Articles Tagged "Raymond Richman"

As an economist and a former student of Prof. Milton Friedman at the University of Chicago, I am by education skeptical about any theory of climate change that explains warming but not cooling. The anthropogenic theory of climate change (AGW) blames man-caused carbon emissions for global warming but cannot explain past periods of global warming and cooling when there were no human beings to blame for climate change. Another economist who shares this view is former Czech President and Prime Minister,Vaclav Klaus, who fought against Communism and recognized in the movement that blames man for causing global warming, a new threat to our freedom saying:

I feel threatened now, not by global warming — I don’t see any — (but) by the global warming doctrine, which I consider a new dangerous attempt to control and mastermind my life and our lives, in the name of controlling the climate or temperature. … I used to live in a similar world called communism. And I know it led to the worst environmental damage the world has ever experienced.” (As quoted in the Herald Sun of Melbourne , 7/28/11)

It not only cannot explain past periods of global warming and cooling, it cannot explain the most recent decade of global cooling. Just fifty years there were allegations that we were entering a period of global cooling. There are reasons to be skeptical.

But even if the AGW theory had some basis, economists have to ask , “What is the best policy to deal with global warming?” Whatever policy is selected should meet the standard economic criteria of economic benefit-cost analysis.

We know what caused the recession of 2008-09. It was the bursting of the housing bubble which created a financial crisis that endangered every large bank in the U.S. and many abroad. The federal government enacted Troubled Asset Relief Program (TARP), the program which sustained the liquidity of almost all of the large financial institutions, giving them time to deal with the enormous number of mortgages in default on their payments. An economic stimulus was enacted which succeeded in stabilizing the level of unemployed at about 9.2% of the workforce not counting involuntary part-timers and the number who dropped out of the labor force. Then much to the surprise of the administration’s economic team, employment fell, causing a substantial drop in the securities’ markets and concern to be expressed about the possibility of a double-dip recession.

Meanwhile, the eurozone had to face the possibility that Greece would not be able to pay its soon to mature sovereign debt much of it created to reduce man-made carbon emissions. The principal other country having difficulty managing its sovereign debt is the USA but fortunately its debt is expressed in dollars and it has the ability to print as much of it as it needs. Greece does not. The euro standard is much like the gold standard. If a country runs out of euros, there is nothing it can do except tighten its belt.

No one mentioned the fact that the reason that Greece was short of Euros with which to pay its debt was its international trade deficit which in 2010 amounted to an estimated €-14 billion. Of course it was not the only European country experiencing a trade deficit. What all the PIIGS had in common in 2010 were trade deficits: Spain, €-45.5 billion; Italy, €-48.5 billion; Portugal, €-15.9 billion; Greece, €-14 billion; and Ireland, €-1.1 billion. France likewise had a trade deficit, €-38.9 billions. But Germany had a trade surplus, €134.6.