A conversation about climate change with former school-mate Eric Shaw, VP Portfolio Manager, IndyMac bank, formerly of Lehman Brothers

In response to the question:

“So how would someone who is "not so liberal" balance the (California) budget?”

Eric:

I would cut taxes to bring both people and business back to this state (hundreds of thousands of people have left CA in the last year, and scores of businesses have either left or are leaving for states with better business climates: TX and NV to name two). I would cut unnecessary state jobs like staff members to some of our termed out legislators and governor who now sit on do-nothing boards and are paid $100k+ salaries. I would re-negotiate union contracts with the state, starting with a bloated and politicized teacher's union that is more about funding non-education related propositions than it is about teaching children. There's no reason our state government's budget should have doubled in the last 10 years, yet we are now in the throws of this crisis. The governator has been an embarrassment as a republican. He failed to uphold his two campaign promises: reign in spending, and no new taxes.

The only thing he seems to be good at is pandering to the "global warming" alarmists to saddle CA with more regulations and restrictions that will further dampen our economy. Thanks

Matthew

I know I'm going to get myself in trouble with a comment like this, but somehow I still feel compelled to ask;
With regards to the global warming "alarmists" you speak of; am I correct in assuming your one of those people that think that the vast majority of the scientists that study climate are wrong about the urgent necessity for the world to reduce greenhouse gas emissions? I am curious; do you believe there is some sort of vast conspiracy by these folks? If so, what makes you so sure you are correct, given that this is not your own area of expertise?
Sorry, I've just got to know; we don't see many of your type here in "Little Bagdad" (Portland, Oregon). I am honestly interested in having an intelligent conversation about this.

Eric
To answer your question, I believe that the climate is an extremely complex system, with many inputs. I know that there are many scientists that believe that the earth is warming, and that humans are the cause. I also know that there are many scientists who believe that solar activity contributes more to changes in the earth's temperature than does CO2. I don't know what the answer is, but I think more research needs to be done before we throw good money after bad treating a problem that may or may not exist. I'm not one of those conspiracy theorists that thinks that all scientists are banding together to preach a doomsday scenario in order to continue to receive government funding to research that very same issue, but I think we need to be sure we are looking at this scientifically, and are open to the hypothesis being proven incorrect.

Matthew
Would you be willing to have the debate on Climate change accessible to your public? I'm no expert by any means (I have however done some greenhouse gas accounting work professionally). I do follow the science from a layman's vantage point, and I believe it is an issue that merits open, honest discussion by two rational people. It could be fun, and who knows, I might learn something...

You know what, on second thought, after spending a bit of time reviewing some of the information available from both sides of the debate, I think that us having this debate publicly is actually a bit pointless. My reason for saying this is that the science is FAR to complicated to be in any way intelligently discussed by two laymen such as ourselves. The debate has been had in many other venues by far more schooled persons than we. This stuff is easy to find. We would just end up throwing conflicting web-sites at each other.

I do however, encourage you to be more than a bit skeptical about the sources of information you hear with regards to climate change skepticism. The Union of Concerned Scientists has published an excellent report detailing one of the disinformation campaign funded by industry. If you're interested, it is linked to in its' entirety here:

http://www.ucsusa.org/news/press_release/ExxonMobil-GlobalWarming-tobacco.html

I guess in the end it just comes down to whether you believe that the scientific groups such as the intergovernmental panel on climate change and many other groups with expertise in the subject, actually represent a consensus or not. An interesting and very readable discussion of this debate is found here:

http://scienceblogs.com/illconsidered/2006/02/there-is-no-consensus.php

I've spent a little bit of time looking at the skeptics arguments. In all honesty, the science makes my head spin. However, what is most telling is that the majority of these skeptics are not being published in peer-reviewed scientific journals. Much like the debate about evolution; the details of the mechanisms are still being debated, and you can occasionally come across a scientist with some level of expertise who doubts it's very existence (see for instance Dr. Duane Gish of the Institute for Creation Research - I once attended one of his lectures out of curiosity; holy cow...it's another story), but I just can not see how any rational person could continue to claim that there is any real debate on the issue of whether the climate change we are experiencing is anthropogenic in origin. The true debate these days is now centered on 1) to what extent is the changing climate reversible 2) if so, how to best do this, and 3) how can we minimize negative effects to our economy whilst restructuring our industries and societies to the extent required to maximize our long-term chances for peace and prosperity as a species (not to mention all the other species who share our little planet...).

On that last point. It is important to remember that with every change comes opportunity. I am not alone in the belief that there is a whole new page to our economy just waiting to be written if only given the right stimulus (from both industry and Government). A "green economy" is more than just a catch-phrase. We as a nation need to start looking more than 10 years into the future. We need to start planning for what sort of world we want our children to live in. The argument that "we need to do more research" has been tried for the past 20 years. Not that more research shouldn't be done, only that NOW is the time to act! Your Nation...heck, your Planet is calling you Eric. You're a smart man, and now you have a very vested interest in the future beyond your own years man!

OK, I'm proselytizing. Sorry about that. But really Eric, Take a look around you...is this the best we can do? Dang it, there I go again...

Eric

I agree that a public debate can very quickly turn into an intrenchment into ideology. I appreciate you sending me the above references. I want to do more reading about this issue, and it's good to see the opposing side of the debate. I will go back through the articles I've read and dig into the studies they've referenced and send you those links. I listened to a book on CD (the best use of traffic time here in LA!) by Michael Crichton called "State of Fear". Given that you are pretty well read in this issue, I'm guessing you've at least heard of it. I went out and bought the book because he has a huge bibliography of the reports he used in researching the book that I'd like to reference. I'll let you know what I find that's interesting. His point, and one that I agree with, is that politicization of science is a dangerous thing. The scientific method should be free of influence (both explicit and implicit), and should stand up to testing similar to the double-blind study that is used in pharmaceutical research. I have never really been a fan of Crichton's books, but I appreciate the research he puts into them (he is a Harvard educated scientist/doctor).

One thing that worries me these days is the "we've got to do something" argument. Our previous president and congress printed 700 billion dollars using the argument. Our current president and congress propose to print over 1 trillion dollars in the same name. Printing money and growing government in the name of "doing something" is a political solution to an economic problem. FDR's measures arguably prolonged the Great Depression rather than shortened it. Markets are self correcting, and "doing something" is a way for politicians to capitalize on mass hysteria. Left to their own, some people would lose their homes to foreclosure. However, many of those people probably should not have been able to purchase a home in the first place, and will have to go back to renting (at a lower price than their mortgage was), and save up to buy a house they can afford. Banks will, and should, go out of business for taking outized risks in the loans they made or the securities they purchased. Those banks leaving the market will open up the way for new banks to come in, and will reward those existing banks that were more fiscally sound. People will lose (and have lost) some of the savings that they invested in the stock market, but that's the meaning of "risk and reward". If we allow reward, but don't allow the possibility of loss, then people/institutions will just take greater risks with their money next time. Why not? Since I can expect to make money in good years, and the government will protect me from losses in bad years, I might as well take out the biggest bets I can. I win in either case! I just want to make sure that "global warming" or "climate change" aren't just another capitalization on people's fears, and another excuse to "do something" no matter the adverse consequences.

Great talking with you, and I've got some reading to do. I'll come back when I've got something for you.

Matthew

I appreciate your thoughtful response Eric. I agree that the politicization of science is a dangerous thing. I'm sure you are aware of the left's complaints about how the previous administration has dipped into this dangerous territory on many, many occasions. With regards to climate science, I propose the anology of a scientist in a crowded theater noticing that the curtains are on fire. He might yell "there's a fire!" as a statement of scientific fact. Suppose a charismatic theater owner rises disputes the claim out of his own self interest (ok, this is getting to be kind of weak...but stay with me). Does the scientist have a moral obligation to sit down and shut up, or rather to organize those around him to do something about the problem? If he organizes, is this action a politicization of the reality of the fire?

Though I've been aware of Criton's stance on climate change I have not read his book. His stuff is usually a bit too "Steven King" for my tastes (i.e. pulp adventure fiction), but I'll give State of Fear a look next time I'm at Powells bookstore. I look forward to continuing this discussion with you.

I share your concern over the economic bailout for banks and individuals who have made poor real-estate and investment decisions. I became a believer in the power of markets to improve peoples lives during my experience in Zambia as a Peace Corps volunteer. I do however strongly disagree with a hands-off approach to markets. There is just too much potential for abuse by the powerful. We do not live in a world with perfect information readily available, nor do consumers make rational, informed decisions, and these poor decisions have consequences that just may affect the ability of our species (again; and many other species) to survive. These items would have to exist for a truly free market to function. For this reasons, I believe markets need guidance and limitations. There is a balance between these two opposing forces; that is of course the trick!

I see your an Ayn Rand devote. I've read several of her novels, and enjoyed them at the time. I myself have many libertarian tendencies myself (mostly in the social sphere). Ayn Rand was a master storyteller; anyone who reads her books can identify with the protagonist. I strongly believe however that her ideas, unfettered, are dangerous and ill-suited to the situation that in which the world finds itself in the 21st Century.