A nice overview of where things stand. Be sure to look through the stories listed and the comments. There's often better stuff there than even in the main post or stories.

Ilargi: For once, I'm afraid, I have to agree with Paul Krugman, himself a highly dysfunctional man in my eyes: the US government is Dangerously Dysfunctional. Only, Krugman, ever eager to be my anti-thesis, -somewhat comfortingly for me- rolls off the rails right away again by claiming that this is a result of party politics, and the blame lies squarely with the party he happens not to like, the GOP. And while I have little sympathy for that particular party, I do know that Krugman's portrayal is false.

Eliot Spitzer and Wiilam K. Black, seemingly honest and (therefore?) marginalized voices, ask to see emails concerning the AIG bailout(s). Therein, they contend, we’ll be able to see what really went on when the world's -then- largest insurer received $180 billion of your money, much of which was transferred at an amazing speed to the likes of Goldman Sachs. Make the emails public and we’ll know, because then "a thousand journalistic flowers can bloom". They actually wrote that.....

Yves Smith at Naked Capitalism reacts, and wants more. She thinks we should know why no research was done into all the parties involved, why they could receive money without being scrutinized before, during and after the bail-out process. Yves provides a well-written overview of Goldman Sachs actions that involved parts of the AIG funds. Still, calling for investigations into the matter, with or without emails, and more than a year after the fact, largely misses the crucial points here. Which takes us back to my buddy Krugman.

The AIG decisions were made in Washington. There was another party on the throne, but what difference did that make? The decision-making problems don’t vanish when another party comes to power. That much, we can all agree by now, has been made exceedingly obvious by the Bush to Obama transfer. The reason behind this is that the real rulers stayed in place while the White House changed occupants. The US simply isn't governed by its elected politicians. Or at least not by their ideas and convictions, if, when and where these differ from those of their donors.

If a politician can be elected only when (s)he has enough money (i.e. millions of dollars, and for a president hundreds of millions) to run a campaign, then the resulting policies will be dictated by those who donate that money. And since one dollar equals one vote, the grandma who ate mac and cheese for a week to donate $10 to Obama has no say, while a financial institution that gave $10 million does.

Both parties partake of the exact same largesse, so claiming that one is to blame and the other is not is nonsense. The system itself is broken. And you can't fix it with a bit more openness here or a few published emails there. You can only fix it by separating politics and business, by taking a big old axe and cruelly cutting clear through the umbilical chords so carefully and profitably attended to on K Street. Anything else is mere make believe. Nobody in Washington seeks the truth behind all this. Everybody seeks a story that makes them look good for their voters.

Arnold Kling describes it like this in The Harvard-Goldman Filter:

As to libertarians, certainly in a world with no deposit insurance or government guarantees I could argue against government interference in the structure of private banks. But banks are not private in this country. They are quasi-public institutions [..].

There is a synergy between big banks and big government. Jefferson and Jackson were right. So breaking up big banks fits in with breaking up big government. Which is why we won't see the Progressive elite breaking up big banks.

The trouble in Denmark on Capitol Hill runs much deeper than a vote or an idea. The country is governed by a few hundred enlightened souls who are all for sale, or they wouldn't be where they are. And if a soul does get lost on the Hill and tries to follow his or her conscience, the rest of them will drown it out.

This is not a new issue, though it has rapidly grown more poignant in the past 3 decades. What is new today is that the dysfunctional system has to deal with a crisis that cannot be dealt with as previous crises were: with more growth.

And without growth, what wealth there is has to be redivided, or society as a whole becomes untenable. And yes, redivided it is, but not in a way that would warrant society's continued viability. On the contrary, those who always had much will have more, while those who had least will now have nothing. And I’ve said it before, it's not a political statement to say that if a society doesn't provide a minimum for its poorest, that society must of necessity fail.

Read all the emails you want, investigate all the crooked deals made in the bail-outs. It won’t matter one iota. Once growth is gone, you need to prevent the rich from lobbying themselves into ever and even more riches. because these will have to come from the mouths of the desolate.

Or you can choose not to, but then your society is over and done with. Now, I don’t really think people will think I’m right. When most read that the noughties were the worst decade for stocks ever, as in since the 1820's, almost 200 years, they’ll think: well, it should go up then, shouldn't it?

Who among them concludes that growth may be gone, even if they know it can’t last forever? It was inevitable that they'd still be expecting -nay, even seeing- growth when the world around them is shrinking.


PS: The Financial Times headline "Bank of Japan says it will not tolerate deflation" inspired a good friend to come up with this quote about King Canute, about a millenium or so old. It would be a valuable lesson for many, not in the least the economists and assorted financial types who overestimate governmental powers and good will of many sorts and stripes.

"Henry of Huntingdon, the 12th-century chronicler, tells how Cnut set his throne by the sea shore and commanded the tide to halt and not wet his feet and robes; but the tide failed to stop.

According to Henry, Cnut leapt backwards and said "Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws." He then hung his gold crown on a crucifix, and never wore it again."

This is from RealClimate. The editorial is available from many sources, but I like the comments here showing some of the process behind the editorial. Unlike RC, I do take a very definite position in support of the editorial.

The Guardian’s Editorial

— eric @ 8 December 2009

The following editorial was published today by 56 newspapers around the world in 20 languages including Chinese, Arabic and Russian. The text was drafted by a Guardian team during more than a month of consultations with editors from more than 20 of the papers involved. Like The Guardian most of the newspapers have taken the unusual step of featuring the editorial on their front page. The Guardian, the editorial is free to reproduce under Creative Commons.
RealClimate takes no formal position on the statements made in the editorial.

---

Copenhagen climate change conference: Fourteen days to seal history’s judgment on this generationToday 56 newspapers in 45 countries take the unprecedented step of speaking with one voice through a common editorial. We do so because humanity faces a profound emergency.
Unless we combine to take decisive action, climate change will ravage our planet, and with it our prosperity and security. The dangers have been becoming apparent for a generation. Now the facts have started to speak: 11 of the past 14 years have been the warmest on record, the Arctic ice-cap is melting and last year’s inflamed oil and food prices provide a foretaste of future havoc. In scientific journals the question is no longer whether humans are to blame, but how little time we have got left to limit the damage. Yet so far the world’s response has been feeble and half-hearted.
Climate change has been caused over centuries, has consequences that will endure for all time and our prospects of taming it will be determined in the next 14 days. We call on the representatives of the 192 countries gathered in Copenhagen not to hesitate, not to fall into dispute, not to blame each other but to seize opportunity from the greatest modern failure of politics. This should not be a fight between the rich world and the poor world, or between east and west. Climate change affects everyone, and must be solved by everyone.
The science is complex but the facts are clear. The world needs to take steps to limit temperature rises to 2C, an aim that will require global emissions to peak and begin falling within the next 5-10 years. A bigger rise of 3-4C — the smallest increase we can prudently expect to follow inaction — would parch continents, turning farmland into desert. Half of all species could become extinct, untold millions of people would be displaced, whole nations drowned by the sea. The controversy over emails by British researchers that suggest they tried to suppress inconvenient data has muddied the waters but failed to dent the mass of evidence on which these predictions are based.
Few believe that Copenhagen can any longer produce a fully polished treaty; real progress towards one could only begin with the arrival of President Obama in the White House and the reversal of years of US obstructionism. Even now the world finds itself at the mercy of American domestic politics, for the president cannot fully commit to the action required until the US Congress has done so.
But the politicians in Copenhagen can and must agree the essential elements of a fair and effective deal and, crucially, a firm timetable for turning it into a treaty. Next June’s UN climate meeting in Bonn should be their deadline. As one negotiator put it: “We can go into extra time but we can’t afford a replay.”
At the deal’s heart must be a settlement between the rich world and the developing world covering how the burden of fighting climate change will be divided — and how we will share a newly precious resource: the trillion or so tonnes of carbon that we can emit before the mercury rises to dangerous levels.
Rich nations like to point to the arithmetic truth that there can be no solution until developing giants such as China take more radical steps than they have so far. But the rich world is responsible for most of the accumulated carbon in the atmosphere – three-quarters of all carbon dioxide emitted since 1850. It must now take a lead, and every developed country must commit to deep cuts which will reduce their emissions within a decade to very substantially less than their 1990 level.
Developing countries can point out they did not cause the bulk of the problem, and also that the poorest regions of the world will be hardest hit. But they will increasingly contribute to warming, and must thus pledge meaningful and quantifiable action of their own. Though both fell short of what some had hoped for, the recent commitments to emissions targets by the world’s biggest polluters, the United States and China, were important steps in the right direction.
Social justice demands that the industrialised world digs deep into its pockets and pledges cash to help poorer countries adapt to climate change, and clean technologies to enable them to grow economically without growing their emissions. The architecture of a future treaty must also be pinned down – with rigorous multilateral monitoring, fair rewards for protecting forests, and the credible assessment of “exported emissions” so that the burden can eventually be more equitably shared between those who produce polluting products and those who consume them. And fairness requires that the burden placed on individual developed countries should take into account their ability to bear it; for instance newer EU members, often much poorer than “old Europe”, must not suffer more than their richer partners.
The transformation will be costly, but many times less than the bill for bailing out global finance — and far less costly than the consequences of doing nothing.
Many of us, particularly in the developed world, will have to change our lifestyles. The era of flights that cost less than the taxi ride to the airport is drawing to a close. We will have to shop, eat and travel more intelligently. We will have to pay more for our energy, and use less of it.
But the shift to a low-carbon society holds out the prospect of more opportunity than sacrifice. Already some countries have recognized that embracing the transformation can bring growth, jobs and better quality lives. The flow of capital tells its own story: last year for the first time more was invested in renewable forms of energy than producing electricity from fossil fuels.
Kicking our carbon habit within a few short decades will require a feat of engineering and innovation to match anything in our history. But whereas putting a man on the moon or splitting the atom were born of conflict and competition, the coming carbon race must be driven by a collaborative effort to achieve collective salvation.
Overcoming climate change will take a triumph of optimism over pessimism, of vision over short-sightedness, of what Abraham Lincoln called “the better angels of our nature”.
It is in that spirit that 56 newspapers from around the world have united behind this editorial. If we, with such different national and political perspectives, can agree on what must be done then surely our leaders can too.
The politicians in Copenhagen have the power to shape history’s judgment on this generation: one that saw a challenge and rose to it, or one so stupid that we saw calamity coming but did nothing to avert it. We implore them to make the right choice.

Anti-AGW Conspiracy

This is a fabulous video. It reveals the foolishness of the denial crowd perfectly.




If you wish to see behind the scenes of a real and ongoing conspiracy, do follow these links:

The American Denial of Global Warming - Naomi Oreskes

ExxonMobile Report: Smoke, Mirrors and Hot Air


Industry Ignored Its Scientists on Climate

Oreskes on her review of the climate literature from 1999 to 2003:

The drafting of such reports and statements involves many opportunities for comment, criticism, and revision, and it is not likely that they would diverge greatly from the opinions of the societies' members. Nevertheless, they might downplay legitimate dissenting opinions. That hypothesis was tested by analyzing 928 abstracts, published in refereed scientific journals between 1993 and 2003, and listed in the ISI database with the keywords "climate change" (9).
The 928 papers were divided into six categories: explicit endorsement of the consensus position, evaluation of impacts, mitigation proposals, methods, paleoclimate analysis, and rejection of the consensus position. Of all the papers, 75% fell into the first three categories, either explicitly or implicitly accepting the consensus view; 25% dealt with methods or paleoclimate, taking no position on current anthropogenic climate change. Remarkably, none of the papers disagreed with the consensus position.
Admittedly, authors evaluating impacts, developing methods, or studying paleoclimatic change might believe that current climate change is natural. However, none of these papers argued that point.

To my knowledge, not much has changed since. The work of even some of the more legit sceptics in no way undermines an anthropogenic forcing of climate change. All the works in this regard either don't undermine the current understanding or are very flawed. The sun's influence, clouds and tropospheric temperatures are all examples. You can check out the rebuttals to those ideas if you go to RealClimate's Wiki page, their index, their Start Here page or, to really understand climate, go to Spencer Weart's The Discovery of Global Warming page, which is created from, I believe, his book of the same name. Warning: it's an extensive site, but if you truly, honestly, don't quite get the whole Anthropogenically forced Climate Change thing, you will after reading that site/book.

If it's a conspiracy, it started a VERY LONG time ago. From Weart's website:

In 1896 a Swedish scientist published a new idea. As humanity burned fossil fuels such as coal, which added carbon dioxide gas to the Earth's atmosphere, we would raise the planet's average temperature. This "greenhouse effect" was only one of many speculations about climate, and not the most plausible...

In the 1930s, people realized that the United States and North Atlantic region had warmed significantly during the previous half-century... one lone voice, the amateur G.S. Callendar, insisted that greenhouse warming was on the way...

In the 1950s... new studies showed that, contrary to earlier crude estimates, carbon dioxide could indeed build up in the atmosphere and should bring warming. Painstaking measurements drove home the point in 1961 by showing that the level of the gas was in fact rising, year by year...

A 1967 calculation suggested that average temperatures might rise a few degrees within the next century...

The scientists' claims about climate change first caught wide public attention in the summer of 1988, the hottest on record till then. (Most since then have been hotter.)...

There is zero evidence of conspiracy, and logically it's idiotic to claim it is a conspiracy. However, as the links further up illustrate, not only is there a conspiracy to deny climate change and to prevent action to mitigate it, we actually have proof of this. It's historical fact. I've yet, in three years of trying, to get one of these deniers to even address this, let alone actually acknowledge it.

Hypocrites.

'Nuff said.

James Hansen on Cap n Trade

Sack Goldman Sachs Cap-and-Trade

            The revolving door between Washington and Wall Street has produced a new scheme to fleece the public. “Cap-and-trade” is the heart of the Obama Administration’s plan to slow global warming and reduce our dependence on fossil fuels. Permits to emit a “capped” amount of carbon dioxide will be traded on Wall Street by big-time players like Goldman Sachs.
            Cap-and-trade was anointed hero status for helping reduce pollution from power plants, specifically acid rain from the sulfur in coal. Seldom have accolades been less deserved. Indeed, this “success” story is a case of calling black white.
            Here, in essence, is how it worked. Congress passed a law, Title IV of the Clean Air Act, capping sulfur emissions from power plants at 50 percent of 1990 amounts. Utilities reducing emissions more than half could sell excess reductions to other utilities, which then did not need to reduce pollution. Physical changes were simple. Many power plants switched to low-sulfur Wyoming coal and a few installed scrubbers. Sulfur emissions were reduced almost 50 percent in 20 years. Great success? Hardly.
            First, it was like a smoker going from two-packs-a-day to one-pack-a-day. Such a cap imposed by law is a floor, as well as a cap. Physicians for Social Responsibility reported on 18 November that continuing coal emissions are significant contributing factors in four of the five leading causes of mortality in the United States – and the mercury, arsenic and other coal pollutants also cause birth defects, asthma and other ailments. The economic value to the public of further emission reductions exceed the cost by a factor of 25, but so far the floor has prevented greater reduction.
            What is needed is not a cap/floor, but a system designed to wind down the pollution in accord with the public good, not the polluters’ profits. Before defining such a system, let me expose the second, even bigger, whopper in the cap-and-trade gimmick. It is the “horse-trading” that polluters demand before they will allow Congress to pass a cap. Yes, I am sorry to say, in America today, with the role of money in government and a revolving door between Congress and lobbyists, polluters sit astride Congress with such brazen “authority”.
            The horse-trade demanded by polluters before accepting the Clean Air Act was that old power plants be “grandfathered”, avoiding many pollution regulations. These old plants would soon be retired anyway. Wink. Two-thirds of today’s coal-fired power plants were constructed before 1970. Utilities find it highly profitable to keep patching up these old polluting cash cows. Meanwhile, public health continues to suffer.
            These basic problems, the floor on pollution and horse-trading, recur, in spades, in the cap-and-trade scheme hatched by big banks and Washington to slow carbon dioxide emissions and reduce fossil fuel use.
            Cap-and-trade sets a nominal emissions cap by auctioning permits to pollute. This cap is a floor – if emissions went below the cap, permit price would collapse leaving no incentive for further emissions reduction.
         Moreover, the cap is a faux cap, a fiction. The real cap is higher, because of “offsets” – alternatives to emission reductions, such as tree planting on degraded land, avoided deforestation in Brazil, or investments in developing countries. Caps are raised by the offset amount, but offsets are often imaginary or unverifiable. Avoided deforestation, for example, does not reduce demand for lumber or food growing area, so deforestation moves elsewhere. Also, offsets encourage developing countries to retain pollution, so they will have offsets to sell.
         Horse-trading further mars the outcome. House and Senate energy bills legislate continued coal use, making it implausible that carbon dioxide emissions will decline sharply. Copenhagen discussions also are headed down the cap-with-offsets, horse-trading path, even though this approach can never achieve the sharp emission reductions that science demands.
         Let’s define a feasible approach. A successful approach must recognize a fundamental truth: as long as fossil fuels are the cheapest energy, their use will continue and even increase. Fossil fuels are cheapest because they are not required to pay for their damage to human health and the environment or for climate impacts on current and future generations.
         “Fee-and-dividend” is a simple solution. A gradually rising carbon fee is collected at the mine or port of entry for each fossil fuel (coal, oil and gas). The fee is uniform, a single number, in dollars per ton of carbon dioxide in the fuel. The public does not directly pay any fee, but the price of goods will rise in proportion to how much fossil fuel is used in their production.
         One hundred percent of the fee should be distributed to the public. Prudent people will use their dividend wisely, adjusting their life style, choice of vehicle, and so on. Those who do better than average will receive more in the dividend than they pay in added costs.
         For example, if the fee were set now at $115 per ton of carbon dioxide it would add one dollar per gallon to the price of gasoline and 8 cents per kilowatt-hour to the price of electricity. Given the amount of oil, gas and coal used in the United States in 2007, that carbon fee yields $670 billion dollars per year. The resulting dividend for each adult legal resident is about $3000 per year or $250 per month. A family with two or more children would receive almost $9000 per year. The dividend would be sent electronically to bank accounts or added to debit cards.
         In reality, the fee probably will be introduced gradually over several years, to minimize waste of infrastructure. By the time the carbon fee reaches $115 per ton utilities are expected to have altered fuel choices, reducing the impact on electric rates to 5-6 cents per kilowatt-hour – and the annual per capita dividend may be only $2000-2500. But given that about 60 percent of the public will receive more in dividend than they pay via increased energy prices, the public is likely to support continued increase of the carbon fee.
         As the fee rises, tipping points will be reached at which various carbon-free energies and carbon-saving technologies are cheaper than fossil fuels plus their fee. As time goes on, fossil fuel use will collapse, remaining coal supplies will be left in the ground, and we will arrive at our clean energy future – free at last from our fossil fuel addiction.
         Economists agree that fee-and-dividend is more efficient and less costly than cap-and-trade. But many economists prefer that proceeds be used to reduce taxes that cause economic inefficiency rather than pay dividends. Their usual suggestion is to reduce payroll taxes, which are regressive.
         A problem with reducing payroll taxes is that half of the people are not on payrolls – being either retired or involuntarily unemployed. Thus a dividend is fairer. As a compromise, I suggest that half the carbon fee be given to legal residents as a monthly dividend, and half used to reduce payroll taxes.
         Need more insight into cap-and-trade? Consider this perverse effect on altruistic actions. Say you decide to buy a high-efficiency little car. That reduces your emissions, but not your country’s or the world’s. Instead it allows somebody else to buy a bigger SUV. Emissions are set by the cap/floor, not by your actions.
         In contrast, fee-and-dividend has no floor, so every action to reduce emissions helps. Indeed, your action may spur your neighbor to do the same. Such snowballing effects can occur with fee-and-dividend, speeding us toward a pollution-free world.
         More convincing needed? Note that the skilled, secretive trading unit of Goldman Sachs is poised to make billions of dollars off cap-and-trade. Banks and other private equity firms already have more than 100 representatives working the issue. The carbon market is expected to be worth more than a trillion dollars. Wall Street wants the market to be loosely regulated, open to speculators, and to include over-the-counter derivatives. Pretty good chance for that, given the Washington-Wall Street revolving door. 
         Where will the banks’ profits come from? All costs of the pollution trading system are extracted from the public, via increased energy prices.  And there is no dividend to the public.
         In contrast, fee-and-dividend only requires the government to divide the collected fee by the number of legal residents. The entire collected fee goes to the public. Goldman Sachs does not get one thin dime.