Friday, May 31, 2019

Fact Check: The Truth About Recessions

"ANOTHER BUSH, ANOTHER RECESSION" - That was the bumper sticker that appeared on my despondent friend's car right after the election of George W Bush.  Haha, I thought, that's not how recessions happen!

You see, I'd been to business school and was taught that there was something called "the business cycle" that determined when recessions happen.  The theory was that economies inevitably grow too fast, peak, and then shrink. It was just what happened, we were told.

Except that's not what happens.

It turns out The Federal Reserve (Fed) causes recessions.  At least every one in modern times. They decide if, when, and how a recession occurs. They can turn elections. They can drive markets.  In many ways the Federal Reserve is the most powerful government institution in the U.S.  They have more power over our day to day lives than any other branch of government.  And they are unelected.

Here's the proof:  There have been nine recessions since 1954.  Each one followed two specific Fed caused conditions:

  • A marked increase in the Federal Funds rate
  • A negative or very low spread between the 10-Year Treasury Bond and the Federal Funds rate.  Also known as a flat or inverted yield curve.

There were no exceptions.  You would think that in sixty five years at least one recession would be strictly tied to economic issues.  But not a single one occurred independent of those two deliberate Fed caused conditions.
 
Click on the graphs below to see them in greater detail.  Grey bars are recessions.  Or use these links to see the interactive originals:  10-Year Treasury minus Fed Funds  ,  Fed Funds Rate

10-Year Treasury minus Fed Funds (Yield Curve) 1954-2019

Fed Funds Rate 1954-2019

There were two times when those two conditions did not result in a recession and there were two cases when only one condition was present.
  1. 1966 had both an inverted yield curve and a Fed Funds hike, but no recession ensued.  1966 immediately followed the Kennedy/Johnson tax cuts which stimulated the economy enough to overcome the Fed caused weakness.
  2. 1995 had a flat yield curve and a rate increase, but again no recession followed. 1995 also came on the heels of anticipated tax cuts promised by the congressional election of 1994 and The Contract With America.    
  3. 1998 had an inverted yield curve, but no Fed Funds hike or recession.  1998 also followed the 1997 signing of the tax cuts first passed by the House in 1995. 
  4. 1984 had an increase in the Fed Funds rate, but no change in the yield curve.  1984 also followed the Reagan tax cuts of 1981, and preceded the promised tax cuts of 1986.
CAVEAT: The only times recessions did not occur there were recent or anticipated tax cuts.  Hopefully, 2020 will prove similarly resistant following the tax cuts of 2017.

Curiously, of those nine recessions, all but one coincided with Republican presidents.  None occurred while the GOP held both houses of congress.  All tax laws originate in congress.  All interest rate policy originates at the Fed.  Presidents originate neither.     





This is all worth noting now that the Fed has initiated both conditions following eight years of ~ 0% rates under Obama.  The tightening from .12% to the current 2.41% amounts to an increase of 1900%,  the largest ever in percentage terms.  And in May 2019 the yield curve predictably inverted.  (The graphs above only go to March, 2019 when the yield curve was still slightly positive. )

It looks like the next recession is scheduled to begin precisely as we head into the next election. It will likely begin sometime between February and September of 2020 based on past timelines.  (See CAVEAT above.)

Maybe my Al Gore supporting friend was right after all... though for all the wrong reasons!

___________________________________________________________


Footnote 1:  Here's why these particular Fed actions cause recessions:  The essential raw material for economic vitality, aside from humans, is credit.  When the Fed raises its Fed Funds rate, banks and lenders pay more for their own credit which ripples through the economy raising borrowing costs.  If the increase is too fast and the Fed fails to correct in time, the yield curve inverts which temporarily misaligns lenders and borrowers; lenders want to lend at the higher short rates and borrowers want to borrow at the lower long rates. Credit slows, and a recession follows.


Footnote 2:  Of course the Fed does not operate in a vacuum.  They would argue they are acting on economic conditions they seek to influence.  Still, the timing and predictability of recessions following those two conditions cannot be denied.


Footnote 3:  The reason this analysis only goes back to 1954 is because that is the extent of available Fed data for both metrics.

Tuesday, April 2, 2019

Fact Check: The Truth About Global Warming



A Socratic Guide To The Burning Question Of Our Time


Intro I

There's an old Jewish joke that goes something like this:

No matter what Shlomo did in bed, his wife could never achieve an orgasm. 

Since by Jewish law a wife is entitled to sexual pleasure, they decide to
 consult their Rabbi.

 
The Rabbi listens to their story, strokes his beard, and makes the
 following suggestion: "Hire a strapping young man. While the two of you are
 making love, have the young man wave a towel over you. That will get God's attention and he will provide an orgasm."

They go home and follow the Rabbi's advice. They hire a handsome young man 
and he waves a towel over them as they make love. It does not help and the
 wife is still unsatisfied. Perplexed, they go back to the Rabbi.



"Okay,' he says to the husband, "Try it reversed. Have the young man make 
love to your wife and you wave the towel over them."

Once again, they follow the Rabbi's advice. They go home and hire the same 
strapping young man.



The young man gets into bed with the wife and the husband waves the towel.
 The young man gets to work with great enthusiasm and soon she has an
 enormous, room-shaking, ear-splitting, screaming orgasm.



The husband smiles, looks at the young man and says to him triumphantly,
 "See that, you schmuck? THAT'S how you wave a towel!"
_________________________________________________________________________________

Intro II

Let’s be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world.

In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period.

Michael Crichton, author of "Jurassic Park", "Andromeda Strain", "Westworld", and numerous other works of fiction and non-fiction. Crichton also held a medical degree from Harvard.
_________________________________________________________________________________

A Brief History of the Theory of Global Warming (aka Climate Change)


It all began back in the late 1700s when some rock stars - no, not that kind of rock star, geologists actually - were traipsing around Europe and noticed that some of the boulders in the valleys matched the rocks on distant peaks.  The only plausible explanation for how those boulders traveled so far was that they must have been carried by ice.  This idea was fleshed-out a few decades later by a scientist studying skeletons and frozen remains of large mammals in Siberia.  Thus was born the idea of The  Great Ice Age.  But that opened up a whole new can-o-worms; if ice once covered the Earth, what melted the ice?

In 1824, around the same time these ideas were percolating, a scientist named Joseph Fourier figured out that Earth would be much colder without its atmosphere.  Air was trapping heat from the sun and keeping us warm, he said.  Fourier had discovered the greenhouse effect.

Building on Fourier's work, other scientists found that about 70% of the greenhouse effect was due to water vapor, 20% was due to carbon dioxide (CO2), and the final 10% was due to methane, ozone, and other gasses.  A theory developed that maybe changes in the atmosphere had ended The Great Ice Age.

Water vapor was dismissed as a cause because excess water condenses and falls-out as precipitation.  CO2, methane, and ozone do not cycle as quickly, so the theory of melting ice focused primarily on CO2, which while only .04% of the atmosphere, accounts for 20% of the warming effect.

Two things were going on at the same time as all this.  One was the industrial revolution and the burning of coal in newly invented steam engines.  The other was the observation that the existing glaciers were continuing to melt!   Could they be related and tied back to changes in CO2?

Along came a Swedish scientist named Svante Arrhenius, who in 1898 calculated the hypothetical climate change that would result if atmospheric CO2 was cut in half.  He calculated that the Earth would be glaciated...as it was during The Great Ice Age!  He also calculated that if CO2 doubled, we'd have melting ice and ...global warming!  So, the "modern" CO2 theory of global warming dates back to the calculations Arrhenius did 120 years ago in an attempt to explain the onset and demise of The Great Ice Age.   

Meanwhile, we've been burning progressively more carbon fuels like coal, oil, and gas in the last 120 years.  Finally, in 1960, an American scientist named David Keeling began measuring CO2 levels at an observatory in Hawaii.  What he discovered was that CO2 was trending up at an alarming rate!  

So with Keeling showing CO2 skyrocketing, Arrhenius' saying we are going to fry if CO2 rises, and glaciers continuing to melt, that eventually leads to Al Gore, Kyoto, Paris, The UN IPCC, and a scientific "consensus" saying global warming is an "existential threat". (Meaning, the end is nigh!)

In 2009, the U.S. government under Barack Obama officially declared that CO2 emissions endangered life on Earth.  Whole generations now believe we are doomed.  Some have even stopped having children thinking there is no future.   

All from a gas that humans exhale, that plants inhale, that makes up only .04% of our atmosphere, and that formed the basis of a theory developed in the 1800s to try and explain the The Great Ice Age!

_________________________________________________________________________________

Pop Quiz:
So, what really ended The Great Ice Age?
A. CO2
B. Mr. Milankovitch
Since this whole CO2 inquiry began as an attempt to explain The Great Ice Age, one of the first questions to ask is, was the premise right?  Have we learned anything new since Fourier, Arrhenius, Keeling, et al?  Do we now know what caused and ended The Great Ice Age?

You are probably certain it was CO2.  After all, you've been told for years that CO2  drives climate.  Since the 1800s and Arrhenius we've believed that changes in CO2 can have dramatic effects.  We still believe CO2 is melting glaciers today.  It's "settled science" after all.

Except, that's not what happened.  It turns out, Mr. Milankovitch did it.  (Yup, our climate has been hacked by the Russians! Actually, he was Serbian, just sounds Russian.)  Milutin Milankovitch was a scientist who figured out in the 1920s that the Earth has a cyclical relationship to the sun.  It tilts. It wobbles. It's orbit changes.  Some cycles take 100,000 years to complete.  Some take 41,000 years.  Some take 23,000 years.  The effect of all this is rather dramatic... ta da... climate change!

MILANKOVITCH CYCLES


Of course, Milankovitch was instantly dismissed as a kook.  Even today as I'm typing this, his name is unrecognized by the spell-check gremlins in my computer.  Fourier, Arrhenius, and Keeling, however, are spell-check VIPs.

Until 1998, Milankovitch got no respect.  But then a funny thing happened down in Antarctica.  Scientists drilled an ice core at a place called Vostok (more Russians!) that gave them a 420,000 year climate history, and voila, there were major ice ages and warmings every 100,000 years.  There were also shorter cycles in between.  Milankovitch could no longer be dismissed, except of course by spell-check.

           


Then in 2000 another Antarctic ice core was obtained at Dome C that goes back 800,000 years.  Again it confirmed Milankovitch.  The Great Ice Age now had a plausible explanation.  The Earth's relationship to the sun caused major climate change - global coolings and global warmings - going back as far as we can see.


Dome C Temperature Estimates


If major climate change happens at least every 100,000 years, as Milankovitch theorized, and the Earth is 4.5 billion years old, then there have been 45,000 of those alone.  The Great Ice Age was just the latest in a countless series of coolings and warmings!

Another name that should get mentioned at this point is Eddy, as in John A. Eddy.   Eddy was one of the most recent astronomers to study the cyclical output of the sun.  He published a groundbreaking study in 1976 and named the most recent solar minimums and maximums.   While Milankovitch cycles play out over tens of thousands of years, solar cycles can be as short as 11 years.  They are also closely correlated with...ta da...climate change!

Here are some of the solar minimums and maximums from recent Earth history that resulted in major global warmings and mini-ice ages:



You can see why glaciers are melting today by looking at the right side of the solar activity graph. We are also near a peak in the Milankovitch cycle.  Something would be horribly wrong if glaciers were NOT melting today!

So between Milankovitch's orbital cycles and Eddy's solar cycles, these are the bases for ice ages and their demise.  These are the bases for perpetual climate change.  In addition, one-time events like volcanoes and asteroids can also produce dramatic and sudden climate swings.

So, CO2 did not cause either The Great Ice Age or any of the many tens of thousands of cyclical coolings and warmings that preceded it.  It's the fluctuating sun and our wonky orbit that cause climate change.

(A newer ice core at Allan Hills, Antarctica claims to go back over 1.2 million years, and it also confirms Milankovitch.)
_________________________________________________________________________________

Pop quiz:
Still, within the Milankovitch and Eddy cycles, we know that:
A. CO2 drives climate change 
B. Climate drives CO2 change
Just because Arrhenius et al were wrong about The Great Ice Age doesn't mean they are also wrong about what will happen if we add massive amounts of CO2 to our atmosphere.  According to the CO2 theory of global warming, as CO2 increases, so will temperatures.
    That's why you are probably certain that CO2 still drives climate change.  A consensus of scientists, academics, politicians, and celebrities have been telling you for years that higher CO2 concentrations will cause the Earth to get hotter.  As we burn more and more fossil fuels, that releases more CO2 into the air.  CO2 is a greenhouse gas, ergo the Earth gets hotter.  It's simple.

    Except, that's not what happens.  Along with temperature records going back 800,000 years, we also got CO2 records for the same time span.

    Here's the CO2 and temperature record from the Dome C ice core: 

    Dome C Temperature and CO2 for 800,000 Years (Red = CO2, Blue = Temps)




    At first glance temperature and CO2 appear to be closely correlated.  One might even conclude that Arrhenius was right and that CO2 caused the ice ages.      

    But when zooming in on this graph, something interesting is revealed; CO2 trails temperature by 1200 years, + or - 700 years!  

    Climate Change (blue) precedes CO2 Change by 1200, + or - 700 Years


    CO2 and the other atmospheric gasses behave somewhat like water vapor, except over a longer timeframe.  We know that hotter air can retain water vapor in greater concentrations than colder air.  There is also a water cycle that is constantly moving water from vapor, to precipitation, to ground, to sea, and then back to vapor.  CO2 has a similar cycle, just not as quick. 

    A number of datasets from ice and sediment cores confirm this finding.  The hotter it gets on Earth, the more CO2 can be found in the atmosphere.  Contrary to what you've been told, CO2 does not drive climate.  Climate drives CO2!  The alleged cause is actually an effect.
             
    _________________________________________________________________________________

    Pop Quiz:
    Still, pumping CO2 into the atmosphere is a new thing, and that's what makes this an existential threat!
    A. True
    B. False 
    As everyone since Keeling knows, CO2 levels are in-fact rising.  And who can forget Al Gore on the scissor lift in his movie showing CO2 going literally off the chart?  And as everyone knows since Arrhenius, more CO2 makes Earth hotter, right?

    Except, that's not what's happening.  Yes, we are in a warm period due to both Milankovitch and Eddy, and accordingly, CO2 is rising.  That's to be expected.  But the question remains: is this time different because we are burning fossil fuels?  Can CO2 work both ways?  Can it both be driven by temperature and also drive temperatures up?

    If greenhouse gasses both increase as temperatures go up, and then cause even more warming, why is the greenhouse effect not a runaway reaction? According to Arrhenius and modern global warming theory, the greenhouse effect should create a feedback loop.  Why isn't that visible in the ice core data? 

    The answer has to do with the light spectrum and each gasses' role in trapping radiation in the troposphere.  

       

    At the affected upgoing wavelengths, which are the ones involved in global warming, CO2 is already absorbing 100% of the radiation it is capable of absorbing.  Adding more CO2 into the atmosphere can not trap more than 100% of the affected radiation!  This is why the greenhouse effect is not a runaway reaction or a feedback loop.  It's a self-limiting reaction.

    In the 1800s, when Arrhenius was doing his calculations, the instruments for measuring the light spectrum this accurately did not exist. (Then again, neither did antibiotics, airplanes, Model T Fords, transistors...)

    Additionally, as CO2 increases, the CO2 cycle speeds up.  Here's an example of how the biosphere absorbs CO2 at faster rates:



    So, adding more CO2 into the atmosphere will not effect climate, and any CO2 increases will just grow the biosphere.  
    _________________________________________________________________________________

    Pop Quiz:
    Still, there is a scientific consensus that says CO2 is uniquely warming our planet, and no one can prove otherwise.     
    A.  True
    B.  False

    Anyone who's taken a middle school science class knows the value of a control group.  Luckily, scientists have the ability to track temperature and CO2 on some of the other bodies around Earth.  Venus, Mars, and the Moon are particularly close to us and have yielded some interesting data.  If global warming theory is right, temperatures on those bodies should be un-correlated to Earth temps because they are free from the effects of industrialization!

    Except, that's not what's happening.  In an odd coincidence both Mars and the Moon are warming!  (Of course, it's still man's fault!)  Milankovitch is particularly relevant to the Moon, because as goes the Earth, so goes the Moon.  Eddy is particularly relevant to Mars, because as goes the Sun, so goes Mars.

    But there's more.

    In our solar system, only Venus, Earth, and Mars have CO2 in their atmospheres.  In another amazing coincidence, the concentrations of CO2 closely match their relative distances from the sun, which in turn determines their temperatures.  Venus, closest to the sun and very hot, has about 2400 times the CO2 concentration Earth has.  Mars, furthest from the sun and cold, has about 24 hundredths as much CO2 as Earth.  Curious, no?  So, it appears climate drives CO2 even on the other planets!

    _________________________________________________________________________________

    Pop Quiz:
    Still, we know that global warming is true because all the predictions have been right!
    A. True
    B. False
    Real science can accurately predict the future.  If a cannon ball with a known mass, is fired from a cannon with a known amount of force, at a known trajectory, etc., science can predict exactly where it will land.  That's how science works.

    If global warming science is real and quantifiable, scientists would be able to similarly predict the future of climate.

    Except that's not what has happened.  In fact, every single dire prediction has been proven wrong.  100% wrong.  Here's a brief summary of what the experts have predicted:

    • Global famine by the year 2000 - Dr. Paul Ehrlich, Nobel Prize recipient, Professor 
    • Entire nations wiped out by 1999 - Noel Brown, U.N. Environmental Director
    • Ice caps will melt away and oceans will rise causing massive flooding by 2014 - Al Gore, VPOTUS, global warming evangelist
    • End of snow in England by 2015 - Dr. David Viner,  climate scientist at The University of East Anglia
    • Increased tornadoes and hurricanes - James Hanson, professor of climate at Columbia University & the high priest of global warming, and The U.N. IPCC
    • New Ice Age in Europe - Dr. Paul Ehrlich
    • Sub-Saharan Africa drying up - U.N. and World Bank
    • Massive flooding in China and India - Asian Development Bank and the Potsdam Institute for Climate Impact Research
    • Polar Bear extinction - National Geographic, The New York Times, Guardian, among many.
    • Drastic Temperature Increases - James Hanson
    • The Earth will be in a “True Planetary Emergency” by 2016 unless greenhouse gasses are reduced - Al Gore
      None of those predictions came true.  Not one.  And that is just a tiny sampling.   

      And here are some of the bad predictions from just this past year!
      _________________________________________________________________________________

      Pop Quiz:
      Still, we are under an existential threat because the Earth is progressively getting:
      A: Hotter 
      B: Colder 
      You are probably certain that the Earth is getting hotter.  The name global warming itself describes the danger.  You are probably familiar with the apocryphal "hockey stick" graph featured in "An Inconvenient Truth":



      Except, that's not what's happening in the long run:
        




      The Earth is actually getting cooler! 

      Five million years is not much when you consider the Earth is 4.5 billion years old.  That would take 900 - five million year graphs!  So, here's another graph estimating 65 million years of global climate change, still only a fraction of Earth's life.  Again, it clearly shows Earth is cooling.  

          
      The existential threat is that we will eventually freeze, not bake!

      _________________________________________________________________________________

      Pop quiz:
      Still, in the 200,000 year history of mankind:
      A. It has never been this hot
      B. It's been much hotter before 

      No doubt you are sure it's never been this hot.  It says so on the "hockey stick" graph.  And just consider the melting glaciers!

      Yet, we know that 1100 years ago, when the Vikings first went to Iceland, there were no glaciers there.  Today, glaciers cover much of Iceland.  Similarly, Vikings settled on Greenland around the same time and successfully farmed there for 500 years.  But they abandoned Greenland in the mid 15th century, presumably because it got too cold.  Those two events are known as the Medieval Warm Period and The Little Ice Age. Curiously, you won't find either of those events on Al Gore's graph.

      Here's a graph that shows 10,000 years of climate change from ice cores on Greenland:





      And here's a map of glacial retreat in Glacier Bay, Alaska going back 3 1/2 centuries.  As you can see, glaciers have been in retreat since long before the industrial revolution!





      We have enough data to know that this warm period is nothing new.   It's been hotter than this many times before, even in man's brief 200,000 year history.

      _________________________________________________________________________________

      You are still free to believe in the CO2 theory of global warming.  Heck, you are free to believe in anything you want, including Santa Claus and the Tooth Fairy!  But any serious person who looks into global warming must reflect long and hard before blindly waving a towel for the consensus.   

      Sunday, March 24, 2019

      Fact Check: The Truth About The Mueller Report



      Mueller has spoken.  No Collusion.  No Obstruction.  Democrats are crestfallen.  Republicans are ebullient.

      But, do they both have it backwards?

      Remember what former Senate majority leader Harry Reid (D, NV) said after being confronted for lying about Mitt Romney not paying taxes.  When asked if he had any remorse, he said, "We won the election, didn't we?"

      Look, anyone with half a brain knew there was no basis for a special counsel on Russian collusion. But Mueller had important Democrat work to do:

      • Trump was thrown off-balance and put under a cloud for his entire Presidency
      • It slowed his progress and hurt his agenda
      • Democrats retook the House
      • Trump's legislative agenda died when Nancy Pelosi became Speaker
      • Blocking immigration reform ensures 4 years of massive illegal influx into border states
      • When Texas flips, no Republican, even Abraham Lincoln, can ever be elected President again 
      • Throwing Paul Manafort into solitary confinement sent a strong signal to anyone entertaining the idea of working for the Trump 2020 campaign
      • By torturing Manafort, they were able to flip Michael Cohen
      • Cohen is now working with the SDNY, which now has the baton
      • It's too late for a full investigation into the attempted coup d'etat before 2020
      • Big investigations take a minimum of 2 years and the election is only 19 months away
      • Meanwhile, election season is in full-swing, so anything Trump does will be dismissed as political

      Democrats and their media accomplices will pay no price for attempting a coup d'etat and perpetrating a massive fraud on the American people.  It's all upside for them, just as it was for Harry Reid. 

      Friday, March 22, 2019

      Fact Check: The Truth About Global Warming


      Intro I

      There's an old Jewish joke that goes something like this:

      No matter what Shlomo did in bed, his wife could never achieve an orgasm. 
      
Since by Jewish law a wife is entitled to sexual pleasure, they decide to
 consult their Rabbi.

 
      The Rabbi listens to their story, strokes his beard, and makes the
 following suggestion: "Hire a strapping young man. While the two of you are
 making love, have the young man wave a towel over you. That will get God's attention and he will provide an orgasm."

      They go home and follow the Rabbi's advice. They hire a handsome young man 
and he waves a towel over them as they make love. It does not help and the
 wife is still unsatisfied. Perplexed, they go back to the Rabbi.



      "Okay,' he says to the husband, "Try it reversed. Have the young man make 
love to your wife and you wave the towel over them."

      Once again, they follow the Rabbi's advice. They go home and hire the same 
strapping young man.



      The young man gets into bed with the wife and the husband waves the towel.
 The young man gets to work with great enthusiasm and soon she has an
 enormous, room-shaking, ear-splitting, screaming orgasm.



      The husband smiles, looks at the young man and says to him triumphantly,
 "See that, you schmuck? THAT'S how you wave a towel!"
      _________________________________________________________________________________

      Intro II

      Let’s be clear: the work of science has nothing whatever to do with consensus. Consensus is the business of politics. Science, on the contrary, requires only one investigator who happens to be right, which means that he or she has results that are verifiable by reference to the real world.

      In science consensus is irrelevant. What is relevant is reproducible results. The greatest scientists in history are great precisely because they broke with the consensus. There is no such thing as consensus science. If it’s consensus, it isn’t science. If it’s science, it isn’t consensus. Period.

      Michael Crichton, author of "Jurassic Park", "Andromeda Strain", "Westworld", and numerous other works of fiction and non-fiction. Crichton also held a medical degree from Harvard.
      _________________________________________________________________________________

      A Brief History of the Theory of Global Warming (aka Climate Change)


      It all began back in the late 1700s when some rock stars - no, not that kind of rock star, geologists actually - were traipsing around Europe and noticed that some of the boulders in the valleys matched the rocks on distant peaks.  The only plausible explanation for how those boulders traveled so far was that they must have been carried by ice.  This idea was fleshed-out a few decades later by a scientist studying skeletons and frozen remains of large mammals in Siberia.  Thus was born the idea of The  Great Ice Age.  But that opened up a whole new can-o-worms; if ice once covered the Earth, what melted the ice?

      In 1824, around the same time these ideas were percolating, a scientist named Joseph Fourier figured out that Earth would be much colder without its atmosphere.  Air was trapping heat from the sun and keeping us warm, he said.  Fourier had discovered the greenhouse effect. 

      Building on Fourier's work, other scientists found that about 70% of the greenhouse effect was due to water vapor, 20% was due to carbon dioxide (CO2), and the final 10% was due to methane, ozone, and other gasses.  A theory developed that maybe changes in the atmosphere had ended The Great Ice Age.

      Water vapor was dismissed as a cause because excess water condenses and falls-out as precipitation.  CO2, methane, and ozone do not cycle as quickly, so the theory of melting ice focused primarily on CO2, which while only .04% of the atmosphere, accounts for 20% of the warming effect.

      Two things were going on at the same time as all this.  One was the industrial revolution and the burning of coal in newly invented steam engines.  The other was the observation that the existing glaciers were continuing to melt!   Could they be related and tied back to changes in CO2?

      Along came a Swedish scientist named Svante Arrhenius, who in 1898 calculated the hypothetical climate change that would result if atmospheric CO2 was cut in half.  He calculated that the Earth would be glaciated...as it was during The Great Ice Age!  He also calculated that if CO2 doubled, we'd have melting ice and ...global warming!  So, the "modern" CO2 theory of global warming dates back to the calculations Arrhenius did 120 years ago in an attempt to explain the onset and demise of The Great Ice Age.   

      Meanwhile, we've been burning progressively more carbon fuels like coal, oil, and gas in the last 120 years.  Finally, in 1960, an American scientist named David Keeling began measuring CO2 levels at an observatory in Hawaii.  What he discovered was that CO2 was trending up at an alarming rate!  

      So with Keeling showing CO2 skyrocketing, Arrhenius' saying we are going to fry if CO2 rises, and glaciers continuing to melt, that eventually leads to Al Gore, Kyoto, Paris, The UN IPCC, and a scientific "consensus" saying global warming is an "existential threat". (Meaning, the end is nigh!)

      In 2009, the U.S. government under Barack Obama officially declared that CO2 emissions endangered life on Earth.  Whole generations now believe we are doomed.  Some have even stopped having children thinking there is no future.   

      All from a gas that humans exhale, that plants inhale, that makes up only .04% of our atmosphere, and that formed the basis of a theory developed in the 1800s to try and explain the The Great Ice Age!

      _________________________________________________________________________________

      Pop Quiz:
      So, what really ended The Great Ice Age?
      A. CO2
      B. Mr. Milankovitch
      Since this whole CO2 inquiry began as an attempt to explain The Great Ice Age, one of the first questions to ask is, was the premise right?  Have we learned anything new since Fourier, Arrhenius, Keeling, et al?  Do we now know what caused and ended The Great Ice Age?

      You are probably certain it was CO2.  After all, you've been told for years that CO2  drives climate.  Since the 1800s and Arrhenius we've believed that changes in CO2 can have dramatic effects.  We still believe CO2 is melting glaciers today.  It's "settled science" after all.

      Except, that's not what happened.  It turns out, Mr. Milankovitch did it.  (Yup, our climate has been hacked by the Russians! Actually, he was a Serbian, just sounds Russian.)  Milutin Milankovitch was a scientist who figured out in the 1920s that the Earth has a cyclical relationship to the sun.  It tilts. It wobbles. It's orbit changes.  Some cycles take 100,000 years to complete.  Some take 41,000 years.  Some take 23,000 years.  The effect of all this is rather dramatic... ta da... climate change!

      MILANKOVITCH CYCLES


      Of course, Milankovitch was instantly dismissed as a kook.  Even today as I'm typing this, his name is unrecognized by the spell-check gremlins in my computer.  Fourier, Arrhenius, and Keeling, however, are spell-check VIPs.

      Until 1998, Milankovitch got no respect.  But then a funny thing happened down in Antarctica.  Scientists drilled an ice core at a place called Vostok (more Russians!) that gave them a 420,000 year climate history, and voila, there were major ice ages and warmings every 100,000 years.  There were also shorter cycles in between.  Milankovitch could no longer be dismissed, except of course by spell-check.

                 


      Then in 2000 another Antarctic ice core was obtained at Dome C that goes back 800,000 years.  Again it confirmed Milankovitch.  The Great Ice Age now had a plausible explanation.  The Earth's relationship to the sun caused major climate change - global coolings and global warmings - going back as far as we can see.

      If major climate change happens every 100,000 years, as Milankovitch theorized, and the Earth is 4.5 billion years old, then there have been 45,000 of those alone.  The Great Ice Age was just the latest in a countless series of coolings and warmings!

      Dome C Temperature Estimates



      Another name that should get mentioned at this point is Eddy, as in John A. Eddy.   Eddy was one of the most recent astronomers to study the cyclical output of the sun.  He published a groundbreaking study in 1976 and named the most recent solar minimums and maximums.   While Milankovitch cycles play out over tens of thousands of years, solar cycles can be as short as 11 years.  They are also closely correlated with...ta da...climate change!

      Here are some of the solar minimums and maximums from recent Earth history that resulted in major global warmings and mini-ice ages:



      You can see why glaciers are melting today by looking at the right side of the solar activity graph. We are also near a peak in the Milankovitch cycle.  Something would be horribly wrong if glaciers were NOT melting today!

      So between Milankovitch's orbital cycles and Eddy's solar cycles, these are the bases for ice ages and their demise.  These are the bases for perpetual climate change.  In addition, one-time events like volcanoes and asteroids can also produce sudden swings.

      So, CO2 did not cause either The Great Ice Age or any of the many tens of thousands of cyclical coolings and warmings that preceded it.  It's the fluctuating sun and our wonky orbit that cause climate change. 

      (A newer ice core at Allan Hills, Antarctica claims to go back over 1.2 million years, and it also confirms Milankovitch.) 
      _________________________________________________________________________________

      Pop quiz:
      Still, within the Milankovitch and Eddy cycles, we know that:
      A. CO2 drives climate change 
      B. Climate drives CO2 change
      Just because Arrhenius et al were wrong about The Great Ice Age doesn't mean they are also wrong about what will happen if we add massive amounts of CO2 to our atmosphere.  According to the CO2 theory of global warming, as CO2 increases, so will temperatures.
        That's why you are probably certain that CO2 still drives climate change.  A consensus of scientists, academics, politicians, and celebrities have been telling you for years that higher CO2 concentrations will cause the Earth to get hotter.  As we burn more and more fossil fuels, that releases more CO2 into the air.  CO2 is a greenhouse gas, ergo the Earth gets hotter.  It's simple.

        Except, that's not what happens.  Along with temperature records going back 800,000 years, we also got CO2 records for the same time span!

        Here's the CO2 and temperature record from the Dome C ice core: 

        Dome C Temperature and CO2 for 800,000 Years (Red = CO2, Blue = Temps)




        At first glance temperature and CO2 appear to be closely correlated.  One might even conclude that Arrhenius was right and that CO2 caused the ice ages.      

        But when zooming in on this graph, something interesting is revealed; CO2 trails temperature by 1200 years, + or - 700 years!  

        Climate Change (blue) precedes CO2 Change by 1200, + or - 700 Years


        CO2 and the other atmospheric gasses behave somewhat like water vapor, except over a longer timeframe.  We know that hotter air can retain water vapor in greater concentrations than colder air.  There is also a water cycle that is constantly moving water from vapor, to precipitation, to ground and sea, and then back to vapor.  CO2 has a similar cycle, just not as quick. 

        A number of datasets from ice and sediment cores confirm this finding.  The hotter it gets on Earth, the more CO2 can be found in the atmosphere.  Contrary to what you've been told, CO2 does not drive climate.  Climate drives CO2!  The alleged cause is actually an effect.
                 
        _________________________________________________________________________________

        Pop Quiz:
        Still, pumping CO2 into the atmosphere is a new thing, and that's what makes this an existential threat!
        A. True
        B. False 
        As everyone since Keeling knows, CO2 levels are in-fact rising.  And who can forget Al Gore on the scissor lift in his movie showing CO2 going literally off the chart?  And as everyone knows since Arrhenius, more CO2 makes Earth hotter, right?

        Except, that's not what's happening.  Yes, we are in a warm period due to both Milankovitch and Eddy, and accordingly, CO2 is rising.  That's to be expected.  But the question remains: is this time different because we are burning fossil fuels?  Can CO2 work both ways?  Can it both be driven by temperature and also drive temperatures up?

        If greenhouse gasses both increase as temperatures go up, and then cause even more warming, why is the greenhouse effect not a runaway reaction? According to Arrhenius and modern global warming theory, the greenhouse effect should create a feedback loop.  Why isn't that visible in the ice core data?   

        The answer has to do with the light spectrum and each gasses' role in trapping radiation in the troposphere.  

           

        At the affected upgoing wavelengths, which are the ones involved in global warming, CO2 is already absorbing 100% of the radiation it is capable of absorbing.  Adding more CO2 into the atmosphere can not trap more than 100% of the affected radiation!  This is why the greenhouse effect is not a runaway reaction or a feedback loop.  It's a self-limiting reaction.

        In the 1800s, when Arrhenius was doing his calculations, the instruments for measuring the light spectrum this accurately did not exist. (Then again, neither did antibiotics, airplanes, Model T Fords, transistors...)

        Additionally, as CO2 increases, the CO2 cycle speeds up.  Here's an example of how the biosphere absorbs CO2 at faster rates:



        So, adding more CO2 into the atmosphere will not effect climate, and any CO2 increases will just grow the biosphere.  
        _________________________________________________________________________________

        Pop Quiz:
        Still, there is a scientific consensus that says CO2 is uniquely warming our planet, and no one can prove otherwise.     
        A.  True
        B.  False

        Anyone who's taken a middle school science class knows the value of a control group.  Luckily, scientists have the ability to track temperature and CO2 on some of the other bodies around Earth.  Venus, Mars, and the Moon are particularly close to us and have yielded some interesting data.  If global warming theory is right, temperatures on those bodies should be un-correlated to Earth temps because they are free from the effects of industrialization!

        Except, that's not what's happening.  In an odd coincidence both Mars and the Moon are warming!  (Of course, it's still man's fault!)  Milankovitch is particularly relevant to the Moon, because as goes the Earth, so goes the Moon.  Eddy is particularly relevant to Mars, because as goes the Sun, so goes Mars.

        But there's more.

        In our solar system, only Venus, Earth, and Mars have CO2 in their atmospheres.  In another amazing coincidence, the concentrations of CO2 closely match their relative distances from the sun, which in turn determines their temperatures.  Venus, closest to the sun and very hot, has about 2400 times the CO2 concentration Earth has.  Mars, furthest from the sun and cold, has about 24 hundredths as much CO2 as Earth.  Curious, no?  So, it appears climate drives CO2 even on the other planets!

        _________________________________________________________________________________

        Pop Quiz:
        Still, we know that global warming is true because all the predictions have been right!
        A. True
        B. False
        Real science can accurately predict the future.  If a cannon ball with a known mass, is fired from a cannon with a known amount of force, at a known trajectory, etc., science can predict exactly where it will land.  That's how science works.

        If global warming science is real and quantifiable, scientists would be able to similarly predict the future of climate.

        Except that's not what has happened.  In fact, every single dire prediction has been proven wrong.  100% wrong.  Here's a brief summary of what the experts have predicted:

        • Global famine by the year 2000
        • Entire nations wiped out by 1999
        • Ice caps will melt away and oceans will rise causing massive flooding by 2014
        • End of snow in England by 2015 
        • Increased tornadoes and hurricanes
        • New Ice Age in Europe
        • South Sahara drying up
        • Massive flooding in China and India  
        • Polar Bear extinction
        • Drastic Temperature Increases
        • The Earth would be in a “True Planetary Emergency” by 2016 unless greenhouse gasses reduced
        None of those predictions came true.  Not one.  

        And here are some of the bad predictions from just this past year!
        _________________________________________________________________________________

        Pop Quiz:
        Still, we are under an existential threat because the Earth is progressively getting:
        A: Hotter 
        B: Colder 
        You are probably certain that the Earth is getting hotter.  The name global warming itself describes the danger.  You are probably familiar with the apocryphal "hockey stick" graph featured in "An Inconvenient Truth":



        Except, that's not what's happening in the long run:
          




        The Earth is actually getting cooler! 

        Five million years is not much when you consider the Earth is 4.5 billion years old.  That would take 900 - five million year graphs!  So, here's another graph estimating 65 million years of global climate change, still only a fraction of Earth's life.  Again, it clearly shows Earth is cooling.  

            
        The existential threat is that we will eventually freeze, not bake!

        _________________________________________________________________________________

        Pop quiz:
        Still, in the 200,000 year history of mankind:
        A. It has never been this hot
        B. It's been much hotter before 

        No doubt you are sure it's never been this hot.  It says so on the "hockey stick" graph.  And just consider the melting glaciers!

        Yet, we know that 1100 years ago, when the Vikings first went to Iceland, there were no glaciers there.  Today, glaciers cover much of Iceland.  Similarly, Vikings settled on Greenland around the same time and successfully farmed there for 500 years.  But they abandoned Greenland in the mid 15th century, presumably because it got too cold.  Those two events are known as the Medieval Warm Period and The Little Ice Age. Curiously, you won't find either of those events on Al Gore's graph.

        Here's a graph that shows 10,000 years of climate change from ice cores on Greenland: 





        And here's a map of glacial retreat in Glacier Bay, Alaska going back 3 1/2 centuries.  As you can see, glaciers have been in retreat since long before the industrial revolution!





        We have enough data to know that this warm period is nothing new.   It's been hotter than this many times before, even in man's brief 200,000 year history. 

        _________________________________________________________________________________

        You are still free to believe in the CO2 theory of global warming.  Heck, you are free to believe in anything you want, including Santa Claus and the Tooth Fairy!  But any serious person who looks into global warming must reflect long and hard before blindly waving a towel for the consensus.   

        Thursday, February 21, 2019

        Fact Check: The Truth About Our Two Party System

        You've heard it your whole life; we have a two party system in the U.S. where power flips back and forth between the Dems and the GOP.  Sometimes Democrats control the government. Sometimes Republicans do.  And it's all more-or-less in balance giving us a wonderful diversity of governing philosophies. Yay us!

        But, is it true?

        In order to truly have control, a party must have the Presidency, a majority in the House, plus 60% of the seats in  the Senate.  Prior to 1975, Senate control required 66%.

        That's because the Senate has a rule that prevents simple majorities from bringing legislation to the floor.  If one party has 51 Senators, they must find 9 votes from across the aisle in order to advance a bill.  This necessitates compromise of one sort or another.  It also empowers minority parties.  Any  minority party with at least 41 votes effectively has veto power over any bill it doesn't like.

        For the first two years of the Trump Presidency, Republicans had simple majorities in the Senate and the House.  It was said that Republicans controlled everything.  But without a supermajority in the Senate, they couldn't even do basic things they had run on.  They also had several members who caucused with the Democrats on big issues like Obamacare.     

        Only when one party has a cohesive supermajority in the Senate, a majority in the House, and the Presidency, can it truly be said that they are in control of the federal government.    

        Can you guess when the last time Republicans had that kind of control?  It was 110 years ago!  1909 was the last time Republicans had the Presidency, the House, and a supermajority in the Senate.

        When that Senate was voted-in, the President was Theodore Roosevelt, WWI was still years away, and Total Government Spending was about 7% of the private sector.        

        Democrats, on the other hand, have had total, complete, absolute control for 15 of the last 110 years.  There were another 7 years where Democrats were within 1 vote of a supermajority while holding the House and Presidency.  There were also 4 years where Democrats had a supermajority, but didn't have the Presidency.  In total, Democrats have had effective Senate control for 26 of the last 110 years, while Republicans have had 0.  The last time Democrats had a supermajority in the Senate, with the House and Presidency was way, way, way back during the... Obama administration.

        When Democrats didn't have complete control, or near complete control, they still had veto control in the Senate.  After 110 years of this, Democrats have taken Total Government Spending from about 7% in 1909, to about 70% of the private sector during Obama's eight years.  

        So do we really have a two party system in our federal government?  In theory, yes, but in practice, we are a one party country.  Democrats have had either total control, near control, or veto control of the federal government's legislative agenda for the entirety of the last 110 years.

        Here's the result in graphic detail:

        Do you see any patterns on the above graph?  (Click on the graph to see it in higher definition, or to zoom-in.  Hint:  Recessions are visible as prominent bumps in the State and Local Spending (red) part of the graph.)

        NOTE: Independents are not shown.  Independents who caucused with Democrats put them over the top for part of the 2009-2011 Senate,  and got them within 1 vote of supermajority in the 1993-1995 Senate. 

        Tuesday, February 12, 2019

        Socialism is the Darwin Award for Economic Ignorance [UPDATED]



        Pop quiz:

        The United States is:
              A) a capitalist country
              B) a socialist country

        No doubt, you were raised to call our economic system, "capitalism".  But did you know that the term "capitalism" is actually a derogatory one?  Do you know who made that term popular?  Did you know that that term didn't exist when the founders designed our economic system? And is it even true that we are a "capitalist" country today?     

        The original design of our economic system could best be described as "free-markets and limited-government", not capitalist.  But by the numbers, we have spent the last 100 years moving, or "progressing", away from our original design.  Arguably, we can no longer be considered a free-market / limited-government country.  Here's a graph that chronicles this "progress": (click on the graph to view it in higher resolution)


        In 1900, total government spending (federal, state, and local) consumed less than 10% of the private sector (private sector = GDP minus federal, state, and local government spending).  Then, in 1919, exactly 100 years ago, the Communist Party of the USA was founded on an agenda of labor unions and totalitarian socialism.  By the 1930s labor unions were in full bloom, and some of CPUSA's socialist wish-list was already law.  Under Barack Obama, the last President to have a complete record, peace-time government spending consumed about 70% of the private sector. That is the highest peace-time level in our history.  Only WWII exceeded it.  When 70% of a nation's wealth is consumed by government during peace-time, that may not be textbook socialism, but it certainly isn't the free-market / limited-government we had prior to 1929.

        In nominal terms, the largest socialist programs on Earth are all U.S. programs.  They make-up about 50% of our total federal, state, and local government spending.  Social Security is the largest government retirement program in the world.  Medicare, Medicaid, SCHIP, Obamacare, etc., make up the largest government medical programs in the world.  Our government welfare programs, federal, state, and local, are the biggest on the planet.  Our food stamp program is the biggest on the planet.  And our accumulated government debt is the largest in the world. Among the most populist countries, none, including countries like China, India, Indonesia, and Russia spend anything near what we do on social programs.  Many European countries do spend more per capita, but they are small compared to the U.S., and the spending differences are, for the most part, minimal.

        But spending is not the only measure of a government's size.  Regulation plays an equally important role, and the U.S. economy is highly regulated at the federal, state, and local levels.  In short, one can make the case that between government spending and our high levels of regulation, we have already turned the corner.  For socialists though, there are no limiting principles, and thus there is always more to do.

        Our latest socialist push, which began with Barack Obama, is gathering steam and is represented today by Bernie Sanders, Alexandria Ocasio-Cortez, and over half the Democrat party which supports Medicare for All, The Green New Deal, Guaranteed Income, Guaranteed Jobs, 70% - 90% marginal tax rates, and the like.  Today, socialism polls higher than capitalism among Democrats and the young.  It is an inexorable political force that is clearly visible on the graph above.  And it will undoubtedly continue to overtake our once free-market / limited-government system.

        Unlike free-markets and limited-government, socialism in its fully realized form requires unlimited, or "totalitarian" government.  That's because coercion is at the heart of it.  Totalitarian government is required to force citizens to do something that is entirely unnatural - work hard without the ability to realize the fruits of one's labor.  (Gee, that sounds familiar. Didn't we fight a civil war over that?).  Dissociating work from reward is the "fatal conceit" of socialism, to borrow a phrase from F.A. Hayek.

        But none of that is taught in America today.  Which is why we are where we are, and are careening rapidly towards totalitarian socialism.  Why is this accelerating now?

        Pop quiz:   
        1. Who is the father of modern socialism/communism?  
        2. Who is the father of modern capitalism? 
        Odds are you will be able to answer the first question correctly and can name Karl Marx as the father of modern socialism/communism.  You probably can do a decent job of explaining Marxism without even looking it up on Wikipedia.  You may even be familiar with the Marxist slogan, "From each according to his ability, to each according to his need."

        Conversely, if you are asked who the father of modern capitalism is, odds are you'd either draw a blank, or be mostly wrong.

        If you attended a public school in the U.S., chances are most of your teachers were union members. Unions were prohibited for most government workers prior to the 1960s because organized labor in the U.S. began as a communist/socialist movement.  Public sector unions were seen as a huge conflict of interest. But that changed in the 1960's under Democrat John F. Kennedy, and since then government workers, including school teachers, have flooded into organized labor. That's not to say all teachers and organized laborers are socialists.  Most probably don't even think in those terms, but the politics of organized labor leans undeniably in that direction. You may or may not have been taught Marxism in school, but you probably weren't taught anything positive about "capitalism"!  

        If you attended a college in the U.S., particularly in recent years, you are very likely to have been taught Marxism.  Karl Marx's "Communist Manifesto" is the third most assigned book at U.S. colleges today.  That's out of all the books ever published!  The next most assigned book in economics, capitalist or otherwise, is not even close.      

        So how did you answer the second question above?  In one sense the answer to that one is again... Karl Marx.  Yes, Karl Marx is both the father of modern communism/socialism AND the father of modern capitalism. Karl Marx was the person who defined that term for the masses in his risible critique of 1860s capitalism, "Das Kapital".  

        Many scholars credit a Scotsman named Adam Smith as the person whose ideas most influenced our economic system.  Adam Smith’s book, “An Inquiry into the Nature and Causes of the Wealth of Nations” was actually published in 1776.  (That date rings a bell, no?)  But the word capitalism wasn't in common use in Adam Smith’s day.  He never used it.  We mistakenly call our economic system capitalism because that's what Marx and the critics called it.  The name unfortunately stuck. 

        If everyone knows what "Marxism" is, why doesn't everyone know what "Smithism" is?  Because it’s not taught, except to select economics majors.  According to the Open Syllabus Project, Adam Smith is assigned at a rate about 25% compared to Karl Marx.  "Smithism" never became a word the way "Marxism" did.  You can go through K-12 and well beyond in schools in the U.S. and never hear the name Adam Smith, never learn about his ideas, and never understand the influence those ideas had on the founding and success of our country.

        Pop quiz:  
        1. What is Supply Side Economics?  
        2. What is Demand Side Economics?
        You are probably familiar with the first term, but can you accurately define it?  Have you ever heard of its opposite, Demand Side Economics?  

        ·         Supply side economics is the theory that people will SUPPLY (create) more value if they are allowed to function in a free market.
           
        ·         Demand side economics is the theory that people will DEMAND (consume) more value if wealth is redistributed to them.    

        These are opposite approaches for achieving different economic goals.  Supply Side seeks to optimize overall economic vitality (Smithism).  Demand Side seeks to stimulate consumption (Keynesianism), or at times to redistribute wealth (Marxism).

        If you look up supply side economics on Wikipedia, you’ll find a thorough entry along with plenty of criticisms.  If you look up demand side economics, you’ll get... crickets.  The language in this case does not favor the Marxist/socialist demand side ideology.   Hence, it is not even defined.  [UPDATE:  There is now a short and inaccurate entry on Wikipedia for Demand Side Economics.  When the first version of this piece was written in 2016, there was only a re-direct to "Keynesianism".] 

        Pop quiz:

        The financial crisis of 2008 was caused by:

              A) Greedy bankers, deregulation, George W Bush, and capitalism
              B) Socialism

        Most likely, you are 100% certain the correct answer is A.  

        No event had a more profound impact on this country's recent tilt towards socialism than the financial crisis of 2008.  It is said that history is written by the victors.  That has never been more true than in the wake of the financial crisis.  Democrats controlled the government commission that wrote the post-mortem.  Barack Obama won the presidency.  Democrats had both houses of congress.  And liberals made the movies and wrote the books explaining the crisis to the masses. Unfortunately, everything they told you was a deliberate deception designed to exonerate socialism, and scapegoat capitalism.   

        The fact is, the financial crisis of 2008 was a perfect demonstration of the failures of socialism. Redistribution of wealth, in this case redistribution of mortgage credit, was at the heart of the financial crisis.  At times, the support for this redistribution was bi-partisan, but the ideology behind it was socialist/demand side regardless of who was advocating.

        It all began with the affordable housing goals promoted by Democrats in the early 1990s, which lowered mortgage requirements.  It accelerated in the mid 1990s under Democrat Bill Clinton with further loosening of mortgage standards, pressure on banks to write loose loans, and mandates for government backed companies FNMA (Fannie Mae) and FHLMC (Freddie Mac) to buy all the new mortgages.  It finally reached its apex in 2007 under Republican George W. Bush, while Democrats including Senator Barack Obama, ran both houses of congress.

        All of the risk from this socialist redistribution was supposed to be assumed by the federal government, mostly in the form of the afore mentioned government backed companies.  Fannie and Freddie were ground zero for the financial crisis.  No government official took more money from these two companies, and at a faster rate, than the junior Senator from Illinois named Barack Obama.  His closest competitors in that money grab included Barney Frank, Chris Dodd, and Hillary Clinton.  If this is news to you,  it's because they wrote the history.

        What they told you was that it was a perfect storm involving greedy bankers, deregulation, and the natural flaws of capitalism.  It was a plausible argument designed to deceive.  Bankers today are no greedier than their banking forebears.  So why did they suddenly engage in such risky lending? Because they were coerced to do so.

        Deregulation also had nothing to do with it.  Canadian banks are lightly regulated compared to their U.S. counterparts and none of them failed.  Why the difference?  Only in the U.S. was mortgage credit redistributed.  To make matters worse, government regulations encouraged financial institutions to load up on mortgage backed securities.   Unfortunately, when the scheme went bad the damage quickly spread to the private financial sector bringing the entire global financial system to its knees.

        The deceptions about this animated the Occupy Wall Street movement, got Barack Obama elected twice, and are responsible for the acceptance of openly socialist candidates like Bernie Sanders and Ocasio-Cortez today.   They are also part of the continuing campaign that has mischaracterized the mortgage market as an example of free-market failure.

        The frightening thing about this is, if history is written by the victors and they engage in deception, aren't we doomed to repeat it?  Fannie and Freddie own just about every new mortgage written since 2008, and the socialist policies promoting home ownership and borrowing accelerated under Barack Obama.  We are currently in the process of building a second real estate bubble.  Adding to that are new socialist bubbles in national debt, student loans, auto loans, and equity prices.

        Pop quiz:

        People love Scandinavian socialism because:

              A) Scandinavian countries are happy, healthy, productive, prosperous, AND socialist
              B) They misunderstand Scandinavian economics and history

        Scandinavian success came long before their experiment with socialism.  They were happy, healthy, productive, and prosperous prior to the 1960s when they first began their turn towards socialism. Socialism had nothing to do with their success.  But sixty years of high taxes and socialism has slowed their growth and momentum.  Until recently, Sweden and Denmark spent more than 100% of their private sectors on government - an obviously unsustainable level.  In response, socialist Europe has been freeing their economies and sharply turning away from socialism.  Switzerland, Ireland, and the U.K. are economically freer than the U.S., and Sweden, yes "socialist" Sweden, is essentially tied with the U.S. in economic freedom today.  (According to the Heritage Foundation rankings.)

        Here's the thing:  National socialism has never produced anything long term other than misery, poverty, totalitarianism, and death.  Think Soviet Union, Cuba, Venezuela, and North Korea.  The NAZIS, who brought about the holocaust, WWII, and directly or indirectly caused the death of 70 million people, were known by the German acronym for "National Socialists".

        So, that's at the national level.  And long term.  At the local level, socialism can survive a bit longer. Local socialism does not eliminate the incentive killing aspects of socialism, but it does avoid the inevitable monetary collapse.  That's because local governments cannot create money and therefore tend to be more fiscally responsible. National governments can hide their insolvency, plunder future generations, devalue currencies, manipulate interest rates, and cause much bigger problems down the road.

        This is an important point that deserves repeating;  socialism cannot work long term at the national level.  The national level is where money is created and controlled.  Our system was never designed to be a socialist system.  The Constitution implied that the states were the proper place for redistributive experimentation.  The conflict of interest at the national level is just too great.  National politicians will eventually destroy the currency, borrow too heavily, undermine the work ethic, and undermine national defense in an attempt to gain and maintain power. The founders knew that.  It is happening today.  We doubled our national debt during just Obama's eight years.  Interest rates were artificially held near zero for that entire time.  If and when rates normalize to historical levels, the debt service alone will cause the kind of pain socialist nations have felt throughout history. We are not immune.
          
        In summary: You were indoctrinated to be a socialist. You were indoctrinated to call our system capitalism.  You've been deceived about the benefits of socialism.  You've been deceived about the evils of free markets.  And you've been deceived about the perils of national socialism.  If you still think socialism is great after all that, congratulations, you've earned a Darwin Award in Economics!