Eugene Linden
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Diary of a Tree Stump

Something lighter:                                    

  “I would vote for a tree stump if it could beat Donald Trump”

   [Timothy Egan, in his Nov. 8, 201...

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Deep Past
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endangered animals
rapid climate change
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Winds of Change
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Afterword to the softbound edition.


The Octopus and the Orangutan
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The Future In Plain Sight
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The Parrot's Lament
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Silent Partners
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Affluence and Discontent
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The Alms Race
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Apes, Men, & Language
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ECONOMIC APARTHEID? Updated


Wall Street is the undertaker beetle of statistics: the markets voraciously consume, digest and then forget the numbers churned out by the keepers of vital economic statistics each week. Every now and then, however, a statistic pops up that gives pause to this number munching machine because the number points to deep and scary forces gathering beneath the surface. That happened Jan. 9, when the U.S. Labor Department announced that non-farm payrolls only increased by 1,000 jobs in Dec. despite robust economic growth, and it was underscored March 5, when the Feb. payroll number came in at 21,000, a small fraction of the 130,000 new jobs predicted by economists and the 300,000 estimated by the White House. After three months of anemic numbers amid a supposedly robust recovery, even the most Panglossian cheerleaders recognize that consumers canít spend if they donít have jobs. Much has been written about outsourcing, but the real threat of these stunning numbers is that they may set in motion a cascade of events that could become seriously destabilizing in the coming years. A jobless recovery that enriches shareholders, but bypasses Americaís debt-burdened employed will exacerbate the wealth gap between rich and poor. This gap was perceived as a problem at the end of World War II, and despite more than 50 years of unprecedented global economic expansion it has only widened, both in the U.S. and in the developing world. In my 1998 book, The Future in Plain Sight, I made the wage gap one of my clues to future instability because the gap is written in the DNA of the way we now do business, and because it is unsustainable. The few can only hold onto their gains with the consent of the many, and at some point those not sharing in those gains will realize that a significant portion the enormous wealth created for the fortunate few in recent years has come out of their future prospects. Back in 1997, I expected that this realization to take a long time to gain traction with workers, but a few more months of payroll numbers such as those released last week, and this ďahaĒ moment might arrive within a year. Thatís when trouble will really begin. The labor department figures have prompted a flood of explanations. Some caution that the payroll number may miss significant numbers of self-employed, while different pundits have mentioned technologically driven efficiency improvements, cautious businesses that make people work harder rather than hire as business improves, and the movement of jobs overseas. This last point is the real problem Any U.S. business can now draw on an unlimited pool of cheap skilled labor for nearly any business need that does not involve face-to-face encounters. This not only fosters recoveries without jobs, it also puts a cap on wage demands by those lucky enough to still hold a job. The executives making decisions to outsource to low wage employees have their own problems. The digital connections that gives Amalgamated Cup access to cheap programmers in Bangalore also gives competitors in China and elsewhere access to Amalgamated Cupís markets at home. If a networked global economy has put a cap on wages, it has also put a cap on the prices a business can charge for their goods. Thanks to the Internet everything and everyone is in danger of becoming a commodity. Both businesses and labor would like to set up barriers to low-priced competitors, but there really is no easy way out of this self-destructive system. If the gap continues to widen and the economy turns down, there will be an ever -growing constituency for protectionist measures and other restraints that could lead us into a disastrous spiral of trade wars. On the other hand, any measures such as government guarantees, safety nets, or other programs offered by politicians trying to capitalize on class resentments would spook the deficit-conscious bond markets, and could easily cause a collapse of the dollar. Because of U.S. dependence on trade and because trillions of dollars in dollar-denominated assets are held overseas, U.S. economic policy is now hostage to the opinions of foreigners, our military might notwithstanding. Is there a solution? Maybe. A massive public works project that did not expand the deficit would help; something like a massive clean energy program or nationwide high-speed rail network financed by new taxes on pollution and fossil fuels. A more progressive tax system would help as well. Both seem inconceivable since the Bush administration wants to spend public works dollars on Mars not earth, and Congress that has just enacted tax breaks that exacerbate the wealth gap. Still, if this jobless recovery stalls, and populist resentments find a voice, I suspect that the few might give up a bit to the many in order to hold onto the rest. The South African tycoon Harry Oppenheimer once remarked, ďIf they donít eat, we canít sleep.Ē He was talking about racial apartheid, but the remark might well apply to economic apartheid as well.

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Short Take

THOUGHTS ON WHY THE EARLY IPCC ASSESSMENTS UNDERSTATED THE CLIMATE THREAT

 

An oped involves extreme compression, and so I thought I’d expand on why I think the initial IPCC reports so underestimated the threat. Make no mistake, the consensus in the summaries for policy makers in the first two assessments did underestimate the threat. The consensus was that permafrost would be stable for the next 100 years and also that the ice sheets would remain stable (there was even a strong sentiment at that time that the East Antarctic sheet would gain mass). Moreover, in 1990, the concept of rapid climate change was at the periphery of mainstream scientific opinion. All these things turned out to be wrong

Of course, there were scientists at that time who raised alarms about the possibility of rapid climate change, collapse of the ice sheets, and nightmare scenarios of melting permafrost, but, fairly or not, the IPCC summary for policy makers was and is taken to represent the consensus of scientific thinking.

In my opinion such documents will always take a more conservative (less dramatic) position than what scientists feel is justified. For one thing the IPCC included policy makers, most of whom were more incentivized to downplay the threats. For another, many of the national governments that were the customers for these assessments barely tolerated the exercise and gave strong signals that they didn’t want to see anything that called for dramatic action, and this being the UN, there was a strong push to present a document that as many governments as possible would accept.

And then there is the nature of science and the state of climate science at that point. There is an inherent structural lag built in to the nature of science. For instance, the 1980’s were marked by the rapid development of proxies to see past climate changes with ever more precision. By the mid-late 80’s the proxies and siting had been refined sufficiently that the GISP and GRIP projects could confidently get ice cores from Greenland that they felt represented a true climate record and by then they also had the proxies with the resolution to see the rapid changes that had taken place in the past. Given the nature of data collection, interpretation, peer-review and publishing, it wasn’t until 1993 that these results were published.

It took nearly another decade for this new, alarming, paradigm about how rapidly global climate can change to percolate through the scientific community, and, even today, much of the public is unaware that climate can change on a dime.

As for the ice sheets, when I was on the West Antarctic Ice Sheet in 1996, there was talk about the acceleratio of  ice streams feeding the Thwaites and Pine Island glaciers, but the notion that there might be a significant increase in runoff from the ice sheet over the next hundred years was still very much a fringe idea.

With permafrost, the problem was a sparsity of data in the 80s and early 90s and it is understandable that scientists didn’t want to venture beyond the data.

The problem for society as a whole was that the muted consensus on the scale of the threat diminished any sense of urgency about dealing with the problem. Perhaps the best example of this was the early work of William Nordhaus. Working from the IPCC best estimates in the early 1990s Nordhaus published one paper in which he predicted the hit to the US GDP from climate change in 2100 would be about ½ of 1%. Nobody is going to jump out of their chair and demand action if the hit to the economy was going to be 0.5% of GPD a hundred years laterLibertarians such as William Niskanen seized on this and testified before Congress that there was plenty of time to deal with global warming if it was a threat at all.  

And then there was the disinformation campaign of industry, particularly fossil fuel lobbyists, as well as pressure from unions (the UAW in particular) and the financial community. These highly motivated, deep-pocketed interests seized on scientific caution to suggest deep divisions among scientists and that the threat was overplayed. Little wonder then that the public failed to appreciate that this was a looming crisis that demanded immediate, concerted action.

 



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