Ear Rational Thoughts

Urban heating

From Anthony Watts:

There’s a new paper out by Dr. Edward Long that does some interesting comparisons to NCDC’s raw data (prior to adjustments) that compares rural and urban station data, both raw and adjusted in the CONUS.

The paper is titled Contiguous U.S. Temperature Trends Using NCDC Raw and Adjusted Data for One-Per-State Rural and Urban Station Sets. In it, Dr. Edward Long states:

“The problem would seem to be the methodologies engendered in treatment for a mix of urban and rural locations; that the ‘adjustment’ protocol appears to accent to a warming effect rather than eliminate it. This, if correct, leaves serious doubt for whether the rate of increase in temperature found from the adjusted data is due to natural warming trends or warming because of another reason, such as erroneous consideration of the effects of urban warming.”

He then displays this striking graph of the raw (i.e. not corrected adjusted by scientists) temperatures:

Of course the first thing to notice is that the urban temperatures show most of the warming since ~1970 and the rural temperatures are mostly flat. Of course it's well known that cities are generally hotter than rural areas because the buildings and concrete trap heat.

But what's truly, truly amazing is the next graph, which shows the corrected adjusted version:

One would've thought that the correction adjustment would've been to remove this urban heat island effect, but instead, it has been to assume the rural areas are somehow artificially cold in recent times and therefore need to be adjusted upwards.

I don't know if the paper is at all valid, but if it is, it's just incredible.

How is climate science like Enron

I don't ask the question, and neither does the always insightful Steve McIntyre. Instead it comes from Rob Bradley, who worked for Enron, and is asked of Gerry North, a climate scientist who worked with Bradley at Enron as their climate consultant. The reference is mostly in regards to information gleaned about the process of climate science from the so-called Climategate emails.

Asks Bradley:

Here are some themes from Enron to consider applying.

1) Slippery slopes where small deviations from best practices escalated into problems that were not anticipated at the beginning of the process.

2) A lack of midcourse correction when developing problems were not properly addressed.

3) Old fashioned deceit when the core mission/vision was threatened (for Enron it was ‘to become the world’s leading company’–for Jones et al., it was there is a big warming and a climate problem developing)

4) The (despised) short sellers busted the Enron mirage. Ken Lay at the last employee meeting even likened the short sellers to ‘terrorists” (this was just a few months after 9/11). Question: does mainstream climate science regard Internet ‘peer review’ of Jones et al. like the Enron faithful regarded the short sellers who first discovered the problems of Enron?

5) Enron suffered from the “smartest guys in the room” problem. Does Climategate reveal arrogance and a lack of humility among “mainstream” climate scientists?

6) Denial: we employees were almost all in denial when the problems at Enron first surfaced. Have you and others who are close to the scientists of Climategate been slow to recognize the problem? Has Nature and Science also been slow? If so, What does this say about human nature.

7) Taking responsibility. Skilling and Lay never did and, in fact, they joined together in a legal cartel where the unstated strategy was to not blame each other for anything and sink or swim together. Has this happened, or is it still happening, with Climategate if you believe that scientific protocol and/or legal rules were violated?

And then:

I do leave Dr. North with the challenge to more forthrightly deal with Climategate, which he has failed to do to date. I am very discouraged about the circle-the-wagons mentality of too many academic scientists who are covering for each other (many are long time personal friends, and they are united in THE CAUSE of climate alarmism).

Dave Henderson on Health Care and the CEA

David Henderson takes on the latest CEA report on health care. His basic problem is that it's inconsistent with itself. For example:

On adverse selection, for example, he [CEA senior economist Mark G. Duggan, who authored the report] laid out how asymmetric information leads to adverse selection, writing:

Insurers cannot perfectly determine whether a potential purchaser is a large or small health risk. (p. 186.)

But then later, in discussing the House and Senate bills, he writes:

These regulations would correct insurance market failures by preventing health insurers from responding to adverse selection by raising rates and denying coverages . . . . (p. 202)

Huh? Just 16 pages after laying out that the adverse selection problem occurs because insurers can't adjust rates to risk, he says that these regulations, which he seems to think are good, will prevent insurers from adjusting rates to risk.

And then:

On moral hazard, Duggan writes:

A second problem with health insurance is moral hazard: the tendency for some people to use more health care because they are insulated from its price. When individuals purchase insurance, they no longer pay the full cost of their medical care. As a result, insurance may induce some people to consume health care on which they place much less value than the actual cost of this care or discourage patients and their doctors from choosing the most efficient treatment. (p. 187)

But in a section titled, "Declining Coverage among Non-Elderly Adults," Duggan writes:

The generosity of private health insurance coverage has also been declining in recent years. For example, from 2006 to 2009, the fraction of covered workers enrolled in an employer-sponsored plan with a deductible of $1,000 or greater for single coverage more than doubled, from 10 to 22 percent....

If the goal is to have people pay more attention to cost when buying health care, this is good news, right? Yet Duggan seems to lament it.

The more I read, the more convinced I am that there's nothing wrong with an open market for health insurance. Fancy sounding phrases like "adverse selection" and "moral hazard" seem to be caused as much by government regulation as helped by it. And while progressives use these phrases a lot in describing why they need to nationalize health insurance, their proposed solutions only seem to exacerbate these problems. And in fact, their preferred model – universal first-dollar coverage with no ability to charge sick people more – is the absolute extreme breakdown of these two conditions.

If nothing else, it's disingenuous to claim to be fixing problems like these when in the end you regard them as features rather than bugs.

Just because it's illegal doesn't mean we stop doing it

Megan McArdle reminds us just how evil our own government can be at times (and she's not talking about the TSA):

I've read a lot about prohibition, but I never read about the government's deliberate effort to make industrial alcohol undrinkably poisonous. Thousands of people seem to have died as a result.

... We pass a law with the best of intentions, and find it doesn't work, and so we pass new regulations and policies designed to crack down on non-compliance, until we are brutalizing the population all out of proportion to the original good we were pursuing.

Drug laws anyone? Immigration? Gun laws? Prostitution?

When you make something illegal and people don't feel morally obligated to stop, you have to work very, very hard with your punishments to get them to do so.

"If you're gay, your identical twin is usually still straight"

Bryan Caplan on the what makes you gay:

Parents have a small effect on sexual orientation. Psychologists used to label homosexuality a "mental illness" caused by overprotective mothers and distant fathers.[i] Now we tend to see sexual orientation as a preference inherent in our genes. When you look at the actual evidence from twin and adoption studies, however, neither story quite works. Genes definitely play a strong role - every major twin study finds that identical twins are more alike in their sexual orientation than fraternal twins.[ii] Yet genes are far from the whole story - if you're gay, your identical twin is usually still straight. Furthermore, family environment clearly affects sexual orientation. The smoking gun: Adoptive brothers of gay men and adoptive sisters of gay women are about six times more likely to be gay that you would expect from chance.[iii] On balance, the evidence that parents make kids gay is a little stronger than evidence that parents make kids well-educated, rich, pious, or chaste. While heredity is the star of the story, upbringing plays a modest supporting role.

[Emphasis mine]

That's surprising. I kinda figured it was settled that being gay was just a matter of genes. So maybe I can blame my man-crush on Jason Segel on my upbringing...

Swedish vs American Health Care

From Tyler Cowen, quoting Tino:

Medicare was introduced 1965 in the US. Public health coverage for the elderly existed by 1950 in Sweden, but full universal coverage dates to 1955 in Sweden (a public health insurance was founded in 1891, and public municipal public health existed for even longer).

In 1950, before Medicare, and before Universal coverage in Sweden the difference was +2.6 at birth and +0.3 at 65. In 2001-2005 the difference between the Sweden and US was +2.7 at birth and +0.3 years at 65. Identical!

First, regarding the life expectancy at birth we can note that 50 years of different health policy, labor mark policy, welfare state coverage seems to have had zero effect on total outcome.

The plural of anecdote is not data, but still - it's one of the progressive movement's poster children, it has the system of health care coverage they want, and it doesn't seem to be helping the Swedes the way we are promised Obama-care will help us.

If this was Bush...

From the Economist:

Unions spent hundreds of millions of dollars on electing Democrats in 2008, and provided an army of campaign volunteers. They expect something back, and Mr Obama is keen to oblige—up to a point. Union leaders ... are regular guests at the White House. Mr Obama has revoked some Bush-era executive orders that unions hate and issued a few they adore. He has appointed union insiders to top jobs, allowed Congress to add “buy American” provisions to the stimulus bill, risked a trade war with China to please tyre-workers, let other trade deals wither and brazenly favoured unions when bailing out car firms.

But his biggest favour has been green, foldable and borrowed. For example, he encourages the use of “Project Labour Agreements” on big federal construction projects, whereby contractors must recruit through a union hiring hall. Such agreements inflate costs by 12-18%, according to David Tuerck of Suffolk University, and were banned under Mr Bush. Even where PLAs are not in force, federal contractors are obliged to pay “prevailing” wages. That actually means something close to the union rates, which is nice for the workers in question but means that taxpayers get fewer roads and schools for their money.

Replace the word "union" with "oil companies" and "Obama" with "Bush" and this story would be much bigger news:

"Oil companies spent hundreds of millions of dollars on electing Republicans in 2000, and provided an army of campaign volunteers. They expect something back, and Mr Bush is keen to oblige—up to a point. Oil company leaders ... are regular guests at the White House. Mr Bush has revoked some Clinton-era executive orders that oil companies hate and issued a few they adore. He has appointed oil company insiders to top jobs... and brazenly favoured oil companies when bailing out ... firms."

You get the idea.

Funny Ralph Nader Anecdote

Courtesy of David Henderson, who's a Libertarian's Libertarian, and quickly becoming one of my favorite reads:

Ralph had brought along copies of his latest book for sale for $27.50. Earlier, in his lunch talk, he had said that we don't really have freedom of contract because corporations give us boilerplate contracts that don't allow us to change the terms. It's take it or leave it. I wanted an autographed copy but I didn't want to pay $27.50. So I went up to him while he was autographing and put my arm around him and said, "You know how you think we should be able to negotiate and you don't like take or it leave it deals." I held out a $20 bill and said, "I'll give you $20." He grinned and knew he was trapped. "How about $22?," he said. "Deal," I said. I opened my wallet and didn't have two ones and his aide noticed a $5 in there and said, "What about $25?" "No," I said. "But you have $25," said his aide. "Right," I said, "and $25 is not $22." Ralph pulled out three ones and we finished the transaction.

Why no flash on the iPhone

As an iPhone user, I've often lamented the lack of Flash. I always assumed it was due to some Steve Jobs ego-trip, but after reading this, I'm rethinking that:

Current Flash sites could never be made work well on any touchscreen device, and this cannot be solved by Apple, Adobe, or magical new hardware.

That’s not because of slow mobile performance, battery drain or crashes. It’s because of the hover or mouseover problem.

Many (if not most) current Flash games, menus, and even video players require a visible mouse pointer. They are coded to rely on the difference between hovering over something (mouseover) vs. actually clicking. This distinction is not rare. It’s pervasive, fundamental to interactive design, and vital to the basic use of Flash content.

He lists some examples. A few (there are more):

• Video players where the controls appear on mouseover and hide otherwise. (This seems to be the norm, in fact. Whereas a click on the same video does something different: usually Pause. Try Hulu for instance.)

• Games where you steer with the mouse without clicking (extremely common).

• Menus that popup up subpage links when you mouse over a main button, vs. going directly to a main category page when you click.

...

He's totally right. Flash sites do use the mouse-hover thing to death. And it's not easy to see how to replicate that without a mouse with which to hover.

Jeffrey Friedman of the AEI on the financial crisis

Jeffrey Friedman at the AEI has a long post worth reading. Some excerpts:

Only in America and in Pakistan, of all places, do more than 20 percent of the respond-ents think that capitalism works well; the average across the twenty-seven countries polled was only 11 percent. And 23 percent of those polled "feel that capitalism is fatally flawed, and a new economic system is needed."

Ouch. But:

As opinion researchers have long known, terms such as "capitalism" are dimly understood by most people (even by intellec-tuals), so the best way to interpret these results is as a repudiation of the status quo, which most people (inaccurately) call "capitalism" or "the free market."

Probably true - most people think the country is closer to pure capitalism (I prefer the term "free market" since I have no particular interest in the efficient use of capital; but I digress...) than it really is.

He then mentions several things that did not cause the financial crisis, despite numerous reports to the contrary. There's some interesting but oft-repeated stuff on deregulation. But he really hits the mark when talking about the notion that incentive problems created by faulty executive compensation schemes were a cause:

[A]t the aggregate level, there is decisive evidence against the thesis that incentives to take risks caused the financial crisis. The evidence is this: 93 percent of all the mortgage-backed securities held by American banks either were issued by Fannie Mae or Freddie Mac, and were thus implicitly guaranteed by the U.S. Congress (as the American taxpayer soon found out), or were issued by investment banks and rated AAA by one of the three rating agencies: Moody's, Standard and Poor's, or Fitch.[11]

Never mind that these three private corporations had had a legally protected oligopoly since 1975, thanks to another SEC regulation.[12] Never mind, in short, that, protected from market competition, these companies' AAA ratings may have been so sloppy or so deliberately skewed that they understated the risk associated with mortgage-backed bonds. That aside, the oligopoly's ratings produced a concrete result: as is true of all bonds, AAA-rated bonds paid less than lower-rated (AA, A, BBB, etc.), supposedly riskier bonds. Bond investors always trade risk against returns. A high rating connotes safety and therefore always pays lower returns than lower-rated bonds pay--and there is no higher rating than AAA. If bankers were being lured by their banks' compensation systems into acquiring risky but lucrative assets--on the basis of which the bankers would have gotten bigger bonuses--then they should never have bought AAA bonds. Instead, they should always have bought higher-paying AA-, A-, or BBB-rated bonds, but they did so only 7 percent of the time.

That is decisive - if compensation schemes are supposedly encouraging you to take risks, why was the flight to safety in the form of government backed and AAA-rated bonds? That's the opposite of what thing you said...

He then procedes to tell the same story about the recourse rule and other regulations as the source of the crisis that I already blogged about here.

But I think in the whole long post, his most important insight is his "advice" to both conservatives and liberals regarding capitalism. Combined they tell a very good story about why capitalism is a net positive:

Let us start with conservatives, many of whom make the mistake of extolling the brilliance, wisdom, or heroism of capitalists. ... Collectively, they [capitalists] possess no superior powers; their lucky guesses, no matter how well informed, are still guesses. Everyone can see this in the wake of the crisis.

Unfortunately, economists have only grown more obsessed with self-interest--that is, "incentives"--since 1950. This has led many conservatives to embrace the idea that "greed is good"--a woeful misreading of Adam Smith. Smith's parable of the baker, to whose benevolence we do not appeal when we buy our bread, is actually a lesson in unintended consequences, not in the wonders of greed. Even if the baker intends merely to make money, he can do so only by providing his customers with bread. In his case, greed is indeed good. But that does not mean that greed is always good and benevolence bad, nor that all bakers are in it solely for the money. Nor does it mean that greed accounts for the success of capitalism.

[I have numerous Republican friends who would personally benefit from learning this lesson.]

And then for those on the left:

They fail to notice that there is more to capitalism than luck and greed: there is competition--the saving grace of the whole system; the device that turns good luck to social advantage; and, when undisturbed, the source of capitalism's systemic strength.

Competition is the engine that turns the talents of the lucky to the service of all. A baker who offers moldy or bland bread can be driven from the field by a competitor offering a better product. [emph. mine] That is the message of Adam Smith. The successful baker, no matter how greedy his motive for baking bread, must unintentionally mimic the very actions an altruistic Rawlsian philosopher would prescribe. The reason is the competitive nature of the capitalist system; the motives of individual capitalists are irrelevant. Competition puts capitalists' different motives, like their different ideas, to the acid test of consumer satisfaction. This tends to give consumers what they want--or at least what they think they want--and it diversifies a capitalist society's investment portfolio. Capitalism thus mitigates both human greed and human fallibility. This is an amazing achievement, but there is nothing magical about it.

Now consider again the alternatives liberals tend to favor--either the regulation of capitalism or its replacement by something more democratic, like an idealized socialism. Since regulators' or citizens' ideas would then be imposed on the whole economy at once, they could not be put to the competitive test--any more than the conflicting arguments of debaters, the conflicting promises of politicians, or the conflicting forecasts of budget analysts can be tested. If the citizens' or the regulators' ideas happen to be good ones, we all gain; if they happen to be bad, we all lose.

Yes, yes and more yes. How so many can have faith that a course of action is right without any verification is beyond me...