Guest essay by Eric Worrall
The Huffington Post is worried that faltering faith in the field of Economics, whose experts spectacularly failed to predict the 2008 crash and the post Brexit economic boom, might spill over into skepticism about predictions of climate driven economic collapse.
With Economics In Disarray, It’s Time To Rethink Climate Change
We heard this week that the economics profession is in crisis. The inability to foresee the 2008 financial crisis and mis-judgments about the impact of the Brexit vote mean economics has lost the trust of politicians and the public.
If indeed economics as a science and way of seeing and understanding the world has had its day, then we quickly need to work out what that means for our ideas about dealing with climate change. Because make no mistake, economics has dominated and defined our understanding of climate change in exactly the same way economics has dominated and defined every other area of our lives.
That’s the reason why the Stern Review on Climate Change (written by Nicholas Stern, an economist) received such wide covered upon its publication in 2006, becoming ‘the reference work for politicians and green campaigners‘. Here at last was someone telling us what to do, and telling us in the only language that mattered – economics. None of that hippy ‘going to live in caves’ nonsense. No doom and gloom. Instead the Review ‘considers the economic costs of the impacts of climate change, and the costs and benefits of action to reduce the emissions of greenhouse gases (GHGs) that cause it’. The ultimate objective of climate policy was to ensure climate change did not damage economic growth.
…
What is needed instead is a way of engaging with climate change which is built from the bottom-up and speaks to the values, experience, hopes and concerns of everyday life. It is about showing the connections between a future which benefits the many, not just the few, with the possibility of a good quality of life that can be shared by all without ruining the quality of life for subsequent generations.
…
Read more: http://www.huffingtonpost.co.uk/chris-shaw/climate-change-economics_b_13984596.html
When I worked with merchant bankers, the bankers never attempted to use their economic and trading models to predict the future, because they knew that didn’t work – bitter experience taught them that their painstakingly constructed economic models had no predictive skill. Instead, they used the models to try to understand the present, to try to detect weaknesses in the structure of their portfolios.
Only in academia and government, where nobody faces consequences for failure, do you find people who are stupid enough to believe they know what is going to happen.
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The Stern review was even more flawed than the average IPCC report…
http://www.templar.co.uk/downloads/Lilley-Stern_Rebuttal.pdf
The problem is ‘Experts’. That is experts who are nothing of the sort. We are plagued with them in the UK over Brexit. All these idiots pop up using their assumed prestige because they work at Cambridge University etc and therefore must know what they are talking about, to spout the most blatant ignorance all over the legacy media. The think-tanks, not to be outdone, wade in with their ignorance. And top of the heap as usual are the politicians.
The previous head of the formerly respected Royal Society is Paul Nurse. He took part in a biased TV programme to attack James Delingpole’s quite sensible views on the global warming scam. He has prestige as head of the Royal Society. A knighthood too. Nobel prize winner. An expert! In anything related to climate, meteorology, glaciers, ice? No. Yeast! So in reality he has no better qualification to pronounce on global warming than James Delingpole, me, most of us on WUWT… Just because he is an acknowledged expert in a field doesn’t make him one in everything.
Surprise surprise there isnt a single comment on Huufington Post in that oiece. Thats what you get when you blog utter drivel.
I notice that several debunkings of the Stern Review are already mentioned in this thread.
As though it has not already been debunked enough – here is another debunking with a link to further debunking material:
http://www.thegwpf.com/stern-review-debunked/
During the cold war when it became clear that communism was a deadly mess I recall reading an article- I believe in the Rolling Stone- the way forward for lefties was to focus on how wonderful the sense of community and belonging was under communist rule vs the capitalist societies. I didn’t realize it at the time, but what the author was speaking to was just how great it is, from his perspective, to live with a controlled media supplying unending praise of the ruling class. Climate obsessed people seem to think the same way regarding how society should deal with analyzing the reality of their claims about climate and energy. In other words for the climate consensus, reality and objectivity are enemies.
Thomas Sowell wrote an article about how it is under capitalism that people have to learn how to cooperate with each other.
Socialism on the other hand, people are forced to do whatever government tells them to do. Therefore those who succeed the best under socialism are those who are best at kissing up to their superiors.
Warmer weather and increased CO2 are both great for the world’s economy. Unfortunately, increasing CO2 doesn’t seem to cause any warming. Either that, or fossil fuels just prevented another LIA and a severe economic downturn.
I don’t agree with the author, because I’ve spent decades recommending or making investments, and these were supported by economic evaluations intended to give a sense as to whether the decision was appropriate. We also used these estimates to optimize project spending, decide on whether to take on partners, evaluate company and property purchases and sales.
I think you do a disservice by simply tossing the concept in the trash. A better approach is to understand risk and uncertainty, and to be much more thorough than say Dr Stern, whose study was simplistic, primitive, and showed he had no education on how to carry out such evaluations.
But when the GCM model inherently (mathematically) has a plus/minus 15 degrees envelope at a confidence limit of 95% 100 years out, who in their right mind would give that an ounce of validity in predicting temperature?
How much money would you invest knowing the models carried that level of uncertainty?
I’d stay out of that market, personally.
You’re already compelled to participate via taxes and fees, though.
If there is significant risk and uncertainty , then the science, by definition, is crappy. Perhaps not totally worthless, depending upon the extent to which the science can reduce the odds.But how can one know how well the science can reduce those odds? They differ from scenario to scenario.
I agre with you. The stock market is an unusual casino, rigged in favor of the investor. True, nobody can predict the future with accuracy, but
by buying low Price to Earnings stocks,
buying stocks selling below book value,
buying stocks with plenty of insider trading,
You’ll do substantially better than average.
buying stocks with plenty of insider trading,
============
so long as you are the insider.
In reply to ferdberple, go to
sec.gov
click “filings”
click “Edgar search tools”
click “most recent filings”
put “4” in form type
and you’ll get a list of all insider transaction
I see Alfred Kingsley, a company director, sold 238,169 shares of Biotime Inc on 01/03/17., and currently owns 5,931,555(2) directly, 1,143,346 through Greenbelt Corporation.
All corporate officers and outsiders owning 5% or more of a company’s stock are required to file their transactions with the SEC.
I should have added, as to insider trading, look for companies where plenty of insiders are buying plenty of shares with their OWN money, not stock awards or stock options.
I should add, that insiders who have access to information that is not publicly available are forbidden to trade until that information does become publicly available.
That is what people refer to when talking about insider trading. What Alan here is refering to are officers of the company.
Insiders are permitted to buy and sell their own companies stock.
Presumably, even when limited to publicly available information, these insiders are in a better position to judge the importance of such information. They are in a position to better see the “big picture”.
+1
In response to the claim that “Only in academia and government, where nobody faces consequences for failure, do you find people who are stupid enough to believe they know what is going to happen.” My immediate response would be to mention the “Long Term Capital Management Fund” which collapsed and
was bailed out by the US government. Plus the auto industries, not to mention the financial sector in 2007/8
that started the whole great recession. The finance industry in particular created the huge housing bubble,
got the government and tax payers to bail them out and then claimed that the government had too much debt and so needed to cut back on social services. And in the UK not only did they not face any consequences but they were rewarded with knighthoods and million pound pensions.
Germinio writes “The finance industry in particular created the huge housing bubble[…….].”
Not so.
The CRA on steroids.
Barney Frank, Janet Reno, Maxine Waters, Chris Dodd, Andrew Cuomo, FannieMae, FreddieMac et al.
Desk audits 0 down 100% home financing.
Massive political and government corruption.
That’s where you start.
siamiam
Absolutely correct. The problem was caused by the government mandates to give mortgages to unqualified people with the promise the government would ultimately acquire and be the final holder. Sure the corrupt bankers decided it was easier to comply with the government mandates and make $$$ at least temporarily. .
Only in academia and government
================
in academia and government you don’t need to be right, you only need to sound right. For example: Eating fat makes you fat. This sounds logical, so it would be the sort of thing “Experts” would promote. It doesn’t matter if it is actually right or wrong. What matters is that it sounds right.
It is the old “heavier objects fall faster” argument brought forward 2000+ years.
closer to 500 years.
+10
So, a singular failure by the private sector is proof that the government should be running things?
BTW, the fact that government bailed out companies is not proof that companies are bad. It’s just proof that government often does stuff it shouldn’t be doing.
The author writes about Bankers as is his right. Bankers deal with a specific discipline within economics, finance. They are intensely concerned with the future as in the ability of the client to meet the terms of the loan. Bankers not only think in the present but in several futures. The worst case scenarios are used to determine the interest rate.
Every person handling their own income is an economist. They use all the major concepts, but are just unaware they are doing so. Everyone knows about, “Too much month at the end of the money,” and most take steps to prevent that.
The greenies are doubly ignorant – both about the extent of global warming and the methods to reduce same. Stupid here, stupid there, stupid everywhere.
They know how to pad their nests and pursue their stupid ideas with your money! Stupid like foxes!
If you start with the idea that oil won’t last forever.
Then realize that nobody will care about that, till it’s all gone.
You are then left to find something that will motivate them to do it any way .. by appealing to the narcissistic notion that “man is the center of the universe” (what Lefty couldn’t latch on to that ?) and simple guilt.
With the carrot of permanent government funding to convince enough climate scientists, you get the UN IPCC and Global Warming.
Now, imagine opportunists, dictators and hundreds of NGOs looking for a permanent source of funding, you get Climate Change treaties.
Now, simply ask the question … who will supply all that funding ? Now, look in the mirror.
When a resource starts to get scarce, it’s cost goes up.
As the cost goes up three things happen.
1) People find ways to use less of it.
2) People look for new ways to create more of it.
3) People look for substitutes for it.
This always happens, no matter what the resource.
There is no need for government intervention.
When it becomes obvious that a resource will soon be running low, even if prices haven’t started rising yet, enterprising individuals will start looking for the next big thing, so that they can be positioned to make a fortune when the prices do start to rise.
Academics are often insulated from the consequences of their failures. In fact they may benefit from taking irresponsible positions by getting published.
The 2008 crash was foreseen by many but thier warnings were simply ignored.
Trickle-down economics was ridiculed when Reagan introduced it. It worked, at least in the US, and it created many more jobs in the US with the lowering of taxes than the last 8 pitiful years of US job growth. Most don’t even know the history of the Reagan years and the growth spurt that resulted from it, lasting into the Clinton years. Same in the UK under Thatcher. Trickle-down economics is still ridiculed, but it worked. Check out the GDP history…
Ref: https://www.thebalance.com/us-gdp-by-year-3305543
The proposal by Trump for lower taxes on families and businesses is smart economically.
I don’t believe Trump has studied the Smoot – Hawley Tariff disaster which was one of the great catalyst/stimulants which resulted in The Great Depression!
One Ref: http://study.com/academy/lesson/hawley-smoot-tariff-of-1930-definition-overview.html
You might want to listen to this audio about tariffs as it is very informative. It is economic common sense:
https://www.conservativereview.com/commentary/2016/04/levin-which-goods-should-we-tariff
I would recommend everyone writing/posting to this post should listen to this 16 minute audio. It is basic economics about tariffs among other things:
https://www.conservativereview.com/commentary/2016/04/levin-which-goods-should-we-tariff
Trickle down was first introduced by JFK. It worked great for him as well.
I once heard it said that Economics is the only field where a well respected expert can be wrong 100% of the time and remain a well respected expert.
wrong 100% of the time
=========
Being wrong more than 50% of the time takes true skill, thus the “expert” label. Most of us ordinary mortals only get things wrong 1/2 the time, demonstrating our reliance of chance rather than skill.
You’re making a bit of an assumption, yes? No?
When it is realized (consciously or sub-consciously) by the Left/Greenies that a given set of Leftists dogmatic “facts” are wrong, or are being seen as wrong, they always “turn” to feelings about the subject of those wrong facts. THAT is what the HuffPost article is calling for. Ultimately, it is not important to the LPSC community if somethings works or doesn’t, something is true or not, something is right or wrong, something makes you money or not. The only thing that matters is how it makes you feel.
(LPSC- Liberal, Progressive, Socialist, Communist.)
When I was at university, admittedly a while ago, I took a one year course on economics.
During the first lecture some of the basic relationships were explained. The explanation included the statement that most of there were non linear, but economists treated them as if they were because it made things easier to understand.
The next lecture spent ann hour explaining y=mx+c.
After the third lecture, I stopped going. I just read the book and passes the exam at the end of the year.
From personal experience, the simplest course for a mathematician to pass in university is 4th year macro economics.
I threw my economics text against the wall and smashed it’s spine. I couldn’t believe that such drivel could be allowed in University (how naive I was). Weak minded nonsense like economics paved the way for climate science (sorry Tim Ball, for what climate science has become)
I think one can benefit from reading Adam Smith! Genuine economic common sense and insight. After that it’s a waste of time. Noam Chomsky-blather, Milton Freidman-pompous blather. Here and there an interesting perspective. I think Keynes gets a bit of a bum rap for what politicians do with his ideas, but he still might be wrong-for reasons other than what he is blamed for.
john harnsworth
“I think one can benefit from reading Adam Smith”
I’d add W.S. Jevons to that list, also part of David Ricardo, who pointed out the somewhat counterintuitive comparative advantage among nations. Even if nation A is better at producing both products X1 and X2 than nation B, both nations can be richer if nation B specializes in the product it is RELATIVELY better at, and trades with nation /A.
You can read the works of all three authors free by going into “project gutenberg”.
“It is about showing the connections between a future which benefits the many, not just the few, with the possibility of a good quality of life that can be shared by all without ruining the quality of life for subsequent generations.”
This is priceless! Interpretation:
A future that benefits many = a future with fossil fuels.
just the few = subsidized renewable energy interests or the just privileged western world that runs on fossil fuels (i.e. let everyone have access to fossil fuels & prosperity )
good quality of life that can be shared by all = cheap energy for all = fossil fueled power for all
without ruining the quality of life for subsequent generations = don’t use wealth-destroying , deficit increasing subsidized renewables.
Their entire statement is an indictment of what they want and an endorsement for a fossil fuel powered future. And they are completely blind to this.
No mention yet of Paul Krugman, the High Priest.
Do you mean the Paul Krugman who immediately after the Trump election penned a prediction that the stock market was going to fall and fall and fall and never recover?
Actually, he’s the LOW witch doctor.
Huffington Post is one of the top mouth pieces for the idiotic Liberal elitists who are the new socialist wannabes. They live in and help sustain their own very, very, special fake news ‘informercial’ bubble.
The truth matters, if you really want to help our country and other countries solve real problems.
There is no CAGW problem to solve, the greenscams do not work, the developed countries have run out of money to spend on everything as we have lost more than half our manufacturing jobs to China (of course higher and higher energy costs will result in more job losses), and the developing countries’ number one issue is a lack of access to low cost reliable electrical power.
http://www.wsj.com/articles/obamas-renewable-energy-fantasy-1436104555
http://wattsupwiththat.com/2014/11/22/shocker-top-google-engineers-say-renewable-energy-simply-wont-work/
http://www.worldenergyoutlook.org/resources/energydevelopment/
http://www.economist.com/news/middle-east-and-africa/21637396-rolling-power-cuts-are-fraying-tempers-unplugged
http://skimon.com/load-shedding-pakistan
http://www.ft.com/intl/cms/s/0/34bcbe66-3821-11e4-b69d-00144feabdc0.html#axzz3V6bHUuQl
I had been looking for the graph with the 95% certainty rate… thanks for posting it. And 97% of scientists believe in AGW . Are they scientists or religious? What scientist could look at that and say, ” that’s right ” ? Further, how could anybody in government possibly agree with that ? I don’t know what the real temperatures are, but they are probably less than the blue squares and round dots at the bottom. If AGW has had to adjust the numbers in the last few years, which they’ve done, then the collection and dissemination of temperature is wrong to start. The same with co2 levels, they’ve adjusted those in the last year…. the models simply can not be wrong seems to be their thinking.
The Hill news
Story of Trump’s transition team getting the House and Senate to allow Pres to reduce some federal employees pay to $1.00 per year.
It is aimed at EPA and Dept of Energy who promote the Climate Change lie.!
Test
reduce some federal employees pay to $1.00 per year.
=============
overpaid even at $1.00
On the other hand it could be aimed at the IRS who went after conservative groups or could be aimed at federal employees who don’t do any work and just sit at their desks protected from being fired by their union. Pay them what they are worth!
Test 2
I would just like to say this about feelings: 40 years ago, as an engineering student, I took economics courses as electives. I now realize I should have been more sensitive to the feelings of the economics majors in the Microeconomics course who were struggling with the concept of calculating the area under the curve.
+100 and I flunked calculus.
“which benefits the many, not just the few,”
A sentence, as deplaved as it is possible with regard to the green business with climate change. Go and learn your lessons of the past in both capitalism and socialism. The human brain is designed in such a way that it first wants benefits for itself and then come with distance the others. Everything else is empty talk. It is only possible to set up the social order in such a way that the waste product of the benefits for few is formed into jobs and salary for many and therefore a certain standard of living is achieved. And this succeeds in capitalism in the long run better than in socialism and green planning. These are simple teachings, ranging from 10,000 years bc to 2017 years after Christ.
Perhaps one does not believe that the human brain is so shaped, but it is so. That is why the Indian sayings about the allegedly healing world are in harmony with nature, and that gold can not be eaten, are nothing but empty talk and envy of the inferior to the victors in a cultural struggle. When many people live together closely in this world, the environment is polluted irrespective of culture. In the so-called third world, and in the case of primitive peoples who have only recently outgrown this status, even to a greater extent. The only limitation here are the possibilities but not the will that first I come and then the rest or the nature. Therefore, the guess that one can transform a man into a better man is nothing but senseless talk and will not prevent green gold diggers from their goldgrass at the expense of others.
Ersic ==> Oddly enough, they come the the right conclusion for the wrong reasons. It is perfectly correct and proper to say:
The only disconnect is that the author(s) thinks that that means implementing the whole CAGW crowd’s single idea solution : Stop Burning Fossil Fuels. Missing that doing so damages future generations, imposes hardship on the many, lowers quality of life for everyone, etc.
The concept is good though — its what I and many others believe — however I think that a pragmatic approach to whatever changes are happening is quite different from the CAGW crowds foolish and destructive solution.
More nonsense from the ill-educated and easily confused mob of chicken littles, waiting in line to agree with whatever excuse some 97% of alleged scientists cook up to rob the taxpayers of their rights, their liberties and their money, IMO, (but not necessarily in that order 😉 This whole house of fantasy baseball cards is about to collapse. Speaking of baseball (and politics), I offer this paraphrase: “…For there is no joy is SWAMPVILLE. Mighty Clinton has struck out!”
If economics is applied correctly as a science then it works fine at highlighting areas of risk and likely impact of changing variables.
Where all science including economic and climate science falls to the ground is when the drivers are back-grounded with hazards. Such hazards are ideology (left inclined academics) financially driven confirmational bias plus many others.
This failure of science is not limited to these two streams witness the food industry, even hard areas like particular physics have been hobbled by big personalities with fixed ideologies.