How To Tell News From Propaganda

Mike Bloomberg makes no secret about his being a climate campaigner, including a letter to the editor in today's WSJ justifying his efforts to close coal power plants.  On the other hand, Bloomberg News purports to be an objective news source that puts out reliable factual information.  But somehow the climate campaign corrupts everything it touches.

Within the past week two different stories on recent temperatures have occupied prominent positions on the front page of the Bloomberg News website.  On April 10 there was "California's New Era Of Heat Destroys All Previous Records"; and then yesterday we had "Global Temperature Records Just Got Crushed Again."  This stuff can sound pretty scary.  From the California story:

What's happening in California right now is shattering modern temperature measurements—as well as tree-ring records that stretch back more than 1,000 years. It's no longer just a record-hot month or a record-hot year that California faces. It's a stack of broken records leading to the worst drought that's ever beset the Golden State. . .The last 12 months were a full 4.5 degrees Fahrenheit (2.5 Celsius) above the 20th century average.

As scary as that sounds, the problem they have is that some of us have read a few other things.  For example, how about that "worst drought that's ever beset the Golden State"?  Really?  Here's something from the San Jose Mercury News last year:

Through studies of tree rings, sediment and other natural evidence, researchers have documented multiple droughts in California that lasted 10 or 20 years in a row during the past 1,000 years -- compared to the mere three-year [now four] duration of the current dry spell. The two most severe megadroughts make the Dust Bowl of the 1930s look tame: a 240-year-long drought that started in 850 and, 50 years after the conclusion of that one, another that stretched at least 180 years.

And how about that "4.5 degrees above average"?  Scary or no?  Glancing at the weather page in today's New York Times I find that the recorded temperature in New York City for 2015 year to date is -- ready for this? -- 4.7 degrees  F below normal!  Over at the ICECAP website Joe D'Aleo reports that January to March 2015 was the coldest January to March during the entire period of the thermometer record (going back to the late 1800s) for the ten Northeast U.S. states plus D.C.  Also that the trend for the last 20 years for that area is down 1.5 degrees F per decade.  Somehow this story didn't make the front page of Bloomberg News.

What we've proved so far is that there is always a record for heat and a record for cold being set somewhere, if you just get to pick your boundaries and your time period to get the result you want.  So how about the worldwide picture?  Bloomberg's version is in that second story:

It just keeps getting hotter.  March was the hottest month on record, and the past three months were the warmest start to a year on record, according to new data released by the National Oceanic and Atmospheric Administration. It's a continuation of trends that made 2014 the most blistering year for the surface of the planet, in to records going back to 1880. 

But wait -- that's NOAA, run by known climate campaigners.  The story also mentions the NASA version of temperatures, which showed that March was not a record high, but close.  But they're also climate campaigners.  Don't the Bloomberg people realize that we know about the satellite measurements from UAH and RSS, going back to 1979?  They cover the whole world much more completely and accurately than the scattered thermometers in the NOAA and NASA sets.  What do the satellites show?  

Below is the latest UAH chart from Roy Spencer's website.  And the answer is that March 2015 is not close to a record for anything.  The March anomaly was +.26 deg C.  The record high anomaly was back in January to March 1998, when it hit +.68 deg C.  I count easily 40 months with an anomaly higher than the +.26 deg C of March 2015, including at least one in the 80s and one in the 90s.  RSS tracks UAH extremely closely.  They have the exact same +.26 deg C anomaly for March 2015 -- and a list of the hottest Marches that shows March 2015 as the tenth hottest in a 35 year record.  Warmer Marches include 1991 and 1983.

Sorry, Bloomberg, but in the age of the internet we know the other data that is out there.  We also know that NOAA and NASA have been aggressively altering their data to lower earlier temperatures to make the latest temperatures appear warmer by comparison.  You just can't put out stories trying to scare people without discussing this well-known adverse information.  If you try, it's immediately recognizable as propaganda rather than real news.  You're not fooling anybody.


What Does Hillary Stand For?

The lead editorials from The Economist over the weekend and from the Wall Street Journal this morning ask exactly the same question.  Actually, not quite exactly the same:  In The Economist it's "What does Hillary stand for?", while in the Wall Street Journal it's "What does Mrs. Clinton stand for?"  Close enough.

Neither thinks we have much of a clue what the answer might be.  The Economist guesses that you might be able to get an inkling of Hillary's plans for the economy by looking at the current proposals of the Center for American Progress, the activist organization long headed by former Bill Clinton Chief of Staff John Podesta.  Not that she's actually said that, of course.  Meanwhile the Journal speculates that she will use her status as the first female major-party candidate for President to push supposedly "women's" issues like universal pre-K and government funding for childcare.  But it's all just guesswork, and these guesses don't even get to the biggest issues.

Try Hillary's new campaign website and you won't get any more.  "Everyday Americans need a champion.  I want to be that champion."  That's nice.  What does it mean?  By the way, can I please opt out of having Hillary as my "champion"?  Really, no thank you.  But anyway, other than offering to be your "champion," the website gives no information as to what she stands for, and no specific proposals on anything.

But this is why you have the Manhattan Contrarian to help you peer into the future.  Hillary may be saying absolutely nothing and keeping it as vague as possible while she awaits her coronation, but here at MC we know how to take the little clues and turn them into deep insights.  People, what do we actually know about Hillary?  Here's what we know:  We know that she is the very most conventional of left-wing thinkers.  We know that she has no interest whatsoever in rocking the government gravy boat.  We know that she deeply believes in the main project of the Left, which is to bring social justice and equality to the world through government action and crony capitalism.  We know that she has taken tens of millions from oil states for her family "foundation."  We know that she believes in the efficacy and moral goodness of government programs to help the downtrodden, in large part because lots and lots of her acquaintances and supporters run all those things and they seem to her like nice people.

Take these basic bits of knowledge and apply them to the big questions of government policy, and all the answers suddenly seem obvious:

  • Without doubt, Hillary supports the continuation and gradual expansion of every single thing that the federal government is currently doing.  $700 billion per year to "fight poverty" and nobody ever exits from poverty?  We'll just let that $700 billion increase on autopilot by 5 or 10% per year.  She will never propose a cut to anything.
  • Obamacare?  She'll veto any attempt at repeal, revision or reform.
  • Entitlements?  If you think Hillary could be bothered to propose any meaningful reform to get them on a sustainable path, you're kidding yourself.  She sees the entitlement issue not at all in terms of what is right for the country and instead entirely in terms of potential partisan advantage: we'll sit back and let the Republicans propose the reform, and then we'll accuse them of throwing grandma off a cliff!  Might she think it's some kind of a problem that the country will be borrowing $50 trillion or so by mid-century in a massive income transfer largely from relatively poor to relatively rich?  Well, math was never her strong subject, and anyway Paul Krugman says that the best thing a country can do for its economy is to borrow $50 trillion and waste it -- and he won the Nobel Prize in economics!  Actually, under Krugmanomics, borrowing $100 trillion would be even better.  And besides, all this is long after her term will be over.  Pass the problem on to the next guy -- it sure worked for Obama!
  • New programs?  Sure she'll propose a few.  After all, if you become President you're entitled to some immortality from putting your name on something.  More spending on education and childcare are good bets.  Should something else be cut to fund it?  That's not her issue.
  • Energy and climate?  Over at Climate Progress they collect various statements that Hillary has made over the years.  The short version is that she's a completely gullible believer in the idea that the weather can be improved by making your electricity a lot more expensive.  "[S]he has said the President’s use of the Clean Air Act to rein in carbon pollution from power plants, 'must be protected at all costs' during a speech last year to the League of Conservation Voters. She has been critical of fossil fuel subsidies and supported boosting renewables. To her, climate change represents 'the most consequential, urgent, sweeping collection of challenges we face as a nation and a world.'  'The science of climate change is unforgiving, no matter what the deniers may say, sea levels are rising, ice caps are melting, storms, droughts and wildfires are wreaking havoc,' she said. "   Does she understand that there may be some contradiction between pretending to be a "champion" of the middle class and trying to double everyone's electricity bill?  Again, math was not her strong subject.  Anyway, don't forget those tens of millions from the Arab petrostates to her foundation.  Energy policy is the perfect place to practice crony capitalism while at the same time claiming the moral high ground and never getting challenged on that by the government press.
  • Foreign policy?  She was Obama's Secretary of State, for Chrissakes.  Sure there could be a few tweaks around the edges, but does anybody think anything major is going to change?

Pick any other issue, and you will see that Hillary's position can be predicted with near one hundred percent certainty.   It's easy!


How Groupthink Works

A fascinating phenomenon in human affairs is how large groups of people in close or semi-close association with each other will claim to believe exactly the same thing about some large and complicated subject.  As Exhibit A, entire nations and peoples will proclaim belief in the same religion, not just the broad generalities, but all the details and particulars of doctrine and dogma.  How many Arabs, for example, will say they are not Muslims?  In some cases like that one, the official group belief may be enforced at times with highly coercive measures, up to and including beheadings and mass executions.  But there are less extreme enforcement techniques with remarkable levels of effectiveness.

Here in the U.S., and among the forces of the Left, we don't so much have religion in the traditional sense, but the closest substitute is the Church of Global Warming, to which most everyone associating with the Left claims to belong.  You often read about a supposed "consensus" that human activities contribute to global warming.  The methodology used to claim that consensus is rather bogus, but more interesting is that the dogmas of the Church extend far beyond the proposition that human activities have some impact on global temperature, and include increasingly dubious tenets such as: mandatory support for government subsidy of renewable energy, mandatory support for restrictions on use of fossil fuels, mandatory support for EPA efforts to ban the use of coal, mandatory support for transfer payments from rich to poor countries as climate reparations, and so forth.  There are even important Church tenets that are manifestly contrary to empirical data, like "the earth is warming" (actual best data from satellites show completely flat trend for 18+ years and declines in the most recent months) and "polar sea ice is disappearing" (actual best data from satellites show record high levels of Arctic plus Antarctic sea ice during 2014-15).  Sorry, but if you want to be accepted as a member into this Church, you must subscribe to all of the tenets, even the ones that are just false statements of fact.

And how do we deal with the apostates?  A fascinating example is playing out with the case of Larry Tribe, celebrity professor of Constitutional Law at Harvard, teacher of Con Law to the likes of Barack Obama, John Roberts, Elena Kagan and even to the Manhattan Contrarian (way back in 1974), arguer of many cases in the Supreme Court, seemingly stalwart icon of the Left, and even Al Gore's lead lawyer in the great Bush v. Gore controversy of 2000.  And now somehow this guy has done the unthinkable and signed on as lawyer for Peabody Coal in challenging pending EPA "clean power plan" regulations designed to shut down the use of coal to generate electricity in the United States.

The official excommunication got under way a little over a week ago with an op-ed in the New York Times by Ricky Revesz, recent ex-Dean of NYU Law School, covered at MC here.  That was only the start.  It is followed with a lengthy article on the front page of Tuesday's print edition,  "Harvard Professor vs. Star Pupil in Climate Case."     Key quote:

To many Democrats and professors at Harvard, Mr. Tribe is a traitor.

Ouch!  As examples, the article cites two of Tribe's fellow Harvard Law professors, Jody Freeman and Richard Lazarus, heaping scorn upon the Con Law arguments he has advanced in support of Peabody:

 “The administration’s climate rule is far from perfect, but sweeping assertions of unconstitutionality are baseless,” Jody Freeman, director of the environmental law program at Harvard Law School, and Richard Lazarus, an expert in environmental law who has argued over a dozen cases before the Supreme Court, wrote in a rebuttal to Mr. Tribe’s brief on the Harvard Law School website. “Were Professor Tribe’s name not attached to them, no one would take them seriously.”  Mr. Tribe’s legal claims, they concluded, are “ridiculous.”

The Times omits any discussion of the merits of Tribe's arguments, or evaluation of their strength.  Are they aware of lengthy concurrences by Justices Thomas, Alito and Scalia in two recent cases making many of the same points?

One of the last lines of the article is the best:

Mr. McKenna, the Republican lobbyist, said dryly, “He’s about to be banned from a lot of cocktail parties.”

McKenna may have said that in jest, but I have no doubt that it is true.  Mr. Tribe, you are now a traitor and a pariah.  That's what happens when you publicly dis the groupthink.  But there is an upside: you are suddenly allowed to think for yourself.  It's liberating!  Now that you have been cast out of the Church, who knows what other dogmas you may think to disagree with?

In other climate news:

  • In an interview with ABC News yesterday, President Obama was asked why Americans should care about climate change, and he pointed to one of his daughters' childhood asthma attacks:  "[I]f we can make sure that our responses to the environment are reducing those incidents, that’s something that I think every parent would wish for.”  Huh?  Careful Larry, if you try to rejoin the Church you'll next be asked to buy into the idea that CO2 in the air causes asthma.   Did I hear somebody claim that Obama is "smart"?
  • Meanwhile, over in Japan, where they have been short of power since the Fukushima nuclear accident a few years ago, there is now a solution at hand:  40+ new coal power plants!



Federal Student Loan Update: How Huge A Disaster?

While our federal government continues to chase many mortgage lenders for so-called "predatory lending" practices, perhaps we should check in on the situation of far and away the biggest predatory lender of all, the federal government itself.  Its most odious practices are in the area of student loans.  I find the term "predatory" a stretch when applied to a mortgage loan for a house, given that in the worst case the borrower got to live in the house, and even if he gets foreclosed and has a deficiency balance he can normally discharge that in bankruptcy.  Not a pleasant process, but sometimes life can be tough.  Compare that to federal student loans, where the government lends inexperienced 18 - 24 year-olds open-ended amounts, often for dubious and overpriced trade schools, and then flatly forbids discharge in bankruptcy.  Many borrowers' finances are ruined for life, and they don't even have marketable job skills to show for it.  Now that's predatory!

I first covered the student loan situation in November 2012.  That's less than two and a half years ago.  At the time total student loan debt outstanding had just hit $1 trillion, and the default rate reported by the Federal Reserve had just suddenly gone from 8.5% in Q2 2012 to 11% in Q3 2012.  I also pointed out that close to half of the outstanding trillion were loans in deferment, grace period, or forbearance -- meaning that the actual default rate on loans in repayment status could be as high as 22%.  And I asked: "Once the Federal credit card gets behind something, how far and fast can it blow up and explode?"

We are now seeing how fast this kind of pushing of "free" federal money can blow up and explode.  Two articles in the Huffington Post (March 27, 2015 here and August 20, 2014 here) collect the data.  First, the upward march of loans outstanding continues unabated, reaching $1.096 trillion as of June 30, 2014 (and undoubtedly well over $1.1 trillion today).

And how much of that will ever be paid back?  You almost can't believe how fast this is going south.  According to the August 2014 post (citing Education Department data as of June 30, 2014), the delinquency/default rate had reached 18%.  Oh, but with another 34% in deferment, forbearance or bankruptcy, meaning that of those supposed to be repaying, almost 27% were in default.  Then in late March 2015 the Department released a new set of numbers on the performance of its largest loan servicing contractors.  The new data are not completely comparable to the prior data, omitting about a quarter of the universe, and counting as delinquent anyone more than 5 days behind on payment, while the old data required 30 days to be counted as delinquent.  With that said, the new delinquency figure is 33%.  8.5% to 33% in barely two years!

And we haven't even gotten to the question of whether you can trust any number coming out of this crooked government.  In the student loan area a big issue is how many borrowers pay nothing and yet still qualify for "current" payment status.  How could that be possible?  Because the government has so-called "income-based" repayment options.  Show little or no income, and you qualify for a zero or near-zero monthly payment and yet you go in the "current" category.  And how many of such people are there?  Actually, they don't give out information on that.  From the August 2014 article:

At a December Education Department conference in Las Vegas, Brian Lanham, then an executive at student loan giant Sallie Mae, said that more than 40 percent of borrowers who enroll in so-called income-driven repayment plans have a zero monthly payment.  It's "something that's really boosted our income-driven repayment application rates," Lanham said, according to a recording of the event the department posted on YouTube. "If they're struggling," he said of borrowers, "it's an option."  The Education Department did not respond to inquiries regarding the number of borrowers enrolled in plans that require them to pay nothing to keep current on their loans.

In other words, a very large percentage of those counted as "current" are actually paying nothing.  But they won't say exactly how many.  So if you add "supposedly 'current' but paying nothing" to the officially delinquent, what's the percent then?  40%?  50%?  More?  (By contrast, delinquency rates on normal consumer debt like credit cards and car loans tend to be around 6%.)  In an April 2013 article I predicted that the government would be lucky to get back half of its trillion of student loan debt.  Today, that "half" is looking wildly optimistic, and the trillion has grown another 10+%.  Don't worry though -- none of this shows up on the federal balance sheet.

And those "supposedly 'current' but paying nothing" people have been put into a completely hopeless mess.  If they actually try to get ahead, they'll just find the government sucking away all their increased income to pay the loans.  How come I'm not reading about this outrage in the New York Times?  

Competition For The World's Largest Extortion Racket: Justice Department v. SEC v. The Mob

Reading the government-cheer-leader press, you probably have the idea that over in Russia the government can take your property (or even put you in jail) on a whim, but here in the U.S. we have the rule of law.  To counter this naive notion, the Manhattan Contrarian is running a contest starting today to identify the "World's Largest Extortion Racket."  I'll put up the first few candidates today, and I invite readers to make nominations of their own.  Funny, but two of my three initial nominations are agencies of the U.S. federal government.  The one exception is "The Mob."  Does it have any chance of winning?

Nomination #1: Justice Department.  Some may say that the Justice Department actually prosecutes some real criminals, and if you look hard enough you can find some of that, but is there any doubt that their main business is shakedowns?  There's been plenty of coverage of some of those on this site, often to the tune of billions of dollars.  But today let's just focus on the latest one to hit the news.  On Wednesday the New York Times had a long article titled "Prosecutors Ease Crackdown on Buyers of China-Bound Luxury Cars."  It seems that many luxury cars like Mercedes, BMWs and Porsches that sell in the U.S. for $50,000 or $100,000 or even more can be sold in China for double or triple the U.S. price.  Some ambitious U.S. entrepreneurs have figured out the arbitrage and gotten into the business of buying as many of the luxury cars as they can get their hands on, shipping them to China, and making the arbitrage profit.  Does that sound to you like normal business?  To me too.  So how does the federal government get involved?

Here the Times article doesn't do a good job of giving the background, but reading between the lines, it seems that the car manufacturers want to keep the China profits for themselves, and therefore attempt to restrict the ability of customers to buy the cars in bulk.  The arbitrageurs are cleverer than that, and according to the Times, come up with "straw buyers" to make the purchases.  And that's where the federal prosecutors get their hook.

At this point you are undoubtedly asking yourself, why exactly is this a matter of interest for federal criminal prosecutors?  Not that they don't have at least some hook -- after all, essentially anything that can be described as "fraud" is a federal crime, and if the manufacturers are smart they are getting some kind of representation from the buyers that may be false.  But these manufacturers are big boys, and they have their own civil remedies that they can pursue against their customers if a contract term is breached.  Why exactly should taxpayer resources be devoted to doing the bidding of big auto manufacturers to protect their profits?  Here's the argument that the feds have made:

Federal authorities have argued that using straw buyers is a deceptive practice that potentially deprives American consumers of a chance to buy the luxury cars and limits the ability of automakers to keep tight control over sales to domestic dealers and to foreign countries.

"Deprives American consumers of a chance to buy luxury cars"?   That's pretty transparently bogus -- if there is come kind of supposed shortage, then explain why these companies spend by the tens of millions to fill the airwaves with their ads trying to get people to buy more cars.  But keep reading and the real reason for the federal intrusion becomes obvious: The prosecutors are stealing the cars, by the hundreds.  OK, they have a more genteel word than "stealing" -- they call it "civil forfeiture."

Since 2013, raids by the Secret Service have resulted in hundreds of Mercedes-Benzes, Land Rovers, BMWs and Porsches being seized, many of them just as they were waiting to be loaded onto cargo ships. . . .  Civil forfeiture is a powerful tool that prosecutors can use when pursuing cases involving money laundering, terrorism, drug dealing or other illegal activity. But it is a particularly punitive measure because the burden is often on the defendants to prove that any property and cash that are seized were obtained through lawful activities.

So first they seize the cars, and then they make you sue them to try to get your property back, in a proceeding where everything is stacked against you.  According to the Times, they have recently been "settling" some of these cases by giving back half the cars and keeping the rest.  The Times article also suggests that recent reforms of civil forfeiture by the Holder Justice Department may be reducing abuses in this area somewhat.  I'll believe that when I see it -- everything I've seen about these "reforms" indicates that they are extremely modest and in any event don't change the law in any way, so that the prosecutors can just go back to the old abuses as soon as no one is looking.

Nomination #2: SEC.  Crain's New York Business reported this week that on Monday March 30 the SEC had brought an enforcement proceeding against one Lynn Tilton, accusing her of "hid[ing] poor performance in three funds managed by her private equity firm Patriarch Partners."  The enforcement action seeks return of some $200 million in fees to which the SEC says Ms. Tilton was not entitled.

Oh, did I mention that the enforcement proceeding was brought not in court before an Article III federal judge (and potentially a jury), but rather in a so-called SEC administrative proceeding where the matter will be heard by one of the Commission's Administrative Law Judges?  Is there any problem with that?  Well, there is the small problem that the Constitution says that the "judicial power of the United States" is to be "vested" only in courts that have the characteristic that judges are appointed by the President, confirmed by the Senate, and serve for life -- all things that might lead someone to believe that the judges have some independence from the leaders of the agencies and might decide cases impartially.  How about the ALJs?  They are employees of the agency that prosecutes the cases.  In October 2014 the Wall Street Journal published an analysis of previously unpublished data on the SEC's record before its own ALJs, and found that in the 12 month period from September 2013 to September 2014 the ALJs had found in the SEC's favor in every single case.  Recent press reports have repeatedly observed that the SEC is steering an increasing percentage of its cases to its own ALJs as opposed to the legitimate courts.  A recent Reuters analysis showed that the SEC's win rate before juries in federal court was only 58%, and listed the string of high-profile cases that it had lost in 2013 and 2014.  Could the SEC's move to its own ALJs possibly be related to its likelihood of victory?

Two days after its initial article, Crain's had a follow up in which it reported that Ms. Tilton had hired Skadden Arps and had sued the SEC in federal court challenging the Commission's authority to prosecute its claim before its own ALJ.  Ms. Tilton tweeted:

"I hold hope that our nation will allow a fair fight for truth, to defend integrity and intent against allegations, and provide fair forums."

I do too, Ms. Tilton, but that's not how these people operate.  Don't worry, if (I mean when) you lose before the ALJ, you can always "appeal" -- to the Commission itself!

Nomination #3:  The Mob.  Puh-lease.  Nothing that The Mob does is within even an order of magnitude of the shakedowns perpetrated by the federal government.

RELATED: The Second Circuit Court of Appeals has denied the request of the U.S. Attorney for the Southern District of New York for rehearing en banc of the decision in United States v. Newman and Chiasson.  See prior coverage here and here No judge dissented.  The Wall Street Journal this morning urges Mr. Bharara to take his case to the Supreme Court, where it is confident he will receive an even more definitive thrashing.  But the betting in the legal press is that the Supremes will decline the case if asked, since there is no split among the circuits and no inconsistency of the Second Circuit's opinion with prior Supreme Court authority.  Meanwhile, how many of Bharara's vaunted collection of 80+ "insider trading" convictions have been undermined by the decision:  20? 30? 40? more?  Seems like it will still be a long time before we find out.