Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

[xPat]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

CI: Give me an example of a broken debate.
EJ: For example the debate about inflation or deflation as potential outcomes of the US credit bubble. They have for years been debated as equally likely and viable outcomes, when in fact one is as likely as summer in the northern hemisphere in August and the other as likely as Paris Hilton inventing a stem cell cure for cancer. The debate should have been about what kind of inflation we’ll have, that we are now having.

A subject near and dear to my heart. I continue to lobby Jim Puplava to organize a Hyperinflation vs. Sustained High Inflation debate, because all of the people who predict hyperinflation seem to base their predictions on the experiences of Argentina, Zimbabwe and Weimar Germany, without ever taking into account the differences between those countries and the United States.

I've suggested an EJ vs. John Williams debate on this subject several times, but so far Jim's not taking the bait. My strong impression is that the reason I've not been successful is that nobody but me is asking for this. Perhaps if more people made the same request, Jim might be persuaded to tackle this subject, which IMHO is probably the most important question we face navigating what's ahead. The Inflation vs. Deflation debate series was one of the most popular in the history of FinancialSense, and IMHO the Inflation vs. Hyperinflation question is both far more interesting, and far less obvious. Very few people even seem to understand the real difference between the two, which is night and day.

CI: Like how?
EJ: That’s outside the scope of this discussion.

AAARRRGGGHHH!!!

Obviously the answer is of great interest to your readers, so why make it a secret? If you really feel it's outside the scope of this conversation, how'bout posting another thread and making it in-scope in that thread.

I used to want to castrate engineers who would write technical documentation that would say "[some topic the reader really needs an answer for] is outside the scope of this document." Obviously they were aware readers wanted the answer, else they wouldn't have had the presence of mind to include this idiotic statement! Why not just answer questions you know your readers are interested in, rather than taunting them with this sort of comment? If the issue is that to do the subject justice would require considerable space, I can certainly understand that. But another dedicated post would be far better than a tease!

xPat

[Chris Coles]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

If the issue is that to do the subject justice would require considerable space, I can certainly understand that. But another dedicated post would be far better than a tease!

xPat

May I presume to give an answer. As a creative, it took me many years to learn to understand that, with many calls for "creativity" there comes a moment in time where the brain tells us to "shut up and sit down to think". It truly is quite impossible to answer every question without running the very real risk of being sent 'Nuts' in the process. So my guess here is EJ simply wants to use his time to what he views as his best advantage.

[EJ]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Wow, how weird to post for the second time to a website i have been reading for 11 years...

I studied climate science in graduate school and got to live a few years in center of this hurricane. Let me strip this down to what to me, is the core issue.

Asking if the current state of the earth system is caused by X (can be anything, let's say fossil fuels in the atmosphere) is NOT A SCIENTIFIC QUESTION. For two reasons.
1. In science you need a control group to infer causality. There is no 'control' earth to compare our earth to, one with lots of CO2, one without.
2. Earth is a chaotic system. So even if you had two earths, or a thousand earths, you will not be able to do the experiment to determine cause and effect, you can only see how the group of outcomes shifts with the given inputs (assuming you can get a signal above the noise).

We will NEVER be able to say that the current warming is due to anything we did to the planet. Never. We do not have the rational tools, the scientific method at our disposal to infer such a thing. It will never be answered.

With that said, there is NO DOUBT that we are screwing with a human life support system. We know that the carbon cycle is delicate, we are dependent on it, and we are messing with it willy nilly by re-released all this carbon that used to be trapped into the atmosphere/oceans etc.

We have known this since the 50's. We didn't need to do any more science after that to know what the right thing was to do. It's nice to do climate research, and it is useful for all kinds of things, but it gets us NO CLOSER to answering the above question. The conclusions there were obvious to those rational and without agendas: re-value carbon based energy to mitigate what we unleash by our 'experiment' on the life support system. For those that don't believe we may accidentally blow up the earth in all kinds of ways we don't yet understand and may never understand (it happens to be a pretty complicated place), i ask you to consider the ozone hole story (at the end of this post). Further, re-value carbon based energy so that we burn it as slowly as possible and as responsibly as possible.

SO, i don't care about the debate, it is nonsense. Everyone that takes either side has bought into increase the veils of confusion and muddying the issue. I agree with EJ, everything and everybody that did NOT get at the core of this issue since the 50's (the oil company speaking heads, the climate scientists who have an agenda to fund their research or feel important forming international committees) are all in the same camp and they may not even know who's agendas they are really promoting.

EJ, if you can wake people up, all the more power to you. It is so demoralising, truly.

The Ozone Hole Story (as told to me by my professor who shared the nobel prize for discovering it)

Around the time the hole first popped up climate scientists no longer studied the stratosphere (where the hole is). It was a simple system and considered known and predictable in all ways (nothing like the troposphere, which remains deeply unknowably complex and we base all our climate predictions on). It was so well known that when the ozone hole was first detected on ground, they replaced the machine because the satellites weren't seeing it and it was 'impossible'.
The new machine had issues to it seemed, so they fired the graduate student. After going a few rounds with this, they realized the satellites were filtering this data out because they had been programmed that those readings are systematic errors.
Some odd years later they finally got the satellites fixed up (still having no idea how this was possible), and figured out it was CFC's that were causing the trouble.

So, you may be saying, well, so what, some people in Australia have to wear hats. However, the punchline is, we didn't have to use CFC's for aerosol cans, we could have easily used Bromide based propellants. Good thing we didn't, they are more powerful and in the time it took to find the problem the bromide would have destroyed the ENTIRE supply of stratospheric ozone. Without ozone in the stratosphere, you can say goodbye to any plant or animal being able to exist in the light of the sun. Mitigate that.

So NOW we are consciously, knowingly messing with what we know is part of the life support system, in a part of the earth system we readily agree we don't understand. Talk about collective loss of reasoning and common sense. It boggles the mind.

What a fascinating response, on many levels.

On the question of AGW, I am willing to modify my position that “we don’t know the answer yet” and accept your notion that “It will never be answered.” We lack the tools. That said, I also agree with you that CO2 emitters should be motivated to reduce CO2 emissions without governments awaiting proof of the impact of human CO2 emissions on the global ecosystem.

The question is how, and is the system that is being motivated by the AGW argument fair, economical, and practical or is it the foundation of yet another scheme by FIRE Economy interests to extract economic rents from the Productive Economy?

More than 30 years ago I took the unpopular position with my fellow Natural Resource Studies students at the University of Massachusetts that we needed to build more nuclear power plants to reduce our dependence on the burning of coal and gas for electricity, heating, and industrial processes. These contribute five times as many pollutants than liquid fossil fuels do when burned for transportation.

At the time, the auto industry and utility companies that owned coal power plants were putting up a full bore bullhorn campaign to slow government initiatives to force them to reduce sulfur dioxide and nitrogen oxides emissions that were causing acid rain. The usual arguments that the costs were too high, would be passed on to consumers, and will make the US uncompetitive and so on were floated. They failed and the legislation that passed was successful. Here’s the Wikipedia entry on it:

“In 1990, the US Congress passed a series of amendments to the Clean Air Act. Title IV of these amendments established the Acid Rain Program, a cap and trade system designed to control emissions of sulfur dioxide and nitrogen oxides. Title IV called for a total reduction of about 10 million tons of SO2 emissions from power plants. It was implemented in two phases. Phase I began in 1995, and limited sulfur dioxide emissions from 110 of the largest power plants to a combined total of 8.7 million tons of sulfur dioxide. One power plant in New England (Merrimack) was in Phase I. Four other plants (Newington, Mount Tom, Brayton Point, and Salem Harbor) were added under other provisions of the program. Phase II began in 2000, and affects most of the power plants in the country.

“During the 1990s, research continued. On March 10, 2005, EPA issued the Clean Air Interstate Rule (CAIR). This rule provides states with a solution to the problem of power plant pollution that drifts from one state to another. CAIR will permanently cap emissions of SO2 and NOx in the eastern United States. When fully implemented, CAIR will reduce SO2 emissions in 28 eastern states and the District of Columbia by over 70 percent and NOx emissions by over 60 percent from 2003 levels.

“Overall, the Program's cap and trade program has been successful in achieving its goals. Since the 1990s, SO2 emissions have dropped 40%, and according to the Pacific Research Institute, acid rain levels have dropped 65% since 1976. However, this was significantly less successful than conventional regulation in the European Union, which saw a decrease of over 70% in SO2 emissions during the same time period.

“In 2007, total SO2 emissions were 8.9 million tons, achieving the program's long term goal ahead of the 2010 statutory deadline.

“The EPA estimates that by 2010, the overall costs of complying with the program for businesses and consumers will be $1 billion to $2 billion a year, only one fourth of what was originally predicted.”

But unlike the CO2, the direct impact of SO2 and NOx emissions on the environment are measurable. CO2 is an input to the natural cycle of CO2 exchange between the atmosphere, land, and sea. We know that human activity added 0.8% to total global atmospheric CO2 in 2006. That sounds like a lot to me, but how much of that annual output gets absorbed in the carbon cycle and how much accumulates in the atmosphere?

It is generally agreed that in the last 100 years atmospheric CO2 increased from 270 to 388 parts per million, an increase of 30% of a gas that is 0.039% of an atmosphere that is 78.09% nitrogen, 20.95% oxygen, and 0.93% argon. So while the 30% change in CO2 contributes only 0.0118% to the total, CO2 may play a crucial role in the ecosystem such that even small variances can result in out-sized changes in the ecosystem, never mind a 30% increase in 100 years. Whether that result is heating or cooling of the atmosphere, or some other impact, as you say, is immaterial. Waiting for results is unwise. Your CFCs versus Bromides example is spot on. We got lucky then. Maybe we won’t be so lucky with CO2.

I thought it was a good idea to lower fossil fuel emissions 30 years ago and still do today, and remain a proponent of nuclear power as an alternative to burning coal and gas. However, unlike the case of SO2 and NOx emissions, since we cannot measure the cost of the impact of CO2 emissions we cannot price the cost of reducing emissions.

This is where I get nervous about AGW. My experience since starting iTulip in 1998 is that when you can’t price something in the market and governments get involved, a racket that benefits campaign contributors develops soon thereafter, with the full engagement of the bullhorn to sell it -- the co-oping of specialists in government and academia, of journalists, and so on. I hope to interview an authority on the carbon exchange itself to answer some of my questions.

All that said, I believe that Peak Cheap Oil will trump AGW concerns.

Remember the truck drivers that sat idle when diesel prices went to $4.73 per gallon in May 2008?

After falling to $2.14 in Feb. 2009 diesel prices are back up to $3.44 today nationally, and $3.65 at the Mobile station up the street where I go to fill my car.

Peak Cheap Oil means we throw out AGW concerns as:

1. We tear the planet to shreds to produce the liquid fossil fuels in a desperate bid to keep our low distillates cost dependent transportation and food production system functioning.
2. Increased federal government fuel subsidies either grow our fiscal deficit and depreciate the dollar further, and raise energy prices even more due to import price inflation, or we cut, say, health care to pay for fuel subsidies.

All Peak Chap Oil roads lead to reducing the consumption of liquid fossil fuels, to conservation. Maybe as I get farther down the road in my research I’ll discover that the idea behind AGW, that explains the pattern of bullhorn propaganda for it, is that it is intended as a forcing function to reduce carbon emissions, which can be most economically achieved by reducing fossil fuel consumption, versus dubious technologies such as CO2 capture that require additional fuel consumption. The alternative is to raise the official alarm about peak oil, which can have all kinds of unpleasant consequences from a governance standpoint, ranging from the governments of oil producers consolidating their power positions vis-à-vis oil consumer countries, to market panics that drive oil prices to $200/bbl in months or weeks.

As for the value of a book that explains the American system of propaganda, the first step toward ending the demoralization that it creates is to explain how it works. But it will give readers more than that. I've often been credited with having a crystal ball. In fact I have learned to filter the bullhorn, to deconstruct its operation with respect to specific products. You might say to write such a book is to give away the keys to the kingdom, but it's more like explaining how to pick a particular brand of a highly sophisticated lock, or method to find the combination to break into a vault. That is the commercial application of it; the social value is inestimable going into the kind of period we are entering now. It merits serious consideration, but there are major downsides for the writer in my position besides the cost of creating economic and market forecasting competition.

I’m honored to have you as a reader for 11 years. I wish you’d post more often. These forums are like a virtual classroom, composed of a relatively small number of frequent participants and a large number of infrequent participants, many of whom have a great deal to say but who for various reasons choose not to. If I were a lecturer I’d say, “I always see the same hands. I'd like to see some new hands raised.” Not to diminish the contributions of the frequent contributors, but it’s great to hear new voices in the discussion. Thank you.

[jk]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

a direct tax on carbon would be as effective as tradeable carbon permits, but the latter- under a banner of [somehow] increased efficiency - allows for the establishment of a huge marketplace for financial intermediaries to milk.

[EJ]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

A subject near and dear to my heart. I continue to lobby Jim Puplava to organize a Hyperinflation vs. Sustained High Inflation debate, because all of the people who predict hyperinflation seem to base their predictions on the experiences of Argentina, Zimbabwe and Weimar Germany, without ever taking into account the differences between those countries and the United States.

I've suggested an EJ vs. John Williams debate on this subject several times, but so far Jim's not taking the bait. My strong impression is that the reason I've not been successful is that nobody but me is asking for this. Perhaps if more people made the same request, Jim might be persuaded to tackle this subject, which IMHO is probably the most important question we face navigating what's ahead. The Inflation vs. Deflation debate series was one of the most popular in the history of FinancialSense, and IMHO the Inflation vs. Hyperinflation question is both far more interesting, and far less obvious. Very few people even seem to understand the real difference between the two, which is night and day.

You have to consider the debate on another level. Inflation versus deflation appears to be about economics and the mechanisms of money growth and so on but it's really a political debate.

The inflationists tend to be conservative and the deflationists liberal. The inflationists distrust the government and monetary authorities while the deflationists tend to trust them. This dichotomy makes sense for a debate that is grounded in an agreement on the operations of monetary tools and the effects of policy. The disagreement is about how those tools will be used and their effectiveness. My position is that I trust the government and monetary authorities to reflate, which in monetary policy circles is the politically correct way of saying "inflate" but without producing an inflation rate much above 2%. I don't think they'll be able to keep it to 2% for political reasons, but I don't think it will go to to 1000% because the tools are available to a reserve currency issuer to prevent that from happening.

The hyperinflationists, the inflation extremists, belong in the same camp as the hyper-deflationists, those who forecast a deflation spiral, the deflation extremists. Both see either inflation or deflation running out of the control of monetary authorities. Compounding the confusion of a conservative versus ideological debate, neither understands the operations of monetary tools and the effects of policy so there isn't even a foundation for disagreement.

My favorite comment on the hyper-deflationists, Steve Keen among them, was by Michael Hudson in an interview when I asked him in 2007 what he believed is behind the deflationist's concerns, such as those of our mutual friend Steve. He said, "It's psychodrama. Modern monetary policy is based on double-entry book keeping, of the central bank adding to the assets and liabilities sides of the balance sheet at will. How can you not believe in it? It's like worrying that gravity might stop tomorrow and we'll all float up into the air!"

Marvelous. Since then I have convinced Keen to look more carefully at the way monetary policy is actually conducted, and additionally capital flows and their impact on currency valuations, and the impact of currency depreciation on inflation expectations, and as a result his site now reflects a thoughtful analysis of why deflation didn't happen.

I got into a lively email debate with Randall Wray who argues that a sovereign can print as much money and issue as much debt as it wants with impunity. An Austrian ideologue would dismiss the idea out of hand but I'm always interested in understanding the full range of ideas out there. After I got an introduction to him I sought an interview with him. He quickly dismissed my inflation argument as "video game economics" and then got rather abusive. For I presume ideological reasons he cannot enter currency depreciation into his calculus of sovereign debt and currency creation limitations, or I should say his theory of the unlimited power of sovereign debt and currency creation limitations does not include foreign exchange inputs. I walked away from the discussion concluding that there is no there there. Wray's argument is ideological, rhetorical and stylistic. I decided not to bother to interview him.

I've reluctantly come to that conclusion about nearly everyone in the field today. I either know what they are going to say or know that the level of discussion will be limited by their miscomprehension of the operations of monetary tools and the effects of policy.

I'm often asked which school of economics I belong to. No one of them works for me. I have to take bits from one and from another to create my own. I wound't want to join any economics school that would have me as a member.

Steve is a so-called "New Keynesian" in his own words. I've tried to pin Hudson down, but it's impossible, and that's a good thing. He tends to trust democratic government more than oligarchy, a position that is often confused for a pro-government, socialistic stance, understandably given his Marxist background. Wray is I think trying to start his own school. Let's call it the Wrayvian school. He certainly raved at me enough to earn it.

AAARRRGGGHHH!!!

Obviously the answer is of great interest to your readers, so why make it a secret? If you really feel it's outside the scope of this conversation, how'bout posting another thread and making it in-scope in that thread.

I used to want to castrate engineers who would write technical documentation that would say "[some topic the reader really needs an answer for] is outside the scope of this document." Obviously they were aware readers wanted the answer, else they wouldn't have had the presence of mind to include this idiotic statement! Why not just answer questions you know your readers are interested in, rather than taunting them with this sort of comment? If the issue is that to do the subject justice would require considerable space, I can certainly understand that. But another dedicated post would be far better than a tease!

xPat

If you search iTulip for the terms Bullhorn and Kazoo you'll see the concept outlined. But as my movie script writer sister Karen taught me 20 years ago, some ideas are essays, others are articles, others are screenplays, and others are books. This idea is a book.

[vinoveri]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Steve is a so-called "New Keynesian" in his own words. I've tried to pin Hudson down, but it's impossible, and that's a good thing. He tends to trust democratic government more than oligarchy, a position that is often confused for a pro-government, socialistic stance, understandably given his Marxist background. Wray is I think trying to start his own school. Let's call it the Wrayvian school. He certainly raved at me enough to earn it.

If you search iTulip for the terms Bullhorn and Kazoo you'll see the concept outlined. But as my movie script writer sister Karen taught me 20 years ago, some ideas are essays, others are articles, others are screenplays, and others are books. This idea is a book.

Perhaps in the context of "In a social democracy all roads lead to inflation" OR "Thou shall not steal ... except by majority vote" - attributions unknown

I've always instinctively trusted the "mob" over the intellectuals; it is an almost intuitive inclination, which is likely shared by most. Perhaps Bernays knew this too and saw that a frontal assault could not be used b/c it would be recognized, and thus saw the subtlety of propaganda as the way.

How about a website along with the book? A practical and real time site that tackles the propaganda associated with and promulgated by various interests groups on a variety of topics. Showing the vested interests on each issue and dissecting conclusions to reveal the false/questionable premises and fallacious conclusions. "iPropaganda.com"?

[bill]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Maybe as I get farther down the road in my research I’ll discover that the idea behind AGW, that explains the pattern of bullhorn propaganda for it, is that it is intended as a forcing function to reduce carbon emissions, which can be most economically achieved by reducing fossil fuel consumption,

I have always said, using toxic pollutant is more effective and convincing.
EPA
http://www.itulip.com/forums/showthr...60924#poststop

What a political football!
http://www.politico.com/news/stories/0211/49857.html

2/19/11 12:07 PM EST

House Republicans led a charge late into the night Friday against Obama administration decisions to regulate greenhouse gas emissions, block mountaintop removal mining and allow increased use of ethanol in gasoline.
The continuing resolution faces an uphill climb in the Senate and a veto threat from President Barack Obama, but the myriad votes against the administration's energy and environmental initiatives this week will likely not be the last.

Rep. Mike Simpson (R-Idaho), chairman of the Interior-EPA Appropriations subpanel, said the strong support for riders blocking the Environmental Protection Agency will build momentum for future attempts to pass more permanent pushbacks on the agency's regulations.
"The same thing that you see on the floor with all the people offering amendments [on EPA] is the same thing I hear out in my district," Simpson told POLITICO. "If the issue of the EPA comes up, it dominates the rest of the conversation, and the EPA needs to know that."
The entire debate – covering hundreds of amendments over several days – was largely anticlimactic as well-worn partisan differences ruled the day. Democrats didn’t even bother to offer amendments aimed at stripping out the Republican language trumping EPA’s ability to regulate greenhouse gas emissions.

http://www.boston.com/bostonglobe/ed...l_create_jobs/

Feb 12, 2011
THE REPUBLICAN attack on the Environmental Protection Agency began in earnest Wednesday with Representative Joe Barton of Texas saying that regulations to curb pollutants and limit greenhouse gases will “put the American economy in a straitjacket, costing us millions of jobs.’’
Lisa Jackson, the EPA administrator, was ready to combat the job-killing rhetoric. In her opening statement to a House Energy and Commerce Committee subcommittee, she quoted a UMass Amherst study that found that the construction and retrofitting investments in the eastern US under two new EPA air quality rules would produce nearly 1.5 million jobs over the next five years. The rules limit the emissions of sulfur dioxide, nitrogen oxide, mercury, lead, dioxin, arsenic, and other pollutants. She said the EPA’s implementation of the Clean Air Act, even in the last year of a Republican Bush administration loath to admit to the dangers of global warming, “contributed to dynamic growth in the US environmental technologies industry and its workforce.’’
James Heintz, associate director at the UMass’s Political Economy Research Institute, which did the study, said in a telephone interview that the potential job growth was not only dynamic, but diverse. “You are talking about an intense infusion of new capital for construction and installation and direct jobs for [people making] boilers, pollution control technologies, scrubbers, and component parts,’’ he said. “The indirect jobs are the kind created that when you install a natural gas-fired generator’’ which includes components made at factories across the country.

The report
http://www.peri.umass.edu/fileadmin/...PERI_Feb11.pdf


Nuclear, its coming.
http://www.world-nuclear-news.org/NP...s-2202118.html

France redirects its nuclear giants
22 February 2011
In addition, the French Ministry of Energy will lead a working group to look into the technical, legal and economic aspects of low power (100-300 MWe) reactor projects, which are becoming increasingly popular.

http://www.world-nuclear-news.org/NN...r-1802117.html

Westinghouse announces Small Modular Reactor
18 February 2011
Westinghouse has officially "introduced" its 200 MWe Small Modular Reactor (SMR), and says it is preparing for a role in the US Department of Energy's demonstration program.

[c1ue]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

C1ue, I have to suspect that you do not live very high up in the Northern hemisphere. Here in the UK the weather has changed quite dramatically over the last fifty years. Rainfall has increased more than 25% year on year; temperatures are rising; spring is showing very good signs of coming very early this year. But all that being said; the only thing that might change your mind is perhaps when sea levels suddenly rise, as I am, personally, sure they will. So let us leave the debate until we have something that will settle the matter. Except that, as they say, the frog is in the pot and the water is getting hotter year by year and if sea levels do suddenly rise by, say, 30 feet, then civilisation as we know it comes to an abrupt end, and this debate will be the least of our concerns.

That's funny, because the Central England Temperature record - the single longest continuous temperature record on earth - disputes your view:

http://hadobs.metoffice.com/hadcet/

Yes, there has been some warming, but only in the last 20 years. And furthermore it should be noted that there is no clear trend prior to this period - especially given the CET began roughly at the low point of the Little Ice Age.

This is highly inconvenient as this graph in no way resembles atmospheric CO2 buildup.

This doesn't even get into 2010 being in the 2nd coldest winter in CET history which was posted here on iTulip:

http://www.itulip.com/forums/showthr...th-eastern-U.S.

Then there's sea level rise: yes, again as temperature increases, sea level rises.

But the rise has been very small and consistent - and appears to be slowing down, not speeding up:



Even at the prior rate, we're talking about 1 foot in 100 years. Hardly a catastrophe.

As for spring coming early - time will tell. Certainly the winter hasn't been mild as has been forecast for the past 3 years.

Again, I have no objection to alternative energy.

But alternative energy can be grid-parity - i.e. at or below existing grid energy costs - without the imposition of massive regressive taxes.

Trying to force a mandate via shoddy science, trying to stampede the herd into a specific political goal - this is neither objective nor rational.

It is demagoguery.

[Bill_G]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Don't the monied interests within the FIRE represent a political "Oligarchy" of sorts?

[LargoWinch]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Perhaps in the context of "In a social democracy all roads lead to inflation" OR "Thou shall not steal ... except by majority vote" - attributions unknown

I've always instinctively trusted the "mob" over the intellectuals; it is an almost intuitive inclination, which is likely shared by most. Perhaps Bernays knew this too and saw that a frontal assault could not be used b/c it would be recognized, and thus saw the subtlety of propaganda as the way.

How about a website along with the book? A practical and real time site that tackles the propaganda associated with and promulgated by various interests groups on a variety of topics. Showing the vested interests on each issue and dissecting conclusions to reveal the false/questionable premises and fallacious conclusions. "iPropaganda.com"?

Good one, but one needs to understand its target audience, hence I suggest: "Dancing with the Bullhorn"

[Chris Coles]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

May I presume to give an answer. As a creative, it took me many years to learn to understand that, with many calls for "creativity" there comes a moment in time where the brain tells us to "shut up and sit down to think". It truly is quite impossible to answer every question without running the very real risk of being sent 'Nuts' in the process. So my guess here is EJ simply wants to use his time to what he views as his best advantage.

I'm going to stick to my own personal mandate that, if it is clear I have placed my proverbial "foot" in it; then I should have the common decency to acknowledge that.

But thank you EJ for putting me in my place with such comprehensive answers to others questions.

[AlexPKeaton]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

EJ,

How does your thinking diverge from Chomsky's in _Manufacturing Consent_?

[Chomsky]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

EJ,

How does your thinking diverge from Chomsky's in _Manufacturing Consent_?

Thanks for asking this question. It perhaps obviously was the first thing that came to mind when EJ mentioned this book idea.

[Jill Nephew]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Thank you EJ for the encouragement to post. Even more surreal to have a direct response! With that encouragement, i will add a bit more to the mix...

You wrote: "Maybe as I get farther down the road in my research I’ll discover that the idea behind AGW, that explains the pattern of bullhorn propaganda..."
My personal take on the propaganda (i expect this to go down in flames as this is way outside my area of expertise...) is that oil companies wish to keep the debate alive as long as possible to postpone inevitable regulation and take as much profits as possible before the party is over. It is just a smokescreen.

You wrote: "It is generally agreed that in the last 100 years atmospheric CO2 increased from 270 to 388 parts per million, an increase of 30% of a gas that is 0.039% of an atmosphere that is 78.09% nitrogen, 20.95% oxygen, and 0.93% argon. So while the 30% change in CO2 contributes only 0.0118% to the total, CO2 may play a crucial role in the ecosystem such that even small variances can result in out-sized changes in the ecosystem, never mind a 30% increase in 100 years. Whether that result is heating or cooling of the atmosphere, or some other impact, as you say, is immaterial"

I don't want to slide into a big climate debate thing here, but there are some things you can hang your hat on.
1. CO2 is a greenhouse gas, no doubt, the others aren't, only water vapor (4%). Therefore with two identical earth systems (lets forget about feedbacks/internal dynamics that may be an effect of the CO2) the one with more CO2 will trap more outgoing radiation.
2. Now if you include feedbacks the only mechanism that gets you out of the warmer earth argument (that has been found so far to the best of my knowledge) is if you argue, we don't know how clouds react to a warmer atmosphere, so let's assume there are more (most people just assume it will stay the same in the absence of knowing). More white stuff around the planet (clouds) that reflect the sun. It could work that way. However, you add more clouds, you change where is sunny, where is cool, where it rains, where it snows so even if you kept the planet about the same temperature, you changed the climate...
2. The CO2 in the atmosphere is due to burning fossil fuels (we can carbon date it).
3. Any extra CO2 that we don't burn can green the earth to a point (plants need other stuff too and eventually that becomes limiting) but we are already measuring that a bunch is being absorbed by the oceans (again, we know it is ours by carbon dating).
4. Oceans CO2 levels are critical for all kinds of things having to do with the bio-geo-chemistry of the planet, making shells is a big one, can't do it with too much CO2, they just dissolve.
5. CO2 is a powerful greenhouse gas because it's absorption spectra falls in a gap (one of the few) that water vapor doesn't cover. Where there is less water vapor (where it is colder and the air is dryer) CO2 becomes a HUGE player. AKA the poles. The poles are white. If you melt them, they become dark and absorb more sunlight and you heat up the surface pole water (on top of having more greenhouse gases up there to warm things up). The poles are where the surface water gets dense enough to sink to the bottom of the ocean and drive the upwelling that gives us nutrients to feed the plant life on the surface that makes all the oxygen for us to breath. If you warm up that water, it may not sink. So water won't rise up somewhere else, so maybe no more oxygen? Who knows.

I dunno. Seems like a potential powder keg to me. There are a lot of moving parts that can go off the rails, and this is just a few of the many and as mentioned before, just the subset we stumbled upon so far poking around measuring stuff.

With all that, I believe part of what has fueled the AWG debate is the climate models. The policy makers asked the climate scientists to be fortune tellers (IPCC), and i believe the scientists should have told them (IMHO) sorry, that's not my job.

But instead, the modellers began trying to become fortune tellers.

Unfortunately in academia, once a sub-field is set up it becomes self funding and hard to kill. If it were up to me, i would kill that wing of academia (boy, talk about sticking my neck out!). The problem is, that the modellers have given the impression that the earth system is predictable on climactic time scales and chaotic systems simply are not. The issue is that, there are all kinds of thresholds, feedbacks and tipping points (a couple mentioned above) or simply things we have observed in the climate history that we cannot quantify enough to put in a model but concerns us, that simply are not captured. A good example - the sliding of an ice sheet off of bedrock. When does that interface become slippery enough for that sheet to go? Not really possible to model, could happen today or effectively never. Clouds and their feedbacks, impossible problem, have to wait and see.

Any climate change is a bad change, we want the climate (the average of the weather) to be stable because societies are built on them. Animals and plants can migrate and adjust their numbers, cities, water supplies, structures at sea level, agriculture, not so easy. To me the climate debate has always been first an economic one, funny how it got spun to the be the opposite.

Some other culprits in the AGW mess (from my perspective) is the organizational structure of academia. First, merit shouldn't be based on unique research for earth science. Experiments need to be coordinated across groups, repeated in a tedious and ongoing manner perhaps at the expense of new findings. Not very exciting for academics. Should be more of an 'earth corps' where people could volunteer and learn how science is done and maintain a weather station or some soil samples somewhere on the planet. Instead, we kind of fudge that climate science research and USGS has got that area covered. But really, they don't. So the data is nowhere what it could be.

Another problem is that academia is broken into silos. If academia was set up so that reviews went across disciplines and even to the general professional public, a lot of stuff would be cleaned up. For instance, if you wanted to publish a climate modelling research paper you would have a non-linear dynamics (math/computer science) expert review your paper as well as meteorologists. Either field may find your work essentially unpublishable, whereas the climate modelling community may think it is grand. If you want to publish a paper on paleoclimatology you may have to have it reviewed by statisticians, which may find your signal to noise so high that there is nothing you can conclude. If you want to publish an IPCC prediction, you may have to have it reviewed by a philosophy of science expert who would inform you that you are not answering scientific questions but speculating and placing bets.

Within the silos the academy is competitive and hierarchical by design and does not always promote the best person to be the leader of the field (it is almost impossible to displace a dictator, you will never get a group of scientists to rebel against a leader in the field that controls all the research money and yet does rotten science - weirdly, it happens).

I believe it should be replaced by a different organizational structure all together and I believe in many ways the internet is allowing that to happen in many areas. So much empirical and good data and lots of people learning how to interpret it. People like yourself self-educating across fields and gaining credibility and audience. People like me with no economic background, barely able to follow the arguments here, but grasping enough that i seem to be in the rare position to have preserved and grown my capital this past decade and stay ahead of the ball (let me take a moment to say - thank you EJ!). From what i am seeing, i don't believe the academics can keep up.

You wrote: "That is the commercial application of it; the social value is inestimable going into the kind of period we are entering now. It merits serious consideration, but there are major downsides for the writer in my position besides the cost of creating economic and market forecasting competition."

I'm not sure what other downside you are concerned about. I am guessing that to think outside the box, you have to be a closet revolutionary. And to mix with the folks you have to mix with, you have to keep a lid on it.

But I agree whole-heartedly that now is the time to put a lot on the line to build social value. It is a heroic act. And i think sometimes that we forgot what those are in this country (more of the propaganda that made us all shameless materialists).

I am biased, I quit my job a year ago as a software engineer in silicon valley working for an up and coming start-up to build and self fund a non-profit web application to attempt to harvest and grow the net amount of human wisdom and constructive future thinking and agency. To me collective human capital as character strength is the only way out of this mess we are in. I guess to support my point, i looked into an academic collaboration and was told by a professor in the closest related field that "most people from the outside are not happy with the pace and rigidity of academia and eventually prefer to work alone".

Maybe the whole system of education has made itself obsolete by its arrogance and protectionism.

[flintlock]

Re: Next Bubble or Last Hurrah? - Part I: Stocks and houses - Eric Janszen

Just out of curiosity, how would you describe your own political views? You seem very intent on bashing libertarians.



Is this "reality" based on anything other than your authoritative assertion?

Does this reality apply to all insurance companies or simply health care?



Yes, they are crooks, no doubt about it. They have rigged legislative/judicial system to protect themselves, for example McCarran–Ferguson Act. Most of what you mention are deceptive or fraudulent practices. I spend a good deal of my time dealing with these issues. I also would benefit from more sick people having insurance. Nonetheless, I still don't understand why not providing insurance to people who you know in advance will cost more than they will pay in premiums is somehow illegal or immoral.

Excellent post.