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May 01, 2009

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Carl Pham

Geez, I don't think you need to bother. Both Krugman and the MIT group pull their mitigation numbers totally out of their asses, and make them just what they want to make them: large enough not to be laughable, small enough to suggest that if you oppose mitigation it must be for perverse ideological reasons, and not because you don't want to go back to a 19th century standard of living.

Let's get real. Even keeping the products of combustion (CO2) level for the next half century would be a staggering blow to the economy, along the lines of the Black Death. It is not possible to achieve those reductions with mere increases in efficiency, because industry and transportation are very near the theoretical maxima for efficiency already, simply because inefficiency is expensive, reduces your profit. So there is no other route than a significant decrease in industrial activity and transportation, with the obvious hit to economic growth that represents.

My impression is that a lot of the typical hocus pocus involves inappropriate scaling up of niche solutions, as in, look! if you live in Phoenix you can replace coal-fired electricity with solar, and it doesn't cost all that much more. Aye, and what happens if you live in Illinois, where one winter I counted 42 days in a row without seeing the Sun? What happens when the demand for solar power accoutrement rises steeply because everyone's mandating it? Thinking that a solution that works in some peculiar local circumstances can be easily scaled up to work globally is naive, at best.

Then there's the wildly optimistic application of Moore's Law to other technology. Look at how much cheaper computers are then they used to be! Clearly, then, the price of, say, fuel-cell powered cars will similarly decrease, once they go into production. Left out of this calculation are the embarassing historical cases where time does not significantly reduce the cost of things, e.g. the cost of getting to orbit, or the cost of open-heart surgery or new drugs. Sometimes technology gets much cheaper over time, as it's widely deployed, and sometimes it doesn't. Indeed, if you could reliably predict ahead of time which it would be, for any given tech, you could obviously make a huge fortune in the VC business.

This isn't serious economics. This is a religion, and there's no point in debating dogma with an apostle. You just tend to validate his insanity by taking it seriously.

bad

I'm all ears.

How presidential of you, TM.

Rick Ballard

"Sometimes technology gets much cheaper over time, as it's widely deployed, and sometimes it doesn't."

One might look at housing costs in that context, paying particular attention to the cost of the developed lot (where government has "helped" so much) in relation to the cost of actual construction.

I note in passing that the very best assemblage of economic credentialed morony blew the Q1 GDP estimate by 30%. I have some slight reservations concerning the the efficacy or relying upon their forecasting ability wrt the effect of imposing another friction cost (flowing through the Cloaca Maxima of Wall Street) upon the GDP 30-50 years out.

Carl,

I take issue with your statement that This isn't serious economics.. It's just as serious as the "economics" which allowed Goldman Sachs to issue forecasts of $150 oil on the basis of specious Peaker claptrap. GS managed to rape the economy for six months and influence the outcome of an election while doing so.

That's fairly serious in my book.

Jack is Back!

This all assumes that CO2 is "bad" when in fact it is not bad but good for all. We have oceans that are CO2 sinks and we have trees love it too. Too bad Obama and Krugman and Gore can't come up with a cap-and-trade plan on solar winds because that is were the action is.

Steve C.

"If emission permits were auctioned off — as they should be — the revenue thus raised could be used to give consumers rebates or reduce other taxes, partially offsetting the higher prices."

This is flat out illogical. If the purpose of the plan is to increase the cost of energy, IE to force more "efficient" use through a pseudo market like mechanism, then how does a tax rebate fit in? And considering how the tax system is skewed, that's right folks, if you earn more than $100K your "rebate" will be so small you will need an electron microscope to see it.

Krugman proposes, like a good big government liberal, to wash the ill gotten gains through the federal treasury, thus allowing the state to take it's share right off the top.

Krugman = Madoff with equations!

bad

Steve C., Krugman wishes he had equations.

Ignatz

-This is flat out illogical.-

Not only is it illogical, it is blatantly false.
Il Douche has already informed the citizenry that cap and spend receipts are going to be channelled to our new and grand 1930's Italian style health care system.

peter

Notice the dearth of posts, Tom. When the topic is this esoteric, only the math majors know enough about it to post anything. This is a humanities majors hangout, damnit.

Rick Ballard

Bad,

Just about any credentialed moron can whip up equations which demonstrate 2 + 2 = 5.83478 under certain assumptions. It's the assumptions part where the battle must be fought and both Carl and Steve are hitting the idiocy of Climate Control Air Taxes pretty well.

Does Wall Street really need crap on trade contracts to maintain the lifestyles of the rich and witless? Was the death of the chimera of ABS a fatal blow to Connecticut's country clubs? I really think that crap on trade contracts could prove even more poisonous than the Deadbeat's Delight of MBS cost shifting. Are there any archived prognostications by credentialed morons as to the long term cost of those little gems?

bad

Rick, I was remiss in not qualifying equations as those that are mathmatically true.

The long term prognostications don't matter because we can feel good about what we hoped to do.

That's all that really matters in unicorn world.....

PeterUK

Well,one "dearth of post" was mine,simply got eaten by typepad.

RichatUF

MEGO when I hear crap-and-trade.

There is plenty of real world failures of various ecocult schemes in Europe, but Team Zero just has to squeeze out that last nickel.

Ignatz-

In Il Douche budget proposal booked "Climate Revenues" (starting at a $78 billion clip) for Obama's "Making Work Pay" tax credit and various "clean energy" subsidies. A bit back of the envelope calculatin': The US produced about 6 billion metric tons of CO2 and the Administration wants to tax that at $78 billion, which would give a CO2 tax of $13/metric ton of CO2.

Over on the European Climate Exchange the Dec 09 contract (if I'm reading the historical data collectly) traded at a high last year of about 30 € and is currently trading at about 15 € after dropping to a low of about 8. At the end of 2007, the enchange contracts for all dates collapsed to a few cents when national governments began gaming the issuance of "credits" at the end of 2007 and the Euro zone economy began to contract.

RichatUF

damn it

fixed?

Nelson

Folks I think this one has already been cleared up. The MIT prof has already come out and said that his numbers were off. Prof Krugman is a little behind on this one. The cap and trade would raise about 3,900 in taxes from a family of 4. If you assumethat the government uses this money to effectly transfer back to families 3,100 then you get the MIT profs number. What is the chance of this money being returned? I'd guess zero given the budget deficits we face. Why oh why can't we have more careful economists that write articles in the popular press. It must be hard for Prof K to keep switching hats from a distinguished academic economist to political hack and back as often as he does. Spend a few minutes on google to check it out. Cheers

Ignatz

Thanks Rich.

Different topic but as good a place to put it as any I guess;

Who the hell is going to ever lend a dime to GM again?
Chrysler will have FIAT as an umbrella to gain access to credit which might provide some protection from Barry's next criminal cramdown.
But GM will be utterly naked in the credit markets and it is hard to conceive of anyone lending to them or anyone insuring any debt that was offered.
Maybe that's the plan?
Screw the creditors now so GM HAS to rely on gov handouts in perpetuity?
Rick,
I think maybe Il Douche and (D)irty fascist is becoming more apropos than (D)irty socialist. With what he is doing to those bondholders it wouldn't surprise me to see him strutting around in riding breeches and a hunting crop pretty soon.

lurking

On the lost thread I commented that I'm shocked that Krugman blithely perverts his economic analysis to the service of his political beliefs. But why am I shocked?

lurking

Nelson's right; I've run across that $3900 figure before, too. And Carl Pham has it, too. Ignatz, who dare lend money to any unionized company now? Obama has really cut off the unions' nose to spite the bosses' face. Short-sighted, stupid, and arrogant. This stuff is cumulative and Air Force One flybys and $540 dollar shoes has got to sink in eventually. Compare with the Bushes.

Ah, the good old days. Eventually one component for the media is going to be remembering how much fun it was to trash a POTUS 'in the good ol' days'.

Rick Ballard

Ignatz,

Given that I regard communism, fascism and socialism as three facets of one pyramid, its base mired in the slime of Hegelian historicism, I have no objection to referring to the TurboZero regime members as (D)irty Fascists.

I believe your observation concerning "who will lend" has far wider application than the fascist bootlickers at GM or Citi. I have no doubt that public employee pension funds will squander billions of their beneficiaries dollars on the fascist "public partner" enterprises but they simply do not have the resources to carry the day.

The Fed/Treasury shell game is going to blow out before fall. I wonder if Bernanke will resign when the rope pushing proves to have been to no avail.

Ignatz

Good points Rick and lurking.


Here's a very intersting and perhaps prescient essay from AmSpec on similarities with the 20's and 30's, especially regarding central banking.

RichatUF

Ignatz-

What-Treasury (and the various Czars Zero has running industrial policy) and Obama's goons at TARP couldn't have Zombiegroup and ZombieofAmerica lend to ZombieMotors?

Rick had a good take when he mentioned the keiretsu system a while back.

bad

Rich, Rick and Ignatz, please go to the stupid shoes thread and add your thoughts to Old Lurker's.

Ignatz

-What-Treasury (and the various Czars Zero has running industrial policy) and Obama's goons at TARP couldn't have Zombiegroup and ZombieofAmerica lend to ZombieMotors?-

Rich,
That's what I meant by gov handouts. A sly fascist always has some capitalist dope as a frontman/fallguy.

-The Fed/Treasury shell game is going to blow out before fall.-

Rick,
We'll see. I still think there is a good chance the economy will rebound on its own. There is a lag between spending vast sums and actually having to collect for it. If Bernanke's string pushing causes inflation it will be harmful to the country and the economy but not necessarily growth slowing. What I'm concerned with is a massive double dip when the tax collector does start showing up to pay for all this insanity. Then you won't just see a capital strike, it will be capital flight.

The chances of Barry crashing everything before then however do seem to be rising.
I guess it's like the old Fram commercial. He's either going to make us pay now or later.

Old Lurker

Sorry folks, I posted my Chrysler rant on the Stephon Marbury thread above. I made the point that this deal proposed by Obama will have immediate and long term huge implications for the US economy. This is so much more serious that just this loser automaker, or even GM when it goes down the same path. If you thought your 401(k) is hurting now, wait till you see what happens to your bond allocations.

PeterUK

Obama is gathering TransAtlantic admirers.

"100 days, and still no clue

I thought it was rather naff of President Obama to hold a news conference to mark his first 100 days in office.

His recognition of a landmark that is merely a journalistic stunt is not the sort of thing new messiahs should sink to doing.

When I watched his campaign last year, he was frightfully good at all sorts of things, with the notable exception of knowing what to do about the economy. As you may discern, this is potentially difficult. After 100 days, he still hasn’t a clue. Will he have one after 200? Or 300?

I increasingly doubt it, which makes the prospect of next year’s mid-term elections rather thrilling. "

Simon Heffer - Telegraph

RichatUF

Ignatz-

The chances of Barry crashing everything before then however do seem to be rising.

The Congress already passed the budget outline for 2010 so it'll be at 3.4 Trillion dollars, and with reconcilation, the Congress will be able to raise taxes, institute a cap-and-trade, and make health insurance more complicated and expensive (with the necessary VA-lite care for those unlucky enough to turn to the government).

All this "green shoots" talk doesn't price in the 2010 budget (and the disasterous consequences regarding oil and gas-the energy crisis being a major factor in the global recession). I still hear credentialed morons yammering on that the so-called "Blue Dog" democrats will be able to slow some of this stuff down, when its those guys who gave all the political power to the Progressive Caucus.

Rick Ballard

"I still think there is a good chance the economy will rebound on its own."

Ignatz,

I don't see any "rebound" until late Q4. We should see a deceleration of the collapse prior to that point and we may be seeing some "green shoots" of that deceleration right now.

I don't believe that our credentialed moron class has applied the net effect of the Boomers rebuilding their 401Ks through very assiduous current saving into their phenomenally complex yet utterly useless calculations. I use a YoY comparison of tax collections and April '09 is behind April '08 as follows:

Taxes Withheld- -9.32%
Personal (SE)- -17.98%
Excise- +.86%
Corporate- -43.09%

I weigh withholding and and personal much more heavily than excise and corporate. I haven't run a comparison with first month Q1 yet but I'm very confident that the economy was still grinding down hard in April.

Original MikeS

The idea that we can spend and regulate our way to prosperity may seem unlikely, but Dems assure us that it will work.

I'm reminded of a similar remedy used by the Mandan Indians and reported by Lewis and Clark. A pre-winter buffalo kill was necessary for the tribe's winter properity. In order to lure the buffalo herds near enough for the Mandans to hunt them, the young men of the tribe would offer their wives to the older men of the tribe for temporary companionship. The elders assure us than in a few days, weeks at most, the buffalo would return to the nearby plains.

JM Hanes

LOL MIkeS!

Here's another old saw that seems appropriate:
Fishermen keep fishing either because the fish or biting or because they're not.

industry shill

MJW, of eternal Plame Game Fame with respect to the unmasking of Richard Armitage as the original leaker, has another laurel to add to her(?) crown. She has helped straighten out Andy Revkin about the faked oil industry skullduggery that Andy first wrote about and Gore used in his hypocritical testimony to Congress about the Cap and Trade bill. Revkin and editors have issued a correction in today's NYT. MJW's work is on the 'Unthreaded' thread at climateaudit.org

Slocum

I just flat out don't believe the 2% figure from IPCC. Not specifically because it has to do with climate change, but because I don't believe anybody can predict the economic future decades from now with anything close to that kind of precision. We're not dealing with linear dynamics here. What if, because of cap and trade, energy-intensive industries migrate out of the U.S.? What does that do to U.S. incomes? OK, now what if, in response to industry leaving, the U.S. government slaps 'carbon tariffs' on imported goods, igniting a trade war? What happens to World and U.S. GDP under *that* scenario?

And, as other have noted, there is simply no way in hell that the U.S. government under Obama is going to rebate 3/4 of the cap-and-trade tax revenues. So what is the economic impact of cap-and-trade taxes if the feds pocket 80% or even 100%?

sbw

How does Obama justify keeping 25% of the cap-and-trade revenue?

Why does Obama get to decide to whom the 75% of cap-and-trade revenue gets rebated to? If it is not rebated to the people who, through energy companies, paid for it, it is not a rebate.

If they rebate it to the people who paid it, why collect cap-and-trade revenue in the first place?

The Sheep Nazi

Italiacto!

The Sheep Nazi

Try this, then.

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