Blog Title: Productivity Shock

Public Domain Audiobooks

If you've always wanted to read Alfred Marshall's Principles of Economics but didn't have the time, there is now a free audiobook version available online (for use on your daily commute or run). It even includes the appendices (not sure how footnotes are handled, though).

Actually there are over 1,000 public domain readings available, at zero money cost, from LibriVox. They are always looking for readers to volunteer. One interesting project in progress right now is Adam Smith's Theory of Moral Sentiments. This is definitely better than Acrobat's Read Out Loud feature, which is still cool in its own way.

Listening to music on road trips has always been essential for me, but this weekend we listened to half of Neal Stephenson's Snow Crash and it was a great experience (only problem is you can't really talk over it). These public domain readings may come in handy in the future.

As with all the good pointers, this comes from CR, though I believe she learned of LibriVox from Nikki, who has done a few readings herself and organized the TMS project.

Rent Seeking and the Bailout Bills

If you suspected that the recent federal bailout bills were dominated by private rather than public interests, you now have some empirical research to back up that hunch. Here is the abstract from a new working paper by Atif Mian, Amir Sufi, and Francesco Trebbi titled "The Political Economy of the U.S. Mortgage Default Crisis":

We examine the determinants of congressional voting behavior on two of the most significant pieces of federal legislation in U.S. economic history: the American Housing Rescue and Foreclosure Prevention Act of 2008 and the Emergency Economic Stabilization Act of 2008. We find evidence that constituent interests and special interests influence voting patterns during the crisis. Representatives from districts experiencing an increase in mortgage default rates are significantly more likely to vote in favor of the AHRFPA. They are precise in responding only to mortgage related constituent defaults, and are significantly more sensitive to defaults of their own-party constituents. Increased campaign contributions from the financial services industry is associated with a higher likelihood of voting in favor of the EESA, a bill which transfers wealth from tax payers to the financial services industry. We also examine the trade-off between politician ideology and constituent and special interests, and find that conservative politicians are less responsive to constituent and special interest pressure. This latter finding suggests that politicians, through ideology, can commit against intervention even during severe crises.

Well, I guess it is some consolation (for certain theories) that politicians are responding to constituent interets. And ideology can matter on the margin, even for politicians.

Does Daylight Saving Time Save Energy?

Daylight Saving Time ends this weekend, so remember to turn your clocks back one hour. A new NBER working paper by Kotchen and Grant, "Does Daylight Saving Time Save Energy? Evidence from a Natural Experiment in Indiana," attempts to test if DST actually serves its stated function. They answer in the negative. Here is part of the abstract:

Our main finding is that -- contrary to the policy's intent -- DST increases residential electricity demand. Estimates of the overall increase are approximately 1 percent, but we find that the effect is not constant throughout the DST period. DST causes the greatest increase in electricity consumption in the fall, when estimates range between 2 and 4 percent. These findings are consistent with simulation results that point to a tradeoff between reducing demand for lighting and increasing demand for heating and cooling. We estimate a cost of increased electricity bills to Indiana households of $9 million per year. We also estimate social costs of increased pollution emissions that range from $1.7 to $5.5 million per year. Finally, we argue that the effect is likely to be even stronger in other regions of the United States.

An ungated version of the paper is here. Is there a rent-seeking explanation buried in there, at least for Bush's extension? That would be in addition to the obvious rent-seeking.

Side note: one of the authors, Laura Grant, is a fellow South Dakota native, doing some cool work on the voluntary provision of environmental goods.

Deposit Losses in the Great Depression

Bank failures are an important component in the story of the Great Depression as well as the creation of the FDIC. But how much was actually lost by depositors prior to the creation of the FDIC? Stephen Carson is seeking clarification on a claim by Peter Schiff that only 2% of deposits were lost in the 1930s. I'll try to provide some clarification.

The place to go for data of this sort is, of course, Friedman and Schwartz. The relevant data is found in Table 16 on page 438. The final column lists losses to depositors per $100 (which can also be read as percentages). The worst year was 1933, when 2.15% of deposits were lost (perhaps this is where Schiff got the 2% figure). The other years 1930-32 range between 0.57% and 1.01%, lower than 1933 but certainly higher than the 1920s. Summing over these four years gives us about 4.3% of deposits lost. All of these figures are much higher than after the FDIC was created, but that is to be expected. Table 16 also indicates that depositors did not bear all of the losses from suspended banks (e.g., in 1933 they only bore about 15% of lost deposits).

Are these numbers high? It's hard to say. Certainly the total number of bank suspensions (just over 9,000) in the early 1930s sounds like a big number, and indeed it is. In 1929, there were 24,970 commerical banks (see Historical Statistics of the U.S., Table Cj251–264), meaning that over 36% of banks failed. Of course, if 36% of banks failed but only 4% of deposits were lost, we know it was mostly small banks that failed. This implies there may have been a regional disparity in the number of failures, and this is also shown by the data. Table 3b in Calomiris and Mason (2003) shows that the Central and South Atlantic regions were hit much harder (these figures differ from Friedman and Schwartz because Calomiris and Mason are using a sample of Fed Member Banks and listing total deposits, not lost deposits).

So, according to my investigation, about 4.3% of deposits were lost over 4 years in the early 1930s. And that is during what is considered one of the worst (if not the worst) period for bank failures in U.S. history.

Goals not met

In preparing a lecture this week I came across the following matter-of-fact statement, found in Chapter 2 of Frederic Mishkin's widely used text The Economics of Money, Banking, and Financial Markets (8th ed., 2006, p. 42):

REGULATION OF THE FINANCIAL SYSTEM

The financial system is among the most heavily regulated sectors of the American economy.  The government regulates financial markets for two main reasons: to increase the information available to investors and to ensure the soundness of the financial system.

Don't Worry, The Next Nine Decades Will Be Better

From the Wall Street Journal Online (I emphasize the important phrase):

In the final years of what has been one of the worst decades this century for stock-market investors, a growing number of baby boomers like Dr. Palanisamy have reshaped their attitudes about risk and return.

The Edge of the Jungle in Somalia

From an AP story, "Somali Pirates Stare Down Global Superpowers":

With a Russian frigate closing in and a half-dozen U.S. warships within shouting distance, the pirates holding a tanker off Somalia's coast might appear to have no other choice than to wave the white flag.

But that's not how it works in Somalia...

read more..

How can a bunch of criminals from one of the poorest and most wretched countries on Earth face off with some of the world's richest and well-armed superpowers?

"They have enough guns to fight for another 20 years," Ted Dagne, a Somalia analyst in Washington, told The Associated Press. "And there is no way to win a battle when the other side is in a suicidal mind set."

From Gordon Tullock's "The Edge of the Jungle" in Explorations in the Theory of Anarchy (1972, edited by Tullock as well):

Suppose that there is a quantity of meat and two lions, one larger than the other, who want it. If they fight, the larger has a good chance of winning and the smaller, therefore, will not only get nothing to eat but will probably be quite severly injured. Nevertheless, we do observe occasional fights...

read more..

The smaller lion is rationally designed to engage in irrational behavior. The smaller lion imposes upon the larger lion the prospects of physical injury, even though the prospects of physical injury for the smaller lion are much greater. ... This requires that the smaller lion sometimes fight and fight hard.

The Median Voter and the Bailout, One More Time

The House and Senate have now both approved the financial rescue package. Was this special interests at work, or democracy accurately reflecting the demands of the median voter? Earlier this week, Caplan used survey data to argue that passage of "a slightly modified bail-out" would be consistent with the Median Voter Model. Was he correct?

Here is one survey from last night that casts doubt on the Median Voter Model, although I admit there may be others with better wording or better samples (please, post them in the comments if you know of any). And while the views of the public may be less libertarian than economists, the survey also indicates that the public has libertarian sympathies. Main findings of the survey:

1. 45% opposed and 30% supported this specific modified rescue plan (rather than a hypothetical modified plan as in earlier surveys).

2. Crucially, 47% were worried that the federal government would do too much in reacting to the current crisis (as opposed to 36% saying "too little").

3. In fairness (and confusion, considering the above), the same survey indicates that 44% of Americans think the rescue plan will help the economy, compared with 23% thinking it will hurt the economy (though if you add in the "no impact" group of 19% the two sides are roughly equal).

Imperfectly Applying The Mueller Test to Bailouts

Previously I have used the Mueller Test as a transcendent critique of Caplan's Challenge. The recent proposals to bailout financial firms presents an excellent opportunity to use the Mueller Test, and with a few existing surveys the importance of this test can be imperfectly demonstrated. To more perfectly apply it, all of the questions would have to be asked to the same survey group, as well as imposing further constrains on tradeoffs.

Yesterday I blogged about a recent Rasmussen survey on the financial market bailouts, in which only 7% of voters supported using tax dollars to keep firms like Lehman Brothers solvent, with 65% of voters favoring bankruptcy. That's an over 9:1 ratio against bailouts. That survey was from early last week.

Of course, there are many different surveys on this issue. Pew has a poll from this week, which apparently the White House is touting, which shows 57% of Americans favor the government "investing billions to try and keep financial institutions and markets secure," with 30% opposed. Or, an almost 2:1 support of bailouts.

An L.A. Times/Bloomberg poll from this week shows 55% of Americans oppose the government using "taxpayers' dollars to rescue ailing private financial firms" and 31% supporting, or slightly less than 2:1 opposing bailouts. The L.A. Times article emphasizes that the wording of the question means the surveys are measuring different things, and this is certainly true. Framing is very important for survey research. But the Mueller Test rests on constraining the mental options for funding a given proposal.

"Investing billions" can be done in any number of ways, such as by raising taxes, shifting funding from other projects, or by deficit finance. "Using taxpayers' dollars" constrains the choice set slightly, but even here we see a big effect. My prediction is that if the choice set is contrained further, e.g., by asking "if your tax bill went up by $2,500 per person in your family," the effect would be larger.

Which level of constraint in question-asking is appropriate? I have attempted to address this issue before, but in the end it is a normative question. My normative answer is that if we really want an accurate reading of public opinion, the actual tradeoffs (as best we can predict them) should be accurately portrayed and constrained in the survey questions.

Bailouts: A Policy That A Majority of Americans Oppose

You might have guessed that my only commentary on the recent bailouts would relate to Caplan's Challenge. From a recent Rasmussen survey:

Only seven percent (7%) of voters think the federal government should use taxpayer funds to keep a large financial institution solvent. Sixty-five percent (65%) say let the company file for bankruptcy.

The Production of Food Safety (Caplan's Challenge Part 7)

Here are the old responses to The Challenge. A new working paper "Public or Private Production of Food Safety: What Do U.S. Consumers Want? " by  V. Kerry Smith, Carol Mansfield, and Aaron Strong provides another response. Abstract:

This paper reports estimates of consumers' preferences for plans to improve food safety. The plans are distinguished based on whether they address the ex ante risk of food borne illness or the ex post effects of the illness. They are also distinguished based on whether they focus on a public good -- reducing risk of illness for all consumers or allowing individual households to reduce their private risks of contracting a food borne pathogen. Based on a National Survey conducted in 2007 using the Knowledge Network internet panel our findings indicate consumers favor ex ante risk reductions and are willing to pay approximately $250 annually to reduce the risk of food borne illness. Moreover, they prefer private to public approaches and would not support efforts to reduce the severity of cases of illness over risk reductions.

Chicago Tribune graphic: all of Africa has won one Olympic medal

Click here to check it out and play with it...there's no zoom feature, no Africa-only version (but there is a Europe-only version)...no apparent (arithmetical) logic behind the choice of countries to have their medal winnings graphically displayed...Jamaica, Kazakhstan, New Zealand, etc., etc., apparently just don't matter -- but let's be sure to note South Africa's one medal on there.  Just amazing!

Hayek, Orwell, and Sports Metaphors

These days George Orwell is blogging. Back in April 1944, he reviewed The Road to Serfdom. It was not a glowing review, but Orwell did offer some praise for Hayek, which you may have seen quoted on recent editions of the book:

In the negative part of Professor Hayek's thesis there is a great deal of truth. It cannot be said too often -- at any rate, it is not being said often enough -- that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitors never dreamed of.

Orwell went on to criticize Hayek's favored system, capitalism:

But he does not see, or will not admit, that a return to "free" competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them.

The last sentence indicates that Orwell has missed the most important insight about the market: mutually beneficial exchange. In most economic competitions, there are not winners and losers. The game is not zero sum. Hayek was not much help on this point referring to "the game of catallaxy" as "the best way to understand" the benefits of the market system. He tries to reassure us that the game is not zero-sum, but even a great mind like Orwell was trained to think otherwise when the words "game" and "competition" are used.

(Thanks CLR for the pointer)

Fireworks, Firefighting, and Missiles

Riddle of the day: What do fireworks in China, airborne firefighting in California, and missiles in the former Soviet Union have in common?

Al Gore: We're Engaging in Commerce with <Insert Scary Country Name>

Al Gore has recently claimed: "We're borrowing money from China to buy oil from the Persian Gulf to burn it in ways that destroy the planet."

Actually we are borrowing money from Japan to buy oil from Canada. Doesn't make for as scary a soundbite.

True, China is the number 2 holder of U.S. Government debt, but non-scary countries the U.K., Brazil, and Luxembourg also rank high on the list. Also true, Saudi Arabia is the number 2 exporter of oil to the U.S. (Mexico is a very close third), but we import more oil from Canada than from all Persian Gulf countries combined. Canada, Mexico, and the U.S. Virgin Islands alone account for around 32% of oil imports.

Battle of the Blogs: O'Driscoll on Bailouts

What does Gerald O'Driscoll think about the Fannie Mae and Freddie Mac bailout? Going on the blog posts of two economists that I respect very much, it is hard to tell.

Dr. Thomas DiLorenzo: "Gerry O'Driscoll also endorses the Fannie/Freddie bailout/taxpayer rippoff/moral hazard generator."

Dr. Don Boudreaux: "Gerry O'Driscoll wisely warns against bailing out Fannie Mae and Freddie Mac."

My reading is that Dr. DiLorenzo is being slightly uncharitable, but I will leave that up to you.

NYT seeks to assign "blame" for growth in "personal debt"

A New York Times homepage animation today scares:

In the United States, personal debt keeps growing.

Who's to blame?

Is growth in "personal debt" inherently problematic or troubling? I am not seeing why.  It could just be that more and larger loans are available to more people than ever before.  That would be a good thing, right?

Affordable Housing: The Free Market Way

In Arlington County, one of the major political parties has proposed allowing property owners more discretion over what they do with their own property. The proposal in question involves allowing home owners to rent out part of their property, in spite of existing zoning laws. The other party is launching a publicity campaign to fight this, claiming it will strain existing public services. They are also shamelessly using this as a fundraising opportunity for the party (in an email I received today).

Maybe you've guessed, based on my coyness about mentioning the party names, that it is the Democrats who are pushing this pro-market change, while Republicans are in favor of anti-property rights zoning laws. Maybe Jason is on to something.

The Price of Milk: It's Udderly Unchanged (Actually Down a Little)

Dr. Horwitz links to a local news story on rising food prices for which he was interviewed. As one would expect from local consumer reporting, there is much talk about how people are suffering and having to cut back, but the story is light on facts. The big example used is that milk sold for $2.85 in 1998 and $4.16 today. Checking with BLS (CPI series APU0000709112) these figures are basically correct, although the May-to-May (latest data) change was $2.67 to $3.76, but I'll go with her data.

As the reporter correctly notes (probably thanks to Dr. Horwitz), about $1 of this is due to inflation, but I don't think she quite understands the full force of this fact. That means that a gallon of milk, over the past 10 years, has gone up 31 cents (3 cents per year) more per gallon than if it had increased at the same rate as the average consumer product. Of course, 3 cents here, 3 cents there, it can really add up across the consumer's full budget. But we also need to look at the other side of the budget, income.

The latest personal income data is for the 1st quarter of 2008, at $34,546 per capita. A decade ago, the same figure was $22,753. That is an increase of 51.8%. The "milk index" presented to us in the story went up 46.0% over the same time period. So income is increasing faster than milk prices. These means that the real price of milk has fallen over the past decade; not by a lot, but it certainly hasn't gone up. What is this food crisis everyone is talking about?

I know that conveying economic logic, as well as throwing lots of numbers at people, doesn't always come over well in 5 second blurbs on TV. But it also doesn't seem like it would have been that hard to put up the income data underneath the milk price data, and compute the percent changes.

I hate to sound all cheery and Panglossian about these things. The economic effects of Fed-generated inflation and the somewhat related economic slowdown are certainly real factors for concern. But the world is not falling to pieces.

Airlines and Oil Speculation

I think I've figured out why the major airlines never seem to turn a profit for very long: they don't understand how markets work. Specifically, how oil futures markets work. I just received an email from Northwest Airlines titled "Help Fight America's Oil Crisis." Everything about the email looks authentic, except the body which reads like spam or a hoax. It calls for increased Congressional regulation of oil futures, and directs me to a website called StopOilSpeculationNow.com.

The letter is signed not only by the CEO of Northwest, but also 11 other major airlines. The letter can be read here. CNN is reporting the story, so I assume it is legit, but it is just so illogical (at least, without a public choice angle). Here is the main piece of evidence offered:

Twenty years ago, 21 percent of oil contracts were purchased by speculators who trade oil on paper with no intention of ever taking delivery. Today, oil speculators purchase 66 percent of all oil futures contracts, and that reflects just the transactions that are known.

Well that solves it, speculation has gone up from 21 percent to 66 percent of oil contracts. Speculators must be the culprit!

Just a few quick questions: twenty years ago, who was buying the other 79 percent of contracts? Why aren't they classified as "speculators"? Are they simply saying that in 1988 spot contracts were the majority of transactions, and now futures contracts are? It's unclear from the letter, and it is also unclear that this trend would be unique to oil markets. I suspect similar trends could be observed for commodities where the real price has fallen in the last 20 years.

Target Audience Fail

The ACLU really seems to have missed the mark with their stance on the 2nd Amendment. Many posts on their blog have zero comments, with basically none having more than 10 comments. Except for their post on the recent Heller decision, which has so far generated 594 comments. Skimming the first 50 comments, my summary is that the ACLU is losing 49-1 (and that one is actually neutral, saying the ACLU should have no stance on the 2nd), with many supporters claiming to be withdrawing financial support (these things are hard to verify, of course).

The only other recent ACLU post I can find with more than 10 comments is one on mandatory ultrasound laws, which has 24 comments. This makes sense when you realize that post is from June 26, the day of the Heller decision, and the thread was hijacked to discuss the case. That's right, the ACLU did not even blog about what a presidential candidate that has a working relationship with the ACLU called "one of the Supreme Court’s most important rulings on behalf of liberty" until 5 days after the decision (but they did have 5 blog posts on that date).

I would also be very interested to here the ACLU's definition of a "collective right ," and whether gun rights are the only negative liberty falling into this category. 

Killer Tomatoes, Or Maybe Not

In the tradition of last week's post on news items, the NY Times (and many other sources) are reporting on that the great tomato salmonella outbreak of 2008 may have nothing to do with tomatoes. What is the real culprit? Well, no one really knows. And maybe we never will.

But I would like to ask a more fundamental question: How do we even know there was an "outbreak"? It's not as if there had been no cases of salmonella last year or the year before. The CDC tells us that every year there are 40,000 reported cases, but those are only the ones that actually get reported and "the actual number of infections may be thirty or more times greater." So there are possibly at least 1.2 million cases per year, or 100,000 per month. This "outbreak" has involved 869 people in about 2 and a half months. This is an outbreak?

Of course, they will tell you that this is a rare strain of salmonella, which only 3 people were reported to have in 2007. And there were apparently common factors found among those that were ill: 1.) "consumption of raw tomatoes" and 2.) "persons who ate at restaurants." Now seriously, how many of you (at least, before the FDA/CDC generated scare) had ate a raw tomato and ate at a restaurant within the past week? I would guess this group of people is something like half of the U.S. population. And a few hundred people got sick.

My guess is that the effect is actually random, but government agencies and the media like to see patterns where none exist. Fooled by randomness. And once the "outbreak" is announced, I'm sure that more people get tested, thus more reported cases. Some of those around 1 million unreported cases are now getting reported. And the false outbreak scare has cost the food industry at least $100 million (I've seen estimates more than double that).

Now Lou Dobbs is one-upping Krugman and calling for Bush's impeachment over this. Seriously? Oh yes, I'm sure if you doubled the FDA and CDC budgets, they could get to the bottom of this, plus prevent all those 1.2 million cases from happening in 2009. Yeah, right. We live in a risky world, much less risky than the past, but still risky. It would be better if we the people, the government, and the media just acknowledged this fact.

News Items That Do Not Surprise Me

In light of the Tom Chalko affair last week (among many other things), I am not shocked by the following two retractions.

First, the "lost tribe" of the Amazon that wasn't so lost (via LRC). They do exist, but the back story was not exactly true:

Far from being unknown, the tribe's existence has been noted since 1910 and the mission to photograph them was undertaken in order to prove that 'uncontacted' tribes still existed in an area endangered by the menace of the logging industry.

The disclosures have been made by the man behind the pictures, José Carlos Meirelles.

Meirelles admitted that the tribe was first known about almost a century ago and that the apparently chance encounter that produced the now famous images was no accident.

Second, the "pregnancy pact" at a Massachusetts high school that might not have been. It appears there is basically no evidence that it existed:

"There was definitely no pact," 17-year-old Lindsey Oliver [one of the pregnant girls] told "Good Morning America" on Tuesday.

Mayor Carolyn Kirk also denied a pact existed after a closed-door meeting with city, school and health leaders on Monday.

Kirk said she and Superintendent Christopher Farmer have been in touch with [Principal] Sullivan [the source of the rumor], and he was "foggy in his memory" about how he came to believe there was a pact.

I would be willing to wager that the retractions got less attention (other than by bloggers) than the original, "shocking" stories.

Rounding Bias, and Some Nudges

Is there a cognitive bias regarding round numbers? A quick search turns up nothing, but maybe someone can help me out. I am referring to the uncertainty created by denoting numbers in a round fashion, typically ending with a zero or sometimes five. Here are a few examples.

I have previously speculated that the metric system may be inferior to other measurement systems, because of the possibility of large errors.

The bias also relates to uncertainty regarding coordination of behavior. If a meeting is scheduled to begin at 10:00AM, my experience is that the meeting will not begin at 10. Some people will show up early, thinking the meeting starts at 10 and not wanting to be late. Some will show right at 10. Some will show up late, thinking the meeting starts "around 10."

Speed limits are another coordination problem. If the speed limit is 55, can I be ticketed for going 56? 60? 65? There seem to be vague rules of thumb, I assume occasionally enforced by courts, but it all seems quite arbitrary. Stated simply, the bias is "when numbers are stated in multiples of 5 or 10, the number loses some of its focal point quality."

I have read Nudge, and have lots to say but really do not know where to begin (or where the "review" would eventually go). Overall I think the book is very confused and confusing, above all since the authors are often ambiguous as to whom the advice is directed: individuals, firms, or government (as Mario Rizzo stressed mulitiple times in a discussion with Thaler).  But I do have some "nudges" for the "rounding bias." And just to be clear, these are suggestions for private meeting organizers and owners of private roads (I expect local governments love the revenue generated from the uncertainty).

For starting meetings (or parties), I have occasionally used the trick of starting at "odd" times, such as 3:03PM. Starting 3 minutes past the hour becomes focal (perhaps simply because it is novel), and the repetition of 3 sticks in your mind. This seems to have had some positive effects, but maybe this is just confirmation bias. For speed limits, posting non-round numbers would be a similar nudge, such as this 29 MPH speed limit at the private Valdez Marine Terminal in Alaska (according to this page the Marine Terminal also has speed limits of 11, 16, 21, and 26).

Is Global Warming Causing More Earthquakes, or More Earthquake Recording Stations?

It is sometimes claimed that economists have nothing to add to the climate change (formerly known as "global warming") debate. After all, what do they know about climate science? Well, I think I found one position for them: fact checker for the AP and CBS. An AP story, published on CBS News, is titled "Today's Quakes Deadlier Than In Past." I discovered the story through a link on the Drudge Report, but it is also (at present) the lead story on the CBS SciTech page. I have mocked journalists' publication of scientific studies before, but this one really has to be read to be believed.

Reading the article itself should raise some red flags. First is the statement that "The research proves that destructive ability of earthquakes on Earth increases alarmingly fast and that this trend is set to continue, unless the problem of 'global warming' is comprehensively and urgently addressed." Note the use of the word "prove." Is there some direct connection, even a theoretical one, between global warming and earthquakes? The article never says, but claims that the author has "proved" this fact and "proved" that "the global annual energy of earthquakes on Earth began increasing very fast since 1990." The article also points out that the increase in seismic activity "is not theoretical but that it is an Observable Fact." Yes, Observable Fact, capitalized. (In the "published" article it is labeled "Observed Reality.")

The work is all done by Dr. Tom Chalko, an "Australian scientist." Although the article doesn't say so, a quick Google search shows that the article was published in the NU Journal of Discovery. "NU" stands for Natural University, which, their website tells us, is "nowhere in particular and yet everywhere on Earth." So basically, it is a website, which publishes this "journal" on a very occasional basis (this article is the fifth published since 2001). Dr. Chalko is also on the editorial board. Apparently, Chalko has a PhD in Laser Holography ("The Science of Light") and also writes books on new age healing. None of this is mentioned in the article, and no other scientists or anyone else appears to have been consulted for the CBS piece.

So obviously, this guy is not a geologist or climatologist. But so what? Hasn't he, as he states, compiled all the earthquake data from USGS between 1973 and 2007? And didn't he find a strong change in trend 20 years ago? What of that Observable Fact that he "proved"? Okay, so there is no causative relationship proved. So what?

Take a look at the graphic accompanying the CBS story. Although there are no labels, I assume time is on the x-axis and some measure of earthquake activity on the y-axis. Notice that big jump about one-third in? It seems a bit big for a one-year change, with two distinct time trends before and after. Any idea what could have caused that? Well, let's ask USGS. First they tell us:

Although it may seem that we are having more earthquakes, earthquakes of magnitude 7.0 or greater have remained fairly constant throughout this century and, according to our records, have actually seemed to decrease in recent years.

Hmm, that's interesting. Anything that might have caused a change in the data in the last 20 years, as CBS and Dr. Chalko report?

A partial explanation [for the perception of more earthquakes] may lie in the fact that in the last twenty years, we have definitely had an increase in the number of earthquakes we have been able to locate each year. This is because of the tremendous increase in the number of seismograph stations in the world and the many improvements in global communications. [My emphasis]

Oh, well it all makes sense now. But how many people that read the headline on CBS, or MSNBC, will do any fact checking? Of course, none of this means that climate change is not happening, and that there will not be some negative consequences from it. But journalists' willingness to publish the results from any "study" without doing the most basic fact checking about the data or whether there was actually causation demonstrated is definitely a worrying trend. It also seems to be correlated with increasing CO₂ levels.

Update (6/19 at 5:02pm): The story was still the lead CBS's SciTech page mid-morning, but now it appears to be gone -- down the memory hole with no explanation. But don't worry, the link to MSNBC story still works and it is also on Yahoo (and the CBS graphic which was prominently displayed on their SciTech page hasn't been erased yet). The MSNBC and Yahoo stories are actually press releases with the source listed as "Dr Tom Chalko." The CBS story was the press release cut-and-pasted to appear like a real story, but the link to Chalko's article and his byline were removed. Good for CBS if they removed pseudo-science (or rather, non-science), but shouldn't they run a correction as the lead story for the next 12 hours or so?

Update (6/20): The CBS story is now in Google cache. There is apparently disagreement between CBS and the AP over the origin of the story (rather than just the press release). Climate Audit is also following the story.