The Current Crisis in the Financial Markets: What Caused it?

I am personally very uncomfortable with the recent federal bailouts of investment bank Bear-Sterns and Insurance company AIG, with the quasi-independent Fannie Mae-Freddie Mac intervention the possible exception. Fannie and Freddie are only partly independent anyway, and are called Government Sponsored Enterprises. They have (had—all have been fired and replaced) their own boards and CEO’s and their stock can be purchased on the open market. They are regulated and overseen by Congress and the administration, but they are technically private corporations, or were, anyway.

Their role in the mortgage industry is to expand home ownership by buying mortgages on the secondary markets, then bundling and repackaging them into “mortgage backed securities” (MBS). The idea behind the MBS’s is to bundle higher risk mortgages (with higher rates of return) with lower risk mortgages (lower rates of return) to balance and mitigate risk to investors while maintaining a decent composite return on their investment (in the MBS’s).
In the days of the Great Depression—when Fannie was born—no other entity would or could (by law) create MBS’s. Freddie was created in the 1970s to offer some competition to Fannie.

Legislation in the late 1990’s allowed commercial banks and investment banks to merge and consolidate their operations. The objective was to introduce even more competition to the financial services industry, and to offer consumers more choice and bring innovation. This allowed the investment banks to package their own loans from their commercial banking operations into so-called ‘private label’ MBS’s, and then sell them on the open market.

Couple this new competitive landscape with other legislation in the 1990’s that required lending institutions to offer mortgages to all areas and customers they served, eliminating what was called “red lining”, and you have a recipe for disaster. The banks were required by GOVERNMENT REGULATION to offer loans to people with poor credit or no credit. To mitigate their risk, the banks came up with, and regulators allowed new sub-prime lending rules, and then could repackage these sub-prime loans with high quality loans and then sell them off as MBS’s. The profits from these MBS turned out to be incredibly lucrative.

All of a sudden more people could buy houses, then the housing bubble began to build, then it popped, sub-prime mortgages began to go into default, and now blood runs down Wall Street.

As is so often the case, (and as I fear it will be again with the “solutions” to anthropogenic global warming) the good intentions of the Clinton Administration and the Republican-controlled Congress (at the time) ended up delivering a crushing blow to many low-income people. They will feel the brunt of this crisis, not anyone on Wall Street.

As my dad always used to say, ‘the road to Hell is paved with good intentions’.

Corporate Income Taxes Not Paid Grossly Exaggerated

According to the Tax Foundation, the AP stories reported today on a GAO report on corporate income taxes have grossly exaggerated the number of “large corporations” who paid no corporate income taxes. The truth is that only .28% of “large” corporations (at least $250 million in assets or at least $50 million in receipts) paid no corporate income taxes. The bulk of US corporations are small companies, or “S” corporations, and pay income taxes only as regular income, not as “corporate income”. The AP stories over estimated the amount of non-corporate tax paying large corporations by 90 times.

Barack Obama: What the Left Expects of Him as President

The Nation, one of the oldest left-wing publications in the US, recently published an open letter to Barack Obama, stating what they consider to be essential policy positions that he must embrace for their continued support. I suspect that they are beginning to become concerned about his level of support for their agenda, given his recent drift to the political ‘middle’.

Below are the policies to which they expect him to commit his unwavering support, lest he risk losing theirs:

• Withdrawal from Iraq on a fixed timetable.
  
  
• A response to the current economic crisis that reduces the gap between the rich and the rest of us through a more progressive financial and welfare system; public investment to create jobs and repair the country's collapsing infrastructure; fair trade policies; restoration of the freedom to organize unions; and meaningful government enforcement of labor laws and regulation of industry.
  
  
• Universal healthcare.
  
  
• An environmental policy that transforms the economy by shifting billions of dollars from the consumption of fossil fuels to alternative energy sources, creating millions of green jobs.
  
  
• An end to the regime of torture, abuse of civil liberties and unchecked executive power that has flourished in the Bush era.
  
  
• A commitment to the rights of women, including the right to choose abortion and improved access to abortion and reproductive health services.
  
  
• A commitment to improving conditions in urban communities and ending racial inequality, including disparities in education through reform of the No Child Left Behind Act and other measures.
  
  
• An immigration system that treats humanely those attempting to enter the country and provides a path to citizenship for those already here.
  
  
• Reform of the drug laws that incarcerate hundreds of thousands who need help, not jail.
  
  
• Reform of the political process that reduces the influence of money and corporate lobbyists and amplifies the voices of ordinary people.

Are the above positions ones which you support? If not, you should not vote for Obama.

Interesting Emails

I received some forwarded emails—often called “viral” emails because they get continuously forwarded—that I thought were an interesting illustration of Left vs. Right. Often these are of dubious origins, and I do not know who originally authored these.

Humans originally existed as members of small bands of Nomadic hunters/gatherers. They lived on deer in the mountains during the summer and would go to the coast and live on fish and lobster in the winter. The two most important events in all of history were the invention of beer and the invention of the wheel. The wheel was invented to get man to the beer.

These were the foundations of modern civilization and together were the catalyst for the splitting of humanity into two distinct subgroups: 1. Liberals, and 2. Conservatives. Once beer was discovered, it required grain and that was the beginning of agriculture. Neither the glass bottle nor the aluminum can had been invented yet, so while our early ancestors were sitting around waiting for them to be invented, they just stayed close to the brewery. That's how villages were formed.

Some men spent their days tracking and killing animals to B-B-Q at night while they were drinking beer. This was the beginning of what is now known as the Conservative movement.

Other men who were weaker and less skilled at hunting learned to live off the onservatives by showing up for the nightly B-B-Q's and doing the sewing, fetching and hair dressing. This was the beginning of the Liberal movement.

Some of these liberal men eventually evolved into women. The rest became known as girlie-men. Some noteworthy liberal achievements include the domestication of cats, the invention of group therapy, group hugs and the concept of Democratic voting to decide how to divide the meat and beer that conservatives provided.

Over the years conservatives came to be symbolized by the largest, most powerful land animal on earth, the elephant. Liberals are symbolized by the jackass. Modern liberals like imported beer (with lime added), but most prefer white wine or imported bottled water. They like their beef well done. Tofu, and French food are standard liberal fare. Another interesting evolutionary side note: most of their women have higher testosterone levels than their men. Most social workers, personal injury lawyers, journalists, dreamers in Hollywood and group therapists are liberals. Liberals invented the designated hitter rule because it wasn't fair to make the pitcher also bat.

Conservatives drink domestic beer, mostly Bud. They eat red meat and still provide for their women. Conservatives are big-game hunters, rodeo cowboys, lumberjacks, construction workers, firemen, medical doctors, police officers, corporate executives, athletes, Marines and generally anyone who works productively. Conservatives who own companies hire other conservatives who want to work for a living.

Liberals produce little or nothing. They like to govern the producers and decide what to do with the production. Liberals believe Europeans are more enlightened than Americans. That is why most of the liberals remained in Europe when conservatives were coming to America. They crept in after the Wild West was tamed and created a business of trying to get something for nothing.

Here ends today's lesson in world history: It should be noted that a Liberal may have a momentary urge to angrily respond to the above before forwarding it. A Conservative will simply laugh and be so convinced of the absolute truth of this history that it will be forwarded immediately to other true believers and to more liberals just to piss them off. And there you have it.

And the second message:

Our Tax System Explained: Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beer by $20.' Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free.

But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings). The sixth now paid $2 instead of $3 (33%savings). The seventh now pay $5 instead of $7 (28%savings). The eighth now paid $9 instead of $12 (25% savings). The ninth now paid $14 instead of $18 (22% savings). The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

'I only got a dollar out of the $20,'declared the sixth man. He pointed to the tenth man,' but he got $10!'

'Yeah, that's right,' exclaimed the fifth man. 'I only saved a dollar, too. It's unfair that he got ten times more than I got'

'That's true!!' shouted the seventh man. 'Why should he get $10 back when I got only two? The wealthy get all the breaks!'

'Wait a minute,' yelled the first four men in unison. 'We didn't get anything at all. The system exploits the poor!'

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Does it Matter what the Europeans think of America?

I have a good friend—a liberal—who is mortified by what he considers the sullied reputation of the United States as a result of Bush administration policies generally, and the Iraq war in particular. In his view, the USA’s ‘diminished’ status internationally makes gaining international cooperation on global issues far more difficult. It seems like many liberals feel the same way as he.

I, however, have a different view. First of all, I know of no definitive evidence that the reputation of the USA has been adversely affected. Moreover, I don’t see that it matters one way or the other anyway. To be completely honest, I really don’t care a wit what the rest of the world thinks of the USA. It’s always nice to be liked, I suppose, but I don’t define my sense of worth based on what others think of me.

In our many debates on this subject, my friend argues that it will be much more difficult to line up international support for US interests and objectives if the people from whom we seek such support don’t “like us”. My position is that France will do what is in the best interests of France first, and the world second, and the United States a distant third. (OK, so the French are a bad example; they dislike everything and everyone not French.) All countries, in fact, will do what is what they believe to be in their best interests, then the best interests of the world. How they ‘feel’ about the USA is, and should be, irrelevant.

US Open 18 Hole Playoff: A Fan's Perspective

I didn’t even consider that I’d have a chance to go the playoff on Monday on my way to work, but once there found that they had plenty of playoff tickets available for employees. I thought about NOT going, since I went to the tournament on Friday, and I figured it would be really crowded. But what the heck, I thought, when would I even get to see a playoff in a major championship again?

We had a parking pass for the North Course lot, so we parked and walked a short distance to the course entrance. We had listened to the radio broadcast on the way down, so we knew to try to get to the 5th or 6th hole. As soon as we got through the main entrance and passed by the huge merchandise tent, we could see the gigantic gallery along the north side of the 6th fairway, and knew that that was a good place to start looking.

Upon arriving at the throng of people, we decided to move west along the fairway toward the 6th tee box. It was only about 9:30am, but I nearly knocked over a man carrying a beer as I walked along the cart path looking up to read the leader board. His slurred, ‘Pardon me’, suggested that his nearly spilled beer was only the latest in a long string of beers so far this morning for him.

They still had the fairway crossing open to cross over the south side of the 6th fairway, and based on my recon work from Friday’s round I suggested we cross. From the south side, we’d have easier access (I thought) to the rest of the course. Once on the south side we found a nice shady spot with good sightlines to the fairway looking west. We were surrounded by young and old, pudgy and athletic, men and women, all hoping for a good view of Tiger and Rocco’s tee-shot landing area and their subsequent approach shots. We weren’t kept waiting for long.

We heard a roar from the 5th green and knew someone made a birdie or saved par with a long putt, and that it wouldn’t be long before they teed off on #6. When we saw the spotters along the rough on the south side of the 6th fairway trot into position we knew the tee shots were on their way. Tiger’s was first, landing gently and quietly in the fairway, left side, just past the bunkers. It belied what we were certain was a controlled explosion on the tee as Tiger uncoiled like spring wound too tightly.

Rocco’s ball fell to earth next, just below the apex of a small swale, about 40 yards behind Tiger. At least he had an uphill lie. We made our way east about 60 yards to a small hill where we had a decent view of the green, and watched as the players walked up to applause and cheers.

Rocco’s approach shot was a bit long and left him just off the putting surface. Tiger, of course, was about 8 feet with what looked from where I stood to be right-to-left break for birdie. Rocco chipped to what looked like was going to be way short of the hole, but it managed to roll just close enough to the edge of the upper tier and then picked up speed as it found the slope down to the hole. He had a couple feet for par, and Tiger, of course, made the birdie putt to go to Even, while Rocco’s par kept him at +1.

After Tiger’s putt we rushed with rest of the gallery to the west side of the 7th fairway, hoping for a view of the tee shots. It was way too crowded, however, and all we saw through the heads and hats was Tiger’s ball dancing in the fairway just right of the bunkers along the left side. It rolled on toward the hole. I couldn’t see where Rocco’s ball landed, and we watched as they two players and the huge entourage of officials, security people, TV reporters and cameramen, still photographers, and other apparent hangers-on made their way down the narrow path in the rough before the beginning of the fairway past us. We, along with thousands of our fellow sweaty fans slowly inched our way across the fairway crossing, since they had the west side of the 7th closed to foot traffic.

We decided to get several holes ahead, and tried to make our way past the confluence of the 8th and 17th greens, and the 18th tee. There was a huge gallery there, and a narrow path. We pushed through the crowd only to find out that the officials had already roped-off the path from the 8th green to the 9th tee, and we were stuck. Couldn’t go back, couldn’t go forward. By that time, fortunately, the players were hitting up onto the 8th, so we had to wait only until they’d putted out and moved, along with their seemingly growing entourage, over past the 18th tee to the 9th. I finally understood how people in large crowds suffocate and die when any sort of panic ensues. It was stiflingly hot, very little wind, and very claustrophobic. I thought I was going to have a panic attack.

Finally the ‘The Entourage’ passed and the ropes opened so we could continue our excruciatingly slow, inching-along-crush-of-humanity route to hopefully more open air and open spaces.

We made our way south between the 9th and the 15th holes, and could see far to the southwest the nearly empty grandstands at the 12th green. We decided to try to get there and see one “quality” hole instead of tiny glimpses of the action between the sun-screened ears and the floppy hats and ‘US Open Torrey Pines 2008’ ball caps.

Along the way we crossed behind the 13th green and found that the grandstands for #11 still had space, so we climbed the stairs and found some good seats. Since #12 was a long walk out of the way, and we had a nice spot there at 11, we bagged the idea of going out to the 12th grandstands.

The wind was light and variable, but the sun beat down on us like a weight. I don’t know what the humidity was, but it felt very high, and the marine layer was occasionally spilling wispy clouds over our heads. The cold beers people kept bringing up the stairs looked very good and very tempting.

We waited almost 15 minutes for the players to get through #10, and the leaderboard across the fairway said Tiger had a 3 shot lead. Some of the spectators had the little hand-held TV’s that you could get by showing your American Express card, and they were keeping us all informed of what was happening. There was an exciting, tension-filled air about the whole day.

Finally, we could see Tiger’s almost neon red shirt on the elevated tee box of #11, nearly 220 yards away. I don’t know what club he used, but it sailed high and landed softly in the left green-side bunker, about 20 feet from the pin. Rocco’s ball landed just short of pin-high, 3 feet right, and rolled to about 18 feet past the hole.

The gallery cheered loudly for both Rocco and Tiger as they approached the green. The green sloped downhill and to the right from where Tiger stood in the bunker, and had a slightly right hand break. Tiger surveyed his shot from every angle then lofted a sand wedge shot high and soft that rolled about 10 feet past the hole. The sound of camera shutters clicking and whirring immediately after he swung was surprising.

Rocco putted next and had a great putt but left it s tiny bit short—but only had a tap-in for par.

I was surprised at how long Tiger took to study his par putt. He looked at it from every angle, slowly circling around the hole and ball like a shark trying to decide how attack and eat his prey. You could almost hear the gears whirring and calculations humming from across the 30 yards between us.

Despite this study, however, he missed the putt and had to settle for a bogey. We watched them walk the 30 yards or so over to the 12th tee, where Rocco hit his normal, average-Joe sounding drive, and Tiger once again exploded on the ball. It sounded like a howitzer going off. He didn’t like the shot though, as it appeared to be going right of the fairway.

After they walked west off the 12th tee, we made our way over toward the 14th hole, hoping to get ahead of the crowd and get another grandstand seat. The 14th looked interesting, because the tees were set way forward, to 277 yards, but was still a par 4. Tiger would only need a 3 wood for that, and Rocco could hit it with his driver. Unfortunately, the gallery around the 14th had grown considerably since we’d walked past earlier, so we continued on hoping for something in the stands on 18.

The 15th was not quite as crowded, and from the west side of the green we found a good spot to sit and wait. We also could see that people were still being allowed up and into the 15th grandstands, so we decided to see if we could get seats as well. We made our way left around the north end of the green and over to the staircase between the northern and central grandstands east of the 15th. The officials ushered us further south where we found seats near the very top of the grandstands. It was a bit shady, and there was a nice breeze.

From where we sat, immediately east of the 15th green nearly pin-high, we could see the 16th tee to the west, the 15th fairway to the south, and, through the trees, the western edge of the 14th green. The 15th green in front of us had a large bunker between the green and us, and across the green and slightly north of us was another. Even further away to our southwest we could see the tee box for the 13th hole, and as we sat down we could just make out Tiger’s red shirt moving around as a red dot.

The next 30 minutes or so we spent moving over and standing up to let others pass to find their own seats in the stands. Some of our fellow spectators had the American Express TV’s, and they were keeping us informed on the player’s progress. The gallery along the west side of the 15th fairway and green continued to grow as more and more people gathered.

One enterprising lady went down to the concession stand and brought back a box full of burgers, hot dogs, and beer, and sold them to anyone who wanted them. She sold them for what she paid, so I guess she wasn’t really that enterprising after all, but nice nonetheless.

People cheered when the leaderboard across the fairway changed from Rocco +3, Tiger +2 to Rocco +2, Tiger +1 through 13 holes. Cheers again and shouts of “ROCCO” as later the scores changed again to Rocco +1, Tiger +1 through 14.

A large tree along the 15th fairway blocked our view of the tee shots, but we could see Rocco’s ball land and hop a few times in the fairway just short of the tree. We waited for Tiger’s ball to fall, and looked 40 yards further up the fairway for it. When we didn’t see it, but then saw ten or twelve officials run east across the fairway toward the 9th fairway, we knew Tiger must have sliced it well right off the tee. There was a line of trees to our south that obscured our view of where his ball landed, so we had to rely on our fellow grandstanders with TV’s to tell us what exactly happened. Tiger had sliced his drive into a fairway bunker on the 9th fairway, but apparently had some sort of shot to the green. We later learned that it was about 175 yards to the pin.

Despite Tiger’s errant tee shot, Rocco was still furthest from the green and he hit first. The traveling photographers set up along the west side of the fairway and were jostling for position. Rocco’s approach shot went very high, and from my vantage point, looked like it would fall short of the green. However, it landed just on the putting surface and rolled behind the pin to about 25 feet. Raucous cheers and loud cries of “ROCCO” rose to an almost deafening level.

Now it was Tiger’s turn. We could barely make him out through the tree line down the east side of the fairway. The gallery had parted, leaving him an alley toward the green. It looked to me like he would have to fade the ball from left to right to hit the green, and after what seemed like a longer-than-usual pre-shot routine, he made his swing and we turned our heads to see where the shot would land. My buddy, after seeing Rocco’s shot, thought Tiger had no chance to even find the green, but I thought that a long bunker shot for tour pros in general and Tiger in particular aren’t much of a big deal. I had an eerie feeling that he’d not just find the green, but that he’d be inside of Rocco’s shot.
The gigantic gallery was hushed, waiting for what seemed like too long for the ball to get to wherever it was heading, ‘Where is it?’, I thought. But then down it came from high above, as if dropped by God, hitting just past pin-high then rolling to 12 feet—yes—inside Rocco’s ball. The gallery roared even louder, and people and photographers rushed up closer to the green looking for a better angle.

The roar of the crowd grew again as the players made their way up the fairway and onto the green, both men tipping their caps in acknowledgment of the enthusiastic fans. It felt more like an NBA playoff than a US Open playoff. The only thing missing was the pounding music and flashing lights.

Tiger marked his ball and Rocco started his pre-shot routine, carefully reading the breaks and judging speed. He walked around the green and looked over his putting line from both sides of the hole, and then went back and looked again from the ball to the hole. The huge gallery was hugely quiet. You could hear yourself breathe, and it was truly amazing that so many people could be so quiet.

Finally he set up, took a couple practice strokes, and then gently stroked the ball toward the hole. As soon as it left his putter face I was certain it would be short. But it must have been slightly downhill, because like the bunny in the TV ads, it just kept on going….and finally dropped gently into the hole.

Again the gallery erupted in cheers and shouts of “ROCCO!!” There were high-fives and handshakes everywhere, and it seemed like the impossible had just happened.

As the noise level slowly receded, Tiger began his pre-putt routine. He placed his ball and removed his mark, and then started to study the break of the putt. This part of his game is something you can’t really pickup on watching him play on TV, because only once in a while do they take the time to show the whole thing. As he did on every other putt, he looks down the line of the putt, then stands and very slowly walks a large circle around the ball and hole, viewing the break from every angle. His stride was actually more of a strut than walk, his eyes locked on the ball and hole, a machine focused on calculating its objective.

The huge throngs of people were rapt in their silence, no one wanting to exhale for fear of interrupting his concentration. At last he stepped up to the ball, took two quick practice strokes, then addressed the ball and putted it. It looked at first like it was in, but it just barely missed to right of the hole and slid about two feet past the hole. He had to settle for par, and Rocco had a one stroke lead.

We watched them tee of on 16 before heading over to try to find a place to watch the action on 18. Unfortunately, the grandstands were completely full, and while we circled the grandstands surrounding the 18th green looking for a place to stand and watch, we realized everyone else had the same idea. It was a crushing crowd, and since I couldn’t come close to seeing any live action, I decided to go over to the air-conditioned comfort of the merchandise tent where they had plenty of big screen TVs where I could watch in comfort.

Rocco shot par the rest of the way, and we all saw Tiger’s spectacular birdie on 18 to force a sudden death playoff on the seventh hole. The seventh—the first sudden death playoff hole— is a dog-leg right hole, which is a difficult for Rocco’s natural right to left shot shape. Tiger’s tee shot was perfect, cutting across the trees on the right and landing just inside the first cut of rough on the right.

Rocco’s tee shot, as expected, went left into a fairway bunker, and I was confident that, short of a miracle, Tiger had just won the US Open again. Rocco’s bunker shot again went left, hit the grandstands, where he got a free drop. His 3rd shot was landed near the pin, but Tiger’s 2nd was just below the hole. Tiger went on to birdie and win the tournament.

It was the most exciting golf I’d ever personally witnessed, and history was made. And knowing now the extent of Tiger’s knee injury (the rest of his season is over as he will undergo reconstructive surgery) makes his victory even more impressive. We can only hope for such excitement in future golf tournaments.

Is Anthropogenic Global Warming Real?

I'm going to try to get back to some posting, at least on Thursdays...

Some of the things I am interested in these days are politics, environment (global warming), economics, taxes, and mostly, of course, LIBERTY.

I have been participating in a long string of comments on a David Whitehouse column that appeared in the December, 2007 issue of The New Statesman. In the article, Mr. Whitehouse, a former science editor for the BBC, discusses how global average temperatures since 1998 have been flat, and even have a slight downward trend. This is, of course, heresy to those who religiously cling to the theory that CO2 emissions from human activities—namely the burning of fossil fuels— are mostly responsible for a rise in average global temperatures since the industrial age began. Or so goes the theory. Mark Lynas, who is The New Statesman's current environmental editor wrote a rebuttal piece, where after the comment thread from the original David Whitehouse comment thread continued. Mr. Lynas, of course, pilloried Mr. Whitehouse's position.

But a very curios thing began to happen on these comment threads. Many of us who were skeptics of Anthropogenic (human induced) Global Warming (AGW), but fairly open minded about it began to learn a lot about the science behind both supporters and skeptics of the theory of AGW. In the end, the thread was closed after a combined 3000+ comments! However, the thread will hopefully be continued at Harmless Sky.

I wrote a rejected column for a major publication, and will reprint it here for some additional background:

Global warming caused by human activity is a fact. Or is it? If you read most mainstream media publications, human-induced, or “anthropogenic” global warming (AGW) is almost always presented as fact. The only problem is that the facts, once you really look into them, don’t support the current AGW theory.

The AGW view of global warming is that rising levels of CO₂ in the atmosphere as a result of the burning of fossil fuels traps heat that would otherwise escape to space, which causes the climate to warm. The fact that the climate has warmed over the last 150 years or so is not in dispute. However, when you take a good look at the mean global temperature (MGT) since the mid-1800’s—when reasonably reliable record-keeping began—the record shows that while MGT rose during that period, there were also declines. In fact, MGT rose from about 1860 to about 1880, then declined until roughly 1905, rose again from 1905 to 1940, then declined until about 1975, after which the MGT rose again until 1998. Since 1998, however, the global temperatures have remained flat and appear set to decline further.

Unfortunately for the AGW lobby, when you overlay CO₂ emissions on the above timeline you find that they don’t match. CO₂ emissions didn’t really start to increase dramatically until about 1950, which was when GMT was in a decline until 1975. The two prior warming periods (1860-1880 and 1905-1940) occurred before any significant amounts of CO₂ were being emitted, so these warming periods were obviously caused by something other than CO_2, but no one knows what caused them. Even the UN’s Intergovernmental Panel on Climate Change (IPCC), admits it doesn’t know what caused these prior warming periods. But then they go on to argue that the most recent warming (1975-98) must caused by CO₂ emissions and not the unknown warming ‘driver’ that caused the earlier warming, because, essentially, nothing else explains it. It’s also worth noting that while the MGT stopped rising in 1998, CO₂ emissions continued their rate of growth unabated, the Kyoto Treaty notwithstanding.

So to review, there were three periods of warming in the last 150 years or so, each followed by a cooling period. CO₂ emissions were insignificant until about 1950, long after the first two warming periods were over and 10 years into the second cooling period. The third warming period began in about 1975, and since no one at the UN can think of anything else that could be causing this third warming cycle, CO₂ must be the culprit.

The scary part of all this is the fact that governments around the world want us to ‘reduce our carbon footprint’, and have instituted ‘carbon taxes’ and other very economically unsound cures for a problem we likely didn’t cause, nor are likely to be able to fix. And many of the AGW ‘cures’ will cost hundreds of billions of dollars that could be much better used on problems we can fix.

But if CO₂ emissions are not the cause of global warming, what is causing it? If you’ve done any reading at all on the subject of climate change recently, you’ll have heard of other possibilities: solar activity is one. Interestingly, when you overlay solar activity onto the MGT graph, they fit very nicely, especially when compared with CO₂ output. The warming also seems to correlates with El Niño years, and something called Pacific Decadal Oscillation (PDO), which is related to El Niño-La Niña phenomenon in the eastern Pacific. The PDO is a swing from cool to warm ocean currents in the Pacific, which greatly affects global climate. Recently, scientists have discovered that the PDO has begun a swing to the cooling phase, and have predicted at least 10 years of cooling!

I am not a scientist, nor a statistician. But I can read, and I can reason. The forces behind the AGW argument are large, powerful, and deeply entrenched in their positions. Billions of dollars and many reputations are at stake. Many who support the notion of AGW are ‘green’ in many other ways, and often tend to be liberal in their politics. And many of those people have ‘just known’ that mankind has been for decades harming the planet, and the AGW theory validates—in their mind—these long-held beliefs. They see it as an opportunity to justify new taxes and regulation, bigger government, and less freedom, all in the name of ‘saving the planet’.

Sources:

[I learned very much on this subject from the many brilliant contributors to the New Statesman David Whitehouse and Marc Lynas comment threads [linked above].]

http://www.jpands.org/vol12no3/robinson600.pdf

http://wattsupwiththat.wordpress.com/

http://ccgi.newbery1.plus.com/blog/

http://www.climateaudit.org/