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Posts Tagged ‘Paul Krugman’

Bits and Pieces 14: Misinformation Trumps Facts on the Economy

Fri ,23/08/2013

  • There has been a tremendous amount of worry about the US deficit, but most of it is stirred up by propaganda that ignores the economic data. Here is what the Nobel prize-winning economist, Paul Krugman, had to say about the deficit.
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Here is the data that shows what he means.


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The Motley Fool reported on a recent Google consumer survey which asked the question, “How do you think the US Federal Government’s yearly budget deficit has changed since January 2010?” With 665 responses from around the country spanning a wide variety of demographics, here’s what it found. Respondents thought the deficit had:

Increased a lot      41%

Increased a little   14%

About the same     24%

Why are so many people getting it wrong? They get misinformation from their Congressional Representatives, who should know better. Many of the Representatives  probably do, but why tell the truth if misinformation works to their advantage?

(c) 2013  J.C. Moore

The Republican Flip/Flop on Cap-and-Trade

Thu ,22/07/2010

A Winning Flip: I can remember when Republicans liked Cap-and-trade. (1) For instance, John McCain cosponsored cap-and-trade bills in the Senate in 2003, 2005, and 2007 and, during his 2008 presidential campaign, proposed a pragmatic national energy policy based upon good stewardship, good science, and reasonableness. As he said then,

“A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy. And the highest rewards will go to those who make the smartest, safest, most responsible choices.”

And he was right. Having to pay the true cost of fossil fuel use is fair and would create incentives for renewable energy and energy efficiency.

Cap-and-trade was once considered to be the market solution to reducing carbon emissions. While popular, a number of key Republicans, such as Sen. Lisa Murkowski (R-Alaska), Sen. Richard Lugar (R-Ind.), Sen. Lindsey Graham (R-S.C.) went on record as endorsing the policy. Even Sen. Scott Brown (R-Mass.), only two years ago, while supporting a version of a cap-and-trade bill in the Massachusetts legislature said:

”Reducing carbon dioxide emission in Massachusetts has long been a priority of mine. Passing this legislation is an important step … towards improving our environment.”

But somewhere amid lobbying, big donations from power companies, and criticisms from so called conservatives who don’t really want to conserve much, the Republicans are now calling it cap-and-tax, essentially making fun of what was once their own idea.

The Sticker Shock Distortion Flop: In an effort to kill the bill, Republicans such as Senator Tom Coburn (R-OK) are now claiming cap-and-trade would cost each U.S. households about $3,100 a year, a cost that has considerable sticker shock. However, that number was fabricated by doing some misleading  additional math on a MIT study. Dr. John Reilly, the economist who authored the study, has criticized Republicans for distorting his work. In his words,

“It’s just wrong, It’s wrong in so many ways it’s hard to begin.” Not only is it wrong, but he said he told the House Republicans it was wrong when they asked him. “That’s just not how economists calculate the cost of a tax proposal”, Reilly said. “The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices.” Moreover, he said, consumers would get some of the tax back from the government in some form. (2)

What Is the Uninflated Cost? The report by the nonpartisan Congressional Budget Office (CBO), the entity responsible for providing Congress with nonpartisan analyses of economic and budget issues, estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion—or an average of about $175 per household. That figure includes the cost of restructuring the production and use of energy but it does not include the economic benefits and other benefits of the reduction in greenhouse gas emissions and the associated slowing of climate change. Households in the lowest income bracket would see an average net benefit of about $40 in 2020 while those in the highest bracket would see a net cost of $245. Overall, net costs would average 0.2 percent of households’ after-tax income. (3) That doesn’t seem so bad, particularly as the CBO experts also estimate the climate and energy bill now stalled in the Senate would reduce the federal deficit by about $19 billion over the next decade. (4)

The High Cost of Doing Nothing: The cost of doing nothing may be unacceptably high in the long run because of resource scarcity, environmental damage, and the risk of reachng catastrophic tipping points. A recent report by the National Academy of Sciences details the high economic costs of reduced streamflow, rainfall, and crop yields (5). Estimates by the World’s top economists such as Britain’s Nicholas Stern (6) or the US’s Paul Krugman (7) are that right now it would cost about 2% of the worlds GDP to mitigate environmental damage – but if delayed, that amount could rise to 20% or more of the world’s GDP and put us at risk of an environmental catastrophe.

A Flip is Needed: What is it worth to have clean air, clean water, a more sustainable economy, and a less risky future? Can we risk doing nothing? We need a flip by our Republican leaders.

(1) http://www.grist.org/article/2010-06-29-remember-when-republicans-liked-cap-and-trade/

(2) http://flavcountry.blogspot.com/2009/05/mit-economist-john-reilly-calls.html

(3) http://cboblog.cbo.gov/?p=300

(4) http://www.msnbc.msn.com/id/38130006/ns/politics-capitol_hill/

(5) http://www.denverpost.com/headlines/ci_15536630

(6)   http://siteresources.worldbank.org/INTINDONESIA/Resources/226271-1170911056314/3428109-1174614780539/SternReviewEng.pdf

(7)  http://www.nytimes.com/2010/04/11/magazine/11Economy-t.html

Bits and Pieces

Fri ,16/07/2010

This article contains bits and pieces, usually short comments on recent science  articles and issues. Other bits and pieces will be added with the newest at the top.

The High Cost of Doing Nothing: A  report by the National Academy of Sciences details the high economic cost of inaction on environmental legislation (2). It’s relatively easy to figure the cost of regulations to protect the environment, but relatively hard to keep from inflating the cost for political purposes.  As a Republican, I am a little ashamed that Republicans have adopted the grossly inflated annual figure of $3200 per  household. That is useful for sticker shock and propaganda, but totally inaccurate. The CBO has estimated that it would cost around $300 and that there would be added savings that would reduce the deficit.

The cost of regulations  should  be compared to the cost of doing nothing. Estimates by the World’s top economists such as Britain’s Nicholas Stern or the US’s Paul Krugman are that right now it would cost about 2% of the worlds GDP to mitigate environmental damage – but if delayed, that amount could rise to 20% or more. That also doesn’t take into account intangibles such as clean air,  clean water, and a more sustainable economy.

Ocean Acidification is Serious: Since preindustrial times, the concentration of CO2 in the air has risen from 280 ppm to 385 ppm, a 38% increase.   As the amount of CO2 in the air increases, the amount that  dissolves in the ocean increases proportionately.  When the CO2 dissolves in seawater, it makes it more acidic, just as adding CO2 to soda makes it acidic. The pH of sea water has  been measured to be  more acidic by 0.1 pH unit than a century ago. Since the  pH scale  is logarithmic, the decrease of 0.1 unit means the oceans are now over 20% more acidic than a century ago and the cause is most certainly CO2.

To put that in perspective, human blood has a  carbonate buffer system similar to that of the oceans.  Normal blood pH is from 7.45 to 7.35 , and a blood pH less than 7.1 would require emergency treatment. Increasing the carbon dioxide in the blood by 38% will decreased the blood pH to about 7.25, not critical, but surely a sign that something is wrong. If the oceans get much more acidic, the coral, the fisheries, the shellfish, and the oxygen-producing plankton that give life to the oceans are threatened.

Complaints about the “scientific secrecy” are disingenuous: There is very little secrecy in science. Scientific papers are presented and openly debated at meetings where anyone can attend. The peer reviewed papers include the data, the results, and the reasoning and are available at public libraries and many are now online. Also:

Researchers are required to keep records of their research so that any other scientist with comparable training and skills could reproduce the research. The “reproducibility” of the research is an important factor in the reviewer’s evaluation of the research. The public has a right to information produced by publicly funded research and that may be requested through the Freedom of Information Act (FOIA). Usually a “Gatekeeper”, such as the project’s director, is designated to handle FOIA requests. That Gatekeeper has a responsibility to see not only that the public’s rights are upheld, but also to see that the FOIA process is not abused and that the scientists are protected. (1)

Only a few things are kept confidential to preserve the integrity of the peer review process.  The main barriers preventing a better understanding of science by the public is not “secrecy”, but poor science education, the lack of responsible and informative reporting by the media, and an ongoing campaign to spread misinformation by those who find the conclusions of science inconvenient to their ideological or financial interests.