There is, of course, no possible correlation.
There is, of course, no possible correlation.
At Zero Hedge, some proposals for what Fed Chair Bernanke should be asked at his reconfirmation hearings. Some are quite technical, some understandable to all. A sample:
6. An important factor in the financial crisis (and a large part of the ultimate cost to taxpayers) was the implicit government guarantee of the GSEs. In part because of decisions you made, there is now an explicit government guarantee of every large firm on Wall Street. Has moral hazard increased or decreased over the past year?
I was in the process of writing an analysis of the disclosures from a general systems point of view, but someone beat me to it, which is just great. The second half of the post discusses why the disclosed data issues are so damaging to the modeling enterprise, the first half puts the scientific, economic and political issues into context. Very nicely done, and credible from my POV, though colonists may have to stumble over some UK-isms. (What, for instance, is "a hiding to nothing"?) (*) It's posted by the pseudonymous "Pedant General", who means he/she can pull rank on me.
(Thanks to SDA.)
Update: Here's another good piece at the WSJ from an MIT meteorology professor. Generally skeptical, but focuses on both what is generally accepted by both sides, and on the issues with modeling rather than just the data quality problems. A sample:
The main statement publicized after the last IPCC Scientific Assessment two years ago was that it was likely that most of the warming since 1957 (a point of anomalous cold) was due to man. This claim was based on the weak argument that the current models used by the IPCC couldn't reproduce the warming from about 1978 to 1998 without some forcing, and that the only forcing that they could think of was man. Even this argument assumes that these models adequately deal with natural internal variability—that is, such naturally occurring cycles as El Nino, the Pacific Decadal Oscillation, the Atlantic Multidecadal Oscillation, etc.(Via Maggie's Farm.)
Update 2: And another good list of modeling issues from Coyote. Meanwhile, these guys have the code from a prominent climate model and are starting to examine it and decide on a platform to bring it up. The Army of Davids is beginning to assemble; we're going to end up with transparency one way or another.
*(Belated update: Apparently a "hiding to nothing" is a colloquial way of saying something along the lines of "you're doomed". Derivation unknown, but possibly from "getting their hides thrashed until there's nothing left" or "hiding in a nonexistent spot, and being, therefore, failed fugitives". Thanks to 'Nortius Maximus' for the "English" lesson.)
Dr. Phil Jones, head of the East Anglia Climate Research Unit, and star of the leaked e-mail and document set from that institution, has stepped down pending an independent review of the unit and its research. So ClimateGate (hate that name) claims its first head on the science side. (Apparently the head of the opposition in Australia fell this week, largely due to a cap-and-trade scheme perhaps exacerbated by the ongoing scandal.)
I have been following the developments, reading relevant blogs as well as skimming a chunk of the e-mails and related text documents. I've also read most of the famous 'HARRY READ ME' file, containing the tribulations of a programmer trying over a period of three years to repeat the derivation of the CRU's temperature database from a poorly documented and sometimes missing set of programs and data. I've made a few comments elsewhere, but not posted here, as those with a lot more familiarity with the climatology data and personalities have entered the conversation, and others a lot more current in the software engineering community, e.g., Eric Raymond, have started tearing apart the released code.
I have drawn a few conclusions, though:
I came to this with skeptical views about catastrophic human-caused warming (CAGW in the jargon). There have been gross perturbations of climate in the past, and yet, here we are. Obviously there are homeostatic processes at work in climate that we understand incompletely at best. Arguments about irretrievable 'tipping points' and runaways leave me cold, and somewhat suspicious of those making them.
On the other hand, I have found the notion of a human impact on warming to some extent to be quite plausible. CO2 has known greenhouse properties, and there's no getting around that we've pumped out a lot of it. That plausibility is now shaken. I've seen a chunk of the research process, and it's a dog's breakfast. The credibility of those pointing out that we haven't accounted for things like solar radiation fluctuations or the effects of urbanization on climate records increases accordingly. I'm reset back to "not proven", which is certainly not going to make me support gross governmental interference in personal liberties and the global economy in the name of global warming.
What I've seen so far of the 'modeling' process is also dismaying. Much of what I've encountered is modeling only in the very grossest sense, consisting of things like cross-correlations and other purely statistical procedures. Such things are notoriously vulnerable to problems like over-fitting, or divergence when dealing with conditions that are uncommon, and therefore under-sampled. (Like, for instance, CO2 driven warming.) It's dismaying to see so little embedded theory and learning process in such a critical domain. I plan on pursuing this somewhat further, in hopes that some of the vaunted redundant sources to CRU do rest on some attempt at theory and a real process of corroboration or refutation.
Over nine years ago I wrote the following in a short piece for an Asian colleague who was interested in the 'Silicon Valley culture':
" The Valley is really an aggressive, colonizing culture that grows by importing immigrants, and has overspread and occupied part of California. By immigrant I mean anyone who moved from outside into the Valley, whether from another region of the US or from outside it."It was therefore interesting to come across this recent post from a population geographer, who had arrived at a similar evaluation from his own direction. For instance:
"...in these global cities [including the SF Bay], two economic geographies share the same physical geography – and those economic geographies are in conflict. One set requires catering to high skill, highly paid workers and firms where cost is a secondary concern. The other involves occupations and industries where cost is very much a concern. The occupants of these two geographies have very different public policy priorities.... In a global city, particularly a mature and expensive one, the elite geography wins. ""And where do these elite come from?
"This explains why, for example, not only have taxes gone up, but things like schools and other basic services have declined so badly in places like California. Traditional primary and secondary education is not important to industries where California is betting its future. Silicon Valley, Hollywood, and biotech draw their workers from the best and brightest of the world. They source globally, not locally. Their labor force is largely educated elsewhere. Basic education and investments in poorer neighborhoods has no ROI for those industries."This is one half of the poorly hidden secret. While industry leaders will express pious support for local education and improvement, their actual exposure is limited: Immigrating employees with children will ask for salaries that can cover the costs of private schooling or locating in one of the high priced areas with decent schools. But since being an engineer, scientist, or manager of same doesn't necessarily breed true in the next generation, it's always assumed that most of the next wave of talent must be imported from elsewhere. Even if they are nominally Stanford or Berkeley grads, their birth certificates usually don't read 'California'. As far as the other population:
"If you are just an average middle class guy, why live in one of those global cities anyway? ... And frankly, the folks on the global city side prefer it if you leave anyway. Immigrants are unlikely to start trouble, but a middle class facing an economic squeeze and threat to its way of life might raise a ruckus. That won't happen if enough of them move to Dallas and rob the rest of critical mass and resulting political clout."If this is sounding familiar, I suggest you read the whole article, which draws some worrisome conclusions for long term social and political impacts on the region and the US generally.
The other half of the secret? The post gives a hint:
"...an attractive environment draws diverse uses, then one becomes economically dominant and, through superior purchasing power, displaces other uses over time. The story ends when that dominant economic activity exhausts itself..."Due to rising costs and regulations, and the effect of the Internet in reducing geographic specificity, Silicon Valley has been progressively moving its lower valued functions offshore: chip fabs, customer support, QA, documentation and lower-level code and data creation and maintenance. With them has gone a good chunk of the immigrant inflow, both American and international, which has shifted to ever more highly educated and experienced people. And it now appears that this generation of more senior offshore immigrants is more ready to return home, rather than making the Valley their permanent station in the global network.
This, along with a recession unprecedented in Valley history, and a government with little understanding of business, may be why Michael Malone has said that the area is now a 'sandwich missing its meat':
"...the big pull [of innovation] has always come from the thousands of fast-moving, risk-taking new start-up companies who find unexpected (and sometimes vast) new applications for those technologies.... Those companies aren’t there anymore. The crucial center of the tech world – new and fast-moving companies – the meat in the technology sandwich – is gone. Under the press of an economic slowdown, government regulations that have handcuffed entrepreneurs and venture capitalists – and perhaps most of all, an Administration that increasingly seems actively hostile to entrepreneurship and small business – high tech is hollowing out. "It took decades to build up the human, financial and technological capital that has made the Valley what it is - for better and worse. It will likely take as long to dissipate that capital, so there is time for a correction. But the trends are in the wrong direction.
(With apologies to A. Conan Doyle.)
Breaking, but not in the MSM just yet: A hacker (or leaker) has copied over 60Mbytes (compressed) of e-mail correspondence, documents, data files and programs from the University of East Anglia Climate Research Unit (CRU), the laboratory of Dr. Phil Jones, and one of the primary sources for data and analysis supporting the global warming hypothesis. The zip file has now been removed from the Russian server where it was first posted, but has predictably appeared at numerous other places on the net. Jones has now confirmed that the leaked data appears to be genuine.
E-mails posted in whole or part at WUWT and other sites appear to describe data manipulations that may or may not be misleading. They are, however, quite explicit is discussing how to manipulate the scientific review and publication processes to prevent dissenting views from appearing. With the release out for only a few hours, there's not been enough time for a full forensic or scientific review of the included documents, so we'll have to stayed tuned and cautious. Even if the bulk of the release is genuine, there's always the chance that it has been 'salted'. With literally trillions of dollars at stake with prospective cap-and-tax and other AGW 'mitigations', there is plenty of incentive here for skullduggery.
My only observation so far is that the e-mail release is obviously cherry-picked, given the number of messages compared to the time period involved. Without seeing all, or a representative block of the total messages, we don't know how or why they were selected. The original Russian posting described this as a 'random selection', implying there's more data out there. The implied threat of further release now hangs over the CRU; someone out there may be learning from Breitbart's tactics of dribbling out the damning data.
Update: On Drudge, Fox, Guardian and BBC now. You can amuse/inform yourself by searching or reading the leaked e-mails as long as it lasts. 'FOI' is reputed to be a good place to start.
I was going to post about GM's grab for some positive PR by repaying a taxpayer loan with other taxpayer dollars, but Jeff Nolan already did a better job, so go RTWT.
Once again GM is substituting publicity for reality, part of what brought them to this pass. Their cash flow bomb blows up in January, so they're hoping you have a really short memory.
...I’m moving. They are doing everything possible to destroy jobs.” So says Emerson Electric CEO David Farr, who was promptly attacked by administration officials.
He's right. Whether through incompetence or ideologically based intent, our government is damaging the economy and discouraging job formation during the worst downturn since the Great Depression. Take for instance, the misnamed 'stimulus'. Financed entirely by deficit spending, it's taking over a million dollars to create one 'job', often a public employee position that should have been cut to balance a state or local budget. From the same article, the private sector puts just over $300,000 of capital to work to create a job, capital less available because it's been diverted to government debt.
That's assuming business is willing to risk capital in the current environment, where one now must assess political as well as market risk. From the point of view of one small businessman, it looks like this:
Over the last year the Congress and Administration have:
- Printed trillions of dollars of new money, raising the risk of future inflation
- Borrowed trillions of dollars, sucking capital out of private lending markets
- Run up deficits that pretty much guarantee future tax increases
- Toyed with health care bills that will substantially increase the cost of labor
- Toyed with climate bills that will substantially increase the cost of fuel and electricity
- Demagogued industries with average to below-average profitability for making obscene profits that must be reduced (e.g. health insurance companies who make 3-4% of sales)
- Taken over whole industries (autos, banks) and run them to the benefit of favored political constituencies, even when it violates the law (e.g. trashing for secured creditors of auto companies in favor of the UAW).
- Demonstrated a disdain for money-making by imposing populist compensation limits on executives of out-of-favor companies and industries.
- Spent money in the stimulus mainly to add government jobs, every one of which is generally focused on making my life running a business harder. If you do not understand or believe this, you have not run a business that employs people.
- Shown a general philosophic hostility towards markets and capitalism
What sane person will put up risk capital, with a potential payoff years in the future, in an environment like this? Is it any wonder that analysts now think umemployment will reach 12 percent or higher? (More likely 20% if you count those who have dropped out entirely from discouragement.)
Mr. President, you're not helping. You're making things worse.
This was originally sent to the Instapundit reagrding his posts on biotech innovation. Since I found it as a comment here, I'm going to take it as being an open letter. I'd be pleased to credit the author if he or she will e-mail me:
"I read with interest your links today on pharmaceutical and medical device innovation, including an article of your which I had not seen before. While what both said is true, it overlooks perhaps *the* major source of innovation in this segment: venture financing of start-ups.
By way of introduction, I run a young biological tools company. Our products will contribute directly to creation of a new generation of pharmaceuticals and of diagnostic tests. At the moment we are funded entirely by NIH, as the venture capital market is moribund. I also serve as a frequent reviewer at both NIH and NSF, on both academic and small business panels, and for a dozen technical journals where research results are disseminated.
These days big pharma does very little research. The innovation comes from the small companies, and those that succeed often acquired by big pharma, or license their drug candidates to them so that the enormous costs of clinical trials are absorbed by the much larger partner.
These small companies live on what can be substantial investment (hundreds of millions of dollars each) by venture capital firms. So the ability of a company to raise money will depend on the VCs being able to generate enough after-tax income for their few successes to fund their failures. Obamacare is squeezing this on both ends. First, the capital gains rate is slated to increase substantially. Second, the revenue potential for the putative new products under whatever form Obamacare takes will undoubtedly decrease. This also affects company value for any potential IPO.
That makes this space a much less attractive investment. Of course companies will still be funded, but they will be far fewer in number and the pressure on them to produce will increase from what is already obnoxious. Since success is partially a numbers game, there will be fewer products that come to market.
No, a company cannot live on grants. A $2 million grant award is a large one, but this is typically the amount that a company raises from venture sources for its *first* funding round (of many). And winning grants these days is really, really challenging: success rates are on the order of 15%. It is nearly impossible to fund a company of any size from grants alone -- only the academics can live on grants since their salary and lab overhead is heavily subsidized by their institution.
I should also note that there are many overhead categories that government grants will not cover, such as intellectual property prosecution. The agency funds the work, and expects you to publish the results, but will not fund obtaining patents. There is a commitment to commercializing new products!
That to me is the major threat to innovation under Obamacare: draining the life blood out of the small-business corpus. That's where the innovation resides, and that's what appears will be hit the hardest."
Dear Representative Speier:
I write to urge you to oppose the health care ‘reform’ bill, so-called ObamaCare, that is currently before the Congress. I ask this for two main reasons:
The first reason is the disparate impact that this bill will have on your district. As you may be aware, the bill imposes a 8% employment tax on growing small businesses, raising the cost and discouraging the creation of new jobs. This is a grave error at a time when the national economy needs small business to lead a recovery in employment. It is specifically a problem for your district, as the formation and growth of startup ventures is key to its economic vibrancy, as well as that of the entire Bay Area. Further raising the costs of jobs here will reduce new venture formation, and send more jobs from growing ventures overseas. This will not only adversely affect your constituents, but will reduce the ability of the Bay Area to attract talent from around the United States and abroad.
Another disparate impact is that on biotechnology, now an important employer and source of growth here on the Peninsula. As you may be aware, the bill before Congress directly imposes taxes on medical devices, many of them created here. This will not only affect the ability of local ventures to grow, but will impose higher costs on those who most need such therapies. The indirect effect of the bill is as bad, if not worse. As a venture investor myself, I can attest that the effect of further regulation and the threat of ongoing political interference in an economic sector is to send investment fleeing elsewhere, to other sectors, or abroad. Both the economic health of your district, and the literal health of your constituents in the future will be adversely affected by this bill’s discouragement of investment and innovation in biotech.
The second major reason to oppose the bill is moral. In our free economy, employees and entrepreneurs alike trade their efforts and the literal time of their lives in the hopes of monetary rewards. How great an imposition is it to tell them how they must, or may not, spend those rewards to enhance their lives, including protecting them with insurance or therapies? Beyond the outrage of using such force against free citizens, the rationing and discouragement of medical advances that accompany government interference in healthcare will affect their very lives. It is apparently more convenient for our government to impose on American’s lives, than to honestly and openly fund medical transfer payments on the budget. American are unlikely to forget or forgive those who would so damage their freedoms.
(The original of this letter was handed in at the representative's San Mateo office yesterday.)