A study from the European Center for Nuclear Rearch may render the findings of climate science a whole lot less settled than they’ve been advertised:

CERN’s 8,000 scientists may not be able to find the hypothetical Higgs boson, but they have made an important contribution to climate physics, prompting climate models to be revised.

The first results from the lab’s CLOUD (“Cosmics Leaving OUtdoor Droplets”) experiment published in Nature today confirm that cosmic rays spur the formation of clouds through ion-induced nucleation. Current thinking posits that half of the Earth’s clouds are formed through nucleation. The paper is entitled Role of sulphuric acid, ammonia and galactic cosmic rays in atmospheric aerosol nucleation.

This has significant implications for climate science because water vapour and clouds play a large role in determining global temperatures. Tiny changes in overall cloud cover can result in relatively large temperature changes.

A little farther down in the article is the really important observation:

Kirkby is quoted in the accompanying CERN press release:

“We’ve found that cosmic rays significantly enhance the formation of aerosol particles in the mid troposphere and above. These aerosols can eventually grow into the seeds for clouds. However, we’ve found that the vapours previously thought to account for all aerosol formation in the lower atmosphere can only account for a small fraction of the observations – even with the enhancement of cosmic rays.”

For more see here, here, and here.

I’ve posted on this subject in the past and it’s gratifying to see more empirical support emerging. I wonder how much attention it will receive?

I’ve got to say that the term “settled science” has always nettled me. Science is never settled or, more accurately, it’s settled until it isn’t. Science is just the collection of the things we know. There will always be plenty of things we don’t know just waiting in the wings to throw the things we know into a cocked hat.

Let’s hope that this finding helps to put more light than heat into the discussion of climate change. While a more limited role for anthropogenic climate change might suggest that the more draconian proposals for dealing with climate change are not warranted, it doesn’t mean that we shouldn’t take commonsense steps in managing the part that we play. Why are we subsidizing oil consumption? Inefficient modes of transportation? I’d also like to hope that we might reconsider off-shoring so much of our manufacturing to China. Take a look at a heat map of the northern Pacific along with a map of prevailng winds and currents some time.

Jonathan Alter mounts a spirited defense of the Obama presidency:

Tell me again why Barack Obama has been such a bad president? I’m not talking here about him as a tactician and communicator. We can agree that he has played some bad poker with Congress. And let’s stipulate that at the moment he’s falling short in the intangibles of leadership.

I’m thinking instead of that opening sequence in the show “Mission Impossible,” the one where Jim Phelps, played by Peter Graves, gets his instructions.

Your mission, Jim (and readers named something else), should you decide to accept it, is to identify where Obama has been a poor decision-maker. What, specifically, has he done wrong on policy? What, specifically, would you have done differently to create jobs? And what can any of the current Republican candidates offer that would be an improvement on the employment front?

Rhetorically, this is called “burden shifting”. The burden of proof is on the affirmative and in this case the affirmative position is that President Obama should be re-elected and it’s up to the president to make his case. The case against him can be observed just by looking around.

In general second term elections are referenda on the incumbent rather than on the challengers or their predecessors. There have been exceptions. Lincoln’s 1864 re-election campaign used the slogan “Don’t change horses in midstream” and Roosevelt’s 1936 “Remember Hoover!” theme come to mind. And Republicans are the president’s best allies in this regard. If Republican primary voters insist on nominating a candidate who can easily be painted as frightening, as LBJ’s 1964 re-election campaign tarred Goldwater, running as the lesser evil can be successful.

But in most U. S. elections the candidate best able to paint a bright, optimistic picture of America and its future wins.

For my case I have been somewhat disappointed in the Obama presidency to date. Not catastrophically so but disappointed largely on two grounds.

First and most importantly in foreign policy he has been too interventionist and military in his approach. Why are we still in Iraq and why do Pentagon officials persistently float trial balloons for a longer stay there?

Counter-insurgency is rather obviously an ineffective strategy for Afghanistan. We should never have built up the force there that we have. I suppose I can hardly be surprised by this since Candidate Obama ran on expanding the efforts in 2008.

I continue to believe that our intervention in Libya was wrong but I also believe that intelligent people can differ on this subject. Like that of the “Arab Spring” generally, it remains far too early to see its outcome.

Multi-lateral trade talks and already-negotiated bilateral trade deals have languished.

Secondly, domestically I think that the president has never missed an opportunity to miss an opportunity. He had the opportunity of producing a more effective stimulus of practically any size he desired. He relied too heavily on his advisors and delegated the outcome too much to the Congress. The end result was a grab bag from the progressive hot list.

He had the opportunity to produce the reform in the healthcare system we continue to need so desperately. Instead he elected to delegate the outcome too much to the Congress. Contrary to the prevailing narrative, I think this state of affairs can be laid squarely on the shoulders of Congressional Democrats. The ACA was passed without Republican votes in the Senate and with only a single Republican vote in the House. That the bill is as feeble as it is is unquestionably because more could not be extracted from Democrats. More and more effective leadership from the president might have changed that.

In other economic policy from dealing with the Wall Street banks to the GM bailout the Obama Administration has followed the lead of the Bush Administration. If the Bush Administration was so horrible, why emulate it?

Camden Fine, writing in the Washington Post, makes the argument in favor of small banks:

Unlike Wall Street banks, which make their money based on volume and transaction fees, community banks make their money the old-fashioned way. They pay their customers interest on their hard-earned savings, they lend those deposits back into their communities to small businesses that create jobs, and they price those deposits and loans to make enough on the difference to pay their employees and utility bills, and maybe even to purchase a scoreboard for their local high school football team.

and explains the harm that present Fed policy is doing to small banks:

Now the Fed is pricing their deposits. Now the Fed is setting the spread. With nearly zero percent rates and slack credit demand, how are community banks supposed to make a viable margin on their funds? Community banks are swimming in liquidity as depositors pour their savings into their local banks in search of safety and security. Most community banks are holding short-term investments because they figured that rates would begin to rise in the next 12 months or so. After all, rates have been near zero for almost three years.

This policy functions in a pincers movement with the policy of providing trillions in loans to troubled big banks while closing troubled small ones. It leads inexorably to ever larger, ever more systemically risky banks, able to make claims on the public purse.

James Freeman reminds us of the limits of infrastructure spending for stimulus:

The easiest project to start is a road through a strip of desert with no people and none of the wildlife deemed vulnerable by environmentalists. Yet even this kind of infrastructure lay-up would take three years from conception until the start of construction, according to an executive at a global firm that advises on such projects. Draw the proposed road to run through an urban area or environmentally sensitive terrain, or assume that negotiations are necessary to acquire land, and 36 months easily turns into seven years of planning before the project is ready for a shovel.

Want to build a bridge? Preparing to create such an economic stimulant requires at least five years, assuming no complications. Mr. Obama may dream of another New Deal-era of big public projects, but he may not fully appreciate the innovations that have occurred in the past three-quarters of a century. At all levels of government, techniques for delaying construction while making it more costly have rapidly advanced, especially in the area of environmental review. It’s possible that the massive Hoover Dam, completed in 1935, couldn’t even be built today. “Damming rivers is a very touchy subject now,” says our source, given the environmental concerns about impact on fish and other species.

This is one reason that America got so little new infrastructure out of the last stimulus. Re-paving existing roads, without offending any new constituencies, is one of the few activities that can be shovel-ready in a short time frame. And the well-publicized difficulties Team Obama had in finding “shovel-ready” projects for Stimulus I would only get worse in the sequel. In 2009 the feds were giving the money away. With a Republican House, the best that Mr. Obama can hope for is funding for his Banana Republic-style “infrastructure bank.”

Maybe not that ready. Remember the repaving of my little street I wrote about a couple of weeks ago? That should have been a two day job. Not including whatever planning went it the project, it began two weeks ago, it still isn’t done, and we haven’t seen a workman in a week.

I can think of all sorts of possible explanations for the lack of progress but the one thing I can’t think of is an explanation that is consistent with a “infrastructure spending as job creation” story.

The Concord Coalitions’s “plausible baseline” projects a deficit over the next ten years about three times as large as the ones that the CBO is projecting. I suspect a lot of the difference is that the Coalition isn’t assuming that the “Bush tax cuts” will be allowed to expire and they are assuming that the FICA cut will be extended. That’ll play hob with the actuarial soundness of the system.

Bruce Krasting takes a closer look at the CBO report so you don’t have to. Read the whole thing.

Mr. Krasting questions five major assumptions in the report:

1. Will GDP really return to its pre-2006 growth path by 2016 without any downturns? That would be an expansion of historic proportions.
2. Will unemployment really return to 5% in just five years? My back-of-the-envelope calculation tells me that in order to do that we’d need to create roughly 220,000 net new jobs a month every month in order to do that. That’s a faster rate of job creation than we’ve seen in well over a decade.
3. Will that putative increase in employment really be accompanied by a sharp increase in hourly earning? They’re projecting an increase nearly as great as that from 1995 to 2000.
4. Will the year-on-year rate of inflation really hold to 2% for ten years? Wouldn’t that be unprecedented historically?
5. Will revenues really increase an average of 7.3% per year while outlays only increase by an average 3.9% (excluding interest) over the next ten years? More specifically, will Medicare spending growth be restrained to 6.3% over the next ten years? It averaged 9% from 2000 to 2009.

Whatever they’re serving at the CBO cafeteria, I’ll have some. And make mine a double.

Has the CBO been mandated to use these assumptions? I don’t see how policymakers can plot reasonable courses of action using such tremendously rosy projections of the future.

Ezra Klein has jumped on the “balance sheet recession” bandwagon

The utility of calling this downturn a “household-debt crisis” is it tells you where to put your focus: you either need to make consumers better able to pay their debts, which you can do through conventional stimulus policy like tax cuts and jobs programs, or you need to make their debts smaller so they’re better able to pay them, which you can do by forgiving some of their debt through policies like cramdown or eroding the value of their debt by increasing inflation. I’ve heard various economist make various smart points about why we should prefer one approach or the other, and it also happens to be the case that the two policies support each other and so we don’t actually need to choose between them.

suggesting that it’s becoming prevailing Democratic Party wisdom.

The effectiveness of the former strategy (conventional stimulus policy) depends on the degree to which those who are reached by the policy are also those who are most indebted. That’s a question of facts, not politics, and as I read the facts the groups aren’t very closely related. Unless you believe that the form that “conventional fiscal policy” is likely to take will be large cuts in the marginal rates on personal income taxes. Cue Paul Krugman’s head exploding.

The latter strategy has two different substrategies, one monetary in nature and the other requiring what for lack of a better word I’ll call “banking reform”. As John Taylor recently noted monetary policy and the strategy of banks have, unfortunately but predictably been working at cross-purposes. The harder the Fed tries to create inflation, the more the banks resist, largely because they’re being allowed to.

It all comes down to the banks. Which is why I’ve been pounding on them so mercilessly for the last few whiles.

The CBO has chimed in with its growth revision for 2011 (and 2012 and 2013):

CBO expects that the recovery will continue but that real (inflation-adjusted) GDP will stay well below the economy’s potential—a level that corresponds to a high rate of use of labor and capital—for several years. On the basis of economic data available through early July, when the agency initially completed its economic forecast, CBO projects that real GDP will increase by 2.3 percent this year and by 2.7 percent next year. Under current law, federal tax and spending policies will impose substantial restraint on the economy in 2013, so CBO projects that economic growth will slow that year before picking up again, averaging 3.6 percent per year from 2013 through 2016.

With modest economic growth anticipated for the next few years, CBO expects employment to expand slowly. The unemployment rate is projected to fall from 9.1 percent in the second quarter of 2011 to 8.9 percent in the fourth quarter of the year and to 8.5 percent in the fourth quarter of 2012—and then to remain above 8 percent until 2014. Although inflation increased in the first half of 2011, spurred largely by a sharp rise in oil prices, CBO projects that it will diminish in the second half of the year and then stay below 2.0 percent over the next several years.

At this point by my reckoning Goldman Sachs, Morgan Stanley, Macroeconomic Advisors, and any number of other banks, research firms, and independent financial advisors have decreased their estimates for 2011 growth over the last few weeks.

Perhaps I should start a pool.

1. When will the Federal Reserve produce its next, decreased growth estimate? IIRC its last decreased growth estimate was about two months ago.
2. When will the next round of decreased estimates begin?
3. When will the NBER announce a recession and when will they say it began?

I have been musing lately about the American consensus and I’m looking for opinions. Is there such a thing? Has there ever been such a thing? What is it?

In my view the American consensus, such as it is, is not a static something but an emergent phenomenon, forged from the contrasting, often competing, and sometimes contradictory views of the American people. Four major strains of that opinion have been characterized as Jeffersonian, Hamiltonian, Jacksonian, and Wilsonian and I’ve written about them pretty extensively.

I also think that to some degree the notion of an American consensus has been an illusion fostered by isolation, particularly regional isolation. It’s easier for Vermonters to believe that their views are consensus views when the views of Mississippians are safely kept out of sight. That our opinion-creating agencies are strongly New York and LA-centric has also fostered the illusion.

Further, I think that the degree of consensus among us waxes and wanes over time. At the present I think it is extraordinarily weak, perhaps weaker than it’s been for 150 years.

But I am admittedly out of touch and at some level proudly so. What’s really going on? Is there an American consensus? What is it?

I’m genuinely concerned. I think that consensus is a requirement for republican government.