Nullius in Verba

Our topic today is charity, as befits the season, and I’ll hope to convince you of how today’s modern wise men would effectively prescribe charity. 

It is roughly 2000 years after the birth of Jesus and whether God or Man, if the entire planet followed His philosophy the world would be a beautiful place - but knowing humans that can only be a dream. I am sure some of my dear readers likely think, most incorrectly, due to my so-called right wing beliefs I am the most Scrooge like character on this planet. They are entitled to their beliefs but I would like to hope that should they know me, they would find themselves grievously mistaken.

(Even before the ghosts, Scrooge effectively reduced poverty)

First of all, I am not right wing, I am libertarian. Secondly I’ll leave it up to those who truly know me to figure the second part out. For they say that he who doth protest much…

The fact is, despite the attempts by socialists to portray them as greedy, the group of most generous humans by far are Right Wing Christians from the United States. They are so generous that no other country comes even close to matching private donations per capita made by these people. Ireland comes one third as close, but it is another hot-bed of capitalist Christians. Canada is pretty dismal but they’re way better than the Swedes, and France makes Scrooge look like Santa Claus. Strangely the government doesn’t need to tell these delusional Americans to give this money, they just seem to do it.

Sadly in this day and age, Charity has become Big Business. How many times have you been presented with a glossy expensively printed flier and asked to donate to a certain charity? Where is that money going? For example 18% of your donations to the American Red Cross go to wages alone.

So how can one be more generous more effectively? Perhaps Biological Science can help us. Researchers have concluded that people injected with oxytocin are 80% more generous. However half of us don’t want to run around with painful uterine contractions more than we need to, and the other half of us being big babies (AKA: Men) are plain scared of needles. That one is simply out.

Government will save the poor right? Wrong. Economic Science presents a pretty dreary picture of just how effective governments are in reducing poverty. As we all know, subsidies cause more harm than good, that much is basic. However there is a more insidious creature lurking within that realm called the Tullock Theorem. (Dr. Gordon Tullock is also famous for the theory of rent seeking of which we shall discuss later). Tullock states that the income redistribution process [social programs] is one that yields gains back and forth across the middle class with little gain at the lower end of the distribution due to voter preferences. This theorem has been demonstrated by evidence from Dr. Daniel Slottje and Dr. Gerald Scully of the Scully curve fame.

The results of this study indicate that Tullock’s (1986) theorem holds again - government’s agenda is not served by a redistribution to the poor, except perhaps as a secondary effect. - Slottje et al

A natural question is why don’t the low income types vote in candidates who will consistently redistribute income in their favor? The result of such a political process would be a downward trend in income inequality. In point of fact, there is no evidence whatsoever of any trend in income equality over the period. The answer to both questions may be that Tullock (1983, 1986) is on to something. If the middle class voters transfer gains back and forth, the poor can’t gain and they don’t, then the distribution should be stable and is. - Scully et al

Well what then? Economic freedom, first ellucidated by Milton Friedman, has been demonstrated to improve economic redistribution and standards of living in the lower income classes. It consists of defined and enforced property rights, free trade and open borders, little government intervention, low taxes and capital markets. Economic growth also helps the poor but it does so while causing a slight increase in gap between rich and poor, however such gap is a meaningless exercise in relative statistics. For instance compared to Bill Gates I am poor, however I can still afford a house, car, tons of modern gadgets, computers, and three good meals a day for my family while someone living in economic growth poor Africa is lucky if he can score any of the above. The question is how are the poor doing at the bottom, and the evidence doesn’t require an economist to confirm the obvious - yet economists still show that the poor in North America have more now than ever.

In this study, it is found that the amount of economic freedom across nations has the attribute of increasing the rate of economic progress and improving the distribution of market income. That economic freedom is a positive and significant macroeconomic determinant of economic growth is not a controversial finding. The empirical evidence here indicates that economic freedom reduces income inequality (i.e., lowers the Gini). Estimation of the structural model applied to the quintile income shares indicates that it does this by increasing the share of market income going to the two lowest income quintiles and lowering the share going to the highest income quintile. - Scully 2002

Unfortunately, you and I dear reader are not the government of some poor dirtbox nation so we cannot fix their heady problems.

Perhaps there is yet another way. While Bill Gates, realizing his mortality, has donated a substantial amount of his wealth to charity it is likely that his creation of Microsoft has done more to help people than his charity ever will. Especially after the lawyers, socialists and other rent seekers run his money through their greedy mitts. In fact no group of people do more to help other people than those who create business, or in the devil’s language: a corporation. Indeed a profitable corporation actually helps people, believe it or not. You don’t need an economist to tell you that, just drive through Hamilton or Detroit and look at where the old factories used to be.

Walmart has done more to help poor people than the federal government this year. Walmart sells goods at very cheap prices (causing what economists call an increase in consumer welfare) and while doing so provides thousands of jobs to people which includes a dental and health plan, and if you are a doctor worth his licence you have a list of their cheap generic medications under your prescription pad for those low income folks who badly need medication. (I was quite literally stunned the first time I saw a five fold reduction in one generic medication compared to a certain famous pharmacy chain and some colleagues in the U.S. tell me that they see even more, as much as 10 times cheaper - quite literally a difference between spending $10 vs. $100 per month!)

(Long the whipping boy of socialists, a modern day Pontius Pilate would find no fault with Wal-Mart)

Unfortunately not all of us have what it takes to start a corporation and become as beneficial to the poor as Charles Dicken’s Ebenezer Scrooge. What, Scrooge noble? If you’re questioning that you haven’t learned anything. Ironically before his transformation Scrooge had done more for Bob Cratchit than anyone, and Cratchit himself says as much multiple times in the Christmas Carol. Scrooge gives to Cratchit employment and a paycheck something he would not otherwise have as Cratchit is horribly unqualified and very close to the poor house during the depths of the 1843 recession in Great Britain and arguably much of the world. Ironically it is in this year that the Economist is first published espousing free market ideas and it is also during this time that the Poor Laws in Britian are at their peak with the Workhouses being at the height of  depravity.

The Poor Laws, a product of Christian philosophy, were created in the 16th century as a method of dealing with poverty though public taxation and wealth distribution. It can be argued that such a system was well in effect in many Christian communities throughout the last 2000 years, but it was during this time that such a philosphy began to have secular interest. Unfortunately the apparent enlightened thinking had, according to Parliament, very little effect on aleviating povery and by the 1830’s desperate measures were taken to provide incentives for poor people to work. By this time the people handling the money meant for the poor had largely managed to seize as much as they could for themselves, rent seeking in full effect. Moreover some parliamentarians felt that if the Workhouses were made as horrible as possible poor people would have an incentive to work rather than go there adding to the corruption and abuse practised by the people managing the Workhouses. Some parliamentarians idealistically felt that by working some of the poor would learn skills enabling them to gain adequate employment elsewhere.

In modern language, welfare given to poor people in return for work is called Workfare. Workfare has been practiced by governments throughout human history, and it is at its most notable during the Great Depression as part of the New Deal policy of Franklin Roosevelt. Ironically most economists view those policies as causing the depression to last longer than it would have. Currently Workfare exists in many countries in the first world. It is one method Sweden uses to hide its high unemployment rates and is a philosphy often bought into by both Right and Left wing governments.

(Our good intentions made this worse.)

Sadly economists cannot find any evidence demonstrating Workfare being an effective means of reducing poverty. While working at even a low income job does increase a worker’s ability to become upwardly mobile in wage through work experience and credentials, it seems that those who partake of welfare have other issues that prevent them from becoming employed or even seeking employment.

Ironically what was at one time deemed charity is now apparently a human right according to that embodiment of failure, the United Nations. Now some people feel that Workfare conflicts with their human right to collect welfare. If you can connect the dots it means some people have a right to your wallet. The Romans tried this, Emperors promising the citizens of Rome daily bread. Unfortunately this removed the incentive for the citizens to learn to work, and created in effect, the mob. It appears the Left, once congratulatory, now think the New Deal is slavery.

So government is a failure when it comes to providing direct means of reducing poverty, so much so that African economists are asking western nations to stop sending aid. Governments can help poor people by providing a foundation of economic freedom so that free enterprise can do what it does best and provide employment. Finally rent seekers are everywhere ready to divert as much money to their own pockets as they can from charities and government initiatives further causing program failures. What can one person do?

In 1848, a few years after Dicken’s The Christmas Carol a German, Friedrich Wilhelm Raiffeisen, designed a system now known as microfinance which successfully provided capital means to German farmers. In the modern age, the economist Dr. Muhammad Yunus took this concept into India using it to the advantage of the poor and winning himself a Nobel Peace Prize in a more deserving manner than Al Goreacle. Microfinance and microcredit is a simple concept where organizations or people lend poor entrepreneurs usually in the Third World small loans which enable them to develop employment opportunties. Unfortunately the economic evidence is still out regarding microfinance’s sum total benefits, but it does appear to be an effective method for enabling people to create sustainable economies.

Indeed not only is it is well established that economic freedom increases economic development, Dr. Ross Levine has demonstrated that the ease of availablity of financing is another positive factor, as reviewed in this paper. That microloans are profitable to both parties is evident by the fact that major banking corporations including HSBC have now entered that market.

So along with the benefit that microloans are not evil subsidies that simply cause more harm than good, they have the benefit of potentially causing economic growth by working with the people who know what they need for their success.

What does that mean to you? Well I have mentioned before that I recently invested in a microloan provider, Kiva.org, where I loaned a small business in a Third World Country some start up money. I have recently received my third re-payment and by all accounts this person is doing well. My small amount of money is a huge deal to this person, it is directly given to them with no rent seeker skimming, I get to monitor how effective it is working, and there is no glossy expensive pamphlet attached.

I’ll leave it up to Eric Thurman to describe his experience with microfinance in this TV Ontario lecture.

And now we have come full circle, from Microsoft to microloans. If you are feeling the need to donate to a charity this time around, consider a microloan. It could be money well spent and poverty well treated.

Merry Christmas

(Wise men seek the evidence before applying charity)

The reader will benefit from reading the blog article previous to this one.

Drs. David H. Douglass, John R. Christy, Benjamin D. Pearson and S. Fred Singer have published an article in the International Journal of Climatology in which they explain that serious discrepencies exist between the computer models of climate change and the 25 year data from satellites and weather balloons.

Christy and Dr. Roy Spencer are the world’s experts on satellite data and Christy is a United Nations International Panel on Climate Change (IPCC) editor. Ironically Christy and Spencer also have serious problems with the IPCC report, claiming it is a politically biased publication and misrepresents a lot of the science, reasons for why Christy left the IPCC process recently. (Christy and Spencer however, do think the evidence suggests CO2 can cause local climate change.) 

Why am I not surprised? As I have said before, having created computer models myself, you have to be concerned with the raw data used and more specifically the assumptions you make. Garbage in can easily equal garbage out. Sometimes even good data in can equal garbage out if your assumptions are wrong. As I have mentioned before at this time the surface station data is suspect.

From the publication:

On the whole, the evidence indicates that model trends in the troposphere are very likely inconsistent with observations that indicate that, since 1979, there is no significant long-term amplification factor relative to the surface. If these results continue to be supported, then future projections of temperature change, as depicted in the present suite of climate models, are likely too high.

In summary, the debate in this field revolves around the idea of discrepancy in surface and tropospheric trends in the tropics where vertical convection dominates heat transfer. Models are very consistent, as this article demonstrates, in showing a significant difference between surface and tropospheric trends, with tropospheric temperature trends warming faster than the surface. What is new in this article is the determination of a very robust estimate of the magnitude of the model trends at each atmospheric layer. These are compared with several equally robust updated estimates of trends from observations which disagree with trends from the models.

The last 25 years constitute a period of more complete and accurate observations and more realistic modeling efforts. Yet the models are seen to disagree with the observations. We suggest, therefore, that projections of future climate based on these models be viewed with much caution.

(Bold faced emphasis is mine.)

Scientists recommending caution, imagine that? But that is what real scientists do. Just like real doctors are cautious about making promises to patients. That’s how I was trained.

Politicians and fake scientists, on the other hand, like Al Gore and the Suzuki make all kinds of hot air promises.

Which reminds me of the ancient Babylonian inscription:

Psychics who make predictions that are found incorrect shall have their heads seized from their bodies and placed upon the southeast gate.*

(How long did it take for the politicians to screw up this earthly delight created by ancient scientists?)

* The one about doctors who fail to save their patients sucks just as bad.

Update:

From the comments:

Models aren’t perfect, but they are our best means to predict the consequences of increasing GHG in the atmosphere. 

- Grant

You mean you trust this data, Grant?:

(Official NOAA Suface Station Sensor, Livermore California)

Update: Guess who was right, Danny and the media or the economist and me? And notice how the media ignores the whole issue when Harper looks like he’s right again. 

Now back to our regular programming:

Watching the recent frenzy over the Climate Conference in Bali I am very happy that we finally have a Prime Minister who is able to blow the cold air of reality into the environmental maelstrom of something that looks like a big-hot-back-slapping doldrum. Canada’s position, Japan’s, (and Australia’s, no thanks to the brainwashing organization, CBC, everyone thinks that the position in Oz has changed because of the new Labour government, but really it hasn’t) and the position of the United States is that there is no point in setting restrictions on greenhouse gas emissions (GHG) when the world’s largest emittor won’t join in, and I refer to China. India’s emissions are projected to overtake the United States as well. The emissions from the US are going down each year under GW Bush, and not due to a recession either as the United States economy is better than ever, while Chinese emissions are increasing rapidly. If you’re one of those people who believes that anthropogenic GHG emissions (AGHG) is causing a disaster then by AlGlorey, why aren’t you concerned? It’s not going to matter one iota how much Canada does or even the United States for that matter, when the fat kids on the teeter-totter are all sitting on one end. Why isn’t this a bigger concern?

It’s comparable to a disarmament treaty during the Cold War that restricts the United States from building missiles but mandates the Soviet Union to build even more.

But does the media care? They’d rather follow the likes of Matt Damon and Leonardo DiCaprio. After all, it should concern us greatly when the dogs of Hollywood fly in on Lear Jets led by Al-Goreacle, and start yapping that perhaps things are getting blown way out of proportion.

Recently a new journal article* published in 2007 by a Canadian climate researcher and external IPCC reviewer, Dr. Ross McKitrik, in the Journal of Geophysical Research has demonstrated that the increase in surface temperature is in large part due to non-GHG anthropogenic reasons, ie: urbanization - in layman’s terms our cities are warm and temperature stations near cities are recording that. Moreover the methodology used by current science to screen out this background effect isn’t doing an effective job. His work reveals that the increase in temperature is half of that which the current United Nations Intergovernmental Panel on Climate Change (IPCC) is estimating, thereby reducing their estimates even lower than their own reduction in estimates from the latest report. 

A group of Dutch scientists have independently confirmed McKitrik’s work. Dr. Jos DeLaat and Dr. A.N. Maurellis at the Royal Netherlands Meterological Institute and National Institute for Space Research Netherlands respectively showed something very interesting indeed in two recent papers. Their latest in the International Journal of Climatology, 2006, states:

Our analysis of climate model simulations of GHG warming confirms our earlier results, namely, that they do not show any kind of CO2 emission–temperature trend correlation. In fact, the modeled temperature trends are quite insensitive to the magnitude of the industrial CO2 emissions. It is possible that the response of the climate system to enhanced GHG radiative forcing is much more localized than expected in that it occurs only in specific regions and mainly in the lower troposphere, although this runs contrary to the current understanding of GHG-related processes (cf Hansen et al., 1997; IPCC, 2001; Hansen et al., 2005; Santer et al., 2005).

This confirms an earlier work of theirs in 2004 that points out that surface stations situated in regions of low economic output show relatively little change in mean surface temperatures compared to surface stations in areas of high economic output as seen in this graph:

(star = high CO2 area, cross = low CO2 area)

In other words, AGHG is not causing global climate change, only a local effect is seen.

Although the exact mechanisms have yet to be determined our findings show that a significant part of the observed surface warming is related to processes other than enhanced greenhouse warming.

Its interesting to see other scientists dispute the current mainstream thinking just for the sake of a challenge. Stephen McIntyre just cannot leave the Dr. Michael Mann et. al. famous hockey stick graph alone, and for good reason. With its projection heavily weighted by the Graybill tree ring data, McIntyre spends some time in the same Sheep Mountain woods doing core sampling to update the data and demonstrates that according to the forest, the planet has been getting colder lately.

And this brings me to my main point. I’m really concerned when science gets manipulated by politicians. Take for instance hurricane researcher and IPCC member Dr. Chris Landsea who points that fact out as he resigns from the IPCC. There is also no doubt that certain countries eye Kyoto as the holy grail of economic subsidies, a diversion of money to their coffers. It is now currently the world’s largest welfare scam. Kyoto has not much to do with saving the planet from AGHG because it’s reductions are meaningless. Kyoto is all about transplanting more factories to China and India.

(In 1614 Galileo challenged mainstream thinking about the sun revolving around the earth leading to an Inquisition where he was soundly chastized)

It disturbs me as a scientist to see things get so manipulated by certain people with certain agendas. Like for instance what happened with Dr. Paul Reiter, a leading expert on malaria and other diseases carried by the mosquito vector. His testamony in front of the British House of Parliament reveals how the lead writers of the IPCC report on the Impact on Human Health are chosen. It is worth reading the whole thing. After not being chosen as a lead author in IPCC 4, largely due to his suspicion that he is not alarmist enough because he states the research doesn’t support an increase in malaria due to Global Warming, he retorts that the people chosen are basically laymen with agendas chosen by politicians:

34.   I replied with a question about the two Lead Authors that had been selected: “It is often stated that the IPCC represents the worlds top scientists. I copy to you the bibliographies of (the two lead authors), as downloaded from MEDLINE. You will observe that (the first) has never written a single article, and (the second) has only authored five articles. Can these two really be considered “Lead authors” with experience, representative of the world’s top scientists and specialists in human health?”

  35.   I also pointed out that one Lead Author is a “hygienist”, the other is a specialist in fossil faeces, and both have been co-authors on publications by environmental activists.

Imagine that, the lead authors of part of a document that is due to set world policy and massive interference by governments at all levels was written by a group of people with no scientific publications at all. 

The list of climate scientists disillusioned with the political manipulation of the IPCC grows longer, however when they try and make their voices heard they are soundly run out of town. That’s partly the fierce nature of the whole argument which involves scientific blows from both sides, however this fight is now one sided because the media, the politicians, and the hollywood hound-dogs have chosen the side they like - the socialist side that says global warming is cause by us bad humans but we should feel sorry for China and let them emit GHG because they’re poor. So in essence lets do nothing but feel good about it. Modern Liberal policy in progress, something Jean Chretien who did nothing about Canada’s GHG emissions over the last 10 years would have been proud of.

* Note: McKitrik’s work is sponsored by the Social Sciences and Humanities Research Council of Canada, not industry.