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“Disasters & Climate Change”, an important new book illuminating the debate

22 November 2014

Summary:  Here’s a recommendation about a brief, powerful, and timely book about climate change (one of the great public policy issues of our time).

The Rightful Place of Science: Disasters and Climate Change

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Review of

The Rightful Place of Science:
Disasters & Climate Change

by Roger Pielke Jr.

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Let’s cut to the chase. There are two important things to know about this book. First, this is a valuable contribution to the public debate about climate change, a brief, clearly written, thoroughly documented description of state of the knowledge about one aspect of climate change: the current trends in disasters.  It’s essential reading for any layperson interested in this vital issue, no matter what your political tribe. It’s especially valuable as assertions that we’re suffering the effects of extreme climate have become frequent page-one features in the news media. Prof Pielke shows the research and benchmarks the research vs the most recent conclusions of the IPCC.

His conclusion about the science (spoiler):

This short volume has sought to answer a straight-forward question: Have disasters become more costly because of human-caused climate change? Only one answer to this question is strongly supported by the available data, the broad scientific literature, and the assessments of the IPCC:

“No. There is exceedingly little evidence to support claims that disasters have become more costly because of human-caused climate change.”

Of course, a lack of evidence does not prevent people from believing in God, aliens, or for that matter, a small celestial teapot orbiting the Sun in the asteroid belt. People may indeed have very good reasons for believing in any of these things for which data and observational evidence are unsupportive, unavailable, or inconclusive. The issue of disasters and climate change will be no different. And of course, science evolves. There may be future research which overturns present understandings. If and when that happens, our assessment of what the science says should change accordingly.

Thus, the conclusions presented here should be interpreted as an indication of the current state of scientific understandings, and not a prediction of what a future scientific assessment might say in the years to come. Nonetheless, one point should be abundantly clear. The evidence available today points to a clear answer to the central question at the focus of this short volume: Human-caused climate change has not led to a detectable increase in the costs of disasters.

But the climate is changing. It would be a mistake to conclude that because the evidence shows that human-caused climate change has not led to demonstrable in-creases in the costs of disasters that (a) climate change is not occurring, or (b) we need not worry about it.

Read more…

What does the health care debate reveal about us, and our future?

21 November 2014

Summary:  Today we have a glance at the debate about one of the most important domestic public policy debates of our time, repeated in every generation since 1945, that illuminates the moral and intellectual nature of America at this point in time. The photo below captures it perfectly, the aggressive ignorance resulting from generations of skillful propaganda on a weak people. Renewal is an inherent capacity of individuals and societies; we desperately need it (more on how to do this in another post).

“Of course we want to have universal health care! We aren’t barbarians!”

— attributed to Margaret Thatcher, said in 1993 at Washington, DC (hat tip to Delong)

Keep govt out of my Medicare

This is America today

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I am applying for health insurance as a self-employed consultant, a painful experience which reminds me of three important facts about America today. Facts which reveal the basic outlines of our situation.

First, our health care system is a disgrace, a failure to adequately handle a public policy issue solved years (or generations) ago by other developed nations. It’s massive cost and low effectiveness (leaving so many poorly covered, or uncovered) reveals the degeneracy of our ethics and folly of our governance. Decent medical insurance (with caps that don’t cause bankruptcy) can easily cost 1/4 to 1/3 of a blue collar family’s after tax income (without Obamacare’s tax credits).

Also, it shows how large vital sectors (finance, defense, health care) have become parasites, consuming resources disproportionate to their role and size. It’s the grifter economy, however well-intentioned the people involved (i.e., in health care and military).

Second, Republicans are the political group most responsible for this, since 1945 having fiercely fought every step to provide health care to America’s poor and working poor from Medicare and Medicaid (1965) to Obamacare. Even today they fight to deprive Americans of affordable health care, with a policy of Repeal and Promise to do something someday.  Rand Paul’s budget proposals call for a slow strangulation of Medicare, while today some GOP governors reject expansion of Medicaid even at no cost to their State (as of September, only 27 States have expanded coverage) — and some fight even the basic terms (e.g., Kansas).  It’s difficult to imagine such callousness, especially as their arguments are largely bogus.

Third, it shows our weakness as citizens that alone among the developed nations Americans have not exerted ourselves to provide adequate health care to all — despite the obvious self-interest in doing so — or run this sector in a rational manner.

Here are links to the latest rounds in the “debate”. Like most public policy debates in America, they’re polarized between facts and delusions. With each groups taking different sides in different debates; sometimes we have bipartisan delusions (e.g, the WOT).

(a) The Anti-Obamacare FAQ“, Reihan Salam, Slate, 14 November 2014 — A fact-free “Everything you need to know about why conservatives want to repeal the president’s health care law.”

(b)  A gentle but thorough rebuttal: “Here’s Why Conservatives Will Never Give Up Their War on Obamacare“, Brian Beutler, The new Republic, 18 November 2014 — Excerpt:

But in any case, none of these basic differences between liberals and conservatives explain, as Salam puts it, why conservatives are “so pissed off about Obamacare.” He attributes their indignation to the belief “that Obamacare only became the law of the land because President Obama misled the public,” then goes on to explain that conservatives aren’t hypocrites for wanting to turn Medicare into an Obamacare-like program for seniors, or for having once supported the individual mandate; then acknowledges that conservatives are miles from consensus on how best to replace Obamacare; and finally concludes that the law should be repealed anyhow.

None of this makes the Obamacare opposition seem even a tiny bit reasonable, but it does present a few good opportunities to explain why liberals think most of this is all window-dressing for a simpler explanation: Conservatives don’t just oppose distributive programs that help the poor and working class — these programs drive them batty in and of themselves. That Obamacare patched up the single biggest hole in the federal safety net, and in so doing extended government-sponsored health benefits to people through every stage of life, intensifies this reaction.

(c)  A detailed and typically brilliant rebuttal by Brad DeLong (Prof Economics, Berkeley): “Continuing on the ‘What Are Conservative Policy Ideas for Replacing ObamaCare?’ Beat”, Washington Center for Equitable Growth, 18 November 2014 — Excerpt:

Read more…

William Lind: thoughts about 4GW, why we lose, and how we can win in the future

21 November 2014

Summary: Twenty-five years ago, in October 1989, the Marine Corps Gazette published  “The Changing Face of War: Into the Fourth Generation”, by four active duty military officers and a civilian military historian. It explained that a new era of warfare had begun, sparked by the invention of nukes (rendering suicidal conventional war among major powers), brought to maturity by Mao (and improved by generations of success and failed insurgencies since then). We failed to learn how to fight these, as proven by our two failed wars after 9/11, the new bipartisan ones being launched now, and the future ones being prepared in Africa.

This series of posts will help you better understand our defeats and prepare you for what is to come. And, perhaps, help motivate you to join the effort to retake the reins of America. This is the second chapter, by guest author William Lind (the civilian co-author of Into the Fourth G).

4GW

Source: Syed Zaid Zaman Hamid

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Thoughts on the 25th anniversary
of the publication of the original article on
the Four Generations of Modern War

By William Lind

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Since the publication of the original article in the Marine Corps Gazette, three things have happened.

First, events have justified the article’s description of the Fourth Generation as war that escapes the state framework. The high-tech alternative, which became known subsequently by a number of buzzwords — the Revolution in Military Affairs, Transformation, Net-Centric Warfare, etc. — is not where war has gone. Most of the high-tech systems we continue to buy have proven irrelevant to fighting non-state forces. So far, at least, the F-22 has not shot down a single Taliban flying carpet.

Second, the theory of 4GW has been expanded and refined, a process that will continue. The most important addition to the theory has been Martin van Creveld’s book, The Transformation of War. Tom Hammes’s book, The Sling and the Stone, while sound on the first three generations, has brought confusion to much of the discussion of 4GW because it gets the Fourth Generation wrong. Insurgency is not a dialectically qualitative change in war. It is merely one way in which war has been fought for a long time. As van Creveld puts it, 4GW is not a change in how war is fought (though it brings such changes) but in who fights and what they fight for. That is a dialectically qualitative change, the biggest since the Peace of Westphalia in 1648.

The third thing that has happened is actually a negative, i.e., something that did not happen. Despite overwhelming evidence that 4GW is the wave of the future (including four defeats of the U.S. armed forces by 4GW opponents: Lebanon, Somalia, Iraq and Afghanistan), the U.S. military has not moved to prepare for it. It remains, and apparently will remain until covered by the lid of history’s trashcan, a Second Generation military. That is to say, it reduces war to putting firepower on targets.

Read more…

The Snowden affair has ended. What have we learned about ourselves, and about America?

20 November 2014

Summary: We’ve concluded the 17 month national dialog started by Edward Snowden’s revelations. As I predicted, nothing happened. In effect, we acquiesced to our government’s mass surveillance. This encourages them to expand further. With each such victory the State grows stronger, its citizens grow weaker (becoming subjects).  But nothing is written. It’s all about choice. America will be what we strive for it to be. For the Boomers, that’s a nation of high and growing inequality plus a powerful and growing Security State. It seems the baton passes to the millennial generation to reform America.

4 July 1776 was the birthday of the America-that-once-was, start of the successful Revolution.

5 June 2013 was the birthday of the New America, start of the first reform movement — which failed.

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Temporary Defeat Is Not Permanent

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Contents

  1. A funereal announcement
  2. Significance
  3. What to do?
  4.  For More Information
  5. Our present and our future

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(1)  A funereal announcement

The USA Freedom Act was not much reform (although better than the toothless bill the House passed this year after voting down real reform last year. But it was a Bill too far for the GOP.

The End of the Snowden Affair“, Steve Vladeck (Prof of Law at American U; bio here), Just Security, 19 November 2014 — Opening:

Sometime around 7:30 p.m. (EST) last night, the 17-month-long national conversation over how to reform U.S. foreign intelligence surveillance authorities effectively ended when the Senate failed to clear a crucial procedural step en route to what would otherwise have been the near-certain passage of the Senate version of the USA FREEDOM Act — the surveillance reform bill that has been in the works for well over a year. The vote “failed” 58-42, falling two votes short of the 60-vote threshold necessary to invoke “cloture.” The preposterousness of the filibuster notwithstanding, I believe that this will mark the moment, in retrospect, when any real hope of meaningful surveillance reform died–and with it, any chance for many of the most important lessons from last summer’s Snowden revelations to be reflected in new U.S. policy.

The Hill explained how reform dies:

Senate Minority Leader Mitch McConnell (R-Ky.) may have dealt the legislation a fatal blow when he used a floor speech on Tuesday to argue that passage of the legislation would hurt U.S. efforts to stop terrorist groups. “At a minimum, we shouldn’t be doing anything to make the situation worse,” McConnell said ahead of the vote. “Yet, that’s just what this bill would do.”

Yesterday’s Senate motion failed 58-42, (GOP: 4 pro, 41 con; Dem: 52-1; Independents 2-0). This follows the 24 July 2013 vote in the House to limit NSA surveillance, which failed 205-217-12 (GOP: 94 pro, 134 con, 6 other; Dem: 111-83-6). So what now?

Read more…

How does The Hunger Games compare to other classic stories of children fighting children?

19 November 2014

Summary: As we watch “Mockingjay”, the 3rd movie in the Hunger Games series, let’s compare Suzanne Collins’ books to the other classics of children fighting children — Lord of the Flies (William Golding , 1954) and Tunnel in the Sky (Robert Heinlein, 1955). Children fighting for their lives against other children, a gripping story-telling motif these authors use to illustrate the nature of a society — or even of humanity.  Each paints different possibilities for our future.

The Hunger Games: Mockingjay

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Contents

  1. Scheduling the annual high school massacre
  2. The Hunger Games
  3. A lesson from another story
  4. Reviews
  5. The trailer for “Mockingjay”

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(1)  Scheduling the annual high school massacre

These three books show children at war with one another. The first two show children as castaways, thrown into nature from adults and society. Unlike Hobbs — life without society is “solitary, poor, nasty, brutish, and short” — in Lord of the Flies Golding shows that children are not solitary, and naturally form gangs. Unfortunately Hobbs got the rest correct; gang life is, as seen on the island (and in US inner cities) “poor, nasty, brutish” and often “short”. Order is restored only by the return of authority. The children (and perhaps, by extension, the mass public) cannot do it on their own.

Critics often describe Heinlein’s Tunnel in the Sky as a rebuttal to Golding, but these books describes very different conditions. The children in Tunnel have been trained to live on the interstellar frontier. To get their certificates, as its final exam each class spends  2 to 10 days on a wild planet with whatever gear they can carry (plus the even more valuable knowledge in their minds).

It’s a daft scenario. Imagine students from your high school armed with their weapons of choice and dumped as individuals in the wild without supervision or even observation. Blood would flow in revenge for years of insults and abuse, retribution by ambush without mercy. See this list of school shootings in America; imagine making these easy, even routine. If that wasn’t motive enough, every student is a WalMart for anyone amoral enough to kill from behind.

Read more…

What might the failure of Abenomics mean for Japan? Big, unpredictable changes, perhaps with a happy ending.

18 November 2014

Summary:  Japan has remained in economic stagnation for so long we have come to consider that as normal. It’s not. Slow decay of a nation eventually ends in reform (as expected in Japan by experts for 2 decades) or regime change. Abenomics aroused excitement as the start of powerful reforms, as Japan’s last chance. The past few months’ data suggest that failure lies ahead. If so, after that will come exciting and unexpected events (but not necessarily beneficial or pleasant events). They will affect the world (especially if Japan walks a path on which America and Europe follow). Let’s review the evidence, and look ahead to the possible happy ending.

“GDP figures for July-September turned out not so encouraging.”
– Prime Minister Shinzō Abe, 17 November 2014 (source: Reuters)

”The war situation has developed not necessarily to Japan’s advantage …”
– Emperor Hirohito of Japan in his first radio broadcast, 15 August 1945

Japan: setting sun

Contents

  1. Dark day for Abenomics
  2. Implications
  3. What’s the problem with Japan
  4. The bad news, and the possibility of a happy ending
  5. For More Information

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(1)  Dark day for Abenomics

In the dark days before Abenomics, as Japan neared the quarter-century milestone for stagnation despite massive economic stimulus (running the government’s debt up to incredible levels), experts wrote that “Something is wrong with Japanese politics“, and about the necessity of “Restoring Political Stability“.

Abe has been prime minster since 26 December 2012. His political strength came from the desperation of his people after almost a quarter-century of the hopes of recovery he aroused, and his bold measures to revitalized Japan (“Abenomics”). Now that Japan enters a triple-dip recession, let’s turn from Wall Street’s happy outlook to ask about the effects should Abenomics fail? And it is failing, despite strong corporate profits and massive stock market gains, as described in this report by Alhambra Investment Partners: “The Inevitable End“.

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Japan: real GDP, QoQ, SAAR

Real GDP, from Alhambra Investment Partners, 17 November 2014

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Perhaps even worse, Abenomics has lowered the value of the yen. While wonderful for corporate exporters and good for their workers, this has proven horrific for everybody else as the cost of imports rises faster than wages (and faster than fixed incomes, such as pensions) — without the promised economic acceleration. Another recession will further increase stress on people, as the yen drops even more — with even less offsetting job and wage growth. This trend cannot continue without ugly consequences.

Read more…

“Castle” helps us adjust to a new America, with women on top

16 November 2014

Summary: The tv show “Castle” prepares us for a New America, as Kate Beckett grows larger and Richard Castle becomes smaller. As women’s education levels increasingly surpass men’s, incomes and status of women will follow. Gender roles will have to adjust, radically. This is the essence of Feminism. Hollywood helps us adapt by showing possible futures, which we can discuss — and prepare for — like the long decay of Castle from alpha to beta, and his failed attempt to reverse it. We’ll see more such stories in the future, on screen and in real life. Post your thoughts in the comments.  Warning: season 7 spoilers galore!

“Oh, wow. You’re engaged to a douche.”
— Rogan O’Leary (Beckett’s husband),  speaking to her about Castle

Beckett abuses Castle in "Flowers for your grave"

Sensing his weakness, Beckett’s abuses Castle in S01E01

Contents

  1. The mystery resolved!
  2. From the start Beckett saw weakness
  3. Over time Castle grew smaller
  4. Other posts about “Castle”
  5. Other posts about women

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(1)  The mystery resolved!

At the end of season 6 Castle had an epiphany. Beckett’s serial deceits (details here) culminated with her “forgetting” that she was married (exquisite from the woman who mocked Castle’s two divorces by saying “I’m a one and done girl”). He saw his evolution from the ruggedly handsome, rebellious, action hero of Season One into a beta. Castle realizes that he shares Rogan’s contempt at what he’s become.

The show ends with a cliff-hanger: Castle kidnapped while driving to his wedding. In the opener of season 7 Castle has amnesia, but the NYPD detectives discover who arranged the kidnapping. The answer is exactly as I predicted. {Transcript from Series Monitor}

  • TORY: {the video plays} This is in the time window when the {money} drop should have taken place. …
  • RYAN: We get eyes on Cardano’s client we can get a real lead on who took Castle. … That’s him. That’s the client dropping off the cash. …
  • BECKETT:  Wait. Freeze that. Zoom in.
  • ESPOSITO: That’s Castle. He’s the one who dropped off the cash. … Castle’s in on this. He planned the whole thing.

In S07E02 Castle tracks down a man who knows what happened, and so learns the source of his amnesia: “… you were the one who asked to forget.” The mystery for season 7: what did he want to forget, and why?

Here’s my guess. Each of us has the capacity for self renewal. Castle has forged new versions of himself, from high school prankster to millionaire novelist to A-team detective.  At the end of season 6 he decided to make a clean break with his old life, using his incredible Rolodex of contacts to arrange the faking of his death — and a rebirth. But he lost his nerve, asked for the memory of all this to be erased, and then blindly fled to await his return to Beckett. Renewal is difficult, and painful — too much for the man he’d become.

Let’s review why Castle decided to bail on his life, and what happened after he returned to it. Reminder: spoilers!

Read more…

Let’s prepare for past climate instead of bickering about predictions of climate change

16 November 2014

Summary: Another post about our FAILure to learn from experience. During the past decade scientists have given scores or hundreds of warnings that we’re not prepared for the re-occurrence of past natural events.  While we bicker about the possibility of future climate change, we remains poorly prepared for normal extreme events. Articles on the FM website have discussed solar storms, mega-tsunamis, and massive volcanoes. Today we look at the latest warming: about storms. The past has brought storms far larger than anything we’ve seen in the modern era. Let’s prepare for their return. Katrina and Sandy were warnings we have FAILed to head.

“We don’t even plan for the past.”
— Steven Mosher (member of Berkeley Earth; bio here), a comment posted at Climate Etc

Superstorm

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Heightened hurricane surge risk in northwest Florida revealed from climatological-hydrodynamic modeling and paleorecord reconstruction

Ning Lin et al
Journal of Geophysical Research: Atmospheres
27 July 2014

Excerpt (citations omited; red emphasis added)
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Storm surges and associated waves are responsible for much of the tropical cyclone (TC)-related deaths and
damage. Typhoon Haiyan in 2013, the deadliest Philippine typhoon on record, killed more than 6000 people
in that country alone, largely due to its storm surge. Storm surge was also a major cause of the over 138,000
fatalities during Cyclone Nargis (2008), the worst natural disaster in Myanmar’s history.

Recent U.S. TC surge events include Hurricane Katrina of 2005 in the Gulf of Mexico, which caused over 1800
fatalities and more than $80 billion in damage, and Hurricane Sandy of 2012 on the Northeastern Seaboard, which caused over 70 fatalities and more than $65 billion in damage. As the most fatal and destructive aspect of TCs, storm surges exact a heavy toll on society. Moreover, coastal populations and sea levels are both rising — a combination that ensures that coastal communities will become increasingly vulnerable to storm surges, which themselves may also intensify under the changing climate. Mitigation of future TC surge disasters requires us to understand the risk — the scale and probability of TC inundation events.

The main obstacle to assessing the risk is the shortness of the historical/instrumental TC record (over a few decades up to a couple hundred years). As a way to extend the hurricane/typhoon records to prehistory, paleohurricane research has emerged as a promising tool for reconstructing long-term TC activity. Identifying and dating TC-related deposits in coastal environments makes it possible to estimate the frequencies of intense TCs at a site and determine how they may have evolved over thousands of years. Such records also provide unprecedented access to natural evidence on hurricane-climate relationships.

… We demonstrate this approach of combining climatological-hydrodynamic modeling and historical and prehistorical records to study surge risk by applying it to the Apalachee Bay area on Florida’s Gulf Coast.

Storms, then and now

… the storm model was constructed using observations from only the last two decades of the twentieth century (1981–2000), which may have been unusually favorable for North Atlantic hurricane activity compared to the previous decade.

… The preservation of these event beds with significantly more coarse material than any of the recent beds suggests more intense hurricanes producing higher levels of surge than those documented historically. …

Read more…

Krugman shows us why the Left loses, despite its advantages

15 November 2014

Summary: This is the fourth in a series about why the Left loses. America’s drift to the Right since 1980 has not only become impossible to ignore, but has accelerated despite the many fundamentals favoring the Left. Such as demographics and the increasing acceptance of behaviors an anathema on the Right (e.g., gay marriage, abortion). Increased concentration of wealth and income by the 1% explains much of the Right’s success. As this series will show, weakness of the Left explains much of the rest.

Closed Mind

Contents

  1. A symptom of the problem
  2. Diagnosis
  3. Significance
  4. Other posts in this series
  5. More evidence

(1)  A symptom of the problem

Triumph of the Wrong“, Paul Krugman, op-ed in the New York Times, 6 November 2014 — Excerpt:

The race is not to the swift, nor the battle to the strong, neither yet bread to the wise, nor yet midterms to men of understanding. Or as I put it on the eve of another Republican Party sweep, politics determines who has the power, not who has the truth. Still, it’s not often that a party that is so wrong about so much does as well as Republicans did on Tuesday. … So now is a good time to remember just how wrong the new rulers of Congress have been about, well, everything.

First, there’s economic policy. … In short, the story of conservative economics these past six years and more has been one of intellectual debacle — made worse by the striking inability of many on the right to admit error under any circumstances.

Then there’s health reform, where Republicans were very clear about what was supposed to happen: minimal enrollments, more people losing insurance than gaining it, soaring costs. Reality, so far, has begged to differ, delivering above-predicted sign-ups, a sharp drop in the number of Americans without health insurance, premiums well below expectations, and a sharp slowdown in overall health spending.

And we shouldn’t forget the most important wrongness of all, on climate change. As late as 2008, some Republicans were willing to admit that the problem is real, and even advocate serious policies to limit emissions — Senator John McCain proposed a cap-and-trade system similar to Democratic proposals. But these days the party is dominated by climate denialists, and to some extent by conspiracy theorists who insist that the whole issue is a hoax concocted by a cabal of left-wing scientists. Now these people will be in a position to block action for years to come, quite possibly pushing us past the point of no return.

One of these three things is not like the others. For the first two Krugman clearly identifies the GOP view and provides rebuttals, all supported by links (I agree 100%). The third asserts that the GOP is dominated by climate extremists — and implies that the Democrats represent the consensus of climate scientists. He provides no evidence for either claim; there are reasons to doubt both. Certainly the public does, with climate change near the bottom of major threats (See Gallup polls, other polls, other evidence).

Is the Republican Party “dominated by denialists?” In Leftist usage, “denialist” has no fixed meaning beyond “people who disagree with me about climate change”. Much like “terrorist” to the Right, it’s a political tool rather than a category. It includes prominent climate scientists skeptical of some aspects of the IPCC’s views (e.g., Judith Curry and Roger Pielke Sr) — or critical of the Left’s exaggerations of the IPCC’s views, and have supported their view with studies in the peer-reviewed literature (e.g., Roger Pielke Jr).

Read more…

Did anyone predict the 2008 crash? Will anyone predict the next crash?

12 November 2014

Summary: There are many who claim to have predicted the 2008 crash. Most (or all) in fact did not foresee the banking collapse that was at its center, that expanded a commonplace downturn into the worst global downturn since the 1930s. That tells us something important about our times, and what we an expect in the future.

Expect the unexpected: fish

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“Unless you expect the unexpected you will never find truth, for it is difficult to discover.”

— Heraclitus, the pre-Socratic “Weeping Philosopher” of Ionia

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An important message of the FM website is that the post-WW2 era has ended, starting an era of unpredictable events. It’s a message nobody wants to hear, ripping asunder our comfortable belief in the reliability and normality of our institutions. We see these things in the history of the 2008 crash, the worst since the Great Depression. Legions claim to have seen it coming; in fact few (perhaps nobody) predicted its nature.

I doubt the many (or anyone) will do better in the next crisis. This uncertainty is a fundamental aspect of our situation. We’re “off the map”, sailing through unknown conditions (that part of the puzzle I got right, writing about it as early as Sept 2008).

As an example of how this worked — and what we can expect in the future — a previous post looked at Steve Keen’s predictions of trouble for our financial system.  He saw the flaws in our financial system, the potentially ruinous fault lines — but not the distinguishing feature that in 2008 turned the commonplace bursting of an investment bubble into a global 1929-like crash: the collapse of banks in the USA and Europe.

Other economists, such as Nouriel Roubini, also saw the danger in broad terms, but not the fragility of the banks that brought so many nations to the brink of Depression. Many non-economists also saw it (though in less detail), such as myself (e.g., the housing bubble and unsustainable levels of debt). I doubt that the senior managers of the banks themselves saw the danger (although their blindness proved quite profitable for themselves, getting paid both to cause and clean-up the bubble).

Another prediction of the crash

Another description of a successful prediction appeared in Gideon Rachman’s review of Jonathan Kirshner’s new book, American Power after the Financial Crisis (Financial Times, February 9): “The fire of the crisis was extinguished at great cost, but ‘the firetrap remained.”

Read more…

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