Climate Failure
Forget the steaming, record heat along the East Coast or the hundreds of peat fires in Russia. It is easy to attribute summer’s soaring mercury to El Niño weather patterns or long-term weather cycles. (We can’t blame sunspots because they have practically disappeared.) Across the northern Rockies, however, signs of long-term global warming have been fast accumulating. Northern pine beetles have destroyed vast tracts of white bark pine, greatly reducing the mountains’ capacity to control snowmelt and prevent spring flooding downstream. At the same time, the golden marmot population in the same ranges has been exploding, and growing fatter too, because of the longer warm seasons in the high country. Nonetheless, Congress failed last month to produce a climate bill before its summer recess.
The House once again did its part, but the Senate, as usual, decided against bringing a bill to the floor. House members are fuming. They took a brave vote in a difficult political season, only to be abandoned by the upper house and by the White House. They worry that constituents, fearful that gasoline taxes and utility bills will rise under a climate bill, will take it out on them at the polls. The administration, with a go-ahead decision from the Supreme Court in 2007, may attempt to meet its international commitments by allowing the Environmental Protection Agency to curtail carbon emissions through regulation. While regulation may provide the hoped-for reductions in the short and medium term, it is not likely to build the national consensus that outspoken leadership on behalf of a climate bill might have begun to create. In addition, unlike a law, agency regulation can be easily overturned by another administration.
Addicted Nation
Afghanistan, the world’s largest opium producer, now finds its own population to be a major consumer of narcotics, with widespread addiction among all age groups. Both production and drug use have greatly increased over the past five years. The trauma of three decades of war-related strife has led many to turn to opium-based drugs as a way to dull the pain of their difficult existence. The typical addict, according to a U.N. report in June, is a 28-year-old male, married with children but separated from his wife. Women too become addicted, especially those who are widowed or divorced. Half of opium-using parents who cannot afford medicine give the drug to their children to assuage pain. Complicating the situation is that there are few treatment facilities for those who seek help. Over half a million people have no access to addiction treatment.
Poppy cultivation has increased in the southern provinces partly because of greater access to irrigation and fertilizers. Efforts to reduce the overall number of poppy fields have met with limited success because the crops bolster families’ incomes, and farmers are reluctant to switch to food crops that would earn them much less. Moreover, Taliban militants fund their insurgency partly by taxing farmers on their poppy crops. There are no easy answers for a problem that threatens the well-being of an increasing number of Afghanistan’s addicted inhabitants. More resources are needed to address this crisis, but corruption and fallout from the nine-year coalition war cast doubt on that possibility.
Profit and Loss
Liberal and conservative economists agree: Actions taken by the Bush and Obama administrations and the Federal Reserve saved the world economy from a depression. Nonetheless, people and pundits are restive. Public anxiety over the slow economic recovery is real. It is also projected onto President Obama. Do we need a second stimulus? Should the president renew the Bush tax cuts for upper-income earners? Ease up on the big banks? In keeping with the pattern of the last two recoveries, business activity in our stratified economy is anemic. There are six job-seekers available for every opening. Measures of household wealth are in decline, not just because of the collapse in the housing market, but because of the long-term decline in wages and the rise in inequality.
Few seem to hold the banks that brought on the economic collapse accountable for the lack of lending or lay criticism on major corporations for their lack of hiring. The financial sector has recovered. In some cases, banking profits are close to record highs and so are salaries and bonuses. Still, banks hesitate to extend loans for fear, they say, of sluggish consumer spending. Yet consumer spending will not rise unless more workers have more to spend. Corporate profits are growing because of greater productivity—that is, companies are getting more work out of employees for the same or lower pay. In the meantime, according to Bloomberg BusinessWeek, corporations are sitting on nearly $2 trillion in cash—enough for two new stimulus bills, with some to spare. The federal government has done its part to save the economy and protect workers. It is time for businesses, especially the banks, to do their fair share to invest in the future of the country and the well-being of their fellow Americans.
Why are corporations sitting on $2 trillion of cash?
Because of the unstable economic environment created by a long series of perhaps well intentioned but disasterous government interventions, and lack of strict government control of the banking functions even Adam Smith said were necessary.
When I studied economics in the late 1960s there was talk of fine-tuning the economy. We don't hear much of the prideful talk today, do we.
Your editorial does not mention that we are in the midst of a 10 year cooling cycle, that Australia, Bolivia, and Chile are suffering record cold spells, but why bother. Human caused global warming is apparently accepted dogma, true or not.
As a practicing Environmental Engineer of many years, and one who strongly believes that our fossil fuel use and dependence on foreign supplies brings pollution to our cities, aggravates asthma and allied respiratory illnesses, and creates social and political problems through fossil fuel greed and need. I also agree that climate change, namely global warming and cooling, is indisputably occurring. It always has, always will. However, despite all good intentions, the relationship between carbon dioxide (CO2), fossil fuel usage, and global warming is tenuous at best. Looking at the data objectively, while not allowing my desire for how that data strongly supports laudable environmental goals and objectives, I must strongly disagree with your implication that this or any administration can do anything about it. To do so implies that you are functioning as a political dupe. If you want to reduce hydrocarbon use, a very laudable and necessary goal, editorialize on increasing prices, not silly political posturing. To me the proposed climate bill is an economic disaster in waiting that will not come close to addressing the issue. During the last gasoline shortage, we experienced a 10% reduction in use when the price was raised $1.00 per gallon. Common sense would dictate not a new government program but an increase in price with revenue distributed back on a per capita basis…. big users would economize, small users (most often the poor) would benefit and fossil fuel usage would drop.As I have mentioned previously, Obama's mode of operation has been to keep uncertainty high. This has a real and measurable economic cost in terms of deferred capital spending, deferred consumer purchases.
I think it is important that we remember that our country has a wide variety of businsses and banks . The private sector is not a monolith. Odds are that no one action alone can change employment opportunities - that is, for the good. We seem predestined to subsidize government jobs by taxes - you know, those jobs with pensions that provide for annual cost of living increases and greater job security than the private sector enjoys - yet we are adverse to cutting taxes even if doing so increases employment. Would cutting taxes on the jobs we need add jobs or not?
One thing that puzzles me is whether allowing all compensation to be tax deductible makes sense. Why, for instance, should the economy subsisize compensation of more than $250,000 or whatever amount that seems so much more than the average taxpayer owns be tax deductible at all to their employer?
Argentina Has Colder Winter Than Antarctica, Spurring Record Power Imports
http://www.bloomberg.com/news/2010-08-03/argentina-colder-than-antarctica-spurs-record-power-imports-shuts-plants.html
Cold Wave Kills 6 Million Fish in Eastern Bolivia
http://globalfreeze.wordpress.com/2010/08/07/cold-wave-kills-6-million-fish-in-eastern-bolivia/
"August 5, 2010
LA PAZ – Authorities in the eastern Bolivian province of Santa Cruz declared an alert following the death of 6 million fish from the unusually cold weather gripping the country in recent weeks.
The provincial government said the fish died in the Grande, Pirai and Ichilo rivers that run through the tropical region.
This is an “environmental catastrophe” brought on by the lowest temperatures registered in Santa Cruz in nearly half a century, Gov. Ruben Costas told reporters."
Peru braces for 7th cold wave this winter
http://english.peopledaily.com.cn/90001/90777/90852/7089760.html
"Peruvians are suffering the coldest winter in nearly five decades, with the temperatures in large parts of the country dropping to record lows. In the capital city of Lima, temperatures have dipped to lower than eight degrees Celsius."
Record cold in Australia
http://globalfreeze.wordpress.com/2010/07/06/record-cold-in-australia/
Some of the cities are experiencing the coldest temperatures in 45 Years.
Temperatures continue well below average in Southern California
http://www.whittierdailynews.com/news/ci_15723011
"The average temperature in July was 79 degrees, five degrees below normal, and the first eight days of this month also have been five to six degrees below normal, weather experts said.
That could put Southern California on track for a near-record-low summer, but it's still too early to say, according to weather experts. The Los Angeles area, in fact, has had below-normal temperatures every month since April."
At one time Jesuits were noted for their scientific endeavors, now it appears that the editors are not aware, or conveniently forgot, that the earth has two hemispheres. The Northern Hemisphere has just experienced one of the coldest winters in 40-50 years and is now having a heat wave and drought while the Southern Hemisphere is undergoing a brutal winter after experiencing a very warm summer and droughts in 2009. That has been the history of the earth's climate since the beginning of recorded history and no doubt even longer.
The majority, if not all, of the scientists and advocates pushing the AGW agenda are either employees of the governments, academics funded by governments, the IPCC, politicians or ex-politicians with finacial interests in carbon trading, carbon credits or green industries or employees of environmental organization funded by wealthy hedge fund operatives. The East Anglia CRU emails and files exposed the motley crew of 'scientists' that is behind the AGW myth.
"1977- The Carter Administration
The Community Reinvestment Act becomes the United States federal law designed to encourage commercial banks and savings associations to meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods."
"1992-The Clinton Administration
The New York Times published the following article outlining the further implementation of the 1977 law.
Fannie Mae Seeks to Ease Home Buying
By KEITH BRADSHER, Published: March 10, 1994
"The organization that stands behind many of the nation's mortgages is taking broad steps to make home ownership easier for lower-income Americans, particularly recent immigrants and minorities, people involved in the effort said today.
Under the new rules, banks would have more flexibility in lending to people who already owe a considerable amount of money or who cannot afford a down payment equal to 20 percent of the price of a home"."
"President Clinton is tentatively scheduled to attend the announcement. The Administration is urging that loans be more broadly available to poor and lower-middle-income Americans."
"In addition to changing its guidelines, Fannie Mae plans a national educational campaign that will seek to teach recent immigrants and minorities how to obtain mortgages. The campaign will be aimed particularly at immigrants in a dozen "gateway" cities where the percentage of home ownership has been declining.
The long-term goal is to broaden the economic and ethnic diversity of homeowners. About 70 percent of white households now own their homes, compared with 40 percent of black and Hispanic households.
"Two Million Excluded
Mortgage experts have estimated that up to two million American households are excluded from buying homes now because of conservative mortgage lending standards. These include Americans with minor blemishes on their credit records, for such things as changing jobs repeatedly or failing to pay utility bills on time. Most mortgage experts assume that even people who fall behind on other bills will struggle to make mortgage payments lest they lose their homes."
"!999 The Clinton Administration
IN 1999 the New York Times warned that Fannie and Freddie were taking on additional risk at the insistence of the Clinton administration and predicted the eventual meltdown and bailout in an economic downturn.:
"This is from the New York Times September 30th, 1999.
Headline: "'Fannie Mae Eases Credit To Aid Mortgage Lending' by Steven Holmes
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. The action, which will begin as a pilot program involving 24 banks in 15 markets - including the New York metropolitan region - will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring. Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits."
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. 'Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.' Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market. In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's."
"The role of HUD during the Clinton administration is documented in a lengthy article in the Village Voice:
Andrew Cuomo and Fannie and Freddie
How the youngest Housing and Urban Development secretary in history
gave birth to the mortgage crisis By Wayne Barrett Tuesday, August 5th 2008
The full article is found at:
http://www.villagevoice.com/2008-08-05/news/how-andrew-cuomo-gave-birth-to-the-crisis-at-fannie-mae-and-freddie-mac/
2003- The Bush Admiistration
In 2003, the Bush administration recommended significant regulatory
overhaul of Fannie Mae and Freddie Mac. However, the Democrats opposed
that proposal, fearing that tighter regulation could sharply reduce
financing for low-income hous ing, both low and high risk. Under
immense lobbying pressure from Fannie Mae in association with
Congressional Democrats led by Rep. Barney Frank, Congress did not
introduce any legislation aimed at bringing this proposal into law
until 2005.
"In 2006, the Federal Housing Enterprise Regulatory Reform Act of 2005
(first put forward by Sen. Chuck Hagel) where he pointed out that
Fannie Mae's regulator reported that profits were "illusions
deliberately and systematically created by the company's senior
management". However, this legislation too met with opposition from
both Democrats and Republicans. This bill was passed by the House,
but was never presented to the Senate for a vote.
Frddie, Fannie, FHA and HUD are still protected and were ot part of the Financial reform bill.
Freddie, Fannie, FHA and HUD are still protected and were not part of the Financial reform bill.
I apologize for the errors.
The blame for this mortgage market debacle, not Fannie, Freddie, banks, et al., was stated in the first paragraph of my post "the Federal Government's social engineering policy that made home ownership an entitlement" and its progression from 1977 as a policy was documented, including the role of Fannie and Freddie.
However by every financial accounting measure and evidence of wrong doing by the highly compensated executives the claim that "Both organizations held forth very high property and credit worthiness standards." is absolutely inaccurate and erroneous.
Between 2005-2007 (the Cuomo years), few of the mortgages acquired were conventional fixed-interest loans with 20% down. Fannie Mae's loan acquisitions were:
• 62% negative amortization
• 84% interest only
• 58% subprime
• 62% required less than 10% down payment.
Freddie Mac's loans were even more risky, consisting of:
• 72% negative amortization
• 97% interest only
• 67% subprime
• 68% required less than 10% down payment.
It was the preponderance of exotic loans in addition to subprime borrowers that made their loan acquisitions so toxic.
Taxpayers are still on the hook hundreds of billions of dollars for Fannie and Freddie's toxic holdings.
There is sufficient blame to tarnish almost all politicians who use the power of the federal government to promote social engineering programs at the expense of hard working taxpaying citizens who are left to pay the bill but receive none of the largess, reserved for those who feed at the public money trough.
If the predictions of global warming are wrong and we act to reduce carbon dioxide, we will have spent quite a bit of money. On the other hand, we will have reduced the nation's current account deficit and our dependence on foreign oil which is wrecking our economy and which drives much of our military spending. We also will have stopped the acidification of the oceans which threatens many forms of sea life and which no one disputes.
Prudence is better than irresponsibility; nevertheless, I don't question the character of those who pursue the reckless path of totally ignoring the possibility of global warming. Surely, if we do not act and the people of the future are suffering from global warming, those that are opposing limiting green house gases will take their own life to make life better for everyone else.
"It is nearly impossible to be absolutely sure about anything that cannot be clearly modeled and tested" is true but the historic cyclical climate history of the earth over the last 12,000 years is well known, starting with the end of the last great Ice Age and in the last 1000 years the Medieval Warm Period, the Little Ice age of the Middle Ages, the warm dust bowl of the 1930-40s, the cold period of the 1950-70s and the warm period of the 1980s-1990s which ended in 1998-2000. It doesn't take computer modeling to study the past, actually today's computer models cannot model the past's history, and today's the AGW driven computer modelers continue to predict disasters based on worst case scenarios based only on C02 despite the cyclical cooling trend over the last 10-12 years.
Archeologists and geologists have a better knowledge and understanding of the earth's climate history as described in a recent Smithsonian article on the secrets of the Sphinx
"The Sahara has not always been a wilderness of sand dunes. German climatologists Rudolph Kuper and Stefan Kröpelin, analyzing the radiocarbon dates of archaeological sites, recently concluded that the region's prevailing climate pattern changed around 8,500 B.C., with the monsoon rains that covered the tropics moving north. The desert sands sprouted rolling grasslands punctuated by verdant valleys, prompting people to begin settling the region in 7,000 B.C. Kuper and Kröpelin say this green Sahara came to an end between 3,500 B.C. and 1,500 B.C., when the monsoon belt returned to the tropics and the desert reemerged. That date range is 500 years later than prevailing theories had suggested.
Further studies led by Kröpelin revealed that the return to a desert climate was a gradual process spanning centuries. This transitional period was characterized by cycles of ever-decreasing rains and extended dry spells. Support for this theory can be found in recent research conducted by Judith Bunbury, a geologist at the University of Cambridge. After studying sediment samples in the Nile Valley, she concluded that climate change in the Giza region began early in the Old Kingdom, with desert sands arriving in force late in the era."
No evidence was found of CO2 emitting SUVs, coal fired power plants or oil refineries.
"dependence on foreign oil which is wrecking our economy." Let's define 'foreign oil", in the first place, Canada and Mexico, two members of NAFTA, are two of largest suppliers of crude oil to the United States, along with Saudi Arabia that has a 50/50 joint venture with Shell USA, Venezuela that owns CITGO and Nigeria. The root cause of the growing dependence were twofold, the US government essentially shutting down the domestic oil exploration and drilling programs both onshore and offshore and a growing economy's demand for energy.
The quickest way to reduce dependence of imports from any source is to reduce demand and the Obama administration is doing all in their power to destroy the private sector's economic survival with it socialist agenda. The availability of a convenient, affordable, high energy material from any source has never been the wreking ball of any economy.
While I agree with most of what is written above, I would like to suggest that for the majority of people who got burned in the mortage debacle that they, themselves, have to accept the majority of culpability. It is easy to blame both the politicians and the banks - and justifiably so. But let us not forget that when people think they can get something for nothing their greed will lead them to misery. I find it difficult to believe that most of these folks did not know that they were stepping in quicksand when buying houses they knew they could not afford.
You are correct.
Unfortunately those who were not financially qualified to obtain a mortgage and either lied or were seduced by unscrupulous mortgage brokers, Countrywide was an example, are again being bailed out by Obama and the democrats with a three billion dollar aid package financed by taxpayers or the Chinese or printing more money to keep them in unaffordable homes. As there is litle or no chance that these people will ever be able to pay off their mortgages, money the country doesn't have is being handed out to the undeserving while many savers and investors who invested in or held Fannie and Freddie stock, directly or in mutual fund or in retirement accounts are big losers as the stocks are worthless, the stock have been delisted from the NY stock exchange and no one is bailing them out.