Kamis, 01 September 2011

Obama "Leads" from Behind

Here is a post by Mark Thoma on his Economist's View blog showing Obama's idea of "leadership":

The White House has a new initiative:

“The idea behind ‘We the People’ – as the new program will be known – is that anyone with an idea or cause can go to the White House’s website, and make a public pitch for support. If the idea gets 5,000 backers within 30 days, said White House spokeswoman Sandra Abrevaya, a ‘working group of policy officials’ will respond.” You can check out the White House website here.

It won't get 5,000 comments, but I have a petition:

The administration should propose an aggressive job creation package as soon as possible, and apologize for not doing so sooner.

The White House website says:

Creating or signing a petition is just the first step. It’s up to you to build support...

I was kind of hoping the administration would help to "build support" for a job creation package, that's been a problem all along. But I suppose I shouldn't expect things to change now.



Maybe Obama will surprise us when he gives his jobs speech later this week (if Boehner will let him talk), and unlike the last time maybe the administration will follow up and do what they can to build the support such a program would require -- given the size of the employment problem it's worth trying -- but I'm not expecting that to happen.

This is pathetic. Obama is encouraging his "followers" to do a "buid your own government and leave Obama out" movement. The guy simply doesn't want to lead. Even when people get together and petition, he will pat them on the back and point them out the back door and tell them "keep up the good work" and not offer even the slightest help. Crazy!



From a separate post by Mark Thoma:

Remember the White House Jobs Summit? It was in December, 2009:

White House Jobs Summit: Real Progress or PR Stunt?, ABC News: President Obama said today that he is not interested in "taking a wait-and-see approach" when it comes to job creation, as his administration faces unemployment numbers at their worst levels since 1983.



"What I'm interested in is taking action right now to help businesses create jobs right now, in the near term," the president said at the opening session of the White House jobs summit.



The summit, announced a week after the Bureau of Labor Statistics said unemployment reached 10.2 percent, is the administration's latest effort to do just that.



However, some critics dismiss it as little more than a publicity stunt.



Obama acknowledged the skepticism that the summit would produce tangible results, but said he was confident there would be some progress...

Obama was not interested in "taking a wait-and-see approach"? Here we are almost two years later and I would be hard-pressed to make a case that the summit marked the beginning of a serious attempt to create jobs. Apparently, being serious about job creation means that when poll numbers are down and a reelection can be seen in the distance, then it's time to pretend like you are doing something.

Don't hold your breath. The 2011 version of "jobs, jobs, jobs" is likely to see as much "follow through" as the 2009 version of "jobs, jobs, jobs".

Obama's Goose is Cooked

Here is Lakshman Achuthan of ECRI pointing out that it is now too late for Obama to change the unemployment level during the 2012 elections:







He points out that unemployment is going back up in the short term and if this cyclical slowdown becomes a recession, then above 10% unemployment is likely. That should have caused Obama to put out a "battle stations!" cry back in the spring, but he didn't. He continues to drive in neutral and wonder why he has no acceleration. Obama deserves a D- grade in economics.

Trouble Right Here in River City

The Music Man sang about trouble in middle America. But there is now big trouble all across America in its higher educational institutions. Here is a bit from a post by Frederick Sheehan in Barry Ritholtz's The Big Picture blog:

The Atlantic magazine has illustrated the unsustainable growth of student debt in the chart below. In David Indiviglio’s August, 18, 2011, article, “Student Loans Have Grown 511% Since 1999,” the author notes: “Obviously the number of students didn’t grow by 511%. So why are education loans growing so rapidly? One reason could be availability. The government’s backing lets credit to students flow very freely…. [U]niversities are raising tuition aggressively since students are willing to pay more through those loans.”



Click to Enlarge


...



The number of colleges will plummet. This is due to the loss of nerve, confidence, substance, direction, integrity – will that do? – of teaching in America. Just look at that chart: what a picture of insatiable greediness and self-indulgence among the colleges. No thought to the unbearable debt deposited on their students.



... In another Atlantic article, “The Debt Crisis at American Colleges,” authors Andrew Hacker and Claudia Dreifus write: “[C]olleges have embraced a host of extraneous activities – from obscure sports to overseas centers – and tacked most or all of their tabs onto students’ bills. Unlike businesses, which cut losing operations, colleges simply hike their tuitions.” Will former Harvard Professor Elizabeth Warren’s ill-defined federal agency, watchdog over slatternly marketing hoaxes by financial institutions, apply the same standards to deceptive, college sales practices?



...



Gloom, Boom & Doom Report, Marc Faber quoted a study from the Goldwater Institute that found between “1993 and 2007, the number of full-time administrators per 100 students at America’s leading universities grew by 39 percent, while the number of employees engaged in teaching, research, or service only grew by 18 percent.”

With unemployment sky high entry into the job market for new graduates is especially hard. So the diploma that was bought with all those big bucks is actually worth less today than it was 5 years ago. Prices up, but value down. That is a recipe for a product that is going to implode.

Reasons to be Skeptical of Doomsday "Global Warming" Claims

Here is one of the better summaries of the skeptical viewpoint on the issue of "global warming" or "climate change" or "climate disruption" or ...



This is from a post by Charlie Martin on the PJ Tattler blog:

“There are few skeptics (I can’t think of any, and I’ve been reporting on this for two solid years and an interested bystander for several years before that) who don’t believe there has been significant warming since the Little Ice Age, or that humans contribute to it, or that additional CO2 or other greenhouse gases aren’t probably part of that contribution.”



Unless one is arguing that humans are the only cause of global warming — in which case I’d have to point to that big glowing thing in the sky during the daytime — what I said explicitly includes a human contribution and even a greenhouse gas contribution.



Now, the IPCC AR4 model is rather stronger than that: it insists that anthropogenic, greenhouse-gas forced warming is the dominant — so dominant that it leads the unthoughtful to turn it into “only” — cause of global warming. For conciseness, call that the AGW model. Reasons I don’t find that hypotheses convincing include:



(1) from the start, it has depended on very sensitive statistical techniques to tease a signal out of an overall warming that has been going on for 500 years. Refer back to the famous “hockey stick” charts and then look for one with actual error bars: even in the papers making the strongest arguments for the AGW hypothesis have very wide error ranges — so wide that the AGW component barely exceeds the limits of the technique.



(2) the specific methods used for some of the dominant studies turn out to be mathematically flawed. in particular, the methods of Mann _et al_ turn out to present a clear hockey stick no matter what the input data is, including pure random numbers.



A method that detects a signal when there is no signal is necessarily suspect. At best.



Other examples of questionable parts of these results include:



the methods used to select data points in the GCHN data sets — examined carefully, it turns out that the selected points used to compute GAST and regional temps are, to a *very* high probability, the points from the raw data set that lead to the most warming. Carefully read, the descriptions of the analysis even say that’s a selection criterion: they’re selecting data points that fit the models well — but then testing the models by how well they fit the data.

actual site locations turn out to very commonly have poor site placement and site changes that would add significant warming. This warming has not been appropriately compensated for. [Note: GHCN3 does handle site changes better, Charlie is probably not aware of it since it is relatively new- Anthony]

odd ad hoc methods to fit together paleoclimate data and actual temperature measurement, including the famous “hide the decline” patching, and contrariwise the exclusion of recent tree ring data that suggests tree rings may not be as strongly correlated with temperature as we think. The explanations for those exclusions end up looking very ad hoc in themselves.



(3) There is actually extensive literature showing anthropogenic components that are not driven by greenhouse gases. These results have been excluded from the IPCC, often in very questionable ways (cf Roger Pielke Sr’s removal from the IPCC editorial board.)



(4) The predictions of further warming are necessarily based on models. Now, it happens I did my PhD work on Federally funded modeling, from which I developed the NBSR Law (named after the group for which I worked): All modeling efforts will inevitably converge on the result most likely to lead to further funding.



Anyone with a unbiased eye who looks into it will find any number of people who have found that a model that predicts more warming gets funded; a model that predicts relatively less warming gets less funding. Pre-tenure researchers in particular are warned away from results that don’t fit orthodoxy.



(5) The models themselves turn out not to be very predictive. Grossly, you could look at Jim Hansen’s prediction from the 80′s that Manhattan Island would be awash by the 2000′s. More technically, there were a number of models that predicted pretty significant warming, and in fact an increased warming rate, increased 2nd derivative, in the span 1990-2010. In fact, the warming was much smaller than predicted, and the second derivative appears even to have turned negative.



These models are often revised so that after the fact that predict what really happened. This isn’t very satisfactory.



In the mean time, actual observation, as eg with Dick Lindzen’s recent paper, simply isn’t fitting the models very well. As Granddaddy used to say “if the bird book and the bird disagree, believe the bird.”



(6) It’s unclear how the AGW hypothesis can be falsified in its current form. Certainly, anecdotally, there are people who predict that unusual warm spells are a sign of global warming, as are unusual cold spells. Should we have a period of unusually small variation, there are people who have suggested that as an effect of global warming. And in any case, simply observing warming doesn’t allow one to infer the truth of AGW as a hypothesis.



(7) The arguments against the skeptics turn out to be unscientific, and often unprofessional, in the extreme.



These range from the common — “the consensus is” — to the ad hominem, and even to outright attempts to suppress free inquiry.



“The consensus is” neglects the fact that science isn’t decided by consensus, not permanently at least. (At one time, the consensus was that fire involved a special elemental substance called phlogiston; at another, it was that atoms were indivisible and unchangeable; not so long ago, it was that light was a wave in a literally ethereal substance called the “luminiferous aether.” If consensus precluded further testing, we would still believe those today.)



The ad hominems include the way that anyone who ever received so much at a 10 cents off gas coupon from a service station is accused of being in the pay of Big Oil. Sometimes, the ad hominems are frank lies, but they get out into the AGW enthusiast community and are treated as truth.



And, well, anyone who read the ClimateGate files knows about actual attempts to suppress certain authors and papers. Perhaps it’s not fair to call it “conspiracy”, but the fact is that there is clear and unequivocal evidence of collusion and bullying on authors, reporters, and journal editorial boards.



If the AGW arguments are that strong, they don’t need collusion and bullying.



So, this is a very long piece considering I’m not getting paid to write it; let me summarize.



First of all, what *I* said wasn’t what you supposed I’d said. It would be worth considering what else you _think_ you’ve read recently for other cases.



Second, to the extent that I have a position, as I said, I think warming is unequivocal, a human contribution very probable, and the magnitude of that contribution in the face of feedbacks and homeostasis currently unknown and on the very edge of what we can actually measure.



And third, I don’t think the AGW enthusiasts consider the costs and benefits of AGW amelioration versus the other possibilities. If preventing a sea level rise of one meter means dooming future generations in the Third World to sickness, hunger, and darkness, it’s not worth it.

The sad fact is that skeptics get painted as some howling crazies by the "mainstream". But the reality is that most skeptics are pretty reasonable people. There are a number of very good reasons to not rush off with a wild-eyed look stampeded by some doomsday fear. I've lived long enough to see many, many examples of fanatics drumming up this kind of frenzy that the world is coming to an end unless we act now! Most have a grain of truth in them. But that element of truth is blown out of proportion and a threat is turned into a bogeyman blown up way out of proportion to the real threat.



Personally, I have nothing against conservation and a push to develop alternate energy sources. What I don't like is hue and cry of fanatics who would have us go back to the lifestyles of the late 18th century. That just isn't going to happen with the population of the earth of today. And I'm not going to allow the spoiled offspring of the well-to-do stampede governments and international organizations into preventing the bottom third of the world from attaining decent lifestyles. That simply isn't morally acceptable and you can't scream "doomsday" loud enough to make that acceptable. I'm from the old school that says that if there is a danger, we all hang together and get out together. We don't let the affluent run for the exits and "sacrifice" the rest of us so they can keep their lifestyles while condemning us to go fossil fuel free.



But my real bottom line is that I just don't believe the "science". I've done computer modeling and I know how hard it is to get it right in a complex scenario. And the climate system is not just complex but not fully understood by climatologists, so the models are "premature" as forecasting tools. They may be useful in investigating climate issues, but they are not ready for prime time predictions about the future.



As Charlie Martin points out, yes there has been warming, but the skeptics are fighting over whether that was anthropogenic or something else. I vote for the "mostly something else". Meanwhile, the portion that is anthropogenic can be dealt with without the hysteria of the doomsday crowd.

Class Warfare

Here is a bit from a post by Dean Baker on his Beat the Press blog that makes it very clear that the rich bankers aren't interested in a jobs program for America or an economic recovery:

It is remarkable that the relatively well-paid Post editorial writers failed to notice the specifics of the division in views at the Fed. There are 5 Federal Reserve district bank presidents who are voting members of the open market committee. For practical purposes, these bank presidents are appointed by the banks within the district. These 5 bank presidents voted 3 to 2 against the statement committing the Fed to maintaining a near zero interest rate for the next two years.



By contrast, the 5 governors, all of whom are appointed by the President and approved by Congress voted unanimously in favor of this statement. This remarkable gap between the views of people appointed by democratically elected officials and the views of people selected by the financial industry should have jumped out at anyone reviewing the minutes and the vote.



The financial industry tends to be very concerned about inflation, since this erodes the value of its assets. They are less concerned about unemployment, since top executives in the industry can do very well even in a time of high unemployment. Profits for the financial industry hit a record as a share of corporate profits in 2010. On the other hand, Fed governors who are appointed through the political process are likely to be concerned about unemployment, since this jobs are the primary concern for most people.



This break suggests that it is not just confusion that caused the divisions within the Fed, it was fundamental differences in interests. The Post editorial writers should have been able to see this.
If you are well off and unsympathetic, then why spend government money helping the poor, the unemployed, and those who lost their homes. Let them eat cake! The real purpose of the government is to make sure that the aristocracy maintains its social standing and continues to party at the Versailles palace. That is the theory of government of the Republican party and, apparently of Barack Obama and the conservative elements of the Democratic party.

Good News & Bad News

The good news is that you don't have the brain of a chimp. You've got a human brain with all the wonders of language and symbolic manipulation that implies.



The bad news is that you've got a problem that chimps don't have. From an article in the Wall Street Journal:

Human brains shrink as people grow old, unlike even our closest animal relative, says a new study in the Proceedings of the National Academy of Sciences that highlights what researchers call the unique character of human aging.



The human brain normally can shrink up to 15% as it ages, a change linked to dementia, poor memory and depression. Until now, researchers had assumed this gradual brain loss in later years was universal among primates.



But in the first direct comparison of humans to chimpanzees, a brain-scanning team led by George Washington University anthropologist Chet Sherwood found that chimpanzees don't experience such brain loss. From that, researchers concluded that only people are afflicted by this oddity of longevity.



...



Unlike chimpanzees and other primates, elderly humans are prey to a host of neurodegenerative diseases, such as Alzheimer's disease. Researchers hope that by understanding the basic biology of the brain, they can devise ways to treat or postpone the harmful mental effects of age.
Go read the whole article to get all the dismal details.



Great! So I get the joy of comprehending my place in the universe, but the price I have to pay is a slow descent into dementia as I get older. I love the sense of humour of Mother Nature.

Cringely Finds the Housing Bubble Still Frothing

I find this amazing.



Robert X. Cringely has a post on his blog I, Cringely that knocks my socks off. The banking industry corruption hasn't died with the 2001-2007 bubble bursting. The sleazeballs in the financial industry have found another way to milk the system and get housing to pay and pay:

A year ago I wrote a sad little column about my friend Ralph and his difficulty getting his mortgage adjusted. Ralph had lost his tech job, there was this federal program to help people in his position lower their mortgage payments, but for some reason it just wasn’t working. His lender kept losing the paperwork, forcing Ralph to reapply three times. Twelve months later Ralph is now working hard at a tech startup that can’t yet afford to pay him, he’s thankful his wife has a good business reselling children’s clothes, but their mortgage still hasn’t been modified, though Ralph keeps trying.



Here are the numbers so far, according to Ralph:



He has dealt with 11 different bank negotiators

He has applied for either 8 or 10 modifications (depends who you ask)

He has made 50 phone calls

He has sent 35 FedEx shipments

He has faxed the bank 300 pages

He scanned 70 pages to PDF and sent by e-mail

He initiated one Congressional inquiry



Understand here that Ralph isn’t an outlier. He is not in foreclosure. He’s precisely in the intended sweet spot for this federal loan modification program — just the sort of customer who ought to easily qualify — and has qualified several times only to have the deal fall apart every time.



...



Instead of concentrating on who is being hurt by it, let’s look at who is profiting. And a lot of people are profiting. Financial bubbles eventually pop, that’s the rule. But this historic housing bubble from 2001-2007 we’re still recovering from hasn’t popped for everyone, at least not yet.



The first thing to notice is that most homeowners aren’t in Ralph’s position. For all the mortgage distress out there only about 14 percent of U.S. homeowners are behind in their payments or in foreclosure. While this is a huge number (something in the range of nine million mortgages) it still leaves 86 percent of U.S. mortgages intact and being repaid. With interest rates at historic lows you’d guess that most of that 86 percent have recently refinanced to take advantage of lower payments. No, they haven’t.



A quarter of those homeowners in good standing have no equity left in their homes at all and the rest have significantly less than they once did — often not enough to qualify for a new mortgage. So they just keep paying on the old one, which is at a significantly higher interest rate. That’s why we saw a refinance flurry in 2008 that has since, for the most part, vanished.



Rates are down, sure, but qualifying rules are stricter and there are at least 30 million U.S. homeowners who are literally trapped in their old mortgages. A few walk away, but most don’t because they worry about ruining their credit. And this means that while new 30 year mortgage rates are in the 3-4 percent range, the average rate paid by these trapped homeowners on their old mortgages is twice that. And since their loan initiation overhead was amortized years ago, their actual yield is even higher.



Are you making seven percent on your money?



What we have here is an astounding corruption of the mortgage market. This game is rigged, yet everyone in government from President Obama down pretends that it isn’t. And don’t blame just Obama: the Republicans might be even worse.



Over the last 30 years the average American home was refinanced every three to four years. That was the life expectancy of your 30-year loan in the mind of the guy at the bank who approved it, when, six years ago? But these underwater and zero-equity ghost mortgages have become essentially perpetual, since they can’t be refinanced and nobody will buy the houses.



This is all you need to know to understand the stalled U.S. housing market: it is stalled because a class of investors has found a way for their investments to not only live on after the housing bubble popped, they are actually making more — in some cases a lot more — than they were on that money when the loans were originated. They are doing so well, in fact, that they can’t imagine a circumstance under which they would ever allow the ghost mortgages to go away, no matter the cost to the economy or the nation.



So the ghost loans aren’t going away. And the longer this unnatural situation lasts the more all the rest of us are being hurt.



Understand that we are talking about at least $2 trillion in ghost loans that really ought to have been refinanced but weren’t because of these structural issues and because the banks — who clearly know what’s happening — don’t have the guts to stand against their investors. But that’s nothing new. And it’s not going to change until someone at the very top does something about it.

I've found it very odd that over the last couple of years that the HAMP program wasn't working. At first I thought it was just a teething problem with a new program, but it has been too long for that. With the above article by Cringely, I now understand why it hasn't worked and never will work. There is money to be made by keeping people in the never-ending torture of being in over their heads with a mortgage.



If Obama actually cared about the economy or cared about the people, he and his "team" would have noticed this by now. The fact that they haven't noticed says me me that the real "team" he is playing on is the banks and the financial industry. He is turning a blind eye so that his buddies on Wall Street and the banks can keep stuffing their pockets with money from people caught in a never-ending nightmare.