am not qualified to have a serious discussion.
    my way of thinking with most things is, “if it aint broken, dont fix it.”
    i just think we tamper with too much stuff.

    i also dont like to eat other animals.
    perhaps i feel that that their brothers and sisters will be angry.
    that is not very scientific, and perhaps just magical thinking, but who knows for sure?
    i have a whole family of rabbits living under part of my house.
    somehow, in some inexplicable way, i think they know i am a vegetarian, and so they are comfortable co-habitating with me.
    i have no scientific proof of this.
    i also apologize to all wasted food and talk to the plants in my garden regularly, as well as with the squirrel family in my tree.
    so i guess i am not the best person to have a discussion with.
    i have no scientific evidence, but i have so many hummingbirds, squirrels and rabbits and butterflies that live right here in my garden, that i think nature approves.
    i wont send any of this to the “new england journal of medicine.”

    Posted by:
    jacqueline |
    April 27, 2009 11:22 AM

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Economics 04/29/2009

• Bill Moyers Journal . Transcripts | PBS

  tags: Economics

  • BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?

    WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you’re talking about was created out of things like liars’ loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That’s why it’s toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it’s scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I’m quoting Fitch, the smallest of the rating agencies, “the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined.”

  • BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?

    WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you’re talking about was created out of things like liars’ loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That’s why it’s toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it’s scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I’m quoting Fitch, the smallest of the rating agencies, “the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined.”

  • WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn’t let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis.

  • BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?

    WILLIAM K. BLACK: There are two reasons. One, they’re much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they’re outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, ‘contracts, sacred.’ But the other element of your question is we don’t want to change the bankers, because if we do, if we put honest people in, who didn’t cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

  • BILL MOYERS: Who’s covering up?

    WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it’s going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they’re allowing all the banks to report that they’re not only solvent, but fully capitalized. Both statements can’t be true. It can’t be that they need $2 trillion, because they have masses losses, and that they’re fine.

• Inflation Prospects In An Emerging Market, Like The U.S. « The Baseline Scenario

  wonderfully informative discussion at Johnson’s blog from the commenters, inflation and the bond holders, that old at-odds couple

  tags: Economics

  • The point (and the problem) is that virtually every action taken heretofore by Paulson/Geithner (Peithner?) has had as its primary goal indemnifying bank CREDITORS against any/all losses whatsoever. It’s not about the stockholders – or even the executives – it’s about the creditors and saving them at all cost. That is why $50 billion was funneled through AIG to Goldman Sachs, Deutsche Bank, Soc Gen, etc. paying them out 100% on what should have been worthless “investments” in AIG credit default swaps. There is a good chance that the CDS’s were, in fact, part of a criminal conspiracy to inflate banks’ balance sheets, in order to facilitate the speculative activity that you so correctly criticized in your now-famous Atlantic article. See:

    http://market-ticker.denninger.net/archives/923-FLASH-AIG-CALLED-CRIMINAL-SCAM!.html

    http://www.ritholtz.com/blog/2009/04/aig-before-cds-there-was-reinsurance

  • One of the most brilliant parts of your Atlantic piece was the proposition that the big banks be nationalized or put into receivership. You seem to have forgotten that in addition to the fact that receivership would help break up “too big to fail” institutions, it would also allow the banks creditors to be either “haircutted” or potentially wiped out. And that’s a good thing. And that’s a good thing that cannot happen with Hank/Tim Peithner continuing the policy of funneling money to the banks (including via the subterfuge that is the PPIP) for the very PURPOSE of protecting bank creditors. Geithner’s half-hearted (and probably insincere) promise to force a bank CEO or two out of office is merely a head-fake to throw everyone off the scent of his real goal: the continuing protection of bank creditors to the exclusion of virtually everyone else in American society. If GM’s bondholders are going to have to take losses (and they are, big-time), why are we wasting hundreds of billions of dollars to protect the creditors of Citi, Deutsche Bank, Soc Gen & others from taking any losses at all?

  • The austrians have a term for the beneficiaries of inflation: early receivers. Guess who they are? The banks, who first get their hands on the newly printed money.

    OTOH, the credit bubble was so big that it appears to my untrained eye to have totally eclipsed our ability to repay in any form, so the inflation necessary to wipe it out will be impossible without End Of The World sorts of events.

  • The receivers — banks, hedge funds receiving TALF/PPIP funding, AIG, etc. — get to spend the new money at old prices which don’t reflect the inflation.

    Next in the chain comes the large corporations who receive financing from the bank. Prices still will not have reacted significantly to the inflation, so they benefit from this as well. Their suppliers will also benefit somewhat, and their suppliers, and on and on.

    The last group in the inflationary food chain are the laborers. Wages are sticky, so laborers can’t expect to have real-time inflation-indexed wages. And, while upper middle class workers may have some negotiating power, less-skilled workers have very little power. As all the players near the top of the food chain begin to adjust to the new money in the system, they will start passing higher prices to their customers, and ultimately to the consumer. The last thing to change will be the laborer’s wages.

  • Fielding Mellish -
    Thanks for the comment about the true objective of the FED and Treasury’s policies. Protection of the bond market. Alas, we can not experience recovery until the credit losses are absorbed. Zombie banks and a fiscal deficit at 14 percent of GDP is obviously not the answer.
  • And the recent decision to start buying long-term Treasury securities means that the Fed is using new approaches to create money. While there is a debate over whether this constitutes “quantitative easing” or just “credit easing,” this represents a major expansion of the Fed’s role, which we discussed in our recent Washington Post Outlook article. These actions may help create moderate inflation and prevent the onset of sustained deflation; there is also a danger that inflation will be substantially higher than expected.

  • Mr. Johnson,

    Your conclusion is correct, but would your analysis change if you consider inflation is currently almost 8% when calculated in the same way as in 1980? See:
    http://www.shadowstats.com/alternate_data
    Read the August 2006 SGS newsletter linked there for the dry details of how and why it was falsified.

    The falsification of the inflation number is the driving force behind your statement:

    “Excessive inflation is a typical outcome in oligarchic situations when a weak (or pliant) government is unable to force the most powerful to take their losses – high inflation is, in many ways, an inefficient and regressive tax but it’s also often a transfer from poor to rich.”

  • The other aspect is that there was a “hidden” inflation created when Greenspan faked the CPI calculation to “fix” Social Security. From the shadowstats.com site it appears the “hidden” inflation has been 8% or more above the official CPI number for more than a decade.

    In other words, if the government claims inflation is 3%, you expect wages to go up about 3% instead of the the 11% more likely inflation number. Then you can’t understand why you keep going in the hole and need to refinace your house to cover expenses. Instead or gaining in wealth with the appreciation in value of your home you are borrowing it and the finance sector gains income for lending to you.

  • Unemployment is accelerating. That is wage deflationary, even if the incomes of those employed remains static.

    Municipalities are asking more from taxpayers (at least here in NY) in property, fees, tolls, public transportation. At the same time the public isn’t spending discretionary income as the fear exists there may be no job (hence no cash) for living expenses. That is deflationary.

    Housing price decline. That too is deflationary, as it was a substitute for static/low rising wages. Home equity wealth was withdrawn and used for consumption (vacations, cars, flat scree TV’s). HEW is now gone, and the wealth effect from that era has been spent.

    Other than praying that it becomes so, how would you expect a wage or price spiral in the shadow of falling job numbers, falling home prices, falling capital production utilization (currently at 65% IIRC, – apology but don’t have a link handy).

    Unless Ben Bernanke launches his cash filled helicopters and begins dropping it in the publics hands, there will be no inflation. Japan has tried and has failed. I think they’re at 190% plus DEBT to GDP….

    When the map (link to Slate.com article below – interactive map of vanishing employment across the country) begins to turn blue again, that’s when you’ll get your inflation. Don’t hold your breath.

    http://www.slate.com/id/2216238/

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Economics 04/27/2009

• http://www.foreignpolicy.com/ Thoroughly Modern Marx

  tags: Economics

  • Ironically, one of the most radical proposals making the rounds today has come from an economist at the London School of Economics, Willem Buiter, a former member of the Bank of England’s Monetary Policy Committee and certainly no Marxist. Buiter has proposed that the whole financial sector be turned into a public utility. Because banks in the contemporary world cannot exist without public deposit insurance and public central banks that act as lenders of last resort, there is no case, he argues, for their continuing existence as privately owned, profit-seeking institutions. Instead they should be publicly owned and run as public services. This proposal echoes the demand for “centralization of credit in the banks of the state” that Marx himself made in the Manifesto. To him, a financial-system overhaul would reinforce the importance of the working classes’ winning “the battle of democracy” to radically change the state from an organ imposed upon society to one that responds to it.

• 19 Major Banks Face Tougher Capital Rule – washingtonpost.com

  tags: Economics

  • Federal banking regulators plan to announce a new, tougher standard for the capital reserves held by 19 large banks that could force some of those firms to sell ownership stakes to the federal government, according to people familiar with the matter.

    Regulators have used the new standard in testing whether those banks — almost all of which got government rescue money — have enough capital to survive elevated losses. The Federal Reserve plans today to share the results of those “stress tests” with bank executives at meetings around the country.

  • Regulators measure the adequacy of bank reserves in several ways, but the most prominent measure, Tier 1 capital, requires banks to hold $6 in capital for every $100 in loans and other commitments. The money is intended to serve as a buffer against losses.

    Regulators have long emphasized a preference for capital raised from the most basic sources, but they have never before articulated a specific standard. Most financial analysts regard $3 in tangible common equity for every $100 in assets as the minimum acceptable ratio.

  • The difference between the two standards has broadened over time as regulators have allowed banks to count the proceeds from the sale of various other financial instruments, and even the fruits of various bookkeeping techniques. Most recently, federal regulators agreed in the fall to broaden the definition to include the money that banks got from Treasury.

    Many financial analysts instruct clients to ignore regulatory capital and focus instead on TCE. They consider this money a more stable and reliable reserve than capital from other sources, such as from the sale of preferred shares, which a bank might desire to repay, thereby depleting its capital.

  • “The market really cares about TCE and it doesn’t care about Tier 1,” the government standard, said Robert P. Kelly, chief executive of the Bank of New York Mellon. He expressed support for an increased regulatory focus on the standard sought by investors.

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Sustainability 04/26/2009

• Worldchanging: Bright Green: Open Intellectual Property as Sustainability Accelerator

  yes – this is the key point that national developments remain incountry, so it’s okay to share the IP globally = the prime benefits accrue incountry

  tags: Sustainability

  • The main point being:

    “Since power plants are built in the home country, most of the investments are in the home country,” he said. “You don’t build a power plant, put it in a boat and ship it overseas, similar to with buildings. So developing technologies for much more efficient buildings is something that can be shared in each country. If countries actively helped each other, they would also reap the home benefits of using less energy. So any area like that I think is where we should work very hard in a very collaborative way — by very collaborative I mean share all intellectual property as much as possible. And in my meetings with my counterparts in other countries, when we talk about this they say, yes, we really should do this. But there hasn’t been a coordinated effort. And so it’s like all countries becoming allies against this common foe, which is the energy problem.”

    This is an incredibly important and poorly understood idea. I also believe that in an era which may see a decline in material globalization and at least something of a return to localized production, adopting open IP becomes paradoxically more important in creating competitive advantages.

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Policy 04/26/2009

• Nudge-ocracy

  read this entire

  tags: Policy

  • Instead, Obama has set out to synthesize the New Democratic faith in the utility of markets with the Old Democratic emphasis on reducing inequality. In Obama’s state, government never supplants the market or stifles its inner workings–the old forms of statism that didn’t wash economically, and certainly not politically. But government does aggressively prod markets–by planting incentives, by stirring new competition–to achieve the results he prefers. With health care, for instance, he would make it easier for employees to tote their insurance from job to job, eliminating the disincentive for insurers to invest in preventive care. Or take his bank plan, which helps banks dispose of their toxic assets, reducing uncertainty and making the banks more attractive to private investors–a far less drastic step than nationalization. Rather than force markets to conform to his wishes, he shapes their calculus so they conclude (on their own) that their interests coincide with his wishes.
  • “reinventing government” to make it more efficient, more responsive, and altogether more

• EzraKlein Archive | The American Prospect

  tags: Policy

  • Yes. Indeed.

    We’ve spent a lot of micro-granular speculation on Obama, but it’s as if we’re playing poker with the man just to figure what he knows, and how he’s really playing, deep down.

    We really can’t know for sure until a few players are cleaned out, and we see who’s stil playing. This will take time.

    But from long before the crucial vote, I’ve been figuring this as poker, and Obama (like Bond in Casino Rolyale) is our best player.

    So – bottom line is, we expect our man to finesse all comers through all events, you see if he doesn’t

    Posted by:
    Ross Hunter |
    April 25, 2009 1:21 AM

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Policy 04/24/2009

• The Unlikely Revolutionary | The American Prospect

  tags: Policy

  • His argument, in a nutshell, is that the last 25 years have seen deregulatory policies driven by the banking interests, leading to an over-large financial sector that has captured the political process. Financiers promoted free-market ideals, served in government, and funneled millions into the political process. Now, the risky behavior of major financial institutions, combined with the public policy they promoted, has created a major crisis. But the bankers’ political power hasn’t waned, and they are preventing the government from acting aggressively to start recovery.

    Johnson and other economists across the ideological spectrum have fashioned a rough consensus that the government needs to take insolvent banks into receivership and use anti-trust tactics to break them apart, producing a financial sector that is small, simple and heavily regulated. But Johnson doesn’t believe this will happen unless the financial crisis becomes even more severe; otherwise, the political incentives standing in the way will be insurmountable even if the price paid by the economy is, in the long-term, devastating.

• EzraKlein Archive | The American Prospect

  tags: Policy

  • I read the profile, and it really does set the tone of Johnson for us nicely.

    I like the final word from Johnson in the article: “Maybe I’m wrong; maybe the banking system isn’t too big, too powerful, or fundamentally bad for us.

    Somewhere between the populism that says there’s a big ol’ conspiracy going on, and the surface press conferences that say the political sphere is in charge of the financial sphere, is the truth of our circumstances.

    I think Simon Johnson’s view of oligarchy is a great way to enter into the conundrum, and I recommend the writings of William Greider for an intimate portrait of the supremacy of capital in our world.

    In all our political ambitions, we have to see that Money was here first, and that long ago banks collected together the first stable critical masses to control the princes and the sovereigns, and that what we’re seeing today is a rare display of how this supremacy of capital works.

    This is important because to regulate the banks, and capital in general, in any meaningful way, will take much more political power and will and focused direction than the voting American people and Obama combined currently possess.

    Posted by:
    Ross Hunter |
    April 22, 2009 9:54 PM

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Economics 04/24/2009

• The Missing Witness « The Baseline Scenario

  tags: Economics

• Economist’s View: Using Anti-Trust Law to Break Up Banks that are Too Big to Fail

  tags: Economics

  • But what should we make of the fact that every singe step in the process is compromised? Every market that was supposed to self-regulate failed? Does every single market
    in the chain fail at the same time through some highly unlikely coincidence? What are the chances that, on their own,
    independently, each and every step in the chain would have been subject to a
    market failure that just happened to let the bubble keep inflating? Whatever it took to keep the
    money flowing through the system seems to have come to pass.
  • So more and more I’m starting to thing there may be a single explanation after all, that the
    regulators of these markets were captured by powerful forces that wanted the
    game to continue. The power of regulators, and the will to enforce the
    regulations, must match – in fact exceed – the will and power of those being
    regulated to resist having constraints placed on their behavior. I’ve talked about why ideology may have eroded the will of regulators, but their will is partly a function of their power. So long as we allow
    huge, clearly over-sized financial institutions to exist, this problem will
    potentially be present.

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Policy 04/23/2009

• EzraKlein Archive | The American Prospect

  tags: Policy

  • Really, this is a laughable idea. The bicameral body of legislation (roughly equaling one house for the nobles and one house for the commoners) has come about quite naturally during the growth of our western heritage. As a system, and especially as the framers of this Union established it for us, it’s a pretty good structure.

    If we perceive that it doesn’t work very well, that doesn’t mean the structure is wrong. It means we don’t have the political muscle to get things done that we want, and to get the system to work effectively (i.e. representatively)

    And the only way to get muscle is to organize. So instead of wasting ink on a sensationalist but lost cause like abolishing the senate, how about defining the present shortcomings, and starting to brainstorm the way to increase political power through organization?

    One day the Republicans will be back, and on that day we’d better hope we got the things done that needed to get done.

    Posted by:
    Ross Hunter |
    April 22, 2009 9:21 PM

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Economics 04/18/2009

• End of economic gloom?

  tags: Economics

  • Given this outlook for the real economy and financial institutions, the latest rally in US and global stock markets has to be interpreted as a bear-market rally. Economists usually joke that the stock market has predicted 12 out of the last nine recessions, as markets often fall sharply without an ensuing recession.

    But, in the last two years, the stock market has predicted six out of the last zero economic recoveries — that is, six bear market rallies that eventually fizzled and led to new lows.

  • First, macroeconomic indicators will be worse than expected, with growth failing to recover as fast as the consensus expects.

    Second, the profits and earnings of corporations and financial institutions will not rebound as fast as the consensus predicts, as weak economic growth, deflationary pressures and surging defaults on corporate bonds will limit firms’ pricing power and keep profit margins low.

    Third, financial shocks will be worse than expected.

  • To be sure, much more aggressive policy action (massive and unconventional monetary easing, larger fiscal-stimulus packages, bailouts of financial firms, individual mortgage-debt relief, and increased financial support for troubled emerging markets) in many countries in the last few months has reduced the risk of a near depression. That outcome seemed highly likely six months ago, when global financial markets nearly collapsed.

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Sustainability 04/17/2009

• Climate Progress » Blog Archive » UK Guardian: “To stop a climate catastrophe … Scientists must stop sanitising their message”

  tags: Sustainability

  • Far from over-playing their hand to swell their research coffers, scientists have been toning down their message in an attempt to avoid public despair and inaction.

  • The idea that the public should be shielded from dire predictions is utter nonsense. When faced with looming threats, people don’t cower under their bed covers. They demand action. They demand wise leadership. And they stand up and do what is right. After all, what choice do we have? But first the threat must be clear and unmistakeable. The scientific community can bring that clarity.

    So it’s about time this sea change began. Scientists have a pressing moral obligation to use the bullhorn at their disposal. They need to push their findings onto the front pages of newspapers and into the lead stories on cable news networks.

    The moment is ripe to toss flowers on the grave of the denier movement. Swing over to Morano’s Climate Depot (sorry I know his name is dead here) and you’ll see what I mean. Many of his posts just cite frightening new scientific studies. The assumption being, I guess, is that we’re supposed to find the conclusions implausible. The point and laugh defense. The other posts mainly link to fringe cranks, who probably failed high school physics, mangling climate data. The deniers are running on empty.

    One of the scientists quoted in that Guardian article said she has to remain hopeful that the world will stabilize at 2 C because she is the mother of small children. But in reality she fears the worst. I don’t want to bash scientists. Without their dedication and perseverance, people like myself would be utterly in the dark. Their research and findings have predicted years in advance the coming catastrophe.

    But if the worst case scenario occurs? What if humanity stays on its current emissions path? What if the firestorm of climatic disruptions ends up sweeping the globe? Will those manning the watchtowers be able to say they shouted as loud as they could?

  • You touched on this before, that many of the predictions say this or that will happen by 2100, 5-7C temp rise, .8 – 2 meter sea level rise. I think that time span is too long to be very effective in convincing folks. It seemed that I read in one of the Real Climate posts, that the models have a “sweet spot” of 20 -50 years in terms of accuracy. By 20 years, the weather noise is weeded out and after 50 years, climate behavior gets too chaotic for very precise prediction. Since we have been modelling for 30 years plus now, I propose saying by 2020, we expect this temperature increase X if we stay with BAU and list predictions for each 10 years intervals. I think that would have more immediacy. Put it all in a matrix or spreadsheet for 5 or so parameters and you would have all in one graphic, a pretty powerful tool. Thanks for your work!
  • Al — Here is something just a few years in the future for you to communicate, if you wish: Solar cycle 24 is just (barely) starting, the sun being in a deep and prolonged minimum. Despite this minimum (and La Nina conditions), 2008 CE was tenth warmest on record. In six years the sun will be at a solar maximum. That implies that 2015 CE will be quite, quite hot!

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Policy 04/17/2009

• EzraKlein Archive | The American Prospect

  tags: Policy

  • And seriously, although the FAQ at texassecede.com tries to twist the logic to show that Texas had a right to secede from the Union during the Civil War, this is not the case.

    I remember reading the US Supreme Court decision (Texas v. White) long ago that demonstrated that none of the states had ever left the Union, because such a thing is not possible simply by declaration of a state.

    The Constitution makes us a perpetual union. The only way to leave is by specifically amending the Constitution to allow this. And one state can’t amend it, it would take the majority agreement of the the nation.

    Which, given the last eight years, might not be hard to come by…

    Posted by:
    Ross Hunter |
    April 16, 2009 4:25 PM

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Economics 04/17/2009

• Reader Questions: Nationalization « The Baseline Scenario

  tags: Economics

  • We made the mistake of describing an economically elegant solution that did not take political realities into account. Our proposal was for the government to buy toxic assets at market value (or something close to it) and then recapitalize the banks directly, at the same time. This would remove balance sheet uncertainty from the banks while minimizing the taxpayer subsidy. The mistake was in overestimating the power of the government to force such a solution. The problem that I have since realized is that as long as the banks can negotiate on their own, they will win that particular game of chicken. They will just say, “no, I won’t sell to you at that price” and wait for the government to propose a sweeter plan – because the government can’t walk away, because it’s responsible for the economic well-being of the country.

• YouTube – Any company that is too big to fail is too big to exist!

  tags: Economics

  • Any company that is too big to fail is too big to exist!

• Op-Ed Contributor – Big Profits, Big Questions – NYTimes.com

  tags: Economics

  • AT its nadir last November, Goldman Sachs’s share price closed at $52, nearly 80 percent below its high of around $250. By then, many of its chief competitors — Bear Stearns, Lehman Brothers, Merrill Lynch and UBS — were dead or shadows of their former selves. Even Morgan Stanley, long considered Goldman’s archrival, had nearly died. But somehow, less than five months later, on the heels of a surprisingly profitable first quarter of fiscal 2009, Goldman Sachs is once again riding high, with its stock closing Tuesday at $115 a share.
  • A few days after Mr. Paulson refused to save Lehman Brothers last September — at a cost of a mere $45 billion or so — he came to A.I.G.’s rescue, to the tune of $170 billion and rising. Then he decided to install Edward Liddy — a former Goldman Sachs board member — as A.I.G.’s chief executive. Goldman has since received some $13 billion in cash, collateral and other payouts from A.I.G. — that is, from taxpayers.

• Steve Keen’s DebtWatch No 31 February 2009: “The Roving Cavaliers of Credit” | Steve Keen’s Debtwatch

  tags: Economics

  • The standard money multiplier model’s assumption that banks wait passively for deposits before starting to lend is false. Rather than bankers sitting back passively, waiting for depositors to give them excess reserves that they can then on-lend,

    “In the real world, banks extend credit, creating deposits in the process, and look for reserves later”.[5]

    Thus loans come first—simultaneously creating deposits—and at a later stage the reserves are found.

  • Thus causation in money creation runs in the opposite direction to that of the money multiplier model: the credit money dog wags the fiat money tail. Both the actual level of money in the system, and the component of it that is created by the government, are controlled by the commercial system itself, and not by the Federal Reserve.
  • Note Bernanke’s assumption (highlighted above) in his argument that printing money would always ultimately cause inflation: “under a fiat money system“. The point made by endogenous money theorists is that we don’t live in a fiat-money system, but in a credit-money system which has had a relatively small and subservient fiat money system tacked onto it.
  • We are therefore not in a “fractional reserve banking system”, but in a credit-money one, where the dynamics of money and debt are vastly different to those assumed by Bernanke and neoclassical economics in general.
  • If only it were the world in which we live. Instead, we live in a credit economy, in which intrinsically useless pieces of paper—or even simple transfers of electronic records of numbers—are happily accepted in return for real, hard commodities. This in itself is not incompatible with a fractional banking model, but the empirical data tells us that credit money is created independently of fiat money: credit money rules the roost. So our fundamental understanding of a monetary economy should proceed from a model in which credit is intrinsic, and government money is tacked on later—and not the other way round.

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Sustainability 04/16/2009

• World will not meet 2C warming target, climate change experts agree | Environment | The Guardian

  tags: Sustainability

  • Guardian poll reveals almost nine out of 10 climate experts do not believe current political efforts will keep warming below 2C

  • The 261 respondents represented 26 countries and included dozens of senior figures, including laboratory directors, heads of university departments and authors of the 2007 report from the Intergovernmental Panel on Climate Change (IPCC).

    The poll asked the experts whether the 2C target could still be achieved, and whether they thought that it would be met: 60% of respondents argued that, in theory, it was still technically and economically possible to meet the target, which represents an average global warming of 2C since the industrial revolution. The world has already warmed by about 0.8C since then, and another 0.5C or so is inevitable over coming decades given past greenhouse gas emissions. But 39% said the 2C target was impossible.

  • Many of the experts stressed that an inability to hit the 2C target did not mean that efforts to tackle global warming should be abandoned, but that the emphasis is now on damage limitation.

Posted from Diigo. The rest of my favorite links are here.

Policy 04/16/2009

• EzraKlein Archive | The American Prospect

  tags: Policy

  • The Washington Post reports on a new study by Raquel Meyer Alexander, Stephen Mazza, and Susan Scholz that quantified returns on a lobbying effort to enact a single tax break in 2004. The one-time change to the tax code benefited 800 companies, allowing researchers to go back and look at how much the various beneficiaries spent to push the change. The found that the legislation “earned companies $220 for every dollar they spent on the issue — a 22,000 percent rate of return on their investment.”

    “The study by researchers at the University of Kansas underscores the central reason that lobbying has become a $3 billion-a-year industry in Washington: It pays.”

  • It’s not just about lobbying either- fundraising for elected officials is a game that pays off by orders of magnitude: Contribute thousands to make millions; millions to make billions.

    There’s just no two ways about it: Politicians are good investments.

    Posted by:
    mkd |
    April 13, 2009 4:50 PM

    

    That was a one year lobbying expense with a multi-year benefit. The return was even higher than 220 times return.

    My regular scan of the newspaper evaluation regularly sees an expected a 1000 fold return to lobbying expense.

    Posted by:
    grooft |
    April 13, 2009 10:19 PM

• EzraKlein Archive | The American Prospect

  tags: Policy

  • Obama thus proposes to save the taxpayers more than $4 billion per year by ending the guaranteed loans. This is as straightforward a case as you can find of a fight between special interests and the public good.

  • This will be a good test case for the power of lobbyists amidst the Obama administration. It’s an indefensible program in a time of unsettling budget deficits. The chosen lobbyists are Democratic heavy-hitters. Their targets are Democratic congressmen. They will be offering contributions for Democratic campaign chests and raising funds for Democratic campaigns. Anyone want to take odds?

    Posted by Ezra Klein on April 13, 2009 3:25 PM | Permalink

  • Never bet against Obama.

    Posted by:
    JB |
    April 13, 2009 7:05 PM

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Economics 04/16/2009

• EzraKlein: IS FINANCIAL INNOVATION A GOOD THING?

  tags: Economics

  • Let’s go further. Why should banks exists?

    I like Felix Salmon’s points, as far as they go, but he doesn’t say or seem to know exactly how to regulate these institutions. Maybe that’s because he’s not going deep enough to cut out the cancer.

    The more reliable solutions may lie in the fundamental area of asking: what, exactly, do we need banks for anymore? Are they really that good at moving money around? Couldn’t we do it better, at far less cost?

    The money power is everywhere a sovereign power, and sovereignty in the U.S. means us the people. We, through the Fed, create (and destroy) money, but it goes first to the banks, who make a percentage on it before it even trickles down to us, discounted in value by the mildly inflationary activity of the banks before us.

    The banks also make a percentage on our deposits in checking accounts, while all we need is a trustworthy storehouse of stable currency to draw on for spending purposes.

    The modern system of adjusting the money supply through interest-dependent banks is an inheritance from the centuries during which the only thing that could move money around was interest, and banks were the vaults that handled the stores of excess liquidity, paying less interest than they earned, and making their profits in the difference.

    The banks still enjoy this legacy position as a supposedly necessary part of the economic matrix. But are they?

  • Right now a vast amount of our sovereign credit and good faith is going down the drain to make whole a class of people who have violated their obligation to manage their own economic affairs prudently, as good stewards of trust, as the privileged intermediary between the Federal Reserve System’s money creation and the markets.

    The only thing that has made our economy stable throughout our history has been Federal intervention as the guarantor of last resort. The government, and thus the American people, have taken up the fiduciary responsibility laid down by the banks. Our latest crisis is little different from all the other panics we’ve had to endure because nobody could come up with a better system of financing the productive economy.

    The answers to the failures of finance don’t need to be looked for in a narrow view of what was missing this time around in terms of regulation. The answers need to be sought from the long history of bank and market failures, and in our willingness to take a fresh look at the mechanics of the financial sector. We should be asking, how we can actually create an economy that behaves in a manner as stable as the sovereign guarantee which is the only thing that makes it all possible in the first place?

    It’s time to get rid of the whole idea of banks, and time for us to start managing our own money ourselves, using the computers that made the Internet, and our own crowdsourcing, and transparently numerated money and instruments of money.

    If finance today is unintelligible to almost all people, that doesn’t mean we can’t design perfectly understandable methods of loan and repayment, and risk and reward, and stable money measures, and have all of this be subject to the rule of law and sovereign political accountability.

    Posted by:
    Ross Hunter |
    April 15, 2009 12:48 AM

Posted from Diigo. The rest of my favorite links are here.

Sustainability 04/14/2009

• The Prophet of Climate Change: James Lovelock : Rolling Stone

  tags: Sustainability

  • His latest thought: suspend hundreds of thousands of
    600-foot-long vertical pipes in the tropical oceans, put a valve at
    the bottom of each pipe and allow deep, nutrient-rich water to be
    pumped to the surface by wave action. Nutrients from the deep water
    would increase algae bloom, which would suck up carbon dioxide and
    help cool the planet.

    “It’s a way of leveraging the Earth’s natural energy system
    against itself,” Lovelock speculates. “I think Gaia would
    approve.”

• Climate Progress » Blog Archive » Washington Post corrects itself: “Make no mistake, Arctic Sea ice is melting,” may be gone in summer by 2013, “renders climate studies and models seemingly obsolete”

  tags: Sustainability

  • Will’s misstatements on Arctic ice were so egregious that Post reporters took the unprecedented step of contradicting Will in a recent news article:

    The new evidence … contradicts data cited in widely circulated reports by Washington Post columnist George F. Will that sea ice in the Arctic has not significantly declined since 1979.

    But the Post has topped that stunner:  Today, the Post ran an editorial, “Arctic Ice Is Melting:  The 30-year decline is accelerating, new data show,” which begins:

    MAKE NO mistake, Arctic Sea ice is melting. According to the National Snow and Ice Data Center and the National Aeronautics and Space Administration, the maximum extent of the winter sea ice cover for 2008-09 was the fifth-lowest on record. Underscoring their point, the agencies added, “The six lowest maximum events since satellite monitoring began in 1979 have all occurred in the past six years (2004-09).”

    Global warming is doing a number on Arctic Sea ice.

    “Make no mistake”?  How about make no mistakes twice? (see “Post lets George Will reassert all his climate falsehoods plus some new ones“)

  • Our financial establishment, if judged by the output of the Council on Foreign Relations, now wants a new cold war with Russia over the 90 billion barrels of oil projected to be under our current polar icecap. They talk about “the new great game in the arctic”, and a gold rush for arctic resources.

    Chances are, they are just setting their readers up for the “adapt to it” conceptual frame, very popular in Time magazine. As if adapting to a methane catastrophe was even possible:

    http://www.killerinourmidst.com

    No we can’t adapt to this thing. And we can’t take a chance that James Lovelock was right, when he realized, as quoted in his interview in Rolling Stone in 2007 ” I realized that the climate system was in failure mode”.

  • One side note (supposition of mine) to these extinction events that ties into crude oil, which supposedly came from huge amount of algae – I could never figure out how you could get such huge amounts of algae with fish and other creatures in the sea which would want to eat it – with a Canfield Ocean (which existed many times for long periods of time) you get a sea full of algae that can handle the hydrogen sulphide – the irony being that our crude oil supplies may have come from (basically) global warming events that spiraled into exctinction events eons ago – and here we are, unknowingly having unlocked pandora’s box to it.

  • We are increasing CO2 at a rate that is unprecedented, and also increasing methane at an unprecedented rate. Couple that with deforestation, and half a trillion tons of carbon stored in the forests that is likely to be released by firestorms, and a trillion and a half estimated tones of carbon in the permafrost some of which is likely to be released by bacterial and fungal decay (and perhaps even peat fires) when it melts. The oceanic methane hydrates contain something on the order of five or so trillion tons of carbon in the form of methane gas, a greenhouse gas currently 25 or so times worse than CO2. The oceans could also start evolving large amounts of dissolved CO2 – think of how CO2 bubbles out of a warm soft drink, compared to a cold one.

    Compare this to something like three quarters of a trillion tons of carbon currently in the in the atmosphere, and a third of a trillion tons of carbon released by the entire industrial revolution. So, to spell it out, runaway heating could dump at least 10 times as much carbon into the atmosphere as it currently has, in a form that is initially 25 times worse as a greenhouse gas than CO2.

    No matter how robust a self-regulating system the climate is, and it is robust, it’s hard to see how it could handle this sort of stress.

    Lovelock may have had it right, IMO:

    http://www.rollingstone.com/ politics/ story/ 16956300/ the_prophet_of_climate_change_james_lovelock

    In this interview in Rolling Stone, he predicts 6 billion dead by 2100. Even he might be conservative in this estimate.

  • Leland, I like to tell myself that if the methane in the Arctic started rushing out, the world would warm so rapidly that the resulting chaos and hysteria would ultimately shut down most of our CO2 emissions as everyone scrambled northward with whatever they had. It would be rather barbaric and nasty, and plenty of people would die, but it would keep us from turning into Venus.
  • ertainly we are capable of solving this. But, here in the U.S., we are dealing with a financial elite that has become an elite because of oil and other fossil fuels. They don’t want to change, and they are so rich and powerful we may not be able to force them to change. The Council on Foreign Relations, traditionally dominated by the Rockefeller family (who remain major stockholders in ExxonMobil and who are powerful enough within ExxonMobil to recently force the ex-CEO, Lee Raymond, to resign) has run a series of truly incredible articles by Scott Borgerson, talking in really incredibly daft terms about a new gold rush for “resources” including oil in the arctic and especially under the current icecap. Borgerson has recently carried this message to Congress, and testified before the House Foreign Relations Committee, who thanked him for his testimony and told him he had been very helpful. This campaign has included at least one op-ed in the New York Times by Borgerson, who also talks about “adapting” to global warming.
  • I’m not worried about ordinary, reasonable people. I’m worried about ExxonMobil, and Peabody Coal, and the Koch brothers that fund the Cato Institute.
  • I remember last summer in northern California. We had a million acres burn, in California, last year, when a couple hundred thousand or less is normal.

  • Chris Field recently testified before Congress. He is a Stanford climate scientist, and one of the IPCC group leaders. His testimony before Congress was rather subdued, but the next day on Democracy Now! he laid it on the line:

    http://www.democracynow.org/ 2009/ 2/ 26/ member_of_un_environment_panel_warns

  • The reason I say we’re on a trajectory of climate change that we haven’t explored is that we have only looked at scenarios where the growth of CO2 was limited to in the range of two to 2.5 percent per year. We genuinely don’t know what a climate will look like with the more rapid rate of increase that we’re actually seeing….

• Methane catastrophe

  tags: Sustainability

  • The amount of methane
    that can be released is indeed massive. Estimates of the amount
    of seafloor methane generally range from about 5000 billion metric
    tons to around 20,000 billion metric tons (a metric ton is equal
    to 1.1 imperial tons, the standard ton used in the United States),
    though they usually range around 10,000 billion metric tons. This
    amount of methane contains about 7500 billion metric tons of carbon,
    vastly more than all the estimated carbon in all fossil fuels:
    petroleum, coal, and natural gas. There is a simple way to put
    10,000 billion metric tons of methane into perspective: it contains
    about ten times the amount of carbon (largely in the form of carbon
    dioxide) as does the entire atmosphere. Moreover, though methane
    entering the atmosphere is quickly oxidized, it is oxidized to
    carbon dioxide, so the problem of its warming ability will remain
    with us for thousands of years into the future.
    

    A methane catastrophe,
    therefore, is an abrupt surge of greenhouse gas that could rival
    or exceed the carbon dioxide warming of the planet. It could potentially
    overwhelm the natural heat regulatory system of the Earth, which
    operates in a much more gradual way, and on a much more protracted
    time scale. The quantity of methane that could be released is
    so massive there would be no remedial action that people would
    be able to take to mitigate it except in the most superficial
    way. Once a methane catastrophe were to begin, there would be
    major consequences for the planet and its inhabitants, human and
    other, and we would be able to do little except wait it out. Methane,
    in a very real sense, is the joker in the deck of global warming.

  • We are certainly on the
    verge of releasing a huge amount of permafrost and seafloor methane
    within a very short time; we may also be on the brink of methane
    catastrophe. By our own actions — by our continuing and increasing
    use of carbon fuels — we are slowly but inexorably creating the
    conditions during which a such a methane release, catastrophic
    or more gradual, could occur. We probably have time to prevent
    a catastrophe, but there is a certain non-negligible possibility
    that we have already crossed — or will shortly cross — an invisible
    threshold that will render a methane catastrophe inevitable and
    unstoppable.

• Poor prognosis for our planet | smh.com.au

  tags: Sustainability

  • The great insight offered by James Lovelock in Gaia is that we are the model. Planet Earth, being a web of complex self-regulating systems, operates very much like a human body. Terminal illness gives us the template for most forms of ecological collapse. One set of changes initiates another, and so on in a downward cascade of negative feedback until the whole system falls apart.
  • wherever you look in the natural world the message of exponential change is reinforced, yet humans have a weird predisposition to see change as linear.
  • But there is no tipping point – a curve is always tipping, and each new finding redraws the curve. If this year’s figure comes in under 4 million square kilometres the patient could be dead inside five years, and ships will be crossing the North Pole in September 2014.

Posted from Diigo. The rest of my favorite links are here.

Policy 04/12/2009

• EzraKlein Archive | The American Prospect

  Kyle is right in his last comment at 2:01pm, Carter was incompetent for the job. Firing his cabinet was just a part of the many mixed signals we received, his whole vibe was confusing.

  I wondered at the time, as I also did in year 2000: in a nation of how many million people, this is all you can come up with for the top job?

  Posted by: Ross Hunter | April 11, 2009 1:51 AM

  tags: Policy

  • 

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Economics 04/12/2009

• Banks and mark-to-market accounting | Messenger, shot | The Economist

  tags: Economics

  • bampbs wrote:

    April 9, 2009 1:23

    Wrong. Mark-to-Market is pro-cyclical systemic lunacy. There is a good reason that assets being held to maturity ought to be carried at historical cost – markets go to idiotic extremes ! Time to kill off efficient market theory idolatry for good. The banks ought to hold beaten-down securities until sanity prevails. Why is it prudent to sell at the bottom ? Please don’t trot out the absurd ’90s Japan analogy. Housing in their six largest cities fell by 2/3. The government propped up their banks so that they could continue to make bad loans for years. How is that relevant ?

• Op-Ed Columnist – Making Banking Boring – NYTimes.com

  tags: Economics

  • During this first era of high finance, bankers were, on average, paid much more than their counterparts in other industries. But finance lost its glamour when the banking system collapsed during the Great Depression.

    The banking industry that emerged from that collapse was tightly regulated, far less colorful than it had been before the Depression, and far less lucrative for those who ran it. Banking became boring, partly because bankers were so conservative about lending: Household debt, which had fallen sharply as a percentage of G.D.P. during the Depression and World War II, stayed far below pre-1930s levels.

    Strange to say, this era of boring banking was also an era of spectacular economic progress for most Americans.

    After 1980, however, as the political winds shifted, many of the regulations on banks were lifted — and banking became exciting again. Debt began rising rapidly, eventually reaching just about the same level relative to G.D.P. as in 1929. And the financial industry exploded in size. By the middle of this decade, it accounted for a third of corporate profits.

• EzraKlein Archive | The American Prospect

  tags: Economics

  • What do you mean, “how to do it is not clear”? It’s very clear.

    Have a look at http://www.truthandpolitics.org/top-rates.php, which shows the history of the top marginal rate. In 1980, the rate was 70% on income over $215,400, which is about $550,000 in today’s money. The Reagan tax cuts pushed this rate to 50% in 1982, thinking the high rate discouraged wealthy people from working. It did, but one form of “work” was engaging in financial recklessness. Another was figuring out ways to cut the pay of workers further down the scale to enrich those at the top.

    A 70% marginal rate on incomes over $600K (regardless of industry) sounds reasonable to me. It would have been politically unthinkable just six months ago, but might fly today.

    In fact, go further back, to 1963. Before the Kennedy tax cuts, the top rate was 90 percent on incomes over $400K, or $2.8 million in today’s money. Really — why not?

    Posted by:
    tyronen |
    April 10, 2009 6:53 PM

• EzraKlein Archive | The American Prospect

  tags: Economics

  • As far as allocative efficiency is concerned, the finance industry is the glaring exception to all. Unlike most other industries, where company profits are closely linked to social value added, there is virtually no such link in the financial industry. When we send smarter people to financial firms, they just figure out more devious ways to increase leverage and unload hidden risk on the rest of the system. They make the total economic pie smaller, not bigger. So an incentive system that steers society’s brightest to the financial industry is actually counterproductive.

  • Let’s see, what else is enormously profitable for the individual participant, but costly for society? Plain old crime! Before the mid 1970s our financial system was regulated in such a way that the hijinx that the banksters were up to would have been criminal. Turning back the clock on the regulatory structure might be enough to do the trick.

    Posted by:
    chrismealy |
    April 10, 2009 5:56 PM

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Economics 04/07/2009

• Beat the Press Archive | The American Prospect

  tags: Economics

  • James – in general interest on home equity loan is deductible, plus loan rates are often lower than credit cards, so it is frequently the smart way to pay CC debt down to zero.

    As for defaulting on CC debt, we’re not talking about defaulting on anything. Your example given was 20K equity value, 15K unsecured debt. Why ruin your credit rating when you’re not even upside down to begin with?

    But it’s not just the equity that may have disappeared, it’s also the workability of a house being the cornerstone of one’s finances that has changed – the banks won’t play.

    I have friends in California who CANNOT persuade their mortgage holder to modify the loan, and this story is common, at least out there.

    People have to walk away from their houses, the banks just won’t cooperate – and while they wait the several months for foreclosure to kick in, soem people are buying as much as they can on their cards if they plan to default on everything, others are re-ordering their finances, perhaps getting to a cash basis for life in a rental on a lower credit score.

    Posted by:
    Ross Hunter |
    April 6, 2009 2:03 PM

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Sustainability 04/02/2009

• EzraKlein Archive | The American Prospect

  tags: Sustainability

  • Let’s get straight on the number for sure. From the 350.org link supplied by Robin Ozretich above:

    ‘As James Hansen of America’s National Aeronautics and Space Administration, the first scientist to warn about global warming more than two decades ago, wrote recently, “If humanity wishes to preserve a planet similar to that on which civilization developed and to which life on Earth is adapted, paleoclimate evidence and ongoing climate change suggest that CO2 will need to be reduced from its current 385 ppm to at most 350 ppm.”‘

    And all of this comes from the fact that everything on the planet that can melt IS melting, and it’s happening now – far in advance of any of the models.

    That Wikipedia link that Ezra supplied needs to be read carefully. It refers to an older model, yet even that model presents only a realm of unknowns at 550 ppm. For more certainty, it suggests 400 ppm for a stable 2 degree rise in temperature (which is way more than we want by the way).

    What’s happening now was not quite foreseen by the science of 2005 presented in the wikipedia summary. What’s happening now is scary – the warming and the melting are already in rapid acceleration, decades before we thought we’d see it.

    It will be a great public service of this blog to get clear on the state of play in climate change, as it has on economics. And as I like to recommend, Joe Romm’s scientific reporting at Climate Progress is the place to go for that.

    Posted by:
    Ross Hunter |
    April 1, 2009 5:21 PM

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