Coyote Blog

I won't repeat the analysis, you need to see it here.  Here is the chart in question:

My argument is that the smoothing and relatively low sampling intervals in the early data very likely mask variations similar to what we are seeing in the last 100 years -- ie they greatly exaggerate the smoothness of history and create a false impression that recent temperature changes are unprecedented (also the grey range bands are self-evidently garbage, but that is another story).

Drum's response was that "it was published in Science."  Apparently, this sort of appeal to authority is what passes for data analysis in the climate world.

Well, maybe I did not explain the issue well.  So I found a political analysis that may help Kevin Drum see the problem.  This is from an actual blog post by Dave Manuel (this seems to be such a common data analysis fallacy that I found an example on the first page of my first Google search).  It is an analysis of average GDP growth by President.  I don't know this Dave Manuel guy and can't comment on the data quality, but let's assume the data is correct for a moment.  Quoting from his post:

Here are the individual performances of each president since 1948:

1948-1952 (Harry S. Truman, Democrat), +4.82%

1953-1960 (Dwight D. Eisenhower, Republican), +3%

1961-1964 (John F. Kennedy / Lyndon B. Johnson, Democrat), +4.65%

1965-1968 (Lyndon B. Johnson, Democrat), +5.05%

1969-1972 (Richard Nixon, Republican), +3%

1973-1976 (Richard Nixon / Gerald Ford, Republican), +2.6%

1977-1980 (Jimmy Carter, Democrat), +3.25%

1981-1988 (Ronald Reagan, Republican), 3.4%

1989-1992 (George H. W. Bush, Republican), 2.17%

1993-2000 (Bill Clinton, Democrat), 3.88%

2001-2008 (George W. Bush, Republican), +2.09%

2009 (Barack Obama, Democrat), -2.6%

Let's put this data in a chart:

Look, a hockey stick , right?   Obama is the worst, right?

In fact there is a big problem with this analysis, even if the data is correct.  And I bet Kevin Drum can get it right away, even though it is the exact same problem as on his climate chart.

The problem is that a single year of Obama's is compared to four or eight years for other presidents.  These earlier presidents may well have had individual down economic years - in fact, Reagan's first year was almost certainly a down year for GDP.  But that kind of volatility is masked because the data points for the other presidents represent much more time, effectively smoothing variability.

Now, this chart has a difference in sampling frequency of 4-8x between the previous presidents and Obama.  This made a huge difference here, but it is a trivial difference compared to the 1 million times greater sampling frequency of modern temperature data vs. historical data obtained by looking at proxies (such as ice cores and tree rings).  And, unlike this chart, the method of sampling is very different across time with temperature - thermometers today are far more reliable and linear measurement devices than trees or ice.  In our GDP example, this problem roughly equates to trying to compare the GDP under Obama (with all the economic data we collate today) to, say, the economic growth rate under Henry the VIII.  Or perhaps under Ramses II.   If I showed that GDP growth in a single month under Obama was less than the average over 66 years under Ramses II, and tried to draw some conclusion from that, I think someone might challenge my analysis.  Unless of course it appears in Science, then it must be beyond question.

Typically, wealthy individuals and investors will work hard to delay declaration of income and to push taxes off as far into the future as possible.  The present value of taxes paid a year from now are less than paying the taxes today.

But over the last several weeks, I have had casual conversations with entrepreneurs and individuals from the moderately to very wealthy, and almost to a one they have said they are trying to pull income into 2007 and 2008 in anticipation of potentially large increases in capital gains tax rates and the rates at the top of the bracket.

On a different topic, a friend and I depressed ourselves in a bar last night laying out the case that the next decade may in many ways be a repeat of the 1970s.  Already, we see both parties reverting to the economic prescriptions they promoted in the 1970s.  Further, this week may herald the beginning of an inflationary monetary and fiscal policy combined with government enforced structural limits on growth (e.g. Co2 abatement policy, trade protectionism, price controls, high marginal tax rates and capital gains tax rates, lending restrictions, etc.)  We are seriously discussing nationalizing a major industry (health care) for the first time since the 1970's (when nationalizing oil was seriously considered).  Currently we have a Republican President who is less market-oriented than his Democratic predecessor, and at least as clueless on economic issues as were Nixon and Ford.  All that's left to do is elect a new Jimmy Carter in 2008...

I sense I am in the minority on this (what's new) but I just don't understand the outrage directed at the decision to let Muhammad Khatemi into the US for some speaking engagements.  I guess I am enjoying the spectacle, though, of conservatives attacking McCain-Feingold for limiting free speech and then attacking the state department for letting a former head of state (albeit a fairly crazy one) into the country to, uh, speak.

The letter says that allowing
Mr. Khatemi to visit America "undermines U.S. national security
interests with respect to Iran and the broader Middle East." It also
says permitting Mr. Khatemi's "unrestricted travel through the United
States runs contrary to U.S. priorities regarding homeland security."

Taking the first part of this objection, I suppose they are arguing that granting this person a visa is somehow a reward, and we don't want to reward Iran.  Now, I will confess that Iran sucks, but I don't get how this rewards them or sets back our cause.  Yes, if he was received in the White House or by a prominent government official, I can understand it, and I would oppose doing so.  Besides, when our former head of state Jimmy Carter goes to other countries, the trips always seem to have the opposite effect that people fear here, as he tends to hurt rather than somehow advance his home country's interests every time.

As to the second part, I could understand it if someone had a legitimate concern that this was a terrorist leader and he would be spending his time visiting and organizing terrorist cells, but I have not seen anyone make that claim.  Besides, if I was in the FBI, I would love it if he was here to do that, and would follow him all over the place.  The CIA and FBI often leave known agents in place, because it is much easier to stay on top of the person you know about than the person you don't.  A high profile visit by Khatemi should be the least of our security concerns.

This just strikes me as one of those silly political loyalty tests that Democrats seem to like to conduct on domestic policy and Republicans conduct on foreign policy.  If you let this guy in, you are branded as a supporter of terrorism and fascism and whatever else. 

As I said just two days ago:

I am constantly irritated by efforts to ban a certain speaker from
speaking or to drown out their message with taunts and chanting.  If
you think someone is advocating something so terrible - let him talk.
If you are right in your judgment, their speech will likely rally
people to your side in opposition.  As I like to tell students who want
to ban speakers from campus -- Hitler told everyone exactly what he was
going to do if people had bothered to pay attention.

By the way, in explanation of the title of this post, I was reacting to something quoted from Rick Santorum.  Now, I often hesitate to react to comments by Santorum, because, like Howard Dean and a few others, he is sort of a human walking straw man.  But here goes:

On it, Mr. Santorum, who
has cut his deficit against his Senate challenger in Pennsylvania to
single digits, wrote that he should be granted a visa only if Iran
allows their people to hear "free American voices."

Mr. Santorum wrote: "We should insist, at a minimum, that the
Iranian people can hear free American voices. Iran is frightened of
freedom. They are jamming our radio and television broadcasts and
tearing down television satellite dishes in all the major cities of the
country. It seems only fair that we be able to speak to the Iranians
suffering under a regime of which Muhammad Khatemi is an integral part."

So now are we going to allow people free speech only if their country does so in a bilateral manner?  All you Americans of North Korean, Chinese, Iranian, Saudi Arabian, Venezuelan, etc. decent, Beware!   This logic betrays a theory of government that rights don't extend from the fact of our existence, but are concessions granted by the government.  By this logic, people have free speech only as long as the government allows it, and the government has the right to trade away an individual's free speech as a part of a negotiation.    

A number of politicians are calling for taxing "windfall profits" driven by the "price bubble" in gasoline and oil.  Previously, I narrow-mindedly opposed this, arguing that the whole point of the pricing signal being sent is to call for new supplies, which won't happen if the government takes the money away from suppliers.

I say narrow-mindedly, because I have had an epiphany.  I realize now that it is indeed unfair for sellers to benefit from such a pricing bubble.  However, I think the politicians are wrong for looking at oil, since that bubble is only small potatoes.  I propose we start with the much bigger bubble:  In housing prices.  In a time of housing shortages, it pains my heart to Americans profiteering from artificially high prices.  Besides, oil companies actually do something useful with their windfall profits, like finding more oil; home sellers will just blow their proceeds on a big screen TV or something.

My proposal is that the government set a "fair price" for housing, based on a standard rate of appreciation.  The price of the house in a base year, such as 1970, adjusted for the CPI is a good starting point, but a process can be created modeled after Hawaiian gas pricing regulation to set up the exact standard.   Every house in the country then will be appraised.  Any house selling for or appraised for an amount above the 1970 price+CPI adjustment will be deemed as having reaped windfall profits.  The government is authorized to seize 100% of these windfall profits.  When this program is a success, we should then consider a retroactive program to seize windfall profits from the Internet stock bubble.

So, for all you who were supporting government intervention into gasoline pricing and profits, this must make you feel even better, since it is a much, much bigger bubble.  Right?  Or was it somehow more fun when Exxon was a target instead of, say, you?

Update:  I thought it was obvious, but I guess not from the email I have gotten:  I am being sarcastic here.  I would oppose a "windfall" profits tax on oil, houses, Internet Stocks, Pokeman cards, or whatever. 

The WSJ ($?) had this editorial on Saturday:

We keep hearing the word "bubble" to describe
industries with rapid and unsustainable rising prices. Hence, the
Internet bubble, the telecom bubble, stock market bubble, and now, some
analysts believe, a housing bubble. Yet for some mysterious reason no
one speaks of the oil bubble -- though prices have tripled in two years
to as high as $70 a barrel.

Reviewing the history of oil-market boom and bust
confirms that we are in the midst of a classic oil bubble and that
prices will eventually fall, perhaps dramatically. Despite apocalyptic
warnings, the world is not running out of oil and the pumps are not
going to run dry in our lifetimes -- or ever. What's more, the
mechanism that will surely prevent any long-term catastrophic shortages
in energy is precisely the free-market incentive to make profits that
many politicians in Washington seem to regard as an evil pursuit and
wish to short circuit.

The best evidence for an oil bubble comes from the
lessons of America's last six energy crises dating back to the late
19th century, when there was a great scare about the industrial age
grinding to a halt because of impending shortages of coal. (Today coal
is superabundant, with about 500 years of supply.) Each one of these
crises has run almost an identical course.

First, the crisis begins with a spike in energy prices
as a result of a short-term supply shock. Next, higher prices bring
doomsday claims of energy shortages, which in turn prompts government
to intervene ineffectually into the marketplace. In the end, the advent
of new technologies and new energy discoveries -- all inspired by the
profit motive -- brings the crisis to an abrupt end, enabling oil and
electricity markets to resume their virtuous longterm downward price
trend.

The limits-to-growth crowd has predicted the end of
oil since the days when this black gold was first discovered as an
energy source in the mid-19th century. In the 1860s the U.S. Geological
Survey forecast that there was "little or no chance" that oil would be
found in Texas or California. In 1914 the Interior Department forecast
that there was only a 10-year supply of oil left; in 1939 it calculated
there was only a 13-year supply left, and in 1951 Interior warned that
by the mid-1960s the oil wells would certainly run dry. In the 1970s,
Jimmy Carter somberly told the nation that "we could use up all of the
proven reserves of oil in the entire world by the end of the next
decade."

We can ridicule these doom and gloom predictions
today, but at the time they were taken seriously by scholars and
politicians, just as the energy alarmists are gaining intellectual
traction today. But as the late economist Julian Simon taught, by any
meaningful measure oil (and all natural resources) has gotten steadily
cheaper and far more bountiful in supply over time, despite periodic
and even wild fluctuations in the market.

Technorati Tags:  Energy, Economics

Instapundit has several links to biographies of Norman Borlaug, who won the Nobel Peace prize for starting the green revolution and perhaps single-handedly saving hundreds of millions from starvation.  This is a particularly interesting one.

Borlaug won his prize, of course, back when the Nobel Peace prize was actually given to people who made the world a better place.  Today the prize is typically given to whatever person did the most to appease a major dictatorship or terrorist or to whoever was most vocal worldwide in their socialism or  anti-Americanism.  This description of the Nobel committee's criteria may sound flippant, but it is clear to me that the committee is dominated by those who favor peace ahead of anything else.  Which, in real life, means that you have to be ready to live with ... anything else, including murder, rape, genocide, totalitarianism, etc. 

Just look at the list of recent winners.  In 1985 they gave the peace prize to the International Physicians for the Prevention of Nuclear War, who as a group systematically opposed everything the US was doing at the time which in 5 years would result in a true reduction in the risk of nuclear war.    In 1988 they gave the award to the serial rapists in the UN peacekeeping forces.    For God sakes in 1994 Yasser Arafat won, perhaps the single person most responsible for chaos in the Middle East.  In 2001 Kofi Anan won, at the very time he was out-Enroning Ken Lay by helping Saddam Hussein steal $20 billion while enriching his own son with contractor kickbacks.  And of course in 2002 Jimmy Carter won for appeasing just about every dictator in the world, but North Korea in particular (interestingly, Jimmy Carter is the only US president since Woodrow Wilson to win the award.  Can you think of any president in the last 60 years who has done less than Jimmy Carter to create a free and peaceful world?)

As a footnote, it would be impossible for Norman Borlaug to win the Peace prize today.  Greens and environmentalists have never liked him, and the politically correct Nobel Committee would never make a choice today that would irritate these groups.  People like Wangari Maathai who fit into the progressive-green sustainable development camp are preferred, even if they don't have nearly the same impact in actually saving or improving lives.

Unfortunately, the libertarian "bloc" in the country tends to be a bit too small for either of the two major parties to fight over - kind of like expending energy on wooing left handed Eskimo pipe-welders.  However, last year, with many libertarians opposing key parts of the Patriot Act, the growth in government spending, and the war in Iraq, the left and the Democratic Party made a bid to woo libertarians over to the Kerry camp. 

I would have found this argument more compelling had the left proven themselves to be a bit more consistent supporters of democracy and individual rights around the world.  Many on the left bent themselves into pretzels supporting blatant totalitarians in hopes of seeing George Bush fail.  Other leftists continue to be strong Marxists, supporting socialist regimes with a blind eye towards their human rights records.

While the socialists are probably a loss, there is still hope for much of the left to craft a freedom- and individual-rights-based foreign policy that libertarians could find compelling -- I handed out some free advice here.  However, before they left can really make progress here, the need to learn how to recognize a dictatorship:

You Know its a Dictatorship When:

1. Michael Moore portrays the country as a kite-flying paradise
2. Jimmy Carter sanctioned their last election
3. The UN certifies that there is no genocide
4. They sign friendship pacts with other dictatorships (also here and here and here too)
5. They are a member of the UN Human Rights commission (not 100% foolproof but getting closer every year)
6. They were once a French colony, and/or France is opposing sanctions against it (also here too)
7. Their people are impoverished and they lag the world in economic growth

Update:  Welcome Powerline and Instapundit readers.