The shame is not realising you're a thread de-railing, illogical, morally superior (in your head) Troll who is incapable of considering an alternative poitn of view, or that the cargo cult you believe in could possibly be wrong, and who constantly puts words in other people's mouths so you can continue to rail against what you perceive they said (usually wrongly).

As TBYJ said, you've been rumbled.

TBYJ, the colour is indeed variable.

Nial, think straight, it is my thread, why should I derail it? And I'm aware that you are not exclusively or even predominantly "evil right wing oil funded deniers". I'm not at all sure what many of you are though, especially when I see claims such as that on the Irreversible thread that "modern coal fired power stations are not "dirty" at all" and at the same time I see Chinese cities shrouded in smog.

Raff, I would not support expenditure on foreign aid for some of the same reasons I do not support it on constraining CO2 emissions.

The money spent on has been net harmful by any measure. It has not only failed to even dent global emissions growth, it will also fail even if the elusive global agreement is reached as the country targets do not stack up. So the people of the emissions-reducing countries will bear both the cost of those policies and practically all the costs of the unabated warming as well. Further any regular at Bishophill of costs being higher than expected and (often) solutions being much less effective than planned from Wind, solar, CCS, power transmission, domestic energy saving etc. Consequences have been to create a new category of poverty and make our energy supplies less secure. In Spain the squandering of money has been proportionately greater and likely made a significant impact of the severity of the economic depression.
The initial justification for foreign aid came out of the Harrod and Domar growth models. Lack of economic growth was due to lack of investment, and poor countries cannot get finance for that necessary investment. Foreign Aid, by bridging the “financing gap”, would create the desired rate of economic growth. William Easterly looked at 40 years of data in his 2002 book “The Elusive Quest for Growth”. Out of over 80 countries, he could find just one – Tunisia – where foreign aid conformed to the model. There were plenty examples of where countries received huge amounts of aid relative to GDP over decades and their economies shrank. Easterly graphically confirmed what the late Peter Bauer said over thirty years ago – “Official aid is more likely to retard development than to promote it.”
In both constraining CO2 emissions and Foreign Aid the evidence shows that the pursuit of these policies is not just useless, but possibly net harmful. The solutions are to think through the consequences of the policies, has independent and robust review prior to implementation, and adjust policies in the light of experience. Short of that, the best solution is to do nothing.

Kevin, I agree that aid programs need scrutiny and control and that money needs to be given as directly as possible (i.e. not through poor country governments), but that is rather different from renouncing aid in principle.

I think you confuse correlation and causation. GDP falls in countries receiving aid might have been even bigger, had they not received aid. How can we ever know? And the the coal lobby here disagrees with you, claiming that aid agency refusal to fund investment in coal power facilities (i.e. bridging your "financing gap") is tantamount to genocide. Of course they don't supply the funds themselves either.

Does your objection to aid extend to WHO programs to eradicate polio or to vaccinate children or recent money to control ebola? Or money to help care for refugees fleeing wars or famine?

I also have trouble with your arguments about CO2 reduction. You might have a valid case, or you might not but at the moment all you have made are various unsubstantiated assertions: when you say that the money spent on CO2 reductions has been "net harmful by any measure", can you name some of those measures and say how reductions have been harmful? Can you identify this "new category of poverty" and describe how you think our energy supplies are less secure; and do you have any proof that Spain's spending on renewables "likely made a significant impact of the severity of the economic depression"?

Raff,
On aid, Easterly had some good examples. An extreme failure was Zambia, where during a 30 year period post independence when aid was consistently above 20% of GDP, GDP fell 30%. Such high levels of aid should have lead to high levels of economic growth. 5% economic growth over 30 years would lead to GDP 4.3 times higher.
At the opposite extreme, India and China have had very little aid relative to their GDPs and their growth take-offs were both due to economic reforms. Easterly (who worked for the World Bank) looked at every country with available data. It is the fact that only one country supported the predictions growth model when 80+ did not that makes it pretty certain that the economic theory is false.
Repudiating the main reason for foreign aid does not mean that no foreign aid should be given. But money is not the primary answer to alleviating poverty and preventing famine. On the latter, Indian Nobel Laureate Amartya Sen is instructive.

The new category of poverty is "fuel poverty". Read the blog more often to see how Britain's energy supplies are less secure.

The net harm of CO2 reductions is as near a truth as is possible. There have very little reductions so far achieved through policy on a global scale - and the measure can only be on a global scale. These have been extremely costly - far more than assumed by benefit-cost studies. Between 1990 and 2020 I estimate global emissions will double. Policy will have made, at most, 2 or 3% difference. At this rate current generations in Britain and other policy countries are bearing the policy cost, and, in the unlikely event of the catastrophic global warming hypothesis being true, future generations will reap nearly all the consequences. This net harm is further exacerbated by actual policies providing to be been extremely costly - far more than assumed by benefit-cost studies. On this compare the Social Cost of Carbon in the 2007 AR4 synthesis report with the full marginal costs of renewables per megawatt in Britain.

Kevin, thanks for the reply. It is clear that aid doesn't exist in a vacuum - the circumstances matter. Countries that receive aid are generally those that for one reason or another cannot help themselves. They are self-selected failures. Just giving money doesn't magically change that. But failures don't invalidate the principle of aid, although they should certainly inform as to methods and expectations.

India and China are not really typical of development aid failures.

It is hard to argue against polio eradication, vaccination and other health programs, or against help for refugees or famine victims. Maybe you are as in favour of that as I am, although you don't mention it. In fact I've not seen opponents of aid budgets mention it (maybe because "all aid is harmful" is a much catchier mantra than "all aid is harmful, except health, refugee and famine relief programs").

Fuel poverty is not new. As for less secure energy, I've seen lots of alarmism and panic stories here but nothing substantive. Have you?

As for CO2 reduction being "net harmful by any measure", you have not provided any measure. All you are saying is that it costs money to build renewables. That is not proof of harm. If you have some proof I'm all ears, as I am to proof that Spain's spending on renewables "likely made a significant impact of the severity of the economic depression"?

I'm not saying you are wrong necessarily, you might be. I just find it strange that you (not just you) promote these ideas without any evidence.

Raff,

Sorry I have not got back to you.
I do not disagree that in every case foreign aid has been harmful. In the cases of the eradication of smallpox and Norman Borlaug's work on increasing crop yields aid has yielded returns many times the cost. But the bulk of it is justified on woolly theories and a policy of giving money without making sure it is properly spent. It is wasted, or worse.
I have looked into the renewables situation in Spain. On solar and wind power alone subsidies are likely to be €5bn euros a year, and unemployment could be more than 250,000 higher than without renewables. My analysis is here.
I hope to post later in the week on why CO2 reduction being "net harmful by any measure". A good source for some background reading is Let Them Eat Carbon: Matthew Sinclair.

Kevin, it seems we're pretty close to agreement on aid. I would perhaps quibble with the word "bulk". I would say that it is likely that a significant part of aid spending is wasted. It may be that, like advertising spending (where the saying is that 50% is wasted - we just don't know which 50%), telling in advance which parts will be a waste is not as easy as it seems in hindsight.

On your analysis, I envy you your enthusiasm for the subject. But it is deeply unconvincing. And I find it it more than a little ironic that a climate science sceptic should offer the result of a computer model as proof of anything. And an economic model at that!

You seem to be suggesting that, had the money not been spent on renewables, it might have been used for tax cuts or some other fictional government spending; this would have been used so much better and created 250,000 jobs. That seems rather counter intuitive. We know that private spending went, in part at least, into building up a huge housing bubble. And we know also that government spending is no more a guarantee of good outcomes than private spending (many people say it is worse).

Incidentally, cutting taxes rather assumes that the budget is in surplus - i.e. not borrowing. I don't know whether Spain was in surplus but if it wasn't then a tax cut would have amounted to borrowing money to give to affluent Spaniards (the poor pay little tax). And Spain's later bust had a lot to do with using the Euro and consequently having no control over its own interest rates. This reduced central control over an overheating economy. The sensible action in these circumstances would perhaps have been to reduce spending (even on renewables) and paid down national debt. That would have created no jobs but might have deflated the bubble a little and reduced the pain later.

I'll duplicate this on your blog - delete it if you like, I don't mind.

You make so many errors it is difficult to know where to begin.
- Aid projects that have been successful usually are those with clearly defined with set objectives. Those that fail have vague objectives.
- Sceptics are a mixed bunch, so your generalisation about all rejecting climate models is incorrect. Many would say they are running too hot. Further, there are different types of models in economics. The graphical/mathematical models of textbooks are different from the empirically based short-term forecast models. The computer simulation models on the lines of the climate models are different again.
- The subsidies for renewables do not come out of general taxation, but are added to utility bills. In the UK the 30% rise in electric and gas bills from 2009 to 2012 was mostly due to this factor.
- It you actually read what I wrote, you would see that I was not trying to explain the entire Spanish crisis in terms of renewables. Unemployment is currently 25% or 5.9million, so 250,000 jobs is quite small.
- If you had studied economics, or read The Economist for a few years, you would know that reducing tax rates can sometimes increase revenue. Much to everyone’s surprise (including my own) Ronald Reagan’s tax cuts in the 1980s did just that.
- The crisis was not caused by an excess of spending. It was caused by an excess of credit which was fed into the housing markets and consumer credit.
Finally, I welcome comments on my blog, particularly from those that disagree with me. I think it is important to enable and encourage people to compare and contrast the arguments.

of dear, as usualkit seems, Rdff was argujng from a position offactual ignorance but moral certainty. Another zealot.

Name some prominent sceptics who acknowledge that we should take heed of what climate models tell us. I've never come across one. You have said of economic models that, "At there best their forecasts at little better than the dumb forecast that next period will be the same as last period." I share your scepticism of economic models. Economics is a social science, it deals with people whose behaviour, unlike climate, does not follow physical laws. Yet you base your analysis of Spain on an economic model.

The UK renewables subsidies are not relevant to Spanish unemployment.

Reading the Economist doesn't make you an economist. But it should make you familiar with the questionable nature of the Laffer curve, which is what you are referring to indirectly.

Here's a choice quote:

"Even Reagan, a supply-sider persuaded by Arthur Laffer's pretty curves that his tax cuts would pay for themselves, raised taxes when they did not."

http://www.economist.com/node/18897489

Or for more detail you could check out:

http://www.economist.com/blogs/democracyinamerica/2012/08/romneys-tax-plan

Wiki, on Reaganomics says, "Federal revenue share of GDP fell from 19.6% in fiscal 1981 to 17.3% in 1984, before rising back to 18.4% by fiscal year 1989. Personal income tax revenues fell during this period relative to GDP, while payroll tax revenues rose relative to GDP".

So can you support your suggestion that the Reagan tax cuts increased revenue? It seems non-trivial given the evidence against.

Your claim, as I understand it, is that had there been no spending on renewables, unemployment would have been 250,000 lower. To support it you use the sort of doubtful economic model that you yourself question and a belief in an economic concept that is generally derided.

And you suggest that I need to read some economics!

Raff,
We have a different view on models. To think that current climate models are rubbish does not mean a total rejection of modelling in climatology. My dispute with climate models is similar to my dispute with extreme versions of economic planning models. There is no clearly defined set of equations that can fully define reality. In both it is impossible to empirically define the equations, as both the parameters AND the structure of those equations are always changing. In both economics and climatology our understanding will always be limited to mere pattern predictions. I might post on it at later date. Others, who have a knowledge of the various strands of economic thought, may start to grasp where I coming from here. They should then relate it to the wiki definition of climatology here, particularly the statement

Climate is governed by physical laws which can be expressed as differential equations.

When I said “If you had studied economics, or read The Economist for a few years” I was recommending that you followed my lead. I have a BA in Economics and for at least eight years subscribed to the Economist within a twenty year period. I do not know about recently, but The Economist used to argue its case whilst recognizing other viewpoints. I found it most helpful when I disagreed with its arguments. Although my degree was from a Polytechnic, it taught me to compare and contrast different points of view. It used to be said that if you got two economists to talk on a subject that you would get three different opinions. I believe this was an understatement.
The “Laffar Curve” is a tautology. It is the particular application that the majority of economists dispute. Keynesians have long recognized also that tax cuts in a minor recession can raise the total revenue from taxes.
If you look further into the Reagan tax cuts, there were actually two tranches – in 1981 and 1986. It was the latter I was referring to. The biggest tax cuts were to those on the top rate of income tax. In 1981 the top rate was reduced from 70% to 50% and in 1986 reduced again to 28%. This is what the Joint Economic Committee of US Congress said in 1996

The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.

The Wiki article that you quote was on total tax take. It omits to mention that in the early 1980s there was a recession and the late 1980s a boom in the USA, which would have impacted as well. Raff, understanding the term “ceteris paribus” will help you understand why you miss the mark here. Understanding the term is also fundamental to comprehending the first of the three types of economics models I alluded to in my comment of Nov 20, 2014 at 9:50 PM - the graphical/mathematical models of textbooks.

Raff,
We have a different view on models. To think that current climate models are rubbish does not mean a total rejection of modelling in climatology. My dispute with climate models is similar to my dispute with extreme versions of economic planning models. There is no clearly defined set of equations that can fully define reality. In both it is impossible to empirically define the equations, as both the parameters AND the structure of those equations are always changing. In both economics and climatology our understanding will always be limited to mere pattern predictions. I might post on it at later date. Others, who have a knowledge of the various strands of economic thought, may start to grasp where I coming from here. They should then relate it to the wiki definition of climatology here, particularly the statement

Climate is governed by physical laws which can be expressed as differential equations.

When I said “If you had studied economics, or read The Economist for a few years” I was recommending that you followed my lead. I have a BA in Economics and for at least eight years subscribed to the Economist within a twenty year period. I do not know about recently, but The Economist used to argue its case whilst recognizing other viewpoints. I found it most helpful when I disagreed with its arguments. Although my degree was from a Polytechnic, it taught me to compare and contrast different points of view. It used to be said that if you got two economists to talk on a subject that you would get three different opinions. I believe this was an understatement.
The “Laffar Curve” is a tautology. It is the particular application that the majority of economists dispute. Keynesians have long recognized also that tax cuts in a minor recession can raise the total revenue from taxes.
If you look further into the Reagan tax cuts, there were actually two tranches – in 1981 and 1986. It was the latter I was referring to. The biggest tax cuts were to those on the top rate of income tax. In 1981 the top rate was reduced from 70% to 50% and in 1986 reduced again to 28%. This is what the Joint Economic Committee of US Congress said in 1996

The share of the income tax burden borne by the top 10 percent of taxpayers increased from 48.0 percent in 1981 to 57.2 percent in 1988. Meanwhile, the share of income taxes paid by the bottom 50 percent of taxpayers dropped from 7.5 percent in 1981 to 5.7 percent in 1988.

The Wiki article that you quote was on total tax take. It omits to mention that in the early 1980s there was a recession and the late 1980s a boom in the USA, which would have impacted as well. Raff, understanding the term “ceteris paribus” will help you understand why you miss the mark here. Understanding the term is also fundamental to comprehending the first of the three types of economics models I alluded to in my comment of Nov 20, 2014 at 9:50 PM - the graphical/mathematical models of textbooks.

A tautology? Laffer is a name and curve is a line that is not straight. How can that be a tautology? It is clear that plotting tax income against tax rate does not yield a straight line and it is very likely that there is a point at which income starts decreasing as the rate goes up. But it is probably impossible to determine at which tax rate that point occurs and so the curve is essentially useless.

You said that reducing tax rates can sometimes increase revenue: "Much to everyone’s surprise (including my own) Ronald Reagan’s tax cuts in the 1980s did just that."

I pointed you to some articles in The Economist (a reliable source, as you had recommended it to me) that show the Reagan claim to be wrong.

Now you say, without apparently noticing the contradiction, that:

1. Keynesians have long recognised also that tax cuts in a minor recession can raise the total revenue from taxes.

2. When you claimed Reagan's tax cuts raised revenue, you were referring not to the 1981 cuts, which were done during a recession, but to the 1986 cuts, which were not.

Your reference to “ceteris paribus” - all else being equal - is irrelevant in economics. In economics, all else is *never* equal. That is the problem with economics and economic forecasts, upon which your 250,000 estimate rests.

Raff,
You have not studied economics, so you do not understand where I am coming from.

The "Laffar Curve" is a tautology - is true by definition. Your statement is ridiculous.

Reading the Economist will show you that there are multiple points of view in economics. In theory there are multiple schools of thought. Short quotes showing one point of view demonstrate nothing.

The term "ceteris paribus" is central to economic theory. It is precisely because "all things are never equal" in the real world that to understand different elements you have to make assume other things are held constant. The textbook that I read before starting a degree that explained this well - the standard 'A' level text of the time - was "An Introduction to Positive Economics" R.G. Lipsey 5th Edition.

Do you not even see the contradiction in your claims (see my 4:40 yesterday)?

On tautologies, I thought you were referring to the words "Laffer Curve" in some odd way. That is how the word tautology is normally used:

tautology |tɔːˈtɒlədʒi|
noun (pl.tautologies) [ mass noun ]
the saying of the same thing twice over in different words, generally considered to be a fault of style (e.g. they arrived one after the other in succession).
• [ count noun ] a phrase or expression in which the same thing is said twice in different words.
• Logic: a statement that is true by necessity or by virtue of its logical form.

If you are instead saying that the curve itself is obviously true, it is not at all obvious that 100% taxation leads to a zero tax take. Such a system might rely on state coercion and repression. Or it might rely on altruism in the form of a commune. It might not be stable in the long term, but it is quite conceivable.

As for economics, I've been a subscriber to The Economist for two decades. I used to believe what they write. Since the crash and the inability of economics to give a single clear message of how to recover I have a lot less confidence in both the magazine and the field. "Short quotes showing one point of view" are fine if you claim tax receipts went up and the numbers say they went down. The numbers win. Do you not even see the contradiction in your claims (see my 4:40 yesterday)?

The problem of "ceteris paribus" is that to "assume other things are held constant" is to assume an unreal world and hence to draw the wrong conclusions. It doesn't work and it never has or will in economics.

Kevin, you're wasting your time.

As TBYJ said on page 1
"Oh Raff, you would argue about the colour of sh*te"

And as I said above, he/she is an "illogical, morally superior (in your head) Troll who is incapable of considering an alternative point of view, or that the cargo cult you believe in could possibly be wrong, and who constantly puts words in other people's mouths so you can continue to rail against what you perceive they said (usually wrongly)."

An example... "If you are instead saying that the curve itself is obviously true, it is not at all obvious that 100% taxation leads to a zero tax take"

Kevin

You are debating with someone who really does not understand what he is talking about and is only arguing for the sake of it. He refers to the Wikipedia article on Reaganomics but obviously did not read it all the way through because it makes exactly the point you made about the impact of the tax cuts, in a way that completely undermines your debater's attempt to refute you:

"The fact that tax receipts as a percentage of GDP fell following the Economic Recovery Tax Act of 1981 shows a decrease in tax burden as share of GDP. Total tax revenue from income tax receipts increased during this time. The economic growth and increase in GDP outpaced the increase in tax receipt revenue, resulting in a slightly reduced tax burden as a percentage of GDP for the economy."

diogenes, read the entries for 1981-6 in the Historical Tables of the Office of Management and Budget table 1.3 in constant 2005 dollars. Total receipts go down. Also look at table 2.1 where you can see that Individual Income Taxes go up and the Total goes up (599,272, 617766 etc) - these are "current" (at the time) values. Table 1.3 shows these values too - you can see the 599.3 (billion) corresponding to the 599,272 (million) - and inflation adjusted values (1,251.1 billion etc). Inflation was around 10% in 1981.

Raff..I rest my case. I looked at the table 1.3and there was a discernible increae in tax receipts between 1981 and 1982.

after a longer look at table 1.3, I see that receipts rose every year in the 80s.apart from a blip betweeen 1982 and 1983, which I think coincided with a rise in health provision costs or something similar (like British National Insurance). What is the point you were making? Even in 2005 dollars.

1197 to 1493 dollars over a decade seems like a rise to me. No doubt your mileage varies. It is also important to note that people pay taxes in nominal dollars rather than 2005 equivalent dollars. Have you ever had to pay taxes? The nominal amount of tax increased from 517 to 991. That would put a crimp in your clothing allowance, as long as costs rose broadly inline with inflation.

But recall that Reagan increased taxes when he had to. it was just those tax-reduction budgets that drew attention. amd they seem to have worked.

"receipts rose every year in the 80s..."

You are looking at nominal (current) values - they are not inflation adjusted. So the numbers went up but the value of money went down. You need to look at the adjusted values (2005) which were:


1980 1,197.3
1981 1,251.1
1982 1,202.6
1983 1,113.4
1984 1,173.9
1985 1,250.5
1986 1,277.2
1987 1,375.0
1988 1,420.7
1989 1,493.3


So after the tax cuts of 1981, receipts went down, not exceeding their 1981 value until 1986. If the argument is that reducing taxes increases revenue immediately then this seems like counter evidence (not conclusive though - it might be argued that it was the recession that reduced revenue and without the tax cuts it would have been worse. That's one problem with economics: we can never disentangle cause and effect). One might argue that reducing taxes increases revenue five years later, but that would not involve Laffer - it would just be an increase in deficit spending. Nobody can ever know, which allows people to read into it what they want. Economics and politics are difficult to disentangle and I tend to think much economics is bunkum; ditto politics.

I imagine your interest in Laffer curves is about as marginal as mine and you are just arguing for the sake of it. That's cool, I do that too. I really doubt that Reagan's tax cuts "worked" in the advertised Laffer-curve way (increasing revenue). I'd be more convinced that they operated as an ordinary Keynesian stimulus, increasing the existing deficit to stimulate a depressed economy. That does seem to have worked as by later in the decade the economy was steaming again.

juat as I said, Raff...you did not read what I wrote.

Raff,

How can you offer any opinion on economics that is of any worth when you reject the subject, and reject the mode of analysis - theoretical models with highly abstract assumptions? (Nov 24, 2014 at 1:10 PM)
Let me guess. You apply the method of climatology. That is, to rely on the quoting (or misquoting) the opinions of proclaimed experts, and attempting to denigrate anybody who disagrees. If you actually explore the quotes in both, they are often without much foundation.

I don't reject economics, I am realistic about what it can tell us. Experiments that assume everything except your parameter of interest remains constant are doubtless interesting, but when in practice we know that this basic premise is false, the results have to be of limited value. My opinion of economics is probably about as valid as yours, mine or anyone else's here of climate science. So what are you saying?

And I don't remember denigrating you, but if I did, I apologise.