Streetwise Professor

September 2, 2017

Harvey’s Danger Has Passed (For Most, Though Not All)

Filed under: Climate Change,Houston,Politics — The Professor @ 9:36 pm

The last several days in Houston have been warm and sunny. Most stores are open (with the surprising exception of a local Starbucks), traffic is getting back to normal–unfortunately (I-610 in particular is a nightmare). There are still flood waters in some locations, but most of the water has drained. I drove on US-59 (I-69, which nobody calls it) yesterday. Here’s how it looked a few days ago.

us59_kayak_at_hazard_dave_rossman

Some of the bayous are pretty much back to normal. Here is Brays (or Braes) Bayou, at Calhoun Rd. near UH, as of Friday–less than 48 hours after the rain stopped.

brays_bayou_calhoun

That doesn’t look much different than on a normal day. (This bayou has been subject to a lot of Corps of Engineers work post-Allison. The place I first lived in for a bit had been flooded up to the 1st floor ceilings during Allison. That area did not flood this time around. Whether that can be attributed to work on the bayou I can’t say.)

I only had to contend with many small lizards who took refuge on my 2d floor patio. When I sat out there after the storm, I felt like I was at a casting call for a Geico commercial.

Thank you to all who contacted me via various channels to inquire about how I was faring. I am deeply grateful, and am glad to say that unlike so many others, I was mainly inconvenienced, rather than suffering bodily or material harm. I am deeply sorry for those less fortunate than I: there but for the grace of God . . .

As I told most of those who wrote, the impacts were highly variable, and largely driven by proximity to the bayous. Or as Beldar, who returned from a long blogging hiatus to write about Harvey put it, there were highly localized but widely distributed areas of impact. In the areas that it was bad, it was horrid. But the bad areas were not as ubiquitous as viewing the news would suggest.

As some commenters have noted, and has been widely recognized, Houston and Texas have acquitted themselves very well. The contrast with the New Orleans during and post-Katrina is remarkable on every dimension. Rather than social disintegration, there has been solidarity and a spirit of mutual aid. My tennis coach’s father works with Red Cross, and says that they have more volunteers than they can handle. The lines in grocery stores that I visited once they reopened were amazing placid, with people patiently chatting while waiting their turn. Would that Christmas shopping scenes be as civil.

But of course, numerous people of ill will outside of Houston and Texas have taken this opportunity to take swipes at the city, state, and their people. Examples include a disgusting “cartoon” in Politico (a Tweet of which the gutless bastards deleted when called out on it), an even more disgusting cartoon in Charlie Hebdo, and more Tweets than I could count claiming that Harvey was divine justice for Houston’s petrol-chem industry–presumably these were Tweeted from artisanal wood and hemp smart phones by people who don’t drive, eschew all plastics, and produce all their own food using only llama dung as fertilizer. (The Unabomber was an evil bastard, but at least he lived what he believed.) These criticisms make as much sense as fundamentalists blaming earthquakes in the Bay Area as God’s retribution on sodomites (which is an illustration of how political opposites are often doppelgängers).

To which most Texans reply: we really don’t give a shit what you think. Or as one meme put it: Hold our beer–we got this.

And of course there are those who are using this to advance their political obsessions. I’ve already mentioned those who assert, obnoxiously and ad nauseum, that Harvey was the inevitable and predictable result of climate change. Among the most prominent, and certainly most execrable of these, was one-time economist Jeffrey Sachs:

Gov. Abbott, we would like to bid you a political adieu. Perhaps you can devote your time to rebuilding Houston and taking night classes in climate science. Senators Ted Cruz and John Cornyn, you will soon be asking us for money to help Texas.

My answer will be yes, if you stop spewing lies about climate dangers, agree to put US and Texas policy under the guidance of climate science, back measures to lower carbon emissions and stay in the Paris Climate Agreement. Then, of course, let’s help your constituents to rebuild.

And to ExxonMobil, Chevron, Koch Industries, ConocoPhillips, Halliburton, and other oil giants doing your business in Texas: You put up the first $25 billion in Houston disaster relief. Call it compensation for your emissions. Tell the truth about growing climate threats. Then, as citizens seeking the common good, we will match your stake.

This is the rankest opportunism, and his entire piece is written with a reckless disregard for the evidence about the link between CO2 and hurricanes generally (which is equivocal at best), and about the link between anthropogenic effects on climate and Hurricane Harvey in particular.

As I noted in my earlier post, Harvey was not an exceptionally powerful storm by historical standards, and indeed storms of its intensity were actually more common during the period prior to large increases in CO2 emissions. Harvey’s devastating effects were a result of the chance interaction of weather patterns that led Harvey to meander and linger over Houston.

At present another hurricane–Irene–is forming in the Atlantic. To illustrate the role of weather, there are two scenarios for its track. If the dominant weather pattern over the North Atlantic is a strong high pressure region, it will likely hit the US, most likely Florida. A weaker high pressure area, will result in Irene turning north and petering out in the Atlantic.

The other hobby horse being ridden with abandon is that Houston’s pro-development policies increased the damage: I’ve read that Houston’s lack of zoning bears some of the blame. Two of the most strident advocates of this view include The Economist and Bloomberg Business Week.

Well, on one level, this is Captain Obvious DUH territory: no development, no damage. More seriously, it is difficult to see how any policy change would have had an appreciable impact. The Houston Has No One to Blame But Itself litany wreaks of the correlation-causation fallacy, and post hoc ergo propter hoc arguments.

Where to begin? I guess with the fact that this was truly an exceptional storm, with record rainfall. Given Houston’s topology and geography, there would have been massive flooding even had the place been inhabited by Karankawa and the Akokisa indians living in grass huts sleeping on chickees, as it was once upon a time.

Houston is flat as a table. It is cut by numerous bayous and streams: its nickname is “The Bayou City.” Many of these streams are quite winding, which means that when they take on a lot of runoff, the water goes up and over the banks rather than rushing out to Galveston Bay, because it has nowhere else to go.

Yes, the pavement and building increases runoff. But several factors need to be kept in mind. First, Houston’s soil is sandy and its water table is very high, meaning that even absent parking lots and streets and buildings the capacity of the soil to absorb is limited. Second, contrary to the prejudices of people who write about Houston in blissful ignorance of the facts, Houston has the largest amount of green space of any city in the United States. Only about 10 percent of the area in Houston is rated as impermeable, and 90 percent is ranks less than 2 on a 5 point scale of permeability (with a lower score indicating greater permeability). Third, many of the outer lying areas that flooded were inundated by the Brazos River and connecting streams, which is another meandering stream, and which was not swollen by runoff from suburban developments, but which just couldn’t handle all the rain and the runoff from undeveloped areas.

And can anyone honestly say that any of Harris County would be that much less developed under any alternative development policies? Zoning for instance, might have affected the distribution of business and maybe some residential areas, but the total amount of the county that would be built on would almost certainly be virtually the same.

Yes, if Houston had adopted the policies of Detroit, and suffered the same economic shocks, there would be a lot more green space and Harvey would have done a lot less damage. No serious person considers that a good trade-off.

Indeed, there have been floods as extreme and even more extreme, back when Houston was far less developed than today. A good example is 1935, when Buffalo Bayou crested at 54 feet. It crested at a mere 40 feet in 2017. But downtown Houston has flooded ever since there was a downtown Houston, because downtown Houston lies hard up a flood-prone bayou. And it was put there because that bayou was the city’s economic link to the world, and which eventually made it one of the great ports in the United States.

In sum, given the prevalence of floods before the boom of the recent decades, it is difficult indeed to attribute this week’s floods to that boom. Instead, the floods are a constant, as is Houston’s geography and topology. Combine those with biblical rains, heavy even by Houston standards, and we have what we have.

Some–The Economist for example–blame permitting of houses in 100 year flood plains. The impact of this (the magazine estimates 8600 houses so located) on the total volume of flooding is certainly trivial, meaning that there are no external effects to speak of. Those who built in these locations assumed the risk, based on the same information The Economist used to make its calculations.

Yes, to the extent that such development is encouraged by subsidized flood insurance, or the prospects of post-flood government assistance, too many of such houses are built, and the private losses are socialized to US taxpayers at large. I completely agree with the principle of making people bear the full cost of insuring the risk, or the full cost of losses if they choose to build but underinsure. But again, the contribution of this to the magnitude of the flooding is probably too small to even measure: the magnitude of the flooding was due to record rain and Houston’s topography. Further, it also likely represents a small fraction of the estimated $160 billion in damage from the storm.

Jeffrey Sachs writes: “Houston has been growing rapidly without attention to flood risk.” It has been growing rapidly, but to say that this growth has occurred without attention to flood risk is a damnable lie–a libel, actually. Especially post-Allison (in 2001) there has been an effort to reduce the city’s vulnerability to flooding. Of course, as with any government endeavor, one can criticize the execution, and the priorities: as commenter and friend Tom Kirkendall notes, money squandered on sports stadiums and light rail (the lightest aspect of which is ridership) could have been better spent on infrastructure, including drainage improvements. But there has been considerable attention. There has been work on the bayous. (For example, there has been ongoing work on Brays Bayou near Calhoun for some time–and the crews were back at work on Friday.)  Moreover, as any Houstonian with a car can tell you (and that is the vast majority of Houstonians, as many outsiders often snarikly remark), every road repaving project is a long running saga because in addition repaving, the city is installing huge storm sewer lines. Shepherd has been a nightmare for years because of such a project.

If you look at the 2011-2015 Houston capital improvement plan, which sets out the various major road projects, you will see that almost all of them include “improving drainage.” There are 27 references to this in the document.

The strategy has been to try to direct runoff to the major highways, which is one reason for some of the most striking images of the flooding. Better to flood freeways than neighborhoods.

So Jeffrey Sachs, in his lofty and deliberate ignorance, can fuck right off.

The rainfall in Harvey was approximately double that of Allison, and covered a much wider area. For example, one reason that some of the major disasters Harvey caused did not occur with Allison is that the former storm overwhelmed the Addicks and Barker Reservoirs, whereas that did not happen with the latter because the heavy rain area did not extend that far.

I do not know for certain, but it is my impression that the Harvey flooding in the area that Allison also hit hard is comparable to what happened in 2001, despite the fact that Harvey’s rainfall was about double Allison’s. A comparison of 2017 and 2001 will tell a lot about how well post-Allison infrastructure changes mitigated the damage this time around.

Post-Allison, the Harris County Flood Control District put out an excellent report on the storm, and its effects. It was titled “Off the Charts” to indicate how exceptional Allison’s rains were. Since Harvey’s were about double Allison’s, off the charts doesn’t even come close to describing 2017.

No doubt HCFCD will put out a post-Harvey report, and will be challenged to come up with a appropriate title. I look forward to reading it, paying particular attention to what it has to say about the effect of post-Allison mitigation efforts.

But the basic point is that this is not primarily, or even secondarily a policy issue, regardless the attempts of opportunists to make it so. This was a historic storm–an epic storm–produced by a chance interaction of weather events. It dumped huge rains on one of the largest cities in the US–in amounts that would have no doubt overwhelmed every major city in the US. Moreover, it hit a city which nature made preternaturally vulnerable to flooding.

In sum, Harvey is a natural disaster. The economic cost is indeed due to economic development, but that is primarily an effect, rather than a cause, as Jeffrey Sachs, the Economist, Bloomberg BusinessWeek and myriad others with an axe to grind would make it.

Musical postscript. I survived Harvey’s danger, and didn’t even have to climb a flagpole.

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August 28, 2017

Hijacking Harvey: It’s High Pressure Meets Low Pressure, Not Climate Change

Filed under: Climate Change,History,Politics — The Professor @ 9:26 pm

As surely as night follows day, a large hurricane causes the usual suspects to harrumph that this MUST END THE DEBATE OVER CLIMATE CHANGE. Interesting that those who claim to be all about Science® argue that you should base your conclusion on a single data point, or a small number of data points.

This is happening now, as the rain continues to fall in Houston, as I can affirm by looking out my window. There is effectively a pump in the Gulf that is pushing massive amounts of moisture into central Houston, and dumping it on my head.

But as Dr. Wayne Spencer points out, attributing this effectively local event to global climate change is a huge stretch. There are those who hypothesize that greater warmth leads to greater ocean temperatures which leads to more frequent and intense hurricanes. There are those who hypothesize that this mechanism is too simplistic. Further, the evidence that there has been an increase in hurricane frequency and/or intensity is equivocal at best. The nearly nine year pause in major hurricanes in the western Gulf is certainly hard to square with this explanation.

And reading this Texas hurricane history (produced by NOAA) or this Louisiana hurricane history makes it plain that hurricanes are a fact of life in this region, and were long before consumption of oil, or even coal in significant quantities. (They also make me ask myself WTF was I thinking when I moved down here :-P) Scan those publications and you will find numerous monster storms, many of which date widespread use of the internal combustion engine, or even the steam engine.

No, what is making Harvey so horrible is something that I feared when I first saw the forecasts of the track before it made landfall: that it would stall over the coast and drop huge amounts of rain, like Allison did in 2001. And that’s what’s happened, but occurring later in the year and being more powerful (as later storms typically are), Harvey is outdoing even Allison in inundating Houston.

It’s the combination of the track and the economic development of eastern Texas that is producing the current catastrophe: those two things are intersecting in Harris county and the surrounding region. Harris county has grown dramatically over the years, and that creates a bigger target. Further, more development is more pavement and built up area, which doesn’t retain water: there is controversy here, but it is quite plausible that due to the political economy of development, takeaway and retention capacity hasn’t kept up with the runoff, leading to more flood risk for a given amount of rainfall. The Tax Day Storm of 2016 could be another illustration of this.

So what kept Harvey from going inland? A high pressure area in central Texas that moved east and has pushed Harvey back into the Gulf, where it can drink heavily and then relieve itself over Houston. This is a chance intersection of weather events and circulation patterns, not a signal of long term climate change.

This is not unique. Consider Racer’s Hurricane of 1837. It was a huge storm, probably Cat 4 like Harvey–illustrating that global warming is not a necessary condition for the development of such storms. Moreover, it wreaked havoc on the entire Texas coast, then the Louisiana, Alabama, and Florida coasts, before petering out in North Carolina (where it also did considerable damage). If you look at the track it did a sharp u-turn, almost certainly because it hit a high pressure area coming in from the north. (Sound familiar?)

What would have happened had Harvey not hit the high pressure, and continued inland from Corpus Christi? Likely a repeat of the 1921 San Antonio Great Flood, which led to flash flooding in the city, with up to seven feet of water in the downtown area. (No margaritas on the River Walk when that happened, I’m wagering.) Harvey is worse because by stalling over the Gulf, instead of moving inland (as the 1921 storm did) it can continue to replenish its moisture.

So this is about weather and circulation, not climate.

It should be noted that many other extreme weather events used to flog the global warming cause are also attributable to circulation, and in particular, the impact of high pressure systems. The great French heat wave of 2006, and the great Russian heat wave of 2010 were attributed–not by climate “deniers” (whatever the hell that is–who denies there is such a thing as climate?) but by NOAA and others who are sympathetic to the warming hypothesis–to high pressure systems that stalled, creating thermal inversions and extended periods of hot weather.

To attribute what is going on outside my window to climate change would require a credible model, with evidence to support it, showing that the probability of the collision of a major tropical depression and a high pressure system over the Texas coast is higher when the average surface temperature is a degree or so warmer than it was in the past. I’m not aware of any such theory, and reading Spencer, he’s saying there isn’t one.

So rather than try to hijack Harvey to advance a political cause, it’s better to accept it as one of those things in the category of “stuff happens.” In this case, “stuff” is high pressure meets low pressure over Houston. Further, that stuff like this will happen regardless of government policy–imagine the havoc that Racer’s Storm would do today, and it occurred a quarter century before the drilling of the first oil well in the US.

Rather than making this another opportunity for political theater, it would be far better if energies were directed to helping out those devastated by the storm. Texans (with a strong assist from those in neighboring states, especially Louisiana) are coping heroically. We gladly welcome assistance from others, and you know that help will be reciprocated (as it has been in the past). To those attempting to exploit Houston’s misery, shut your pie hole and pitch in. Or don’t pitch in–but shut your pie hole regardless.

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July 26, 2017

Europe Has Always Been at War With the Diesel Engine!

Filed under: China,Climate Change,Economics,Energy,Politics,Regulation — The Professor @ 7:26 pm

Europe is at war with the diesel engine. Paris, Madrid, and Athens will ban diesels starting in 2025. Even Stuttgart (home of Daimler and Porsche) and Munich (home of BMW) are following suit. France and Britain have pledged to eliminate internal combustion engine cars by 2040.   The cars–diesel in particular–are too polluting, you see. And so the Euros are intent on replacing them with electric vehicles.

Europe has always been at war with diesel!

Um, not really. Like Oceania and East Asia, Europe and diesel were once fast allies. In its early days of the fight against climate change, Europe figured that since diesel engines burn fuel more efficiently than gasoline ones, they could reduce carbon emissions by forcing or inducing people to switch to diesel. They gave tax breaks and incentives that led to 1/3 of the European car fleet being diesel.

Then reality crept in. Diesels create more particulates, which create nasty pollution, particularly in urban areas. The Euros thought they could address this by strict emissions standards. So strict, that auto companies couldn’t meet them economically. So they lied and cheated. Brace yourself: even morally superior German companies lied and cheated! So Europe bribed people to pollute their cities. Well played!

Further, even by its own objectives the policy was a failure. Even though diesel has lower CO2 emissions, it has higher soot emissions–and soot contributes to warming. Whoops! Further, the CO2 advantage of diesel has been narrowing over the years, due to improvements in gasoline engine technology. So at best the impact of diesel on warming has been a push, and maybe a net bad.

But never fear! The same geniuses who forced diesel down Europe’s throat have a solution to the evils of diesel: they will force electric cars down people’s throats.

What could possibly go wrong?

Well, off the top of my head.

First, in the near term, a good portion of electric cars will be powered by electricity generated by coal. This is especially true if China goes Europe’s way.

Second, the green wet dream is for renewables to replace coal. Don’t even get me started. Renewables are diffuse and intermittent–they don’t scale well. They have caused problems in the power grid wherever (e.g., Europe, California) they have accounted for over 10 percent or so of generation. They consume vast amounts of land: air pollution (if you believe CO2 is a pollutant) is replaced by sight pollution and the destruction of natural habitat and foodstuff producing land. Renewables are a static technology (e.g., the amount of wind generation is limited by physical laws), whereas internal combustion technology has been improving continuously since its introduction in the 19th century. Really economic renewables generation will require a revolution in large-scale storage technology–a revolution that people have been waiting for for decades, but which hasn’t appeared.

Third, disposal of batteries is an environmental nightmare.

Fourth, mining the materials to produce batteries is an environmental nightmare–and is likely to benefit many kleptocrats around the world. Are greens really all that excited about massive mines for rare earths (notoriously polluting) and copper springing up to provide the materials for their dream machines? Will they pass laws against, say, blood cobalt? (And when they do, will they acknowledge–even to themselves–their culpability? Put me down as a “no.”)

Fifth, depending on the fuel mix, carbon emissions over an EV’s lifetime are not that much lower than those of an internal combustion car using existing technology–and that technology (as noted above) will improve.

Like I say, top of my head. But there’s an even bigger reason:

Sixth, unintended consequences, or more prosaically, shit happens. Just like the diesel box of chocolates was full of things the Euro better thans didn’t expect, and didn’t like upon consuming, the EV craze will also present unintended and unexpected effects, and in this type of circumstance, these effects are usually negative.

But they know better! How do we know? Because they keep telling us so! And because they keep telling us what to do!  Despite the fact that their actual record of performance is a litany of failures. (I cleaned that up. My initial draft had a word starting with “cluster.”)

Given such a track record, people with any decency would exercise some restraint and have some humility before embarking on another attempt to dictate technology. But no, that’s not the elite’s way. That’s not the bureaucrats’ way. They have learned nothing and forgotten nothing and will continue to prove that until someone stops them. Sadly, short of revolution it’s hard to see how that can happen.

Almost all attempts by states to dictate technology are utter fiascos. The knowledge problem is bigger here than anywhere, and the feedbacks are devilishly complex and hard to predict. Look at something seemingly as prosaic and well-understood as the production of oil and gas. Ten or twelve years ago, only a few visionaries glimpsed the potential of fracking, and I doubt that even they would admit that they foresaw the transformation that has occurred. Trying to dictate a technology that is dependent on myriad other technologies, and which may be rendered obsolete by technologies not yet developed, is something that only fools do.

But alas, there are many fools in high places.

The Orwellian switch from Europe and Diesel Have Always Been Allies to Europe Has Always Been at War With Diesel is particularly revealing because rather than recognize that the experience of Europe’s pro-diesel policy makes a mockery of policymakers pretenses of foresight, the failure of that policy is spurring them to embark on an even more speculative binge of coercion!

If you think CO2 is an issue, tax CO2 and let the market figure out the optimal way of reducing emissions: there are many margins on which to adjust, including technical innovation, fuel substitution, changes in lifestyle. Yet these madmen (and women) and fools insist on dictating technology right after their past dictates have proved failures. Worse than that: they are issuing new ukases because their old ones were crashing failures.

We are in the best of hands.

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July 4, 2017

Sunlight is the Best Disinfectant: If the Light of Day Scares You, You May Be a Germ

Filed under: Climate Change,History,Politics — The Professor @ 10:30 am

The Climate Change Mafia is threatening to go to the mattresses over EPA director Scott Pruitt’s plans to hold a “red team/blue team” exercise to evaluate climate science. Given the billions the US lavishes on this research, such a review is a salutary thing: but perhaps because it threatens said billions, the Mafia is going nuts:

The idea has been derided by activists and scientists who say it’s “dangerous” to elevate dissenting voices who disagree with them on global warming.

“Such calls for special teams of investigators are not about honest scientific debate,” wrote climate scientist Ben Santer and Kerry Emanuel and historian and activist Naomi Oreskes.

“They are dangerous attempts to elevate the status of minority opinions, and to undercut the legitimacy, objectivity and transparency of existing climate science,” the three wrote in a recent Washington Post op-ed.

Defenders of the “consensus” argue the existing peer-review process works well and a red-blue team dynamic is not needed. They further argue scientific bodies, like the Intergovernmental Panel on Climate Change, provide a forum for scientific debates.

“Developing science, far from being ignored, is confronted directly and openly in such assessments,” Santer, Emanuel and Oreskes wrote.

This is very, very revealing. What Pruitt is planning threatens the role of people like Santer and Emanuel as gatekeepers–although “trolls under the bridge” is probably a better metaphor. They dominate peer review, through a variety of mechanisms. They are the editors of the journals. They are the go-to referees. Look back at some of the references to peer review in the Climategate emails if you doubt this. No Little Skeptical Billy Goat or Medium Size Skeptical Billy Goat is going to make it over their bridge of peer review. But the sight of Pruitt and Trump playing the role of The Big Billy Goat Gruff has them quaking in fear.*

As for “scientific bodies, like the Intergovernmental Panel on Climate Change” providing a “forum for scientific debates”–don’t make me laugh. There was more open debate at Soviet Party Congresses in the 1930s. Again–these people dominate these forums, and like any guild or clerisy, they cannot tolerate the rise of competing forums where contrary voices may be heard.

This is all very revealing. Truly confident scientists would welcome the opportunity to prove in a very public way that they are right. They would welcome the opportunity to vanquish publicly–and if they are so right, to humiliate–their adversaries.

This lot is very fond of pointing out what transpired during the Scopes Monkey Trial. Well, here’s their opportunity to make their supposedly anti-science opposition a public laughingstock, just like Clarence Darrow did (unfairly, truth be told) in 1925. Yet they recoil at the prospect.

Telling, no?

Also telling is the refusal of many states to provide public records relating to voter registration and voting to the Trump administration’s Presidential Advisory Commission on Election Integrity. The media and the governing establishment heap scorn on anyone who dares suggest that there might be voting irregularities in the US. Well then–turn over the records so that it can be proved! If US elections in every jurisdiction in the United States are as pure as the driven snow (I snort writing that, being a Chicago native), you’d think these states would be falling over themselves to prove what a great job they are doing in achieving such an outcome, right?

They say that sunlight is the best disinfectant. Those–like the Climate Change Mafia and state election officials and pols–who shriek at the suggestion that sunlight be cast on their activities just might be germs.

* Looking back on my old Climategate posts, I stumbled across something I’d forgotten: that the Climate Mafia was truly ahead of its time in blaming its discomfiture on Russian hackers.  Just like Hillary and her minions and the media (but I repeat myself), they attempted to distract attention from the damning substance by attacking how the embarrassing emails came to light. I had a very Trumpian response, years before Trump was a political phenomenon–I praised the FSB. Hilarious.

 

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June 2, 2017

Trump Rejects the Climate Gateway Drug: Global Progressives Go All Spanish Inquisition

Filed under: China,Climate Change,Economics,Energy,Politics — The Professor @ 7:00 am

The wailing, gnashing of teeth, and rending of garments that has followed Trump’s widely expected decision to withdraw the US from the Paris Climate Accord is truly amazing to witness. It is virtue signaling taken to a new extreme. Indeed, since so many people want to signal simultaneously, each apparently feels obliged to outdo the other in hysterics in order to attract the attention their precious egos crave. Hence the apocalyptic paroxysms of rage that started the moment Trump spoke.

Truth be told, even if one believes the predictions of standard climate models, and even if one believes there will be compliance with the commitments of the Accord (which is slightly less likely than my becoming Pope), it would have a trivial impact on global temperatures: on the order of .2 degrees. The impact of the US withdrawal alone, given its declining CO2 emissions relatively (especially compared to China and India) and even absolutely (something the pious Europeans have not been able to manage despite their moribund economy and costly—and insane–commitment to renewables), means that Trump’s action by itself will have an immeasurable effect on climate in any time frame.

So despite all of the screeching that Trump has doomed—doomed I say!—life on earth, in reality the accord is not a practical agreement, but a ritual. And like all rituals, its primary purpose is to provide an opportunity to display obeisance to a creed, theology, doctrine, or dogma.

Which explains the overwrought reaction: those rejecting creeds, theologies, doctrines, and dogmas are heretics, and heretics must be attacked, ostracized, ridiculed, and in the dreams of some, burned. Trump is accused of heresy on three counts — heresy by thought, heresy by word, heresy by deed, and heresy by action — four counts! Yet he does not confess, and indeed revels in his heresy, only infuriating his inquisitors all the more.

There is much dispute over the concrete effects of Paris qua Paris. Some claim it is merely symbolic. Others claim that it will lead to real policy changes. Whatever the practical effects, there is no doubt about the ambitions of those pushing Paris, and Trump rejected them all. He rejected the delegation of authority over the United States to an unelected and unaccountable (self-perceived but actually utterly failed) elite. He rejected the exploitation of climate concerns to implement a vast scheme of international wealth redistribution.

And perhaps most importantly, he called out, confronted, and rejected the role of Paris as a gateway drug to even more intrusive supranational elite control and power:

The risks grow as historically these agreements only tend to become more and more ambitious over time.  In other words, the Paris framework is a starting point — as bad as it is — not an end point.  And exiting the agreement protects the United States from future intrusions on the United States’ sovereignty and massive future legal liability.  Believe me, we have massive legal liability if we stay in.

Absolutely. Climate concerns (hysteria, really) have become an engine for rent seeking and power grabbing on a global scale never seen before, and it needs to be throttled in the crib. For it is evident from years of experience how the leftist-statist-dirigiste march through the institutions works. Stake out a modest set of policies to achieve a lofty goal. When the policies fall short, impose more draconian ones. When those policies in turn fail, unleash more bureaucratic dragoons to intrude on every aspect of institutional life. And in this case, the institution at stake is the world. Better to stop it now, then to watch it metastasize later.

The reaction has been predictable. Corporate rent seekers—Goldman Sachs’ Lloyd Blackfein, GE’s Jeffrey Immelt, and our favorite among them Elon Musk—have expressed their rage and dismay. Political power seekers, the Euros most notable among them, are beside themselves.

The Euros are particularly amusing. After Trump spurned them, they are now looking to China’s Xie for climate policy leadership, just as they did on “free trade” at Davos. Daddy didn’t give them what they wanted, so they are throwing themselves into the arms of the leader of a biker gang. That will show that meanie, harrumph!

That won’t end well, and don’t bother come crying to us when it doesn’t! China is a mercantilist environmental disaster that will pump out increasing quantities of CO2 for the foreseeable future. China is in this for China, and will exploit climate policy to advance its economic interests while paying lip service to green pieties. Only the willfully self-deluded refuse to see otherwise.

The economic costs of any actual implementation of Paris promises would have dwarfed any benefits accruing to its effects on climate. Force-feeding of renewables will increase energy costs, thereby impairing growth—which will have a disproportionate effect on the poor. Taxes to fund global wealth transfers will have similar effects: and if you think that money transferred to poor countries is going to go to the poor, rather than sticky-fingered elites, you are truly a fool.

So Donald Trump has said we’ll never have Paris. And that’s a damn good thing. Arguably the best thing he’s done—and the shrieking of global progressives is about the best proof of that I can think of.

 

 

 

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February 26, 2017

If You Want Blood, You Got It–Tesla Redux

Filed under: Climate Change,Economics — The Professor @ 3:24 pm

When Musk announced his plans to merge Tesla and Solar City, I remarked that “Tesla bleeds cash like a Game of Thrones battle scene.” Elon (who long ago blocked me on Twitter, BTW) apparently recognized this. In an August 29, 2016 email to Tesla employees Musk emphasized how important it was for the company to report a positive cash flow for 3Q16:

I thought it was important to write you a note directly to let you know how critical this quarter is. The third quarter will be our last chance to show investors that Tesla can be at least slightly positive cash flow and profitable before the Model 3 reaches full production. Once we get to Q4, Model 3 capital expenditures force us into a negative position until Model 3 reaches full production. That won’t be until late next year.

. . . .

Even more important, we will need to raise additional cash in Q4 to complete the Model 3 vehicle factory and the Gigafactory. The simple reality of it is that we will be in a far better position to convince potential investors to bet on us if the headline is not “Tesla Loses Money Again”, but rather “Tesla Defies All Expectations and Achieves Profitability”. That would be amazing!

Were you amazed(!) that Tesla eked out a positive cash flow in the third quarter? If so, do you feel like a fool now that the 4Q16 results are out, showing that the blood is gushing again? For in the quarter, Tesla set a record (and not the good kind!) for free cash flow: a cool $1 billion to the negative, -$447 in operating cash flow and $522 in capex. The operating number reflected lower vehicle emissions credits, illustrating the company’s dependence on this source of revenue.

So what?, you say. Elon said that “Once we get to Q4, Model 3 capital expenditures” will make results look bad. But it appears that Telsa actually held back on capex. In the vaunted 3Q guidance, the company implied that it would spend $1 billion in capex in 4Q16: it barely spent half of that. This does not bode well for delivering the Model 3 on time, and demonstrates the dilemma that Musk faces.

Given Musk’s emphasis on delivering a positive cash flow number in the third quarter, it appears that his accountants rose to the task. There raises serious questions about the legitimacy of the third quarter number. It was obviously a one-off. Elon said that it was vital to “convince potential investors to bet on us” by “defying expectations.”  Was it necessary to lie to defy?

Any such suspicions should be strengthened by the, well, suspicious resignation of Tesla’s CFO on the day its 8-K was filed, to be effective when its 10-K is filed.  The reason given is rather odd: Wheeler plans to “pursue opportunities in public policy.” Well, I guess it’s better than “I want to spend more time with my family.”

The resignation of a CFO is never a good sign, especially when it coincides with the release of an ugly earnings report that follows an earnings report that appeared to be too good to be true at the time–and which looks even more too good to be true in retrospect.

Even Elon appears a little anxious. He said that the company’s cash position is “very close to the edge.” So get ready to have your stock watered again, boys and girls: “So we’re considering a number of options but I think it probably makes sense to raise capital to reduce risk.”

Or, to mix metaphors: another transfusion for the bleeder. In the vein, out the artery. Investors and Wall Street have been very forgiving. For years. How long can that continue?

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February 5, 2017

Those Who Control the Past Control the Future, Climate Data Edition

Filed under: Climate Change,Politics — The Professor @ 10:33 pm

Advocates of the anthropogenic climate change hypothesis excoriate anyone who expresses skepticism as being anti-science. One of the hallmarks of true science is uncompromising commitment to the integrity of data. Ironically, this is a norm that warmists repeatedly transgress.

Case in point: the influential paper by Thomas Karl and coauthors which purports to show that the 15+ year pause in warming was chimerical. But a former NOAA scientist who was the primary steward for temperature data, and the designer of climate data protocols, has blown the whistle on this article. Dr. John Bates asserts that the data was fundamentally flawed, that the basic protocols were not followed, that Karl et al repeatedly made choices that biased their results in favor of finding warming, and that they failed to submit the data for review. To give just one example of their dubious choices, these “scientists” forced the more reliable buoy sea surface temperature data to conform with less reliable data collected the old fashioned way by ships.

But it gets better. And by better, I mean worse: “the computer used to process the software had suffered a complete failure,”  which means the study cannot be replicated. (What?!? No backup?!? How is that possible?)

Replication is another bedrock principle of science. Since Karl et al cannot be replicated, for all intents and purposes the article does not exist. The journal that published it–Science–should withdraw the paper, especially since Karl et al violated the journal’s policies involving data archiving and documentation. Indeed, Science should repudiate it. It should be removed from all citation indices, and any journal that published a paper that cites it should carry an errata listing all of these articles. Further, the conduct of the researchers should be evaluated in order to determine whether any federal funding supporting the research should be returned.

Would that this were a one-off. Alas, basic temperature data has been manipulated in a perfect illustration of Orwell’s dictum: “He who controls the past controls the future. He who controls the present controls the past.”  Those who control the data in the present have “adjusted” historical temperature records repeatedly, and almost uniformly in a way that shows more rapid warming. This has involved, for instance, reducing recorded temperatures from decades ago–most notably from the 1930s, which was a very warm period in the original, unadjusted data. By making the past cooler, these manipulations have increased the estimated rate of temperature increase, thereby advancing the warming narrative, and exerting control over current and future policy. The adjustments have not been done transparently, and they cannot be reviewed or replicated. God only knows if the original data has been retained with its integrity intact.

But even that Orwellian fiddling with the past was not enough to eliminate all anomalous evidence: the pause was flatly inconsistent with the predictions of the climate models, and in an effort redolent of “hiding the decline” of Climategate infamy, Bates makes a compelling argument that Karl tortured the data in order to “bust” the pause. And before anyone could check, checking became impossible.

It is not too much of an exaggeration to say that the data have been raped, by Karl in the present instance, and by many others who are actually allegedly the stewards of the basic records. This is profoundly unscientific, which makes the arrogant posturing of individuals like Karl, who presume to judge those who disagree with them as being anti-science, all the more insufferable. It also makes one wonder what they are afraid of, if the evidence regarding warming is so overwhelming and incontrovertible.

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February 4, 2017

The Regulatory Road to Hell

One of the most encouraging aspects of the new administration is its apparent commitment to rollback a good deal of regulation. Pretty much the entire gamut of regulation is under examination, and even Trump’s nominee for the Supreme Court, Neil Gorsuch, represents a threat to the administrative state due to his criticism of Chevron Deference (under which federal courts are loath to question the substance of regulations issued by US agencies).

The coverage of the impending regulatory rollback is less that informative, however. Virtually every story about a regulation under threat frames the issue around the regulation’s intent. The Fiduciary Rule “requires financial advisers to act in the best interests of their clients.” The Stream Protection Rule prevents companies from “dumping mining waste into streams and waterways.” The SEC rule on reporting of payments to foreign governments by energy and minerals firms “aim[s] to address the ‘resource curse,’ in which oil and mineral wealth in resource-rich countries flows to government officials and the upper classes, rather than to low-income people.” Dodd-Frank is intended prevent another financial crisis. And on and on.

Who could be against any of these things, right? This sort of framing therefore makes those questioning the regulations out to be ogres, or worse, favoring financial skullduggery, rampant pollution, bribery and corruption, and reckless behavior that threatens the entire economy.

But as the old saying goes, the road to hell is paved with good intentions, and that is definitely true of regulation. Regulations often have unintended consequences–many of which are directly contrary to the stated intent. Furthermore, regulations entail costs as well as benefits, and just focusing on the benefits gives a completely warped understanding of the desirability of a regulation.

Take Frankendodd. It is bursting with unintended consequences. Most notably, quite predictably (and predicted here, early and often) the huge increase in regulatory overhead actually favors consolidation in the financial sector, and reinforces the TBTF problem. It also has been devastating to smaller community banks.

DFA also works at cross purposes. Consider the interaction between the leverage ratio, which is intended to insure that banks are sufficiently capitalized, and the clearing mandate, which is intended to reduce systemic risk arising from the derivatives markets. The interpretation of the leverage ratio (notably, treating customer margins held by FCMs as an FCM asset which increases the amount of capital it must hold due to the leverage ratio) makes offering clearing services more expensive. This is exacerbating the marked consolidation among FCMs, which is contrary to the stated purpose of Dodd-Frank. Moreover, it means that some customers will not be able to find clearing firms, or will find using derivatives to manage risk prohibitively expensive. This undermines the ability of the derivatives markets to allocate risk efficiently.

Therefore, to describe regulations by their intentions, rather than their effects, is highly misleading. Many of the effects are unintended, and directly contrary to the explicit intent.

One of the effects of regulation is that they impose costs, both direct and indirect.  A realistic appraisal of regulation requires a thorough evaluation of both benefits and costs. Such evaluations are almost completely lacking in the media coverage, except to cite some industry source complaining about the cost burden. But in the context of most articles, this comes off as special pleading, and therefore suspect.

Unfortunately, much cost benefit analysis–especially that carried out by the regulatory agencies themselves–is a bad joke. Indeed, since the agencies in question often have an institutional or ideological interest in their regulations, their “analyses” should be treated as a form of special pleading of little more reliability than the complaints of the regulated. The proposed position limits regulation provides one good example of this. Costs are defined extremely narrowly, benefits very broadly. Indirect impacts are almost completely ignored.

As another example, Tyler Cowen takes a look into the risible cost benefit analysis behind the Stream Protection Rule, and finds it seriously wanting. Even though he is sympathetic to the goals of the regulation, and even to the largely tacit but very real meta-intent (reducing the use of coal in order to advance  the climate change agenda), he is repelled by the shoddiness of the analysis.

Most agency cost benefit analysis is analogous to asking pupils to grade their own work, and gosh darn it, wouldn’t you know, everybody’s an A student!

This is particularly problematic under Chevron Deference, because courts seldom evaluate the substance of the regulations or the regulators’ analyses. There is no real judicial check and balance on regulators.

The metastasizing regulatory and administrative state is a very real threat to economic prosperity and growth, and to individual freedom. The lazy habit of describing regulations and regulators by their intent, rather than their effects, shields them from the skeptical scrutiny that they deserve, and facilitates this dangerous growth. If the Trump administration and Congress proceed with their stated plans to pare back the Obama administration’s myriad and massive regulatory expansion, this intent-focused coverage will be one of the biggest obstacles that they will face.  The media is the regulators’ most reliable paving contractor  for the highway to hell.

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January 17, 2017

Didn’t Know China is a Beacon of Economic Openness & Political Freedom? You’re Not Worthy of Davos!

Filed under: China,Climate Change,Economics,Politics — The Professor @ 9:26 pm

The Davos set is in such a complete meltdown over Trump that they are desperate for someone to champion the cause of globalism and to fight against the growing tide of protectionism. And they found him! Chinese President Xi Jinping.

No. Really. The slobbering over his speech today praising globalization and criticizing protectionism was embarrassing, even by Davos standards.

Trump’s views on trade are utterly misguided, but to view Xi and China as some sort of avatar for an open society is not just bizarre. It’s perverse. Beyond perverse, really.

China’s economy is a Frankenstein of controls and state intervention. Vast swathes of the Chinese economy are strongly protected from foreign competition, and foreign investment is heavily regulated. The currency is also tightly controlled, and not freely convertible: that will happen in a decade, if ever. I am not saying that that the currency is currently manipulated downwards. To the contrary, at present the reverse is true. Chinese are looking for every way possible to get money out of the country, a sure sign of an overvalued currency. (Small illustration: visit a luxury car dealer in any major city in the US, and you’ll note how many of the buyers are Chinese.) The government  is doing everything possible to prevent it, and may be forced to go to hard capital controls. The point is that in the currency as in other things, the Chinese buy open markets a la carte, and only when it pleases them.

In brief, China is a heavily controlled mercantilist economy. Xi and the Chinese do things that Trump could only dream of in his greatest flights of mercantilist fantasy. To view Xi as the anti-Trump is utterly ridiculous, even by the clownish standards of the Davos dips.

Trump’s presidency and the environmental holocaust that it will supposedly bring has also led many to turn to China for leadership on climate. This is just as clueless, even if one overlooks the real pollution that chokes China–already this year, 60 Chinese cities have declared smog emergencies–and focuses on the far more speculative issue of CO2.

Yes, China has spent gazillions on wind and solar. But what has it received for its massive investment? This NYT article gives a great illustration:

On the edge of the Gobi Desert, the Jiuquan Wind Power Base stands as a symbol of China’s quest to dominate the world’s renewable energy market. With more than 7,000 turbines arranged in rows that stretch along the sandy horizon, it is one of the world’s largest wind farms, capable of generating enough electricity to power a small country.

But these days, the windmills loom like scarecrows, idle and inert. The wind howls outside, but many turbines in Jiuquan, a city of vast deserts and farms in the northwest province of Gansu, have been shut off because of weak demand. Workers while away the hours calculating how much power the turbines could have generated if there were more buyers, and wondering if and when they will ever make a profit.

“There’s not much we can do right now,” said Zhou Shenggang, a manager at a state-owned energy company who oversees 134 turbines here; about 60 percent of their capacity goes unused each year. “Only the state can intervene.”

China, the world’s largest emitter of greenhouse gases, has pointed to its embrace of wind and solar power and other alternatives to coal to position itself at the forefront of the global effort to combat climate change.

More than 92,000 wind turbines have been built across the country, capable of generating 145 gigawatts of electricity, nearly double the capacity of wind farms in the United States. One out of every three turbines in the world is now in China, and the government is adding them at a rate of more than one per hour.

But some of its most ambitious wind projects are underused. Many are grappling with a nationwide economic slowdown that has dampened demand for electricity. Others are stymied by persistent favoritism toward the coal industry by local officials and a dearth of transmission lines to carry electricity from rural areas in the north and west to China’s fastest-growing cities.

Then there’s this: “Wind power now accounts for 3.3 percent of electricity generation in China.”

And so how does China generate power? With dirty coal, mainly–as the choking smog in Beijing and other major cities testifies.

In brief, China’s renewables boom is a classic example of green hype, and of the grotesque malinvestment that has occurred in China in the past decades, especially post-financial crisis. Keep this in mind when you interpret Chinese economic statistics. These thousands of windmills that produce nothing contributed to measured Chinese GDP–but they contribute virtually nothing to its actual economic wealth or consumption. Much of measured Chinese GDP growth is due to the incurring of costs that confer no benefits, and is as economically meaningful as Soviet statistics. (Alas, allegedly smart people are as deceived today by China as they were by the supposed Soviet miracle.)

The article also contains this tidbit: “The tepid demand for electricity in an economic downturn has also exacerbated the troubles for renewable energy. Demand for electricity grew by only 0.5 percent in 2015, the slowest rate of growth since 1974.” But measured GDP increased 6.9 percent. It’s hard to reconcile those figures.

But the “elite” is so obsessed with Trump and the havoc that they are just sure he will wreak on trade and the environment that they embrace the leader of a mercantilist environmental disaster as their savior.

And it’s not just economics. The elites project every conceivable oppression fantasy on Trump, and portray him as a mortal threat to racial and religious minorities (including Jews–quick: Someone warn his son-in-law!), LGBTQXYZwhateveritisnowIcan’tkeepupandwillprobablyrunoutofletters, immigrants, and on and on and on. Yet they are lionizing a real oppressor, indeed, the leader of one of the most repressive regimes on the planet: what it lacks in rigor compared to North Korea, it makes up with in size. They ignore real oppression and get hysterical over oppression that exists exclusively in their imaginations.

I would say these people are not serious. I wish that were true. The problem is that these people are deadly serious.

They are also completely without a clue. Davos founder Klaus Schwab ostentatiously said that Trump was not invited. First, as if Trump gives a flyer–indeed, he probably considers this a compliment. Second, and more importantly, it demonstrates exactly why this lot was utterly blindsided by the events of 2016–most notably by Brexit and the election of Trump. Davos–and elite conversation around the world–is a carnival of confirmation bias, an impenetrable bubble of self-congratulation utterly cut off from the people they condescendingly claim that they want to help. People with way too much money and way too little sense.

At the risk of sounding like Tom Friedman quoting some cab driver, I will relate a story from today that illustrates the disconnect between those in Davos giving tongue baths to a mercantilist leader of a police state and the people who are toppling their heroes and putting their arch enemies in their stead. While getting a haircut, my barber–a Lebanese immigrant, by the way, not a member of Storm Front–said “I don’t pay much attention to politics, but I hope Trump tells the Chinese to go fuck themselves.” (Note: China had not been part of the conversation up to that point.)

But this is our world now. Due to the Trump derangement syndrome the allegedly liberal globalist elites heap praises on the leader of a protectionist, mercantilist, serial human rights violator. And all the while ignoring those with more common sense (like my barber), then wondering why they are losing.

 

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November 29, 2016

A Policy Inspired More by the Marx Brothers Than Marx

Filed under: China,Climate Change,Commodities,Economics,Politics,Regulation — The Professor @ 9:51 pm

As goes China, so go the commodity markets. The problem is that where China goes is largely driven by a bastardized form of central planning which in turn is driven by China’s baroque political economy. In past years, China’s rapid growth conferred on the government a reputation for wisdom and foresight that was largely undeserved, but now more people are waking up to the reality that Chinese policy engenders tremendous waste, and that the country would actually be richer–and have better prospects for the future–if its government tempered its dirigiste tendencies.

Case in point: Morgan Stanley’s Chief China Economist uses the ham-fisted intervention into the coal industry to illustrate the broader waste in the Chinese system:

These reforms entail the necessary reduction of excess capacity, particularly in state-owned enterprises (SOEs) and industries where overproduction issues are often the most acute.

While economists agree that a reduction of excess capacity, particularly in heavy industry, is key to the nation’s efforts to get on a more sustainable growth trajectory, China’s supply side reforms bare little resemblance to the “trickle down” Reaganomics of the 1980s, which seized upon tax cuts and deregulation as a way to foster stronger growth.

In Morgan Stanley’s year-ahead economic outlook for the world’s second-largest economy, Chief China Economist Robin Xing uses the coal industry to detail two key ways in which supply-side reforms with Chinese characteristics have been ill-designed.

“The state-planned capacity cuts and the slow progress in market-oriented SOEs reform have come at the cost of economic efficiency,” laments the economist.

In a bid to shutter overproduction and address environmental concerns, Beijing moved to restrict the number of working days in the sector to 276 from 330 in February.

But in enacting these cuts, policymakers employed a one-size-fits-all approach.

“The production limit was implemented to all companies in the sector, which means good companies that are more profitable and less vulnerable to excess capacity are affected just as much as the bad ones with obsolete capacity and weak profitability,” writes Xing.

This is largely true, but begs the question of why China adopted this approach. The most likely explanation is that the real motive behind the cuts has little to do with “environmental concerns”, though those are a convenient excuse. Instead, forcing the most inefficient producers out of business–or allowing them to go out of business–would cause problems in the banking and (crucially) the shadow banking sectors because these firms are heavily leveraged. Allowing them to continue to produce, and propping up prices by forcing even relatively efficient firms to cut output, allows them to service their debts, thereby sparing the banks that have lent to them, and the various shadow banking products that hold their debt (often as a way of taking it off bank balance sheets).

If the goal was to reduce pollution, it would have been far more efficient to impose a tax on coal-related pollutants. But this tax would have fallen most heavily on the least efficient producers, and would caused many of them to fail and shut down. The fact that China has not pursued that policy is compelling evidence that pollution–as atrocious as it is–was not the primary driver behind the policy. Instead, it was a backdoor bailout of inefficient producers, and crucially, those who have lent to them.

Morgan Stanley further notes the inefficiency of the capital markets which favor state owned enterprises:

As such, this misallocation of production serves to amplify the already prevalent misallocation of credit stemming from state-owned firms’ favorable access to capital. That arguably undermines market forces that would otherwise help facilitate China’s economic rebalancing.

But this too is driven by politics: SOEs have favorable access to capital because they have favorable access to politicians.

The price shock resulting from the output cuts hit consuming firms in China hard, which has led to a lurching effort to mitigate the policy:

This month, Beijing was forced to reverse course to allow firms to meet the pick-up in demand — another case of state dictate, rather than price signals, driving economic activities.

“In this context, we think the more state-planned production control and capacity cuts cause distortions to the market and are unlikely to be sustainable,” concludes Xing.

“Beijing was forced to reverse course” because utilities consuming thermal coal and steel producers consuming coking coal pressured the government to relent.

The end result is a policy process that owes more to the Marx Brothers than to Marx. A cockamamie scheme to address one pressing problem causes problems elsewhere.

Methinks that Mr. Xing is rather too sanguine about the ability or willingness of the Chinese government to sustain such highly distorting policies. They have done so for years, and are showing no inclination to change their ways. Efficiency is sacrificed to achieve distributive and political objectives, and the bigger and more complex the Chinese economy the more difficult it is for the authorities to predict and control the effects of their policy objectives. But this just induces the government to resort to more authoritarian means, and attempt to exercise even more centralized power. This is costly, but these are costs the authorities are willing and able to bear. Inefficiency is the price of power, but it is a price that the authorities are willing to pay.

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