Catallaxy Files

In Greek mythology, the gods were anthropomorphic. They were spiteful, vengeful and capricious. People knew that they had to offer sacrifice or earn the wrath of the god they offended.

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Some people might remember Steve Keen’s bold prediction about the collapse of the housing market. Now he is in a right pickle.   The Charles Sturt (property) newsletter reports.

Sixteen months ago Mr Keen made a bet with Macquarie Group interest rate strategist Rory Robertson after claiming that house prices would dive by 40% when the GFC was at its worst.
Fortunately his predictions didn’t eventuate, and now Mr Keen will deliver on his promise to walk 224km from Canberra to the top of Australia’s highest mountain, Mt Kosciuszko. It remains to be seen whether he will wear a t-shirt saying “I was hopelessly wrong on home prices! Ask me how.”
Dr Keen was way off the mark. Australian home prices bottomed out by 5.5% from their peak in late 2008. Read the rest of this entry »

Roger Pielke Jr. linked to an old post today. In February 2009 he made these comments.

The political consensus surrounding climate policy is collapsing. If you are not aware of this fact you will be very soon.
…
The current shrillness that has been put on display by many politically-active climate scientists and the feeding-frenzy among their skeptical political opposition can be explained as a result of this looming collapse, though many will confuse the shrillness and feeding-frenzy as a cause of the collapse.
…
The climate scientists (and their willing allies) have taken their battle to the arenas of politics, waging a scorched earth campaign of bullying, name calling, threats, and obnoxiously absurd appeals to authority. The skeptics participate in similar fashion, and the result is an all out brawl that we see escalating still before our eyes.

The Australian installment of that debate was a five-part essay by Clive Hamilton published by the ABCs The Drum. This week, for some balance, The Drum is publishing some climate change sceptics. Yesterday Alan Moran was on and today Tom Switzer had the honours.

This is not good enough for Crikey’s Bernard Keane. It seems that Alan and Tom are not climate scientists; although neither is Hamilton so I don’t know how far that line takes us.

Spare a thought for Keane though – he had the task of writing something to a tight deadline. So he went for the fisk. That probably explains the broken links (this is the link you want) and vague and breathless references to peer-reviewed literature. Like the peer-review process itself hasn’t been damaged by this whole scandal.

The biggest problem with the Crikey story is that Keane clearly didn’t follow the breaking news out of the UK. He claims

Peer-reviewed evidence shows no noteworthy impact of factors such as urban warming, and NASA adjusts its data to remove any impact anyway – although a large minority of readings show urban records are cooler than rural records because many monitoring units are located in parks.

This is how Fred Pearce at the Guardian reports some Phil Jones testimony.

Nobody asked if, as claimed by British climate sceptic Doug Keenan, he had for two decades suppressed evidence of the unreliability of key temperature data from China.

But for the first time he did concede publicly that when he tried to repeat the 1990 study in 2008, he came up with radically different findings. Or, as he put it, “a slightly different conclusion”. Fully 40% of warming there in the past 60 years was due to urban influences. “It’s something we need to consider,” he said.

I wonder if that paper is going to appear in a peer-reviewed journal anytime soon. To be fair to Jones, I would like to see the actual transcript on that question.

Keane raises, again, the issue of Jones’ BBC interview and whether or not there has been statistically significant warming since 1995. My take on that question is here, here and here. There may be more coming on that front soon. I haven’t been able to track down a paper but I have seen reports on this

Professor Terry Mills, professor of applied statistics and econometrics at Loughborough University in England, looked at the same data as the IPCC and found that the warming trend it reported over the past 30 years or so was just as likely to be due to random fluctuations as to the impacts of greenhouse gases. Mills findings are to be published in Climatic Change, a peer-reviewed environmental journal.

In a paper published in the Journal of Data Science Terry Mills concludes

Indeed, examining much longer records of temperature reconstructions from proxy data reveals a very different picture of climate change than just focusing on the last 150 years or so of temperature observations, with several historical epochs experiencing temperatures at least as warm as those being encountered today: see, for example, Mills (2004, 2007b) for trend modelling of long-run temperature reconstructions. At the very least, proponents of continuing global warming and climate change would perhaps be wise not to make the recent warming trend in recorded temperatures a central plank in their argument.

I should point out that Mills is not a climate scientist either, he is an econometrician and author of magnificent book on modelling time series. It might be a bit hard claiming that he doesn’t understand first year stats.

What I don’t understand is why the AGW lobby pursue this kind of tactic.

a scorched earth campaign of bullying, name calling, threats, and obnoxiously absurd appeals to authority

It clearly isn’t working for them.

Update: The Australian debate is at stage two.

Cartoon by Josh.

Amazingly, the leftwing blog Daily Kos has posted a really helpful gloss on the Hayek vs Keynes rap!

The SMH has an op-ed today by George Williams arguing against the death penalty. Apparently the federal parliament is considering a ban. This would prevent any State or Territory government from reintroducing the death penalty. Putting this in context, the last person executed in Australia was hanged in 1967. The last jurisdiction to maintain the death penalty on the books was NSW (abolished in 1985) but the last time someone was executed there was in 1940. The last ANU election survey indicates that support for the death penalty has fallen below 50 percent. So what’s the problem?

This leaves Australian law in an unsatisfactory state and our citizens facing the death penalty overseas in an even worse situation. Equivocation on the death penalty by our leaders, such as by recognising it as appropriate for someone like Saddam Hussein, makes it harder to oppose the execution of Australians overseas.

So being soft on war criminals and their ilk makes it less likely that Australians will be executed? This argument seems a bit strained to me. Irrespective of our domestic law – where the death penalty is not on the books in any State or Territory and history suggests that the authorities are loathe to execute anyway – I would expect the Australian government to assist Australian citizens on death row in other countries and oppose their execution.

Ambiguous statements by our politicians, combined with the silence in our law on the reintroduction of the death penalty, leave the door ajar for its return in a state. A political leader seeking high office could take the law and order debate to a new low by arguing for the reintroduction of the death penalty in response to a particularly heinous crime.

That could happen. The tyranny of the majority is a well-known potential cost of living in a democracy. But how serious is this threat? If you look at elected politicians they are more likely to oppose the death penalty than approve of it. I suspect that is due to selection mechanisms within political parties. Elite opinion is opposed to the death penalty and elitist organisations, like political parties, enforce that opinion. To be sure, some individuals get through the system, but I doubt there would be enough pro-death penalty people in any Parliment to pass that legislation.

So all up, I think the legislation is a waste of time and effort. While the budget is in deficit and the Commonwealth is indebted our friends in Canberra should be focused on economic management and not wasting our money and our time on this non-issue. As Williams concedes

Unfortunately, no federal law can prevent the reintroduction of the death penalty by a future federal parliament. Prohibiting its reintroduction at the state level is as far as we can go without changing the constitution.

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The Australian Institute of Criminology has a history of the death penalty in Australia.
Tim Fry and I wrote on the death penalty in 2007.
The NY Times has some coverage on the economics of the death penalty here.
The best economic anti-death penalty argument I’ve seen is by Justin Wolfers and John Donohue. A more recent paper is here.

Ross Gittins seems to think libertarians have quietly watched as the Rudd government has bungled its response to the north Atlantic banking crisis and massively, irresponsibly expanded public debt (”Libertarians silent on insulation bungle”, March 1). Nothing could be further from the truth.

I gave this evidence to the Senate inquiry into the stimulus package in February last year: “In my opinion, the package does not contain enough stimulus relative to the spending that it contains, and the spending that it does contain is of poor quality. This kind of stimulus package has a very poor track record of success, and economically we cannot really expect it to succeed.”

I gave evidence again in September: “We have actually seen a very poorly implemented policy of a substantial amount of taxpayer money that has basically, to a large extent I believe, been wasted.”

In December, I told a visiting OECD delegation that, in addition to wasteful spending, three people had died in connection with the insulation program and many houses had burned down due to poor insulation practices.

Individuals do not need the nanny state to look after them, but that does not absolve government from responsibility for its actions. To ask the question, ”And whatever happened to individuals accepting responsibility for their own affairs?” is simply astonishing. The Rudd government established a policy that was poorly thought out and poorly executed. Individuals responded to incentives created by that program. Kevin Rudd has accepted responsibility on behalf of his government.

The claim that libertarians have not warned that the stimulus package was wasteful is simply ignorance.

This is somewhat different to the original letter that I sent. But some toing and froing lead to this. In the last draft the editor dropped my comment about lazy journalism.

Update: I got three responses to my letter. I’ve blanked out the names.

Like so many economists, Sinclair Davidson (Letters, March 2) seems determined not to pollute his non-interventionist ideology with information from the real world.

He warned a Senate committee and an OECD delegation that the stimulus spending was wasteful. Consider this: the government provided money to individuals and organisations to spend to stimulate the economy. They either spent the money, saved it or paid off debt.

Since excessive debt and low bank cash holdings were at the heart of the financial crisis, the two latter options both worked to alleviate the crisis. If this money saved individuals or organisations from going broke, there was a massive cost saving to the government, the public and the banking system.

But what happened to the money that was spent? Every dollar that helped keep a person in a job saved the government the cost of providing the dole, and gave that person money to spend to help save other jobs. Part of this money then comes back to the government as income tax. And every time the rest is spent, and spent over and over again, 10 per cent comes back as GST.

Not only was it not ”wasteful”, it worked a treat. It probably helped keep a lot of economists employed.

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Sinclair Davidson fails to address the ”hard case” that Ross Gittins describes. It is easy to criticise the government; indeed, the real challenge is to do a better job of it than Kevin Rudd. But to properly criticise the home insulation scheme, one cannot absolve home owners or the private enterprises involved of all responsibility.

By focusing on when he began asserting that the economic stimulus package would not be effective, Professor Davidson supports Gittins’s argument that libertarians are uncomfortable discussing how to deal with shoddy work performed by cowboy businessmen.

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It was refreshing to read that Sinclair Davidson testified twice to Senate inquiries that the government’s stimulation package was ineffectual. It is a rare thing indeed that an academic admits publicly – nay, draws attention to the fact – that his prognostications were demonstrably wrong. Well done, Professor Davidson.

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