Warming, phytoplankton, and climate denialism – No doubt neither the latest climate report – the past decade was the warmest on record, and every indicator is moving in the direction predicted by analysis of anthropogenic global warming – nor the really, really scary paper in Nature about diminishing phytoplankton as a result of oceanic warming will suffice to open the closed minds of the climate denialists. They’ll just keep chanting “Climategate! Climategate! Climategate!” But we’re now at a state of knowledge where refusing to do something serious about global warming can only be called a policy of homicidal recklessness. Dying phytoplankton are a much bigger deal than the threat from a stray asteroid; too bad there’s no way to fire a nuclear missile at the problem, or the propeller-head faction among the libertarians might get interested.

» This morning I came upon a paper in Nature whose abstract is as follows (emphasis added): In the oceans, ubiquitous microscopic phototrophs (phytoplankton) account for approximately half the production of organic matter on Earth. Analyses of satellite-derived phytoplankton concentration (available since 1979) have suggested decadal-scale fluctuations linked to climate forcing, but the length of this record is insufficient to resolve longer-term trends. Here we combine available ocean transparency measurements and in situ chlorophyll observations to estimate the time dependence of phytoplankton biomass at local, regional and global scales since 1899.We observe declines in eight out of ten ocean regions, and estimate a global rate of decline of ~1% of the global median per year. Our analyses further reveal interannual to decadal phytoplankton fluctuations superimposed on long-term trends. These fluctuations are strongly correlated with basin-scale climate indices, whereas long-term declining trends are related to increasing sea surface temperatures. We conclude that global phytoplankton concentration has declined over the past century; this decline will need to be considered in future studies of marine ecosystems, geochemical cycling, ocean circulation and fisheries

EconomPic: Great Recession was Worse than Thought – I detailed that Q1 GDP was revised up one full point… great news right? Not when past quarters have been revised down. Per Calculated Risk:The recession was worse in 2008 than originally estimated.Q1 2010 was revised up, but Q3 and Q4 2009 were revised down. So the recovery is a little weaker than originally estimated.On a cumulative basis over this time frame, the current level of GDP is 0.8% smaller than previously estimated.

White House proposal would ease FBI access to records of Internet activity – The Obama administration is seeking to make it easier for the FBI to compel companies to turn over records of an individual’s Internet activity without a court order if agents deem the information relevant to a terrorism or intelligence investigation. (FBI access to e-mail and web records raises fears) The administration wants to add just four words — "electronic communication transactional records" — to a list of items that the law says the FBI may demand without a judge’s approval. Government lawyers say this category of information includes the addresses to which an Internet user sends e-mail; the times and dates e-mail was sent and received; and possibly a user’s browser history. It does not include, the lawyers hasten to point out, the "content" of e-mail or other Internet communication. (FBI and Department of Justice join forces, investigate Wikileaks)

China’s labour market: The next China | The Economist -THE angrier they become, the less intimidating they seem. The strikes, stoppages and suicides that have afflicted foreign factories on China’s coast in recent months have shaken the popular image of the country’s workers as docile, diligent and dirt cheap. America’s biggest labour federation, the AFL-CIO, blames imports from China for displacing millions of Americans from their jobs. But in June its president applauded the “courageous young auto workers” who waged a successful strike at a Honda plant in Foshan demanding higher wages.While foreign unions cheer, multinational companies fret. According to UNCTAD, foreigners have invested almost $500 billion in China’s capital stock. Their affiliates employ about 16m people in the country. For a decade this combination has dominated global manufacturing growth, dispatching ever cheaper goods from China’s ports. Of China’s 200 biggest exporters last year, 153 were firms with a foreign stake. But the recent unrest has put Chinese labour at odds with foreign capital.

The Basel Committee Moves Quickly on Basel III – The Basel Committee on Banking Supervision put on a burst of speed today, coming to broad agreement on many of the major outstanding issues regarding Basel III. (For more information on the goals, consequences, and process of the committee, please see my primer on Basel III.) The good news goes beyond the high probability of meeting their deadline. The Committee appears to have preserved the integrity of their original set of proposals, laid out in a consultative document in December of last year. There has been considerable "horse trading", but the results appear sound.

 – Hank Paulson, the criminally inept Treasury Secretary who shoveled trillions of taxpayer dollars to insolvent banks, facilitated the grand theft of some near $20 billion dollars from AIG by Goldman Sachs (where he was previously CEO), is attempting to change the narrative of the credit crisis and collapse.In today’s Washington Post piece, Paulson ignores facts, rewrites history, and fabricates causes of the economic collapse:“A significant root cause of the crisis was the combined weight of government policies promoting homeownership; these are apparent in the housing GSEs, the Federal Housing Administration (FHA), the Federal Home Loan Banks, the federal tax deduction for mortgage interest and various state programs. Homeownership was overstimulated to the point that it was unsustainable and dangerous to the broader economy.”Let us point out a small problem with Paulson’s rewrite: Throughout the 20th century, interest rates were kept in a realistic range, at least relative to economic growth, by bond traders and the Fed


Some observations regarding interest on reserves – ATL Fed macroblog – One of the livelier discussions following Federal Reserve Chairman Ben Bernanke’s testimony to Congress on monetary policy has revolved around the issue of the payment of interest on bank reserves. Here, for what it’s worth, are a few reactions to questions raised by that discussion: Is interest paid on reserves (IOR) a free lunch? Ken Houghton has the following objection: "… in September of 2008, the Fed decides to pay interest on reserves—including Excess Reserves. The banks can now make 25 times what they pay in interest, risk-free, just by holding onto money. The Fed is, essentially, leaving $100 bills on the sidewalk." I’m not sure exactly where the "25 times" comes from, but it seems to me that the most obvious transaction would be to borrow in the overnight interbank lending market—the federal funds market—and then "lend" those funds to the Fed by placing them in the Fed’s deposit facility. The differential between the return on those options is a good deal lower than a multiple of 25. In fact, as many have noted before, the puzzle is why the gap between the funds rate and the deposit rate exists at all.


With Recovery Slowing, the Jobs Outlook Fades – NYTimes – The nation’s economy has been growing for a year, with few new jobs to show for it. Now, with the government reporting a growth rate of just 2.4 percent in the second quarter and federal stimulus measures fading, the jobs outlook appears even more discouraging. “Given how weak the labor market is, how long we’ve been without real growth, the rest of this year is probably still going to feel like a recession,” said Prajakta Bhide, a research analyst for the United States economy at Roubini Global Economics. “It’s still positive growth — rather than contraction — but it’s going to be very, very protracted.” A Commerce Department report on Friday showed that economic growth slipped sharply in the latest quarter from a much brisker pace earlier, an annual rate of 5 percent at the end of 2009 and 3.7 percent in the first quarter of 2010. Consumer spending, however, was weaker than initially indicated earlier in the recovery

Extending Tax Cuts Better Than Nothing, But Not Much – During the George W. Bush administration, Congress enacted a number of large tax cuts, none of which were made permanent. They all expire at the end of this year, which will impose a large tax increase on Jan. 1 unless they are extended. Congress is now in the midst of deciding what do to. More than likely, Congress will just kick the can down the road and extend all of the tax cuts for another year. Given the weakness of the economic recovery, it would be unwise to raise taxes; economists across the political spectrum are united on that. Unfortunately, this means that substantive debate on the efficacy of the Bush tax cuts and alternatives that might be better for the economy will be put off until next year.
The Great Growth Recession? –  According to the BEA’s advance estimate, the US economy continued to grow in the April-June quarter, but at a not-very-fast 2.4% annual rate.That’s not fast enough to bring the unemployment rate down. Since output growth has been positive for a year now, we can’t really say we’re in a "recession," but with growth too slow to reduce unemployment, the word "expansion" doesn’t really feel right. An informal term for this positive-but-slow growth state is "growth recession." While we shouldn’t read too much into one quarter’s (preliminary) data, it does raise the question of whether or not the "great recession" will be followed by the "great growth recession."

Q&A: Romer Reacts to GDP Data  Gross domestic product came in Friday slightly below economists’ expectations at a 2.4% annual growth rate for the second quarter, and some raised concerns about the second half of this year. Christina Romer, who chairs the president’s Council of Economic Advisers, spoke with the Journal about the report. She said that there is room for the government to do more to promote economic growth and jobs, and noted some encouraging signals, including a higher savings rate that indicates much of the necessary consumer retrenchment may be past. Here is a Q&A.

Don’t Know Much About Economics – Krugman – Hoo boy. I missed this; but Yglesias points out that in Ezra Klein’s interview with Paul Ryan, Ryan says that the way to increase lending is to raise interest rates:We need to do things to free up credit. We need regulatory forbearance there. Right now, the policymakers and regulators are doing opposite things. So you’re right that there’s a lot of capital parked out there, and we need to coax it out into the markets. I think literally that if we raised the federal funds rate by a point, it would help push money into the economy, as right now, the safest play is to stay with the federal money and federal paper. I don’t even know where to start with this. What does Ryan think the fed funds rate is? (It’s the rate at which banks lend each other money overnight, usually to help meet reserve requirements.) He obviously doesn’t know the the Fed funds rate basically equals the return on federal paper, so that raising that rate would make banks more, not less, likely to stay with that federal paper. I’m sure someone will try to come up with a reason why Ryan is being smart here, but the truth is that he’s stone-cold ignorant.


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