Joshua Hedlund

Is Irene Evidence of Global Warming or Arrogant Journalism?

Sometimes I wonder if my posts are any good, or if I’m just spouting arbitrary digital nonsense that may not even be correct. But every now and then I see posts by noted commentators getting circulated around the Internet which are so bad that I am reminded that I started doing this because I thought l could do better.

I’m talking about Bill McKibben’s piece alleging that the huge force of Hurricane Irene is undeniable proof of ~~global warming~~ climate change.

Let me start out by saying that I try to consider myself a true “skeptic” about the whole issue. Folks like Anthony Watts and his crew like to say they’re skeptics but they are completely convinced that man-made global warming is utterly false just as many scientists are completely convinced that it is true, and a true skeptic is never completely convinced of anything. I’m glad Watts is here to point out when overzealous scientists or media are engaged in cherry-picking, but I’ve seen posts on his site that do the same thing in the other direction.

Anyway, let’s look at some of Bill’s claims. I believe his post is a shoddy piece of journalism which, most like most shoddy pieces of journalism, is built upon cherry-picked facts and compounded by arrogance.

Continue reading Is Irene Evidence of Global Warming or Arrogant Journalism?

Why Is FEMA So Incompetent And Should It Be Abolished?

Ron Paul is, unsurprisingly, taking criticism for suggesting that there is no need for FEMA to respond to Hurricane Irene because it shouldn’t exist at all. Paul has a philosophical objection to federal intervention of this nature, but while progressives are pontificating that conservatives just don’t want to help people, they are forgetting that there is a very large difference between doing things that are supposed to help people and doing things that actually help them, and FEMA has a gross history of incompetence when it comes to actually helping people.

The Federal Emergency Management Agency is most infamous, of course, for its bungled response to Hurricane Katrina. Some progressives blame this on active actions by the Bush administration to handicap the organization or divert its resources. But while we can debate about the blame for the lack of preparedness or resources, it is also clear that even the resources that were available were often mismanaged (such as the luxurious abuse of the distributed debit cards). We can argue about why FEMA was slow to establish a presence in the affected areas, but it is also clear that even when they had a presence they were often preventing other people from assisting (There are scores of infuriating stories about FEMA stopping doctors from treating victims, turning away volunteer firefighters, prohibiting volunteer boats from entering the city, and preventing the Red Cross and Walmart from delivering goods to the needy – to name a few.)

Continue reading Why Is FEMA So Incompetent And Should It Be Abolished?

Thank Government For Something: National Weather Service

T.G.I.F. Thank God It’s Friday – or if you prefer the secularized version, Thank Goodness It’s Friday! But what about… Thank Government? It’s always fun to rant and rave about ridiculous government spending or frustrating government regulation, but I thought it might be appropriate to spend some time every now and then thanking the government for something good that it does. So I’m kicking off a new (possibly weekly) category called T.G.F.S: Thank Government For Something. And today, with Hurricane Irene skirting up the East Cost, I’m thanking government for the National Weather Service.

The National Weather Service is a subset of the United States government that gathers and disseminates information about weather all over the country. It is now considered part of the National Oceanic and Atmospheric Administration, but according to Wikipedia the NWS has been around for 100 years longer – since 1870. From snowstorms to tornadoes to floods to hurricanes, they track everything that’s going on and issue warnings to citizens about dangerous weather. The best part has to do with how well they’ve made the transition to the digital age – all of their data is publicly available at what I consider to be one of the most important, if not one of the prettiest, websites in the world: www.weather.gov.

Right now they’re featuring all kinds of links to maps and information about Hurricane Irene, but the information extends far beyond that. In the water section you can find up-to-date information about gauge levels across hundreds of rivers, as well as historical information for every one of those gauges. You can find a decade’s worth of tornado and severe weather data broken down by state (although it’s easier to find the section by googling “tornado statistics” than by clicking around NWS’s imperfect navigation). And there are hoards of other kinds of information there available as well. From satellites to ocean buoys to Doppler weather radar systems, this government service provides an incredibly valuable amount of information about weather every single day.

Markets, and societies in general, require the flow of information to function properly. Individual citizens do not have the resources to personally track past, present, and (possible) future weather, but having access to that vast body of knowledge enables them to make much better (and safer!) decisions that lead to a much better society. Government has the necessary resources to be able to gather all of that information, and I don’t know that such reliable and comprehensive information could be trusted to come from the private sector. Sure, The Weather Channel’s weather.com is full of hurricane information, too, but would The Weather Channel have placed river gauges all along the Mississippi River to help track flooding if the government hadn’t, and also made that treasure trove of information freely available to the public? Would their meteorologists be able to tell us all about the latest wind speeds and millibars of pressure coming from Hurricane Irene without the National Weather Service’s investments? I’m not sure, but I doubt it.

When I read a book about Hurricane Katrina a couple of years ago, I remember recognizing a sharp contrast in some of the things that the government did. When it came to gathering and disseminating raw information about the hurricane’s size, shape, and location, the government did a fantastic job. When it came to figuring out how to distribute resources among the people who truly needed it vs. the people who just took advantage of it… eh, not so much. Local charities and organizations were much more effective (well, when FEMA wasn’t actively preventing them.) In both situations the effectiveness was a result of the flow of information. Local people had better information about the needs of other people close to them than a far-away government did – but the government was able to gather much better information about the hurricane than anyone in Louisiana could have on their own.

I think economists would call the information gathered by the National Weather Service a “public good.” It is something that each citizen can enjoy the benefits of without taking away from the benefits of another citizen (unlike, say, a dollar from FEMA, which if it goes to one victim can’t also go to another victim). If the population of the United States doubles, it doesn’t cost any more money to gather information about hurricanes and tornadoes and provide it to citizens than it did before, so we’re in fact getting more value out of our relatively cheap investment in the National Weather Service all the time.

This is not to say that there may not be inefficiencies or bloated pensions or any number of improvable aspects in the NWS, but I think it still provides us a very positive value by its overall existence, unlike many government agencies and programs that have a negative value that is constantly getting worse. There are some good-intentioned conservatives now trying to say that we don’t need the National Weather Service, but I don’t think they understand how much data the private weather stations get from them, and I’m not sure they understand what a public good is.

So, thank you, National Weather Service, for helping us stay informed about the weather. Information is a valuable thing. Thank Government For Something!

More on Keynesian Broken Window Disasters

Yesterday I tried to make sense of the Keynesian idea that breaking and replacing windows could be good for the economy. I found it interesting that soon after writing that broken windows could “increase growth,” Matt Yglesias linked to Nate Silver’s piece about the potential expensive catastrophe of Hurricane Irene. Nate says there could easily be billions of dollars of “incalculable” damage. So does Matt think that if Irene breaks a lot of windows, the money spent to replace them will still “increase growth”? Or are there scenarios where spending money to undo destruction actually leaves the world worse off than before? If the answer to that question is an obvious yes, than I wonder how the Keynesian knows when we have a scenario where spending money to undo destruction actually does “increase growth.”

I’ve been thinking about these Keynesian arguments over the last couple of days. I suppose I need to learn more about the concept of the liquidity trap. I can almost understand a scenario in Paul Krugman’s world where there’s a bunch of businesses that have a lot of money that they’re not spending like they usually would, and some disaster would force them all to spend that money on repairs, increasing demand and getting more money flowing through the economy and so forth. And, indeed, we are living in an interesting world where corporate profits are high but hiring levels are not. So, even without being fully educated on the argument, I think I can conceive of a theoretical scenario where a disaster stimulates the economy.

But when windows get broken in the real world, doesn’t it seem like a pretty big wildcard to expect an unfolding scenario of the stimulating variety? What if the disaster is so big that the repair costs are far greater than the present amount of trapped liquidity, and some companies go right out of business because they can’t afford to repair? Or what if they can, but the damage to the local community and infrastructure is so great that they lose some of their customer base? As far as I’m aware, the economic evidence from Katrina to Japansuggests that disasters lower economic growth.

And that’s common sense. If you have to spend money replacing your broken windows, when it’s all said and done you have the same window you had before but less money to spend on something else – just like Bastiat said a couple centuries ago. Now maybe there exists the possibility of precise scenarios (like an alien invasion in a liquidity trap?) where people who have stopped investing magically end up spending their extra investment money to repair things, and that stimulates the economy, but I think the burden of proof is on the Keynesian to prove that the convenient line of factors required to make that a net gain instead of a net loss ever conveniently line up in the real world.

Keynesians, Earthquakes, and Broken Windows

Keynesians like Paul Krugman, believing that government spending is needed in a recession to stimulate the economy, have been arguing that the previous round(s) of stimulus weren’t big enough. There has been some interesting discussion across the economic blogosphere in recent months, but in the past few days some of the discussions have been escalating almost to the point of parody.

Some of this recent debate has to do with the “broken window” idea considered by Bastiat a long time ago. The Keynesian argument (ok, Keynes came after Bastiat, but it’s modern Keynesians that are bringing up this broken window) is that if a shopkeeper’s window is broken, he has to spend money to replace it, which increases revenue for the window-fixer, who then has money to spend on something else, and it basically “trickles down” from there. Voila, stimulated economy! The Bastiat response is that this does not consider what is “unseen” – namely, what more efficient resources the shopkeeper might have spent his money on if he hadn’t had to fix his window. The Keynesians respond that while the shopkeeper may be losing short-term wealth he is shifting future consumption to present consumption which stimulates the economy now, and so on and so forth. At this point we start to get into complicated economic models where both sides rely on abstract theory and cherry-pickings from historical examples to prove their points.

But the Keynesians have been fervently arguing for the broken window lately. Paul Krugman actually suggested that preparations for a fake alien invasion would stimulate the economy. Matt Yglesias just said that somehow you can increase growth by breaking windows but nobody ever said you could increase wealth that way. But here’s what tops them all: When the East Coast was hit by its largest earthquake in more than century yesterday, jokes went around Twitter that Paul Krugman said it wasn’t “big enough.” But then Krugman’s Google+ account actually said, “People on twitter might be joking, but in all seriousness, we would see a bigger boost in spending and hence economic growth if the earthquake had done more damage.”

Woah. That statement ignited the conservative interwebz! Was Krugman so attached to his Keynesian theories that he wished for greater natural disasters to stimulate the economy more?

Then we all found out that Krugman doesn’t have a Google+ account and that the whole thing was a hoax. But the lie in the hoax was that it made Krugman sound like a mean guy who wanted big disasters to stimulate the economy – not that Krugman doesn’t think big disasters really could stimulate the economy. The real Krugman’s response was that things like war aren’t “desirable,” but the idea that they do stimulate is still “correct.” Krugman doesn’t want a major earthquake to happen, but it sounds like he really does think it would stimulate the economy through all the money that would have to be spent to rebuild everything. (Krugman’s Keynesian fans apparently thought so, too, because before the hoax was revealed and the post was deleted, they were engaging in fervent comment debate about how the broken window fallacy is not really a fallacy.)

Now maybe I’m just a dumb armchair post-libertarian who doesn’t understand the nuances of the complicated economy (I hope I’m not adding to the misrepresentations of Krugman here), but if great natural disasters stimulate the economy, then why did interest rates immediately plummet after the giant March earthquake in Japan? (I remember this because we were house-hunting and we locked in a lower interest rate for a mortgage a couple of days later.) All the world’s investors didn’t jump out of stocks and into bonds because they thought growth was about to be stimulated.

But, hey, maybe the Keynesian technocrats are smarter than the world’s investors (irrational market theories and all that). Or maybe the broken window fallacy really isn’t a fallacy under certain conditions. But I’m not convinced that a 9.0 magnitude earthquake is one of those conditions.

Continue reading Keynesians, Earthquakes, and Broken Windows

Will the EU collapse or grow stronger?

When I was in junior high learning about the rise of the European Union, it seemed like apocalyptic history in the making. It was a definitive step toward the evangelical’s eschatological future of one-world government. As such, I find it fascinating that in the last several months the threat of the EU’s collapse has grown from hushed whispered conjectures on economic blogs to front-page mainstream-media discussion across the world. I’ve gone from believing the world was on its way to political unification to believing that the main evidence for that belief was going to collapse any day now.

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Missouri Criminalizes Teachers As Facebook Friends?

Maybe I shouldn’t have started listening to St. Louis Public Radio again on my drive home from work. I keep discovering too many things to blog about. Thursday it was an NPR interview that made dangerous implications about productivity and joblessness. Yesterday it was local news that the Missouri State Teachers Association is filing suit to block a new law that prohibits teachers and students from being Facebook friends.

Say what?? Hold up just a minute, there, lady announcer, I seem to be a little behind on my local news…

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Reasons For Optimism 4

Today’s cool breakthrough comes from a 13-year-old kid who discovered a more efficient way to collect power from the sun:

My investigation asked the question of whether there is a secret formula in tree design and whether the purpose of the spiral pattern is to collect sunlight better…

I designed and built my own test model, copying the Fibonacci pattern of an oak tree. I studied my results with the compass tool and figured out the branch angles. The pattern was about 137 degrees and the Fibonacci sequence was 2/5. Then I built a model using this pattern from PVC tubing. In place of leaves, I used PV solar panels hooked up in series that produced up to 1/2 volt, so the peak output of the model was 5 volts. The entire design copied the pattern of an oak tree as closely as possible…

I compared my results on graphs, and they were interesting! The Fibonacci tree design performed better than the flat-panel model. The tree design made 20% more electricity and collected 2 1/2 more hours of sunlight during the day. But the most interesting results were in December, when the Sun was at its lowest point in the sky. The tree design made 50% more electricity, and the collection time of sunlight was up to 50% longer!

Continue reading Reasons For Optimism 4

Are Productivity Increases Hurting the Job Market?

I heard a frustrating interview on NPR yesterday on my drive home from work. Melissa Block was interviewing Michael Ward, CEO of the freight rail company CSX, about how his business was doing with the recession and everything (transcript here). She seemed rather concerned with the fact that even though the company’s business was picking up again, they were still hiring fewer employees than they had during their pre-recession peak:

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Missing Millionaires and the Dangers of Tax Dependence

Just in time for my piece about Warren Buffet and the dangers of relying on high-income earners to pay all the taxes, the Wall Street Journal is out with an editorial analyzing some IRS data that reveals some interesting things:

In 2007, 390,000 tax filers reported adjusted gross income of $1 million or more and paid $309 billion in taxes. In 2009, there were only 237,000 such filers, a decline of 39%. Almost four of 10 millionaires vanished in two years, and the total taxes they paid in 2009 declined to $178 billion, a drop of 42%.

Those with $10 million or more in reported income fell to 8,274 from 18,394 in 2007, a 55% drop. As a result, their tax payments tanked by 51%. These disappearing millionaires go a long way toward explaining why federal tax revenues have sunk to 15% of GDP in recent years. The loss of millionaires accounts for at least $130 billion of the higher federal budget deficit in 2009.

Surprise, surprise. All those rich people that were earning money on their investments in the good years (and paying taxes on them) found themselves losing money in the bad years. This tells me a couple of things.

First, it supports the argument that it’s a bad idea to increase the government’s dependence on large but volatile incomes. If you balance your budget by taxing the rich what are you gonna do in a year when their tax payments drop 51%? As I said earlier,

The super-rich don’t make $100 million a year because they’re earning wages of $50,000 an hour doing constant work. They make that much because they invest money in the stock market along with various other complicated and volatile things that are taxed at different rates… the income of the super-rich is much less dependable than mine or yours – when the stock market crashed in 2008, so did the income of the super-rich. A lot of them even lost money. So the more you count on super-rich income to fund your government, the more you’re going to be hurting when super-rich income completely disappears for a year.

Second, it suggests that everybody like Warren Buffet can’t really be paying lower rates than their secretaries – how else could the government lose so much revenue if they weren’t paying very much to begin with?

Now the Wall Street Journal claims this article is based on “more detailed tax data” straight from the IRS, but they are often accused of cherry-picking data to fit their agenda. The reliable Media Matters makes such an accusation, picking apart the WSJ article with their own piece, which… isn’t very good. It hems and haws about how “millionaires” are usually defined by net worth, not income in a single year, and that millionaires have actually been going up. It references a recent WSJ article that talks about a new record number of millionaires. It talks about how silly it is to blame Obama for this and so on.

But Media Matters seems to be missing the entire point. When discussing government revenue, it doesn’t matter if the number of net-worth millionaires hasn’t gone down because we don’t tax net worth. We tax annual income. It doesn’t even matter if the number of annual-income millionaires came back up in 2010 or if it seems to be coming back up in 2011. The amount of government revenue from high-income earners still went down in 2009, and Media Matters does not seem to dispute this at all.

Clearly the years in questions (2007 vs. 2009) are a clever selection, as usually-high-income earners don’t have bad years like that all the time. But the point is that those kinds of years do happen, and if the top 0.2% are already paying more than 20% of the total income tax, how much more should we be relying on them to plug the gaps in our ever-expanding budget? With the stock market crashing again, the government might not collect very much money from “millionaires” in 2011, either.

It’s certainly a popular notion to tax the rich, and I’m open to ideas about simplifying tax schemes or rolling back some of the most recent tax cuts. But simply from an accounting perspective, I don’t think it’s a good idea to increase the part of your budget that is dependent on a revenue source that can go up or down by hundreds of billions of dollars a year. Am I missing something here?