Author Archive

S-Corps and Faulty Income Inequality Data

In a traditional C corporation, the corporation pays its own taxes, and then income that is passed on it its owners in the form of dividends is taxed again as personal income on an individual's 1040.  The S-corporation was an positive innovation that has corporate income passing through to the tax return of the owners, and getting taxed only once on these individual returns.  Over the last 50 years, there has been a steady shift of small businesses from C corps to S corps.

Over a decade ago, I suggested that this shift may be in part to blame for the rise in income inequality.  Entrepreneurial profits that would have stayed before in a C-corp are now showing up immediately on individual tax returns.  In January, 2007 I wrote

The introduction of the "S-corporation" means that an increasing amount of entrepeneurial income is showing up on 1040's.  With C corporations, the incentive was to delay taking any income from the company for as long as possible to avoid double taxation, preferably taking it at time of the company's sale.  With S-Corporations, there is no double taxation problem so corporate income flows through to the individual 1040.  Business owners are suddenly reporting more income not because they are making more, but because they are recognizing it in a different way in a different tax form.  Much of the rich getting richer is actually just the rich recognizing their corporate income in small businesses in a different way

I am happy to see empirical proof of this hypothesis start to arrive:

Since 2000, different measures of top income inequality have exhibited very different trends. Top income shares based on measures of total income show a continued rise, whereas top income shares based on wage and salary income show no increase in inequality post-2000. The most important difference between these two measures of income is the income that accrues to S-corporations....

But interpreting trends in the S-corporation component is extremely difficult. Feenberg and Poterba (1993), Gordon and Slemrod (2002), and Cooper et al. (2016) warn that much of the recent increase in S-corporation income is income that previously accrued to C-corporations. Such income is not “new” income earned by top earners but is simply income that was previously labeled as corporate income rather than household income.

My Customer Service & Communication Advice to the United CEO

My company serves nearly 3 million visitors a year.  Though we always try for 100% satisfaction, some customers are going to slip through the cracks and be dissatisfied.   Each year, I get maybe 10 visitors who are severely dissatisfied, think they were mistreated, want to call their Congressman, are going to sue me, etc. I would say that these complaints eventually land on my desk but I actually look at every single comment card and letter and review that we get from customers and personally am involved with every single complaint of any sort.  Anyway, 10 or so are severe issues with a very upset customer that get to me without having been resolved in the field.

Folks who are involved in customer service will tell you that of these complaints, there will likely be a range of blame.  In some cases we screwed up.  In some cases no one screwed up but there was a mismatch of expectations.  And in some cases the customer was acting like a total asshole and was entirely to blame for the whole affair.  Sometimes it is hard to parse out after the fact which case is which -- something I wrote about here.  When these major complaints get to me, here is my guide to how I respond:

When we screw up:   "I am very sorry we did a poor job and you had a bad experience.  I am going to personally investigate immediately and we are going to make changes so this does not happen again -- but in the mean time, I want to refund your money and give you a certificate for some free camping so you can come back in the future and give us another chance to serve you well."

When the customer broke the rules and acted like a total jerk:   "I am very sorry we did a poor job and you had a bad experience.  I am going to personally investigate immediately and we are going to make changes so this does not happen again -- but in the mean time, I want to refund your money and give you a certificate for some free camping so you can come back in the future and give us another chance to serve you well."

When the exact situation is unclear:    "I am very sorry we did a poor job and you had a bad experience.  I am going to personally investigate immediately and we are going to make changes so this does not happen again -- but in the mean time, I want to refund your money and give you a certificate for some free camping so you can come back in the future and give us another chance to serve you well."

In any of these cases, if the customer describes poor behavior by my employees, I will tell them that "the behavior you are describing is absolutely unacceptable and, as I said, I am going to investigate personally as soon as we get off the phone."  You don't have to admit the behavior.  It is common that angry customers will dress up a story with a few added descriptions of outlandish employee behavior that may not actually be what happened.  You will try to figure that out later in the investigation.   But give the customer as much as you can.  If the customer said the employee used profanity, then it is perfectly fine to say "you are right, ms. customers, use of profanity by our employees is absolutely unacceptable" even if you suspect the employee did no such thing.

Giving this very positive response to customers who may have been bad actors or may be exaggerating can be hard because my local managers want to get very mad at me -- "Warren, don't you understand, he was a BAD customer.  You can't reward him for being a BAD customer."  To which I will say:  "First, you and I have not talked so I don't know yet if he was truly a BAD customer.  We may be the ones who screwed up.  But second, even if they were bad in some way, I am not rewarding a bad customer, I am trying to avoid a bad Tripadvisor review which will sit there on the Internet forever like a turd you can't flush.  And third, you seem to be trying to teach this customer a lesson, and make them realize they have been bad.  Even if the customer is really a jerk, this is never, ever ever ever going to happen.  You will never ever convince a jerk that they are a jerk, because almost by definition jerks last self-awareness, so stop trying."

We do a lot of training on this.  I tell folks all the time that if we have a customer like this who gets to me, I AM going to apologize and AM going to give them a refund and AM going to give them some free camping.  It doesn't mean that I am undermining the folks in the field, it means that this is smart business practice, particularly in this age of Internet reviews.  I tell my managers that they are letting their ego and pride stand in the way of having a customer walk away more satisfied, and if they refuse to check their ego, they are delegating the task of being humble upwards to me.  And over time, the good news is that most of my managers have gotten the message and have started emulating me so fewer and fewer of these ever reach me, they are solved much earlier in the field.

Postscript:  The first reaction I get from other business people is -- "don't you get taken advantage of and give out refunds to people who are just posturing about bad service just so they can get a refund?" And my answer is "yes".  But recognize that we have had over $100 million in revenues in this company since I started it, and we have perhaps paid $500 or $1000 is false refunds, or about .001% of revenues. I don't think .001% is very much to pay for the very high customer satisfaction rate we have.  But you would be surprised at the number of people that just can't let it go.  I don't know what this is called psychologically, but I will give another example.  We have a number of sites where the entrance station is not staffed on certain days and payment is on the honor system.  I have people who work for me who really get upset with me, telling me I simply HAVE to staff that gatehouse because some people are not paying.  You are being CHEATED!  I say that I am perfectly aware people are not paying, but it costs, all-in, probably $120-$150 to have a person sit in that gatehouse for 8 hours.  In that time perhaps 15 cars will come in.  At $6 apiece, even if every single one of them is cheating (and they do not, we have very good compliance in most honor system locations) I would be paying $150 to collect an extra $90 of revenue.  That would be insane.  But somehow the thought of lost revenue just makes some people crazy, no matter how expensive it is to chase it down.

No Matter What They Actually Say, the Public Trusts Private Corporations More Than Government, And I Can Prove It

As a libertarian, I find myself constantly saying to folks something like:  "private actors (corporations, businesses, individuals, etc. are inherently more trustworthy than government because they cannot legally interact with you through force or fraud -- the government is free to do both.  If you don't like what a private actor is doing, you can simply refuse to interact with them further, an ability one does not have with the government."  This seems like such an obvious point but few people, particularly on the Left, will ever agree with me.  But I have recent proof that in their hearts, most people understand this perfectly.

What is my proof?  The universal, bipartisan freakout over the man who was dragged off by force from a United flight.  People are focusing on this event for the very fact that this example of a private company deploying force against its customers is so incredibly rare.  The Internet is filled with similar or in fact much worse examples of the government abusing its authority -- false arrests, petty harassment, asset seizures without due process -- but people just yawn and these videos gets 236 views  vs. millions for the United video.  Because, presumably, people have come to expect such abuses from the government but not from private companies.

And to a large extent, this particular example of private violence is the exception that will prove the rule.  Because United is going to experience real accountability.  It is already getting a firestorm of bad press that will cost them current and future business.  They will face lawsuits and possible government action.  But the average police officer or government official (or VA or IRS administrator) who abuses their power retain their jobs for life with no negative consequences from their actions.  Also, we should note that it was a government agent in this case who was the one who actually used force and dragged the passenger off, not a private United employee.  Almost every time one looks deeply at an abuse by private companies, at the end of the day that company is enabled or protected in doing so by so some sort of crony relationship with the government.

So I suppose we should ask, if people really in their hearts understand that private "power" is much less menacing than government power, why do they still support increasing the power of government over private actors?  And the answer must be that they believe (or hope, or expect) that use of this government power will achieve some end they want that they cannot achieve without force.  The problem with this of course is that it is naive -- it assumes that once you give great power to the government, government employees will use this power in the way you would use it, for the same goals and ends.  But this is seldom the case, certainly over the long haul.  I argued for years that the Left under the Obama administration was supporting Presidential power on the assumption they would hold the White House forever and thus get to wield all this power.  Which is why, I suppose, there has been so much freakout over Donald Trump's victory.

Postscript:  Here is an example video of government brutality just from my news feed today.  It will get no real traction because everyone has come to expect the government to act in this manner.

I am Not An Isolationist, But...

US military interventions abroad -- at an absolute minimum -- have got to represent some reasonable path to a better future.  It is amazing how even this simple and obvious test is almost never met by our actions.  Instead, I think many folks substitute some test more like "Is the situation really bad?--if so, rev up the troops."  To this end, Assad is clearly a bad guy.  Assad (or someone) using poison gas on civilians is a bad thing.  Russia providing cover for these bad things is also a bad thing.  But what is the alternative?  Obama's support of rebels in Libya is just a fantastic example we should all remember -- the Libyan regime was bad but we supported its overthrow in favor of a situation now which is clearly worse.  Iraq-style regime change is out of favor for good reasons, but at least regime change advocates had a clear explanation of how they wanted to get to a better future with military action -- they were going to take the whole place over with massive military force and stand on it for a couple of decades until, like Germany after 1945, it becomes a responsible citizen of the world.  The costs are high and I don't think it is in our long-term interests to do so, but at least there was a logical story.

What is the story in Syria?  We kill a couple hundred folks with cruise missiles to avenge a few dozen folks killed with poison gasses and, what?  Do the citizens of Syria really need yet another foreign power lobbing explosives into their country?  The only argument I hear is that Assad crossed a line and now we have to show him what for.  But this sounds like an 18th century aristocrat vowing to defend his honor after an insult.  It's sort of emotionally satisfying -- take that, asshole! -- but where does it get us except further mired in yet another foreign conflict we have not hope of making better?  We look back and criticize the major powers in 1914 for getting involved in the constant squabbles in the Balkans but do the same thing in the Middle East, the 21st century's Balkans.

My Favorite Convenience Tech: The Disney Magic Band

Before discussing the Disney Magic Band, I got to thinking about this from this article linked by Tyler Cowen:

The syringe slides in between the thumb and index finger. Then, with a click, a microchip is injected in the employee’s hand. Another “cyborg” is created.

What could pass for a dystopian vision of the workplace is almost routine at the Swedish startup hub Epicenter. The company offers to implant its workers and startup members with microchips the size of grains of rice that function as swipe cards: to open doors, operate printers, or buy smoothies with a wave of the hand.

The injections have become so popular that workers at Epicenter hold parties for those willing to get implanted.

“The biggest benefit I think is convenience,” said Patrick Mesterton, co-founder and CEO of Epicenter. As a demonstration, he unlocks a door by merely waving near it. “It basically replaces a lot of things you have, other communication devices, whether it be credit cards or keys.”

If you are like me, your immediate reaction is "Yuk, I can't imagine doing this."  But my second reaction is that there is really a step change in convenience here that folks who have not tried it may be underestimating.

The reason I know this is from my experience with the Disney Magic Band, a waterproof bracelet about the size of a small watch.  Here is an example, which includes my awesome customized tiger striping I painted on the basic orange band:

At Disneyworld, this band acts as

  • Your room key, activating the electronic locks on your room
  • Your credit card and wallet, with the ability to pay for anything anywhere in the parks and affiliated stores and hotels with a touch to the reader at every register (most require a 4-digit PIN number to be entered as well)
  • Your park entrance ticket
  • Your restaurant reservation
  • Your ride reservation (Fastpass)

One can easily navigate a multiday trip through Disneyworld without a wallet or keys and just this on your wrist.  It is pretty compelling.

Looking for Some Help -- Business Owners with 10-40 Employees

I am doing a paper on labor market regulation which I hope to get published through a prominent think tank.  I run a service business with about 300-400 near-minimum-wage employees, so I am familiar with a lot of labor regulation.  However, to make sure I am not missing something that may seem small to me but might be a big deal for a smaller company, I am looking to interview a few owners of small businesses.  I am looking for folks who run companies from 10-40 employees.  My preference is that most of the employees be average income or lower -- in other words, I don't really need to talk to the owners of 15-person hedge funds about overtime rules.

Interviews will be entirely private and no one will be quoted or referred to by name or even anonymously.  This is just background for me.  If you fit these criteria and are willing to help with a 30-minute phone interview, drop me an email at the contact link above.  I am out for a few days so you may not hear back for a week or so.

Crap, You Mean This is Not A Real Product?

I Never Meet With Young Women Alone

Apparently Mike Pence is being criticized for refusing to meet alone with young women.  Seriously?  Because I have pretty much the exact same policy.   I never meet with young women one-on-one any more.  If I am interviewing a young woman for college, we meet in the Starbucks rather than my office.  I try to meet with sales people via the web rather than face-to-face, but if a young female sales person does show up at my door and I really must meet with them, we do it downstairs in the lobby and not in my office.

Am I being "dudely"?  ( I swear to God this is the world the Atlantic uses).  The explanation is simple, and can best be illustrated with this comment highlighted by Glen Reynolds:

1. Greatly expand definition of sexual harassment.
2. Make any accusation of sexual harassment career-ending.
3. Proclaim that women should always be believed when they accuse a man.
4. Complain that men won’t have 1-on-1 meetings with women.

Postscript:  To clarify, there is in Mike Pence's policy an element of avoiding temptation.  That is not my rational.  After nearly 30 years of testing, I find myself to be immune from temptation (at least in deed if not in thought).  This policy is pure self-protection.

Another Reason to Discuss Government-led Local Business Development

I have written many times about my frustration with cronyist business relocation incentives handed out by most local and state governments.  I have always considered these government incentives to be insanely unproductive spending, often taking taxpayer money to move a company as little as a few miles to get it over some artificial border.  One issue I have not considered in these critiques is whether the sorts of companies selected for relocation are really in the long-term interest of the local community at all.

Almost by definition, most relocation subsidies go to large, well-known companies.  This is for a couple of reasons.  First, large companies have the clout to lobby and demand such subsidies, clout smaller businesses do not have.  Second, politicians are handing out these subsidies in order to get re-elected.  The actual product of these subsidies is a press release and a blurb on the politician's campaign website.  A press release saying that your faithful governor has gotten Joe Smith's Widgets to move to Arizona is a lot less powerful than saying he got a branch of General Electric to move to Arizona.  In fact, the sexier the name the better, which is why politicians fall all over themselves to get Google and Apple and Tesla to come to town (despite the fact that in my observation, it is the staid old companies like Honeywell and Wells Fargo and such that tend to invest a lot more in their local communities).   We have a plant in the Phoenix area that has already had two subsidized sexy companies in it (First Solar and an Apple screen manufacturing partner) and now is empty yet again waiting for the next sexy crony.  Apparently, the state has agreed to subsidize Apple again to use it for a data center, though the move-in may be delayed as there was a large fire at the building when the solar panels on the roof caught fire.  Three sexy press releases for Arizona politicians for the same building!

Anyway, I was thinking about this when I read the piece below from Scott Sumner

This reminded me of a very interesting study that compared two cities in Michigan, Flint and Grand Rapids:

In 1946, sociologist C. Wright Mills and economist Melville Ulmer concluded the fortunes of two of Michigan's largest cities, Flint and Grand Rapids, were headed in opposite directions.Seventy years later, their predictions are getting new notice from academics.

The researchers warned Flint was overly dependent on its big employers even though its workers made 37 percent more than the national average at the time.

The warning seemed out of place. By 1950, Flint was labeled "the happiest city in Michigan" and the "epicenter of the American Dream," thanks to its thriving auto industry.

Grand Rapids, whose economy was defined by its numerous small businesses, was less flashy. But it offered its citizens more mobility and opportunity for its middle class that would help it survive tough times, the researchers concluded.

Flint was still booming in the late 1960s, so it looked like this 1946 prediction was wrong. But then the prediction suddenly came true. Flint's metro population fell from 445,589 in 1970 to 410,849 in 2015. In contrast, Grand Rapids has been booming, with its metro population soaring from 539,225 in 1970 to 1,038,583 in 2015. And both of these places are in the rustbelt state of Michigan.

Why I Quit Recruiting for Princeton

Princeton, like many top Universities, requires a face to face interview of every candidate.  They do this mostly through their alumni network.  I volunteered for this effort for well over a decade, and it was fun to meet and talk to a lot of bright kids.

However, it was becoming clear to me that Asians, with the same qualifications, had a much worse chance of getting in than other similar kids of other ethnicities.   I started getting Asian kids asking me about this and I had some canned answer from the University to give them, but that answer looked like BS to me.  I felt like I was being asked to lie if I told Asian kids they did not face discrimination in the process.

So I quit.  Princeton is a private institution (though it accepts a lot of public money) so I suppose it can pick candidates any way it wants, but that does not mean I have to act as an agent for them if I disagree with what they are doing.

The WSJ has a follow-up today on a couple of cases being made by Asians against Princeton and Harvard admissions:

In 2006 Jian Li filed a complaint with the Education Department’s Office of Civil Rights after he was denied admission to Princeton University. Mr. Li, who emigrated from China at age 4, had a perfect score on the SAT and graduated in the top 1% of his high school class. He alleged that Princeton violated civil-rights laws banning discrimination on the basis of race, color and national origin. The complaint was initially rejected, but Mr. Li appealed and the government reopened the investigation in 2008. Seven years later, in 2015, the Obama administration, which strongly supported the use of racial preferences in college admissions and obviously took its sweet time reviewing Mr. Li’s case, issued a report exonerating Princeton.

Last year Mr. Blum’s organization filed a public records Freedom of Information Act request with the Education Department to gain access to the same documents that the federal government used to clear Princeton of any wrongdoing. Mr. Blum’s organization represents a group of Asian plaintiffs who are suing Harvard University over its admissions policies. The judge in that case has ordered Harvard to turn over six years of admissions records, and Mr. Blum suspects that the data will show that Harvard is unlawfully capping Asian enrollment.

America’s Asian population has exploded in recent decades, and Asian attendance at highly selective schools with colorblind admissions, such the California Institute of Technology and the University of California, Berkeley, reflects this demographic trend. At Harvard, however, the percentage of Asian undergrads has remained remarkably consistent for an institution that claims race is not a determining factor in who is admitted. Mr. Blum suspects that Princeton engages in similar shenanigans, but the school has been pressuring the Education Department to deny him the information that he requested more than a year ago.

Concerned that the government was finally going to fulfill the FOIA request, Princeton sued the Education Department on March 17 to block the release of the admissions documents. The suit argues that the material being sought is exempt from FOIA, a claim that the government has rejected. The school also maintains that releasing the data would compromise student privacy, and it likened its admissions process to “trade secrets” that, if exposed, would put Princeton at a competitive disadvantage in attracting students.

Don’t believe it. Admissions officers switch schools all the time, presumably taking knowledge of admissions procedures with them, and the criteria used by elite institutions to evaluate applicants is not the equivalent of an iPhone patent. Nor is student privacy an issue since names, addresses and other personal information can be redacted. Mr. Blum’s organization simply wants the number of Asians who have applied to Princeton, their SAT scores and grade-point averages, and other information that the school used to analyze applicants academically.

What really concerns Princeton is a potential discrimination lawsuit. What ought to concern the rest of us is the apparent determination of elite colleges to punish Asians students for their academic success. Asians have long been the forgotten victims of liberal affirmative-action schemes, subject to unwritten “just for Asian” admissions standards that recall the treatment of Jews in the first half of the 20th century. Princeton wants them to shut up about it. Let’s hope they don’t.

I will say that the act of turning down a perfect SAT is not limited just to Asians, so I don't take that as necessarily proof of discrimination.   Harvard and Princeton (and I suppose other Ivies but I really only know something about these two) seem to take a perverse pleasure in turning down perfect SATs.  I don't have the facts, but I wouldn't be surprised if the admit rate for kids with SAT's one notch short of perfect is better than those with perfect SATs.

My evidence of discrimination is based on years of actually meeting the kids, seeing their scores and resumes, and talking to them about their activities and passions -- and comparing who gets in and who does not.  And, of course, one merely has to look at the percentage of kids with Asian heritage at Princeton and compare it to universities like Berkeley that have color-blind admissions systems.

What A Disaster Nationalization of the US Oil Industry Would Have Been!

Back in the 1970's, there were serious proposals in Congress to nationalize US oil companies.  My dad, who was an executive at a major oil company, was being constantly dragged to DC to testify in front of Congress to try to explain what a bad idea that would be.  This was a time of incredible economic ignorance in Washington, perhaps even more than average, when a Republican President had recently instituted wage and price controls and Congress was looking for ways to "fix" problems with oil supply that they themselves had caused with price control rules and other restrictions on exploration.

Think about what we know about state-run oil companies in Venezuela, Mexico and even Saudi Arabia:

  • They always under-invest capital in well maintenance, preferring to route cash flow to social spending that helps maintain shaky governments in power.  Many folks don't understand this, but production from a well starts falling off almost from the moment you drill it.  Well's must be expensively reworked and maintained and upgrade to keep flowing over their life.  This has gotten so bad in Venezuela that the country with the world's largest oil reserves is running out of gas.  I worked with Pemex for years and, at least in the 1990's, were about 1 step away from Pemex looking just like Venezuela's state oil company
  • They have missed most of the recent revolutions in technology, and do no technology development of their own.  If not for technology developed by private western oil companies, they would barely be ahead of Edwin Drake.
  • They deal with price downturns by forming cartels and attempting to fix prices and reduce output.

Private oil companies at the same time:

  • Reinvest massively in both new and existing fields, often with 20-30 year time horizons
  • Continue to revolutionize technology - the shale boom is just one example
  • Respond to market price downturns with innovation and efficiency improvements.

The link above is gated so here is an excerpt:

Now, with oil currently trading near $50 a barrel, these producers are trying to unleash fracking 2.0, the next step in the technological transformation of the sector that is aimed at extracting oil even faster and less expensively to eke out profits at that level.

The promise of this new phase is potentially as significant as the original revolution. If more producers can follow EOG’s lead and profitably ramp up output from shale drilling even at lower prices, the sector could become a lasting force that challenges OPEC’s ability to control market prices.

For a sector in which the previous era’s success was tied to the rapid expansion of output, the shift toward finding more cost-effective ways to get to that oil and gas is full of challenges. When oil prices dropped, critics wondered if the shale industry—rife with heavily indebted companies that had never turned a profit—would collapse.

EOG, with its longtime focus on low-cost production, is the producer many hope to emulate, thanks to the iSteer app and dozens of other homegrown innovations. Dubbed the “Apple of oil” by one analyst, EOG made its name as a pioneer in horizontal drilling and in finding ways to get oil out of shale—often dense layers of rock that hold oil and gas in tiny pores—a feat many once believed impossible.

Can you imagine people like Gina McCarthy running our state oil company?  Good god, we would have $10 gas and import 80% of our oil.

New York Museum & Restaurant Recommendation

Large museums can be overwhelming.  I remember a while back, one of the writers at Maggie's Farm blog suggested that the best way to see large museums is to pick one limited section and plan to visit just that section.  I have tried that a couple of times and it is an enjoyable approach, though as a completionist I have trouble walking away when I have not conquered every room (I am that guy, for example, that has to reveal every single square inch of dark space on a Diablo III map).

However, another alternative is just to visit a smaller museum.  Sometimes smaller museums can be disappointing, because the average quality (or at least name-value) of what is being displayed may be lower than in the large museums.  Not so the Frick Museum in New York City.  This is probably my favorite small museum.  The building itself is marvelous, the Fifth Avenue mansion of Henry Frick, Andrew Carnegie's right hand man (among many other ventures).  I first went to the museum years ago because it houses one of my favorite paintings, the Comtesse d'Haussonville by Ingres.  In addition in just 7 or 8 rooms, it has a virtual who's who of western art history, including Rembrandt, Monet, Manet, Renoir, Degas, Gainsborough, Turner, Holbein, Goya, Gilbert Stuart, Whistler, and many others.   The ratio of big names to also-rans is just amazing.  Walking the halls is like watching the actor list in the opening credits of the movie "A Bridge to Far".  My only complaint on this visit is that the Comtesse has been moved to a poor spot for viewing.

Another nice small museum nearby we also went to this weekend was the Neue Gallery, which focuses on German and Austrian art.  My wife loves Klimt, which is the reason we went.  The museum has a very good collection of Klimt and Egon Schiele, neither of which are really my cup of tea but for those who enjoy these artists it is a nice destination.  The third small museum we saw as the Museum of Arts and Design, with a great location on Columbus Circle.  We saw an exhibition of American 60's and 70's age-of-Aquarius style clothing.  There are also a few craft studios where one can watch designers work.  It was fun but probably overpriced for what it was.  However, on the 9th floor we went to the restaurant Robert which was really good -- very good food and drop dead gorgeous views of Columbus Circle, the park, and the rest of Manhattan.  We had a window table and this was the view:

On the far left, 4 or 5 floors up, is Per Se, one of the top restaurants in Manhattan and perhaps the country.  Given how hard it is to get a reservation, this is probably as close as I will come to eating there.

Amazing Facts

"Steven Seagal released seven films in 2016. Seven."

source

Updated Climate Video -- Understanding the Climate Debate: The Lost Middle Ground

I have updated the slides and audio of my core climate presentation called "Understanding the Climate Debate:  The Lost Middle Ground"

This is basically the same presentation as here at Claremont-McKenna but you can read the slide a bit better and the audio is clearer in parts.

More Folks Climb Onto the US Royal Family Bandwagon

Back on Inauguration Day I wrote:

Wow, it sure does seem useful to have a single figurehead into which the public can pour all the sorts of adulation and voyeurism that they seem to crave.  That way, the people get folks who can look great at parties and make heart-felt speeches and be charismatic and set fashion trends and sound empathetic and even scold us on minor things.  All without giving up an ounce of liberty.  The problem in the US is we use the Presidency today to fulfill this societal need, but in the process can't help but imbue the office with more and more arbitrary power.  Let's split the two roles.

Last week, Andrew Heaton made a similar proposal in the Federalist, but explained the logic better than I did:

We threw the baby out with the bathwater when we kicked the monarchy out of America, and we ought to bring it back. To be clear, I do not mean the sort of hereditary tyrants who rule North Korea, Saudi Arabia, or the New York Yankees. Rather, I’d like for us to get one of those cute, ornamental throne warmers the Europeans trot around to cut ribbons at events.

In America we’ve combined power and reverence in the office of the presidency, but legal authority and veneration compliment each other about as well as Scotch and back pain medication. It’s safer to ingest them separately....

In America our head of government and head of state both problematically reside in the president. We can see that unholy union in full force during the spasm of pageantry which is the State of the Union address. President Jefferson rightly viewed the whole affair as pompous and monarchical, and sent Congress a letter instead.

Unfortunately the nimbus of deference surrounding the presidency has swelled with time. In 1956 a political scientist named Clinton Rossiter published “The American Presidency,” a tome sopping wet with sycophantic notions about the Oval Office. He described the commander-in-chief as “a combination of scoutmaster, Delphic oracle, hero of the silver screen, and father of the multitudes.”

Gag me. The president is the top bureaucrat, and there’s nothing more American than despising bureaucrats. The government is basically a giant Human Resources Department with tanks, and the president is in charge of it.

My only response to this is to quote from just about every comment section on the internet:  "first!"

Losing the Prisoner's Dilemma Game: Economic "Development" Incentives are a Total Waste of Money

From today's WSJ:

The race to woo companies has intensified as state and local governments struggle with a slow economic recovery, sluggish new business formation and job losses resulting from automation. Many older industrial cities see tax incentives as one of the few levers they can pull.

The fight to attract and retain companies “is probably as competitive as it has ever been in the 30 years I have been doing this type of work,” said Lawrence Kramer, managing partner with Incentis Group, the consulting firm that helped Riddell with incentive negotiations.

Economic-development tax incentives more than tripled over the past 25 years, offsetting about 30% of the taxes the companies receiving incentives would have otherwise paid in 2015, compared with about 9% offset in 1990, according to an analysis of incentives covering more than 90% of the U.S. economy.

By 2015, the total annual cost of these incentives was $45 billion, according to the analysis, by Timothy Bartik, a senior economist at the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich. The study looked at 47 cities in 32 states plus the District of Columbia.

Total incentives are likely higher because the analysis didn’t include some used by cities, including Elyria, such as city income tax rebates for companies.

Seriously, how absolutely pointless is this:

When Elyria Mayor Holly Brinda learned that Riddell Inc. was looking to leave this small city in northeast Ohio, she came up with a $14 million package of tax incentives and offered to lease land to the company for $1 a year.

It wasn’t enough. Riddell, which makes the football helmets used by many NFL and college players, decided to move its roughly 320 employees just over 2 miles down the road to a neighboring town, which offered its own bundle of incentives and lower corporate and individual income-tax rates.

You can't even argue you are trying to save jobs for local people, because the same people are working, just with a 2 mile delta in their commute.

One of the very earliest posts on this blog, waaaay back in 2005, was to compare local economic development spending to a prisoner's dilemma game:

politicians who are approached by a company looking for a handout for business relocation face what is called the prisoner's dilemma.  Many of you may know what that is, but for those who don't, here is a quick explanation, via the Stanford Encyclopedia of Philosophy:

Tanya and Cinque have been arrested for robbing the Hibernia Savings Bank and placed in separate isolation cells. Both care much more about their personal freedom than about the welfare of their accomplice. A clever prosecutor makes the following offer to each. "You may choose to confess or remain silent. If you confess and your accomplice remains silent I will drop all charges against you and use your testimony to ensure that your accomplice does serious time. Likewise, if your accomplice confesses while you remain silent, they will go free while you do the time. If you both confess I get two convictions, but I'll see to it that you both get early parole.  If you both remain silent, I'll have to settle for token sentences on firearms possession charges. If you wish to confess, you must leave a note with the jailer before my return tomorrow morning."

The "dilemma" faced by the prisoners here is that, whatever the other does, each is better off confessing than remaining silent. But the outcome obtained when both confess is worse for each than the outcome they would have obtained had both remained silent.

I hope you can see the parallel to subsidizing business relocations (replace prisoner with "governor" and confess with "subsidize").  In a libertarian world where politicians all just say no to subsidizing businesses, then businesses would end up reasonably evenly distributed across the country (due to labor markets, distribution requirements, etc.) and taxpayers would not be paying any subsidies.  However, because politicians fear that their community will lose if they don't play the subsidy game like everyone else (the equivalent of staying silent while your partner is ratting you out in prison) what we end up with is still having businesses reasonably evenly distributed across the country, but with massive subsidies in place.

Of course, garnering positive press releases for politicians' re-election campaigns is part of the equation as well.  Actually, the game is worse than a prisoner's dilemma game because politicians playing it enjoy all the positive benefits while the price is paid by others (taxpayers).

It would be great to ban this stuff entirely.  But you know what, Arizona already did!  In its Constitution no less.  And we still can't stop this BS.  Our Constitution reads that neither the state nor any municipality in it may “give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation.”  This seems pretty definitive, but as I wrote here

This has been interpreted by the courts as meaning that if a state or municipal government gives money to a private company, it must get something of value back - ie it pays money to GM and gets a work truck back.  But politicians will be politicians and have stretched this rule in the past out of all meaning, by saying that they are getting "soft" benefits back.  In other words, they could subsidize the rent of a bookstore because reading is important to the community.

The Goldwater Institute in AZ keeps filing suit and has been pretty successful in blocking some of the most egregious subsidies, but it takes constant vigilance, and at the end of the day, if politicians want to throw money at private companies in order to help their re-election chances, they are going to do it.

 

The 80's called....

CenturyLink, our telephone company in Florida, called and said that our listing in the telephone book was no longer free and that they would begin charging us $20 a month if we wanted to stay in.  LOL, I did not even know they made telephone books any more.  Back in the 1980's, when being in the phone book had value, the listing was free.  Now, when being in the book has zero value, they want to charge for it.

Kudos to Robert George and Cornel West

I have criticized Princeton on a number of occasions, but it deserves credit for hosting this statement on free speech and engaging contrary opinion from Cornel West and Robert George (who used to teach a class together at Princeton).

Solar Road Update -- The Stupid Continues

The one thing that I can count on is that if someone, somewhere in the world writes on solar roads, I am going to hear about it in my email.  I will confess that I have a soft spot for solar roads -- it is hard not to be entranced by the spectacle of such an incredibly stupid idea that is greeted by so much enthusiasm from nominally "pro-science" types.  My best estimate is that there may be close to a million acres of flat commercial roof space in this country, real estate where solar panels could be free of disturbance and angled optimally for the most power output.  So instead folks just seem to be giddy about putting solar panels on roads, there they cannot be angled and where they have to be hardened against driving and traffic.

So here is your latest update, from Idaho:

Despite massive internet hype, the prototype of solar “road” can’t be driven on, hasn’t generated any electricity and 75 percent of the panels were broken before they were even installed.

Of the panels installed to make a “solar footpath,” 18 of the 30 were dead on arrival due to a manufacturing failure. Rain caused another four panels to fail, and only five panels were functioning shortly thereafter. The prototype appears to be plagued by drainage issues, poor manufacturing controls and fundamental design flaws.

Every single promise made about the prototype seems to have fallen flat and the project appears to be a “total and epic failure,” according to an electrical engineer.

If it had worked, the panels would have powered a single water fountain and the lights in a restroom, after more than $500,000  in installation costs provided by a grant from the state government. The U.S. Department of Transportation initially handed $750,000 in grants to fund the research into the scheme, then invested another pair of grants worth $850,000 into it. The plan, dubbed, “Solar FREAKIN’ Roadways” raised another $2.2 million dollars in crowd-funding, even though several scientists publicly debunked the idea.

Scientists repeatedlycriticized the scheme as panels on roads wouldn’t be tilted to follow the sun, which makes them incredibly inefficient, would often be covered by cars during periods when the sun is out and wouldn’t be capable of serving as a road for long.

Solar FREAKIN’ Roadways has received fawning coverage in The Huffington Post, Nature World News, Newsweek, Wired, Ecowatch and National Geographic. The program was supported by political leaders like Idaho Republican Sen. Mike Crapo.

I don't know if the manufacturing failures here are related to the hardening of the panels that must occur for them to be used for roads, or if they are more typical of the boondoggles one gets when crony companies enrich themselves by selling cr*p on government contracts.

But good news!  If you have extra money that you were just going to throw on the street because it was too much of a hassle to carry in your wallet, you can still give cash to Solar Freakin Roadways instead.

 

 

The Continuing Climate Disconnect and the Climate Bait and Switch

I am at an impasse.  Here is my dilemma:  I don't know if the media is purposely obfuscating the climate debate or whether they are just ignorant and scientifically illiterate.  For now, because I am a happy soul that does not like making dark assumptions about other people's motivations, so I am going to give the media the benefit of the doubt and just assume they are ignorant.  But it is getting harder to reach this conclusion, because for it to be ignorance, it has to be serial ignorance lasting many years and crossing thousands of people.

The other day, in response to an article at Skeptical Science, I wrote about the typical media myths in the climate debate that make actual conversation about the theory so difficult.  The first one I listed was this:

  • "Climate deniers are anti-science morons and liars because they deny the obvious truth of warming from greenhouse gasses like CO2"

In fact, if you read the article, most of the prominent climate skeptics (plus me, as a non-prominent one) totally accept greenhouse gas theory and that CO2, acting alone, would warm the Earth by 1-1.2C.  What we are skeptical of is the very net high positive feedbacks (and believe me, for those of you not familiar with dynamic systems analysis, these numbers are very large for stable natural systems) assumed to multiply this initial warming many-fold.

This is just tremendously frustrating, in part because climate alarmists (at least in the media) don't seem to understand their own theory.  I constantly have to patiently explain that the theory of catastrophic man-made global warming (or climate change if you prefer) is a two part theory, and that warming forecasts are based on two independent chained theories:  First, CO2 acting as a green house gas incrementally warms the earth and second, large net positive feedbacks in the Earth's climate multiply this initial warming many times.  The majority of the warming actually comes from the second theory, not greenhouse gas theory, but every time I am in a debate or interview situation one of the early questions is "how can you deny greenhouse gas theory, it is settled science?"   This is what I call the climate bait and switch -- skeptics have issues with the second theory but the media and climate alarmists only want to argue about the first.

Robert Tracinski at the Federalist highlights a really good example of this:

In a CNBC interview, the host asked, “Do you believe that it’s been proven that CO2 is the primary control knob for climate?” Pruitt answered: “No, I think that measuring with precision human activity on the climate is something very challenging to do, and there’s tremendous disagreement about the degree of impact. So no, I would not agree that it’s a primary contributor to the global warming that we see. But we don’t know that yet. We need to continue the debate and continue the review and the analysis.”

This is a pretty reasonable answer.  It is simply absurd to argue that CO2 (at a current atmospheric concentration of 0.04%) is the "primary control knob for climate".  CO2 is obviously part of a large and complex equation with many, many variables, but calling it the primary control knob is like saying that the sugar industry is the primary control knob for the US economy.

But back to the issue of the climate bait and switch.  Here is NPR responding to Pruitt's comments.  Can you guess what they say?

Those statements are at odds with an overwhelming body of scientific evidence showing that humans are causing the climate to warm by releasing CO2 into the atmosphere. The view that CO2 is a major heat-trapping gas is supported by reams of data, included data collected by government agencies such as NASA and the National Oceanic and Atmospheric Administration.

Greenhouse gas theory is settled science!  But Pruitt has never, in anything I have read, disagreed with greenhouse gas theory.  He just thinks the effects have been exaggerated.  But here is the media, yet again, ignoring the actual arguments of skeptics and trying to recast their position as denying greenhouse gas theory.  The media sets up this false dichotomy that either you accept that CO2 is "the primary control knob of climate" or you deny CO2 is a greenhouse gas at all.  They allow no intermediate position, despite the fact that both of these choices are scientifically absurd.

Mr. Tracinski goes on to make the same point I often make, so I will let him do it in his own words since I don't seem to have any success explaining it:

The question is not whether carbon dioxide is a greenhouse gas. The question is whether it is the “primary control knob for the climate.” The question is whether it is the greenhouse gas, the one factor that dominates all other factors.

There is good reason for skepticism. For one thing, just on the “basic science,” Pruitt is absolutely correct. Carbon dioxide is a greenhouse gas, but it is not the most powerful greenhouse gas, by a long shot. Water vapor is far more effective at trapping heat and releasing it back to the atmosphere, primarily because it absorbs a lot more radiation in the infrared spectrum, which is released as heat.

That’s why all of the climate theories that project runaway global warming use water vapor to juice up the relatively small impact of carbon dioxide itself. They posit a “feedback loop” in which carbon dioxide increases temperatures, which increases the amount of water vapor in the atmosphere, which increases temperatures even more. These models need a more powerful greenhouse gas to magnify the effect of carbon dioxide.

But does it really work that way? By how much does water vapor magnify the impact of carbon dioxide? And is that effect dampened by other factors? Consider cloud formation: more water in the atmosphere means more clouds, which reflect sunlight back into space and have a cooling effect that counteracts the warming effect. But by how much?

The answer is that nobody really knows. There are varying estimates for “climate sensitivity,” that is, how sensitive global temperatures are to increases in carbon dioxide. They range from a relatively trivial impact—less than one degree Celsius warming from a doubling of atmospheric carbon dioxide—to more than five degrees.

 

 

The Income Tax Bait and Switch -- Tennessee

Tennessee is one of those states that prides itself on not having an income tax.  And I will say that in general, Tennessee has been a very good place for us to do business.

However, for entrepreneurs whose income is mostly derived from a self-owned company, the whole "no income tax" thing in Tennessee is misleading.   In fact, I just had to prepare and pay 10 different quasi income tax submissions in TN -- the state Excise tax on businesses, the state Franchise tax on businesses, and county business tax in 8 counties.  Some of these are not actually income taxes but are taxes as a percentage of revenue, but in some sense these are even worse than income taxes as they must be paid even if the company is losing money.  Only California with its $800 minimum tax just for existing do we see a worse setup for a startup or money-losing entity.

In most states I pay state income tax based on my company's earning in that state (as an S-corp the corporate earnings pass through to my personal income taxes).  But in TN, despite the fact it is not our largest state and supposedly has no income tax, I am going to end up with one of our highest state tax bills.

Progressive Narrative Fail: Why Are Low Income Workers and the Unemployed Running from High Minimum Wage States to Low Minimum Wage States?

I think many folks are aware of how certain wealthy neighborhoods use zoning to keep out the lower-income people they don't want around  (e.g. minimum lot sizes, minimum home sizes, petty harassment over home and lawn maintenance, etc.)  If you think of California as one big rich neighborhood, many of their labor and housing laws have this same effect of keeping lower income people out.

From the Sacramento Bee

Every year from 2000 through 2015, more people left California than moved in from other states. This migration was not spread evenly across all income groups, a Sacramento Bee review of U.S. Census Bureau data found. The people leaving tend to be relatively poor, and many lack college degrees. Move higher up the income spectrum, and slightly more people are coming than going.

About 2.5 million people living close to the official poverty line left California for other states from 2005 through 2015, while 1.7 million people at that income level moved in from other states – for a net loss of 800,000.

...
The leading destination for those leaving California is Texas, with about 293,000 economically disadvantaged residents leaving and about 137,000 coming for a net loss of 156,000 from 2005 through 2015. Next up are states surrounding California; in order, Arizona, Nevada and Oregon.

Wow, I am totally lost.  The minimum wage currently in California is $10.50 an hour, going up to $15 over the next 5 years.  The minimum wage in Texas is the Federal minimum at $7.25.  If I understand it right from progressives, minimum wages are a windfall for workers that raise wages without any reduction in employment.  So why are the very people California claims it is trying to help leaving the state in droves?  For unenlightened Texas, of all places.

Of course the reason is that minimum wages do indeed have employment effects.If you think of California as one big rich neighborhood, minimum wages act as a zoning plan to keep the "unwashed" out.  Setting a minimum wage of $15 is equivalent to saying, "if your skills and education and experience are low enough that your labor is not yet worth $15 an hour or more, stay out."

Of course, there are a lot more problems for jobs in California than just minimum wages.  At every turn, California works to make operating a business difficult and hiring unskilled workers more expensive.  And then there is the cost side.  With its building restrictions and environmental rules, most California cities have artificially inflated housing costs, just another way to tell lower income  people to keep out.

Well-paid new arrivals in California enjoy a life that is far out of reach of much of the state’s population. Besides Hawaii and New York, California has the highest cost of living in America.

During the past three years in Sacramento, median rent for a one-bedroom apartment has risen from about $935 a month to $1,230 a month, according to real estate tracking firm Zillow.com. A single mother working 40 hours a week at $15 an hour would spend nearly half of her gross income to afford an apartment at that price. She would pay about 10 percent less for a one-bedroom rental in Houston or Dallas.

Sacramento remains relatively affordable compared to other California markets. Median rent for a one-bedroom apartment in Los Angeles is about $2,270 a month. In San Francisco, $3,700. Without subsidies, those prices are unreachable for a single parent making $15 an hour.

The key to attacking poverty is creating more jobs, not artificially raising the rates of entry-level jobs.

Quest Complete, Achievement Unlocked

About a year and a half ago when I was in Asia, I saw a lot of folks has laundry racks that were essentially lifts, where one could put the laundry out to dry and then lift it up out of the way.  I thought this would be awesome for our laundry room, which unusually for a laundry room has a 12 foot ceiling.   Since we live in Arizona, I hand a lot of things like my cotton shirts to dry, it reduces the wrinkles and in our 4% humidity it tends to be bone dry after just a few hours.

But it was impossible to find one in the US.  I even had a contest on this web site to try to find one, with no real luck.  So after nearly a year of searching, multiple false starts, language issues, shipping issues, disappearing orders, and a general contractor who had absolutely no idea how to install the thing, we finally meet with success:

It is awesome for us -- lowers to about 5 feet above the ground to make it easy to hang things on it, and then raises high enough that the laundry clears me head.  Down & Up:

      

I'd buy the US distribution rights for this thing if I thought anyone else had similar applications for it over here.

So Skeptical Science Is "Correcting" Me

I really wasn't going to do much with this Skeptical Science post by Rob Honeycutt called "Correcting Warren Meyer on Forbes," but several readers have asked me about it and it's Friday and I am sort of bored in the office so here goes.  I may skip parts of his critique.  That does not necessarily mean I agree with it, but several sections of this article are just so trivial (let's defend Al Gore!) that it is hard to work up any energy about it.  As reference, my original article published back in 2012 is here.

Dammit Meyer, You Changed The Words to the Doxology!

The author begins his critique this way:

Mr. Meyer opens with a misleading attempt to frame the issue as a debate on "catastrophic man-man global warming theory." This approach conflates two very distinct elements of the science on anthropogenic climate change. Nowhere in the published scientific literature can you find the phrase he uses. When I did a search on this term in Google Scholar, what did I find? Mr. Meyer's Forbes article. Also searching "catastrophic man-made climate change" I get a smattering of non-research related materials coming from people who rejecting human influence on climate. Meyer has formed a completely irrelevant and fabricated framing of the issue for the basis of his discussion.

In Mr. Meyer's article he claims this is the "core theory" and states that he will use the IPCC as the primary source for this, even though there is no place where the IPCC frames climate change in this manner.

Hey, thanks for making my point!  I always start climate discussions by saying that supporters of climate action are frequently sloppy with the way they frame the debate.   They use phrases like "climate denier" for folks like me which make no sense, since I don't deny there is a climate.  Clearly "climate denier" is a shortcut term for my denying some other more complex proposition, but what proposition exactly?  Merely saying "global warming" as a proposition is sloppy because it could include both natural and manmade effects.  Climate change is even sloppier (I would argue purposely so) because it obscures the fact that deleterious effects from anthropogenic CO2 must be via the intermediate stage of warming (i.e. there is no theory that CO2 causes hurricanes directly).

With this in mind, I begin nearly every discussion of climate change by doing what many proponents of climate action fail to do  -- I am very precise about the proposition I am going to discuss.  It's not just global warming, it's man-made global warming.  And since the climate alarmists are urging immediate action, it is not just man-made global warming but it is catastrophic man-made global warming, ie man-made global warming with negative effects so severe it requires urgent and extensive actions to circumvent.  I think that is a very fair reading of what folks like James Hansen have in mind (if he does not think it will be catastrophic, why is he getting arrested in front of power plants?)  The fact that Google searches do not yield these precise terms but rather yield millions of hits for meaningless phrases like "climate denier" just go to support one of the themes of my original piece, that the climate debate is made much muddier by the sloppy framing of the issues in the media.

However, while Mr. Honeycutt criticizes my framing as non-canon, he offers no specific critiques of how the phrase "catastrophic man-made global warming" might be wrong and offers no alternative framing.  I really do try to pass Bryan Caplan's ideological Turing test on this stuff, so I am interested -- if advocates for climate action do not think "Catastrophic Man-Made Global Warming" is a fair statement of their theory, what would they use instead?

So Is Feedback a Critical Assumption or Not?

I really don't want to repeat my article, but it is useful to understand my thesis:  Catastrophic Man-Made Global Warming Theory is actually a two-part theory, with two chained steps.  In the first, CO2 (and methane and other stuff) act as greenhouse gasses and incrementally warm the planet (about 1-1.2C per doubling of CO2 levels).  In the second step, via a second theory unrelated to greenhouse gas theory, the initial warming from greenhouse gasses is multiplied several times by positive feedbacks that dominate the Earth's climate system, up to the IPCC's estimate of 3-5 C per doubling.  Most of the projected warming in forecasts, such as those from the IPCC, are actually from this second step.  My position is that I largely agree with the first step, which is well understood, but believe there is little real understanding of the second, that feedbacks could be net positive or negative, and that scientists either over-estimate their certainty on feedbacks or, more commonly, bury the feedback assumptions and don't even talk about them in public.

As an aside, I have presented this in front of many climate scientists and no one has really disputed that my summary of the logic is correct (they have of course disputed my skepticism with the feedback number).  In fact Wikipedia, no climate denier, has this in their article about climate sensitivity:

CO2 climate sensitivity has a component directly due to radiative forcing by CO2, and a further contribution arising from climate feedbacks, both positive and negative. "Without any feedbacks, a doubling of CO2 (which amounts to a forcing of 3.7 W/m2) would result in 1 °C global warming, which is easy to calculate and is undisputed. The remaining uncertainty is due entirely to feedbacks in the system, namely, the water vapor feedback, the ice-albedo feedback, the cloud feedback, and the lapse rate feedback";[12] addition of these feedbacks leads to a value of the sensitivity to CO2 doubling of approximately 3 °C ± 1.5 °C, which corresponds to a value of λ of 0.8 K/(W/m2).

In a critique, I would expect someone to say, "your description of the theories is wrong because of X" or "I agree with your basic description of the theories but think there are good reasons why we expect feedbacks to be strongly positive".  But this is what we get instead from Mr. Honeycutt

New errors pop up when trying to describe this "theory" where he attempts to describe water vapor feedbacks. He states that the IPCC "assumed" a strong positive feedbackfrom water vapor. The IPCC doesn't assume anything. The IPCC is a collection of leading experts in their fields who ware painstakingly cataloguing the scientific research. Meyer also makes an error suggesting the IPCC "just add" 2-4°C onto the 1°C for CO2 warming. Such figures, again, are completely manufactured by Meyer. They don't jibe with climate sensitivity figures and he provides no reference to what he means with figures like these.

The IPCC actually produces graphs such as the following to quantify forcings on the climate system, which also very clearly indicate levels of scientific understanding and uncertainty ranges.

He follows with a IPCC chart that showing forcing number estimates for different atmospheric components and the range of IPCC climate sensitivity forecasts, then says

By comparison, the IPCC and research scientists take the uncertainties involved with climateforcings and feedbacks very seriously. They clearly quantify and document them. The net result of the research suggests that our climate's sensitivity to forcing centers around 3°C for doubling CO2 concentrations. The low end probability is ~1.5°C, and the IPCC clearly state that anything lower than this is highly improbable.

My first thought is a snarky one, that it is interesting to see someone from a site with the word "skeptical" in the title go in for such a full-bore appeal to authority.  But to the substance, I am certainly familiar with all the IPCC forcing charts, and what is more, that these charts include a self-assessment by the IPCC about how confident they are in their estimates.  Since that self-assessment never is supported by any methodology or analysis in the reports, or any neutral third-party review, I take it with a grain of salt.

But to the rest, if one wants to discuss climate change with a lay audience, it is not wildly useful to start spewing out forcing numbers that have little meaning to the reader, and which the reader has no ability to connect to what they really care about, ie how much temperatures may rise.

More tellingly, though, after I spend most of my article discussing how the media frequently merges the effects of greenhouse gasses acting alone with the effects of feedbacks in the system that multiply or reduce these direct effects, Mr. Honeycutt does just that, offering forcing numbers that, if I read them correctly, include both direct effects and feedback multipliers.

The reason why it is useful to separate the direct warming effect from CO2 from the follow-on effects of feedback multipliers is the level of certainty we have in assessing their values.  We can figure out pretty precisely the absorption and reradiation characteristics of CO2 in a laboratory.  We can't do anything similar with feedbacks -- they must be inferred using various (all to-date imperfect) approaches to isolating feedback effects from everything else in the climate.  An example from another field might be useful.  Let's say we want to know the economic effect of hosting the Superbowl in Phoenix.  It is pretty easy to measure the direct effects, like the money spent on tickets for the event.  But when we look at the total system, things get really hard.  Sure we had people come in spending money on the Superbowl, but maybe we had fewer tourists doing other things, or maybe increased spending at the Superbowl was offset by less spending at movies or amusement parks.  We might compare that day's revenues to other years, but other years might have had different weather, different population, and a million other small differences that affect the outcome.  Sorting through all these literally millions of changing variables to get the net effect of hosting the Superbowl is hard (and in fact for the last Superbowl hosted in Arizona, academic groups have come up with a huge array of numbers that range all the way from highly positive to negative for the net economic effect).  The one difference between this example and what scientists have to do to isolate effects of individual inputs to the climate system is that the climate problem is much harder.

In responding to Mr. Honeycutt, I cannot honestly tell if Mr. Honeycutt is refuting this formulation of the problem (ie incremental warming from greenhouse gas effects of CO2 is increased to much higher, catastrophic levels by a second theory that the earth is dominated by strong positive feedbacks) or merely disputing my assertion that the second half of this proposition is not well-proven.

Missing the Point on Past Temperatures

Mr. Honeycutt has a number of problems with my discussion of past temperatures.  First, he doesn't like my saying that warming from pre-industrial times was 0.7C.  Mea culpa, it was probably 0.8C when I wrote the article.  He also does not like the satellite temperature measurement, because it measures temperatures in the lower troposphere (a couple miles up in the atmosphere) rather than at the surface.  He is absolutely correct, but you know what?  I am skeptical of both land and space data sets.  They both have their flaws.  Land surface temperatures, especially near the poles and in places like Africa, are widely spaced requiring a lot of interpolation.  They are also subject to a number of biases, such as from changing land use and urbanization.  Satellite data tends to cover larger swaths of the Earth, but have to be corrected for orbital decay and other satellite aging factors.  And as the author mentioned, they measure temperatures in the lower troposphere rather than the surface.  However, since the IPCC says that the most warming from greenhouse gasses should be in the lower troposphere, even greater than the warming on the surface, satellites strike me as a useful tool to look for a global warming signal.   That is why I always use both.  (As an aside, Mr. Honeycutt departs from his appeals to IPCC authority by advocating two land surface data sets NOT chosen by the IPCC as their lead data set -- I use the Hadley CRUT4 because this is what the IPCC uses as their gold standard).

But all this misses the point of why I introduced past temperatures in the first place.  My thesis was that past warming was not consistent with high CO2 temperature sensitivity numbers.  I used charts in the article but I can repeat the logic simply here.  Sensitivity numbers in the IPCC are the warming expected per doubling of CO2 levels.  Since pre-industrial times we have increased global CO2 concentrations from about 270ppm  (or 0.0270%) to about 405 ppm.  This increase of 135pp from 270ppm is conveniently (for the math) about 50% of a doubling.  Because the ratio between concentration and temperature is logarithmic, at 50% of a doubling we should see 57% of the doubling effect.  So for an IPCC sensitivity of 3C per doubling, since pre-industrial times we should have seen a warming of .57 x 3 =  1.7C.  We are nowhere close to this, even if every tenth of degree of warming over the last 100 years was man-made (a proposition with which I would disagree).  At the high end of the IPCC range, around 5C, we would have had to see 2.85C of warming to date.  At the low end of 1.5C, which the author calls unlikely, we would have seen about 0.86C of historical warming.  If one argues that manmade warming is only about half the past warming, then the sensitivity would have to be less than 1C  (by the way, this disconnect only gets larger if one considers greenhouse gasses other than CO2).

There are plenty of potential arguments one could counter with.  One could argue that time delays are really long or that man-made aerosols are masking past warming -- and we could have a nice back and forth on the topic.  Instead we just get printouts from models.  Seriously, is that how skeptical folks approach science, accepting black box model output that embodies hundreds or even thousands of potential GIGO assumptions and inputs?  I would love someone to show me in a sort of waterfall chart how one gets from 1.7C of expected warming from 270-405ppm to Hadley CRUT4 actual warming around 0.8C.  Doesn't anyone feel the need to reconcile their forecasts to actual observations?

There are really good reasons to distrust models.  If Donald Trump wanted to invest $100 million in building new military bases, and said that he had a computer model from experts with graphs that show the plan will grow GNP by a trillion dollars, would you automatically accept the model?  If GNP only grew by $200 million instead of by a trillion, would you want a reconciliation and explanation?

There are also good reasons to distrust climate models and forecasts.  James Hansen's models he used in his famous testimony in front of Congress in 1988 over-predicted warming rates by quite a bit (full explanation here).  Since people argue endlessly over this chart about how to center and zero the graphs, it is much easier just to look at implied warming rates:

Even the IPCC finds itself questioning its past warming forecasts:

These forecast failures are not meant as proof the theory is wrong, merely that there is good reason to be skeptical of computer model output as somehow the last word in a debate.

Actually, Missing the Whole Point of the Article

I had naively thought that the title of the article "Understanding the Global Warming Debate" (rather than, say, "Climate Alarmists Are Big Fat Liars") might be a clue I was trying outline the terms of the debate and the skeptic position in it rather than put a detailed dagger through the heart of, say, climate models.

I wrote this article based on my extreme frustration in the climate debate.  I have no problem with folks disagreeing with me  - in enjoy it.  But I was frustrated that the skeptic argument was being mis-portrayed and folks were arguing about the wrong things.  Specifically, I was frustrated with both of these two arguments that were frequently thrown in my face:

  • "Climate deniers are anti-science morons and liars because they deny the obvious truth of warming from greenhouse gasses like CO2"

In fact, if you read the article, most of the prominent climate skeptics (plus me, as a non-prominent one) totally accept greenhouse gas theory and that CO2, acting alone, would warm the Earth by 1-1.2C.  What we are skeptical of is the very net high positive feedbacks (and believe me, for those of you not familiar with dynamic systems analysis, these numbers are very large for stable natural systems) assumed to multiply this initial warming many-fold.  Of all the folks I have talked to in the past, perhaps less than 1% were familiar with the fact that warming forecasts were a chain of not one but two theories, both greenhouse gas theory and the theory that the Earth's atmosphere is dominated by strong net positive feedbacks.  Even if the audience does not choose to agree with my skepticism over feedback levels, isn't this education of the public about the basic theory useful?  The author accuses me of purposeful obfuscation, but for those of us who are skeptical, it is odd that alarmists seem to resist discussing the second part of the theory.  Could it be that the evidence for strong positive feedbacks dominating the Earth's long-term-stable greenhouse gas theory is not as strong as that for greenhouse gas theory?  Evidence for high atmospheric positive feedbacks simply HAS to be weaker than that for greenhouse gas theory, not only because they have been studied less time but more importantly because it is orders of magnitude harder to parse out values of feedbacks in a complex system than it is to measure the absorption and emission spectrum of a gas in a laboratory.

  • "Climate deniers are anti-science morons and liars because there is a 97% consensus behind global warming theory.

Well, studies have shown a 97% agreement on .. something.  This comes back to the first part of this post.  If one is sloppy about the proposition being tested, then it is easier to get widespread agreement.  The original study that arrived at the 97% number asked two questions -- "do you think the world has warmed in the last century" and "do you think a significant part of this warming has been due to man".  97% of scientists said yes.  But I, called a climate denier, would have said yes to both as well.  Alarmists attempt to shut off debate with skeptics by siting 97% agreement with propositions that have little or nothing to do with skeptics' arguments.  Try asking a large group of scientists if they think that the world will warm 3C per doubling of CO2 levels, the proposition with which I disagree, and I guarantee you are not going to get anywhere near 97%.  This is simply a bait and switch.

I will conclude with his conclusion:

Meyer ends with an unjustifiable conclusion, stating:

So this is the real problem at the heart of the climate debate — the two sides are debating different propositions!  In our chart, proponents of global warming action are vigorously defending the propositions on the left side, propositions with which serious skeptics generally already agree.   When skeptics raise issues about climate models, natural sources of warming, and climate feedbacks, advocates of global warming action run back to the left side of the chart and respond that the world is warming and greenhouse gastheory is correct.    At best, this is a function of the laziness and scientific illiteracy of the media that allows folks to talk past one another;  at worst, it is a purposeful bait-and-switch to avoid debate on the tough issues.

The positions he's put forth in this article are the epitome of lazy analysis and scientific illiteracy. He's bizarrely framed his entire discussion attempting to attack the positions of the IPCC, a body composed of the world's leading researchers, as being scientifically illiterate. One has to ask, from where does his own "literacy" if not from leading climateresearchers? It's certainly not based in the available published research which the IPCC reports are based on.

In this, perhaps he's inadvertently answering his own questions in a manner that he would prefer to reject. What are "skeptics" denying? Answer: The scientific research.

Well, first, I would advise him to work on his reading comprehension scores.  I called the media scientifically illiterate, not the IPCC and researchers.  The basic framework of greenhouse gas incremental warming multiplied many times by assumed positive net feedbacks is in the scientific literature and the IPCC -- my frustration is that the feedback theory seldom enters the public debate and media articles, despite the fact that the feedback theory is the source of the majority of projected warming and is the heart of many climate skeptic's criticisms of the theory.

And with that, the "skeptical science" article ends with an appeal to authority.

Postscript:  Thinking about it more, at some level I find this article weirdly totalitarian, particularly the last paragraph where I am described as doing nothing but polluting the climate discussion.  Here he writes:

Forbes is a very high profile publication and thus someone there, at Forbes, decided that it was fine and well to give this person an internet soapbox to promote a position rejecting the climate science which he has absolutely no expertise. He is not genuinely adding to the discussion on climate change but is being placed into a position as someone to listen to. Meyer is polluting the discussion with misinformation and poor analysis which has no bearing on the actual issue of climate change. And thanks to Google, these types of discussions, lacking in any substance, are given equal weight to actual science due to the traffic they generate.

This seems an oddly extreme response to someone who:

  • agrees in the linked article that the world has warmed over the last century
  • agrees in the linked article that a good chunk of that warming is due to manmade CO2
  • agrees in the linked article that CO2 acting as a greenhouse gas will increase temperatures, acting alone, by about 1-1.2C per doubling
  • argues for a form of carbon tax (in a different article)
  • but disagrees on the magnitude of added warming from net feedback effects.

It seems that we have moved beyond "you are either with us or against us" and entered the realm of "you are either entirely with us on every single detail or you are against us".

Postscript #2:  Something else has been bothering me about this critique and I think I can finally put it into words  -- the critique is sort of science without thought, a regurgitation of the canon whenever I diverge from orthodoxy without actually considering the arguments presented.

Look, there are tens of thousands of people talking past each other on climate issues.  One of the things I try to do, if nothing else to bring something new to the discussion, is try to reframe the discussion in more useful and accesible terms, often with different sorts of graphs.  Sometimes these are useful reframings, and sometimes not, but I do know that in general I am a heck of a lot better at creating charts to communicate with a lay audience than is the IPCC or most of the prominent folks on either side of the climate debate.  This is why getting feedback (as in this critique) that I use different words to summarize the issue or that I do not use the standard charts everyone else xeroxes out of the IPCC reports (as did Mr. Honeycutt) is not very helpful.

Quick Thanks to Mark Perry

I know Mark Perry reads this blog from time to time, so I thank him for not hammering me (specifically) in his annual grammar day post.  I actually do know all this stuff (and had a uselessly high score on my verbal SAT all those many years ago, though my kids claim it was a much easier test then) but I seem to be the worst proofreader in the world.