Harry Newton's In Search of The Perfect Investment
Newton's In Search Of The Perfect Investment. Technology Investor.
8:30 AM EST, Thursday, March 29: I'm
glad I didn't send out the info on my commodities fund. You may remember I promised
readers I'd give you the name of my commodities fund if you emailed me. I wasn't
trying to be cute, just careful. And I wasn't trying to capture email addresses.
There was nothing sinister, just a general feeling of uncomfortableness playing
investment advisor. I got avalanched with emails. But I never sent anyone the
name. Here's the story:
invested $500,000 on October 27, 2005 and another $500,000 on February 21, 2006
in the fund. As of February 28, 2007, my million dollars was worth precisely
$1,039,703 -- a return of less than 4% and far less than I'm earning (with less
aggravation) on my Sovereign Bank weekly CD which is paying 5.2%.
I actually should be grateful I'm earning anything on the commodities fund.
It started the month of February, 2007 at $998,064. It made 4.17% in February.
I suspect this month, March, will be pretty good. Oil bounced up $5 yesterday,
nicely on its way (eventually) To $80. See yesterday's column. Click
have several investment thoughts on my semi-miserable commodities fund:
1. Did I get into commodities too late? I suspect so. By the time I got
in, commodities had gone up strongly for several years. Why did I assume that
they would continue into the ionosphere? Was this like getting into tech stocks
in March of 2000 -- at their very peak. Do dumb investors (aka amateur investors
like me) always get in when the financial press "discovers" the area?
If Business Week, The Wall Street Journal, Forbes and Barrons enthuse on a new
investment area, then is it too late? Is it time to sell? Yes and Yes.
Diversification makes huge sense. Spread yourself. Spread your risks. Spread
your opportunities. Maybe some will hit. But there are some that may never hit,
and that may now include commodities.
How long do you stay with a "loser" investment? I have three money
managers (not including my hedge funds and index mutual funds). Manager A did
5% in the first quarter (until yesterday). Manager B did 1.8%. Manager C did
0.29%, far worse than the S&P 500 which did 0.727%. Do I get rid of him,
or simply reduce my holdings? Sell my losers. Invest more in my winners, like
Dennis, my hedge fund genius. I'm mulling my options and my reasons.
-- also called portfolio allocation -- is a not a one-time decision.
It's one you need to address regularly -- probably at the end of each quarter.
We're there now.
warming presents opportunities: That global warming exists is indisputable.
That it's man-made is disputable, and sadly, political. Democrats believe it's
man-made. Republicans believe it isn't, though more are switching sides. There
are strange events. Al Gore, who believes in man-made, lives in a house that's
wastefully consuming of fossil fuel. President Bush just built himself a house
in Texas that heats and cools itself with geothermal energy gleaned from the
ground beneath the house.
Global warming will warm hot places into extinction. And make cold places into
new paradises. Global warming is changing weather patterns, making places like
coastal towns in the south increasingly prone to aberrant weather, like ultra-strong
hurricanes. Because global warming is happening so quickly, there are huge implications
for real estate -- a subject that hasn't been much written about, until now.
The latest issue
of the Atlantic Monthly has a totally fabulous piece by Gregg Easterbrook
called "Global Warming: Who Loses -- and who wins." I strongly
recommend you buy a copy on your local newsstand. To subscribe, click
here. Here's an excerpt. I've bolded some bits:
could have a broad impact on industrial sectors, and thus help or hurt your
stock investments and retirement funds. What types of equity might you want
to favor or avoid?
inundated, farming regions parched, ocean currents disrupted, tropical diseases
spreading, glaciers meltingan artificial greenhouse effect could generate
climate changes meaningfullyand the National Academy of Sciences, previously
skeptical, said in 2005 that signs of climate change have become significantthere
could be broad-based disruption of the global economy unparalleled by any
event other than World War II.
means winners as well as losers. Huge sums will be made and lost if the global
climate changes. Everyone wonders what warming might do to the environmentbut
what might it do to the global distribution of money and power?
natural or mainly artificial, climate change could bring different regions
of the world tremendous benefits as well as drastic problems. The world had
been mostly warming for thousands of years before the industrial era began,
and that warming has been indisputably favorable to the spread of civilization.
The trouble is that the worlds economic geography is today organized
according to a climate that has largely prevailed since the Middle Agesrunaway
climate change would force big changes in the physical ordering of society.
In the past, small climate changes have had substantial impact on agriculture,
trade routes, and the types of products and commodities that sell. Larger
climate shifts have catalyzed the rise and fall of whole societies. The Mayan
Empire, for instance, did not disappear mysteriously; it likely
fell into decline owing to decades of drought that ruined its agricultural
base and deprived its cities of drinking water. On the other side of the coin,
Europes Medieval Warm Period, which lasted from around 1000 to 1400,
was essential to the rise of Spain, France, and England: Those clement centuries
allowed the expansion of farm production, population, cities, and universities,
which in turn set the stage for the Industrial Revolution. Unless greenhouse-effect
theory is completely wrongand science increasingly supports the idea
that it is right21st-century climate change means that sweeping social
and economic changes are in the works. ...
might be expected to appreciate steadily in value during the 21st century,
given that both the global population and global prosperity are rising. The
supply of land is fixed, and if theres a fixed supply of something but
a growing demand, appreciation should be automatic. Thats unless climate
change increases the supply of land by warming currently frosty areas while
throwing the amount of desirable land into tremendous flux. My hometown of
Buffalo, New York, for example, is today so déclassé that some
of its stately Beaux-Arts homes, built during the Gilded Age and overlooking
a park designed by Frederick Law Olmsted, sell for about the price of one-bedroom
condos in Boston or San Francisco. If a warming world makes the area less
cold and snowy, Buffalo might become one of the countrys desirable addresses.
At the same
time, Arizona and Nevada, blazing growth markets today, might become unbearably
hot and see their real-estate markets crash. If the oceans rise, Floridas
rapid growth could be, well, swamped by an increase in its perilously high
groundwater table. Houston could decline, made insufferable by worsened summertime
humidity, while the splendid, rustic Laurentide Mountains region north of
Montreal, if warmed up a bit, might transmogrify into the new Poconos.
These are just
a few of many possible examples. Climate change could upset the applecarts
of real-estate values all over the world, with low-latitude properties
tanking while high latitudes become the Sun Belt of the mid-21st century.
in housing demand are only small beer. To consider the big picture, examine
a Mercator projection of our planet [there's a map in the article -- Harry],
and observe how the Earths landmasses spread from the equator to the
poles. Assume global warming is reasonably uniform. (Some computer models
suggest that warming will vary widely by region; for the purposes of this
article, suffice it to say that all predictions regarding an artificial greenhouse
effect are extremely uncertain.) The equatorial and low-latitude areas of
the world presumably will become hotter and less desirable as places of habitation,
plus less valuable in economic terms; with a few exceptions, these areas are
home to developing nations where living standards are already low.
So where is
the high-latitude landmass that might grow more valuable in a warming world?
By accident of geography, except for Antarctica nearly all such land is
in the Northern Hemisphere, whose continents are broad west-to-east. Only
a relatively small portion of South America, which narrows as one travels
south, is high latitude, and none of Africa or Australia is. (Cape Town is
roughly the same distance from the equator as Cape Hatteras; Melbourne is
about the same distance from the equator as Manhattan.) More specifically,
nearly all the added land-value benefits of a warming world might accrue to
Alaska, Canada, Greenland, Russia, and Scandinavia.
the possibility that an artificial greenhouse effect could harm nations that
are already hard pressed and benefit nations that are already affluent. If
Alaska turned temperate, it would drive conservationists to distraction, but
it would also open for development an area more than twice the size of Texas.
Rising world temperatures might throw Indonesia, Mexico, Nigeria, and other
low-latitude nations into generations of misery, while causing Canada, Greenland,
and Scandinavia to experience a rip-roarin economic boom. Many Greenlanders
are already cheering the retreat of glaciers, since this melting stands to
make their vast island far more valuable. Last July, The Wall Street Journal
reported that the growing season in the portion of Greenland open to cultivation
is already two weeks longer than it was in the 1970s.
For generations poets have bemoaned this realm as cursed by enormous, foreboding,
harsh Siberia. What if the region in question were instead enormous, temperate,
inviting Siberia? Climate change could place Russia in possession of the largest
new region of pristine, exploitable land since the sailing ships of Europe
first spied the shores of what would be called North America. The snows of
Siberia cover soils that have never been depleted by controlled agriculture.
Whats more, beneath Siberias snow may lie geologic formations
that hold vast deposits of fossil fuels, as well as mineral resources. When
considering ratification of the Kyoto Protocol to regulate greenhouse gases,
the Moscow government dragged its feet, though the treaty was worded to offer
the Russians extensive favors. Why might this have happened? Perhaps because
Russia might be much better off in a warming world: Warmings benefits
to Russia could exceed those to all other nations combined. ...
Of course, it
could be argued that politicians seldom give much thoughtone way or
the otherto actions whose value will become clear only after they leave
office, so perhaps Moscow does not have a grand strategy to warm the world
for its own good. But a warmer world may be much to Russias liking,
whether it comes by strategy or accident. And how long until high-latitude
nations realize global warming might be in their interests? In recent years,
Canada has increased its greenhouse-gas output more rapidly than most other
rich countries. Maybe this is a result of prosperity and oil-field developmentor
maybe those wily Canadians have a master plan for their huge expanse of currently
might do more for the North, however, than just opening up new land. Temperatures
are rising on average, but when are they rising? Daytime? Nighttime? Winter?
Summer? One fear about artificially triggered climate change has been that
global warming would lead to scorching summer-afternoon highs, which would
kill crops and brown out the electric power grid. Instead, so far a good share
of the warmingespecially in North Americahas come in the form
of nighttime and winter lows that are less low. Higher lows reduce the harshness
of winter in northern climes and moderate the demand for energy. And fewer
freezes allow extended growing seasons, boosting farm production. In North
America, spring comes ever earlierin recent years, trees have flowered
in Washington, D.C., almost a week earlier on average than a generation ago.
People may find this creepy, but earlier springs and milder winters can have
economic value to agricultureand lest we forget, all modern societies,
including the United States, are grounded in agriculture.
If a primary
impact of an artificially warmed world is to make land in Canada, Greenland,
Russia, Scandinavia, and the United States more valuable, this could have
three powerful effects on the 21st-century global situation.
privileged northern societies might not decline geopolitically, as many commentators
have predicted. Indeed, the great age of northern power may lie ahead, if
Earths very climate is on the verge of conferring boons to that part
of the world. Should it turn out that headlong fossil-fuel combustion by northern
nations has set in motion climate change that strengthens the relative world
position of those same nations, future essayists will have a field day. But
the prospect is serious. By the middle of the 21st century, a new global balance
of power may emerge in which Russia and America are once again the worlds
paired superpowersonly this time during a Warming War instead of a Cold
Second, if northern
societies find that climate change makes them more wealthy, the quest for
world equity could be dealt a huge setback. Despite the popular misconception,
globalized economics have been a positive force for increased equity. As the
Indian economist Surjit Bhalla has shown, the developing world produced 29
percent of the globes income in 1950; by 2000 that share had risen to
42 percent, while the developing worlds share of population rose at
a slower rate. All other things being equal, we might expect continued economic
globalization to distribute wealth more widely. But if climate change increases
the value of northern land and resources, while leaving nations near the equator
hotter and wracked by storms or droughts, all other things would not be equal.
us to the third great concern: If climate change causes developing nations
to falter, and social conditions within them deteriorate, many millions of
jobless or hungry refugees may come to the borders of the favored North, demanding
to be let in. If the very Earth itself turns against poor nations, punishing
them with heat and storms, how could the United States morally deny the refugees
Shifts in the
relative values of places and resources have often led to war, and it is all
too imaginable that climate change will cause nations to envy each others
territory. This envy is likely to run both north-south and up-down. North-south?
Suppose climate change made Brazil less habitable, while bringing an
agreeable mild clime to the vast and fertile Argentinean pampas to Brazils
south. São Paulo is already one of the worlds largest cities.
Would a desperate, overheated Brazil of the year 2037its population
explodinghesitate to attack Argentina for cool, inviting land? Now consider
the up-down prospect: the desire to leave low-lying areas for altitude.
Heres an example: Since its independence, in 1947, Pakistan has kept
a hand in the internal affairs of Afghanistan. Today Americans view this issue
through the lens of the Taliban and al-Qaeda, but from Islamabads perspective,
the goal has always been to keep Afghanistan available as a place for retreat,
should Pakistan lose a war with India. What if the climate warms, rendering
much of Pakistan unbearable to its citizens? (Temperatures of 100-plus degrees
are already common in the Punjab.) Afghanistans high plateaus, dry and
rocky as they are, might start looking pleasingly temperate as Pakistan warms,
and the Afghans might see yet another army headed their way.
A warming climate
could cause other landgrabs on a national scale. Today Greenland is a largely
self-governing territory of Denmark that the world leaves in peace because
no nation covets its shivering expanse. Should the Earth warm, Copenhagen
might assert greater jurisdiction over Greenland, or stronger governments
might scheme to seize this dwarf continent, which is roughly three times the
size of Texas. Today Antarctica is under international administration, and
this arrangement is generally accepted because the continent has no value
beyond scientific research. If the world warmed for a long timeand it
would likely take centuries for the Antarctic ice sheet to melt completelyinternational
jockeying to seize or conquer Antarctica might become intense. Some geologists
believe large oil deposits are under the Antarctic crust: In earlier epochs,
the austral pole was densely vegetated and had conditions suitable for the
formation of fossil fuels.
And though Ive
said to this point that Canada would stand to become more valuable in a warming
world, actually, Canada and Nunavut would. For centuries, Europeans drove
the indigenous peoples of what is now Canada farther and farther north. In
1993, Canada agreed to grant a degree of independence to the primarily Inuit
population of Nunavut, and this large, cold region in the countrys northeast
has been mainly self-governing since 1999. The Inuit believe they are ensconced
in the one place in this hemisphere that the descendants of Europe will never,
ever want. This could turn out to be wrong.
finding attractive land to buy and hold for a warming world is fraught with
difficulties, particularly when looking abroad. If considering plots on the
pampas, for example, should one negotiate with the current Argentinian owners
or the future Brazilian ones? Perhaps a safer route would be the contrarian
one, focused on the likelihood of falling land values in places people may
leave. If strict carbon-dioxide regulations are enacted, corporations will
shop for offsets, including projects that absorb carbon dioxide
from the sky.
Growing trees is a potential greenhouse-gas offset, and can be done comparatively
cheaply in parts of the developing world, even on land that people may stop
wanting. If you jump into the greenhouse-offset business, what you might plant
is leucaena, a rapidly growing tree species suited to the tropics that metabolizes
carbon dioxide faster than most trees. But youll want to own the land
in order to control the sale of the credits. Consider a possible sequence
of events: First, climate change makes parts of the developing world even
less habitable than they are today; then, refugees flee these areas; finally,
land can be snapped up at Filenes Basement pricesand used to grow
If Al Gores
movie, An Inconvenient Truth, is to be believed, you should start selling
coastal real estate now. Gores film maintains that an artificial greenhouse
effect could raise sea levels 20 feet in the near future, flooding Manhattan,
San Francisco, and dozens of other cities; Micronesia would simply disappear
below the waves. Gores is the doomsday number, but the scientific
consensus is worrisome enough: In 2005, the National Academy of Sciences warned
that oceans may rise between four inches and three feet by the year 2100.
Four inches may not sound like a lot, but it would imperil parts of coastal
Florida and the Carolinas, among other places. A three-foot sea-level rise
would flood significant portions of Bangladesh, threaten the national survival
of the Netherlands, and damage many coastal cities, while submerging pretty
much all of the worlds trendy beach destinations to boot. And the Asian
Tigers? Shanghai and Hong Kong sit right on the water. Raise the deep a few
feet, and these Tiger cities would be abandoned.
The global temperature
increase of the last centuryabout one degree Fahrenheitwas modest
and did not cause any dangerous sea-level rise. Sea-level worries turn on
the possibility that there is some nonlinear aspect of the climate system,
a tipping point that could cause the rate of global warming to
accelerate markedly. One reason global warming has not happened as fast as
expected appears to be that the oceans have absorbed much of the carbon dioxide
emitted by human activity. Studies suggest, however, that the ability of the
oceans to absorb carbon dioxide may be slowing; as the absorption rate declines,
atmospheric buildup will happen faster, and climate change could speed up.
At the first sign of an increase in the rate of global warming: Sell, sell,
sell your coastal properties. Unload those London and Seattle waterfront
holdings. Buy land and real property in Omaha or Ontario.
greenhouse effect may also alter ocean currents in unpredictable ways. Already
there is some evidence that the arctic currents are changing, while the major
North Atlantic current that moves warm water north from the equator may be
losing energy. If the North Atlantic current falters, temperatures could fall
in Europe even as the world overall warms. Most of Europe lies to the north
of Maine yet is temperate because the North Atlantic current carries huge
volumes of warm water to the seas off Scotland; that warm water is Europes
weathermaker. Geological studies show that the North Atlantic current has
stopped in the past. If this current stops again because of artificial climate
change, Europe might take on the climate of present-day Newfoundland. As a
result, it might depopulate, while the economic value of everything within
its icy expanse declines. The European Union makes approximately the same
contribution to the global economy as the United States makes: Significantly
falling temperatures in Europe could trigger a worldwide recession.
ready to sell your holdings in Europe, look for purchase opportunities near
the waters of the Arctic Circle. In 2005, a Russian research ship became the
first surface vessel ever to reach the North Pole without the aid of an icebreaker.
If arctic sea ice melts, shipping traffic will begin transiting the North
Pole. Andrew Revkins 2006 book, The North Pole Was Here, profiles
Pat Broe, who in 1997 bought the isolated far-north port of Churchill, Manitoba,
from the Canadian government for $7. Assuming arctic ice continues to melt,
the worlds cargo vessels may begin sailing due north to shave thousands
of miles off their trips, and the port of Churchill may be bustling. If arctic
polar ice disappears and container vessels course the North Pole seas, shipping
costs may declineto the benefit of consumers. Asian manufacturers, especially,
should see their costs of shipping to the United States and the European Union
fall. At the same time, heavily trafficked southern shipping routes linking
East Asia to Europe and to Americas East Coast could see less traffic,
and port cities along that routesuch as Singaporemight decline.
Concurrently, good relations with Nunavut could become of interest to the
Oh, and there
may be oil under the arctic waters. Who would own that oil? The United States,
Russia, Canada, Norway, and Denmark already assert legally complex claims
to parts of the North Pole seasincluding portions that other nations
consider open waters not subject to sovereign control. Today it seems absurd
to imagine the governments of the world fighting over the North Pole seas,
but in the past many causes of battle have seemed absurd before the artillery
fire began. Canada is already conducting naval exercises in the arctic waters,
and making no secret of this.
perhaps ownership of these waters will go in an entirely different direction.
The 21st century is likely to see a movement to create private-property rights
in the ocean (ocean property rights are the most promising solution to overfishing
of the open seas). Private-property rights in the North Pole seas, should
they come into existence, might generate a rush to rival the Sooners
settlement of Oklahoma in the late 1800s.
to our oceans, climate change might also cause economic turmoil by affecting
freshwater supplies. Today nearly all primary commodities, including petroleum,
appear in ample supply. Freshwater is an exception: China is depleting aquifers
at an alarming rate in order to produce enough rice to feed itself, while
freshwater is scarce in much of the Middle East and parts of Africa. Freshwater
depletion is especially worrisome in Egypt, Libya, and several Persian Gulf
states. Greenhouse-effect science is so uncertain that researchers have little
idea whether a warming world would experience more or less precipitation.
If it turns out that rain and snow decline as the world warms, dwindling supplies
of drinking water and freshwater for agriculture may be the next resource
emergency. For investors this would suggest a cautious view of the booms in
China and Dubai, as both places may soon face freshwater-supply problems.
(Cost-effective desalinization continues to elude engineers.) On the other
hand, where water rights are available in these areas, grab them.
Much of the
effect that global warming will have on our water is speculative, so water-related
climate change will be a high-risk/high-reward matter for investors and societies
alike. The biggest fear is that artificially triggered climate change will
shift rainfall away from todays productive breadbasket areas and toward
what are now deserts or, worse, toward the oceans. (From the human perspective,
all ocean rain represents wasted freshwater.) The reason Malthusian catastrophes
have not occurred as humanity has grown is that for most of the last half
century, farm yields have increased faster than population. But the global
agricultural system is perilously poised on the assumption that growing conditions
will continue to be good in the breadbasket areas of the United States, India,
China, and South America. If rainfall shifts away from those areas, there
could be significant human suffering for many, many years, even if, say, Siberian
agriculture eventually replaces lost production elsewhere. By reducing farm
yield, rainfall changes could also cause skyrocketing prices for commodity
crops, something the global economy has rarely observed in the last 30 years.
show that in the last few decades, precipitation in North America is increasingly
the result of a few downpours rather than lots of showers. Downpours cause
flooding and property damage, while being of less use to agriculture than
frequent soft rains. Because the relationship between artificially triggered
climate change and rainfall is conjectural, investors presently have no way
to avoid buying land in places that someday might be hit with frequent downpours.
But this concern surely raises a red flag about investments in India, Bangladesh,
and Indonesia, where monsoon rains are already a leading social problem.
investments might be attractive in another way: for hydropower. Zero-emission
hydropower might become a premium energy form if greenhouse gases are strictly
regulated. Quebec is the Saudi Arabia of roaring water. Already the
hydropower complex around James Bay is one of the worlds leading sources
of water- generated electricity. For 30 years, environmentalists and some
Cree activists opposed plans to construct a grand hydropower complex that
essentially would dam all large rivers flowing into the James and Hudson bays.
But its not hard to imagine Canada completing the reengineering of northern
Quebec for hydropower, if demand from New England and the Midwest becomes
strong enough. Similarly, there is hydropower potential in the Chilean portions
of Patagonia. This is a wild and beautiful region little touched by human
activityand an intriguing place to snap up land for hydropower reservoirs.
the treasury office of the United Kingdom estimated that unless we adapt,
global warming could eventually subtract as much as 20 percent of the gross
domestic product from the world economy. Needless to say, if that happens,
not even the cleverest portfolio will help you. This estimate is worst-case,
however, and has many economists skeptical. Optimists think dangerous global
warming might be averted at surprisingly low cost (see Some Convenient
Truths, September 2006, Atlantic Monthly). Once regulations
create a profit incentive for the invention of greenhouse-gas-reducing technology,
an outpouring of innovation is likely. Some of those who formulate greenhouse-
gas-control ideas will become rich; everyone will benefit from the environmental
safeguards the ideas confer.
some form of binding greenhouse-gas rules is now essential both to slow the
rate of greenhouse-gas accumulation and to create an incentive for inventors,
engineers, and businesspeople to devise the ideas that will push society beyond
the fossil-fuel age. The New York Times recently groused that George
W. Bushs fiscal 2007 budget includes only $4.2 billion for federal research
that might cut greenhouse-gas emissions. This is the wrong concern: Progress
would be faster if the federal government spent nothing at all on greenhouse-gas-reduction
researchbut enacted regulations that gave the private sector a significant
profit motive to find solutions that work in actual use, as opposed to
on paper in government studies. The market has caused the greenhouse-gas problem,
and the market is the best hope of solving it. Offering market incentives
for the development of greenhouse-gas controlsindeed, encouraging profit
making in greenhouse-gas controlsis the most promising path to avoiding
the harm that could befall the dispossessed of developing nations as the global
Yet if global-warming
theory is right, higher global temperatures are already inevitable. Even the
most optimistic scenario for reform envisions decades of additional greenhouse-gas
accumulation in the atmosphere, and that in turn means a warming world. The
warming may be manageable, but it is probably unstoppable in the short term.
This suggests that a major investment sector of the near future will be climate-change
adaptation. Crops that grow in high temperatures, homes and buildings designed
to stay cool during heat waves, vehicles that run on far less fuel, waterfront
structures that can resist stronger stormsthe list of needed adaptations
will be long, and all involve producing, buying, and selling. Environmentalists
dont like talk of adaptation, as it implies making our peace with a
warmer world. That peace, though, must be madeand the sooner businesses,
investors, and entrepreneurs get to work, the better.
should nations act to control greenhouse gases, rather than just letting climate
turmoil happen and seeing who profits? One reason is that the cost of controls
is likely to be much lower than the cost of rebuilding the world. Coastal
cities could be abandoned and rebuilt inland, for instance, but improving
energy efficiency and reducing greenhouse-gas emissions in order to stave
off rising sea levels should be far more cost-effective. Reforms that prevent
major economic and social disruption from climate change are likely to be
less expensive, across the board, than reacting to the change. The history
of antipollution programs shows that it is always cheaper to prevent emissions
than to reverse any damage they cause.
For the United
States, theres another argument that is particularly keen. The present
ordering of the world favors the United States in nearly every respectpolitical,
economic, even natural, considering Americas excellent balance of land
and resources. Maybe a warming world would favor the United States more; this
is certainly possible. But when the global order already places America at
No. 1, why would we want to run the risk of climate change that alters that
order? Keeping the world economic system and the global balance of power the
way they are seems very strongly in the U.S. national interestand keeping
things the way they are requires prevention of significant climate change.
That, in the end, is whats in it for us.
how political has Global Warming become? The answer
is "very." Here's Thomas Friedman's column yesterday titled, "How
read something about this administration that is just so shameful it takes
your breath away. For me, that was the March 20 article in this paper detailing
how a House committee had just released documents showing hundreds of
instances in which a White House official who was previously an oil industry
lobbyist edited government climate reports to play up uncertainty of a human
role in global warming or play down evidence of such a role.
Philip A. Cooney, left government in 2005, after his shenanigans were exposed
in The Times, and was immediately hired by, of course, Exxon Mobil. Before
joining the White House, he was the climate team leader for the
American Petroleum Institute, the main oil industry lobby arm.
The Times article,
by Andrew Revkin and Matthew Wald, noted that Mr. Cooney said his past work
opposing restrictions on carbon dioxide emissions on behalf of the oil industry
had no bearing on his actions at the White House. When I
came to the White House, he testified, my sole loyalties were
to the president and his administration. (How about loyalty to scientific
method?) Mr. Cooney, who has no scientific background, said he had based his
editing on what he had seen in good faith as the most authoritative
and current views of the state of scientific knowledge.
of all the gin joints. Of all the people the Bush team would let edit its
climate reports, we have a guy who first worked for the oil lobby denying
climate change, with no science background, then went back to work for Exxon.
Does it get any more intellectually corrupt than that? Is there something
lower that Im missing?
I wonder how
Mr. Cooney would have edited the recent draft report by the Intergovernmental
Panel on Climate Change, written and reviewed by 1,000 scientists convened
by the World Meteorological Society and the U.N. It concluded that global
warming is unequivocal, that human activity is the main driver,
and that changes in climate are now affecting physical and biological
systems on every continent.
I am not out
to promote any party, but reading articles like the Cooney one makes me say:
Thank goodness the Democrats are back running the House and Senate
because, given its track record, this administration needs to be watched at
But I also say
thank goodness for the way Gov. Arnold Schwarzenegger has built a Republican-Democratic
coalition in California to blunt climate change. The governor is not only
saving the Republican Party from being totally dominated by climate cranks,
like Senator James Inhofe, and hacks-for-hire, like Cooney, but he also is
creating a bipartisan template for dealing with climate change that will be
embraced by Washington as soon as the Bush team is gone. I went out to Sacramento
to interview the Governator a few weeks ago.
is over, he said to me. I mean, how many more thousands and thousands
of scientists do we need to say, We have done a study that there is
What is amazing
for someone that does not come from a political background like myself,
said Governor Schwarzenegger, is that this line is being drawn
between Democrats and Republicans on climate change. You say to yourself:
How can it be drawn on the environment? But it is. But the great
thing is more and more Republicans are coming on board for this. Seeing how
important this is. And more and more Democrats and Republicans are working
together. ... I said in my inaugural address: There isnt such
a thing as Republican clean air or Democratic clean air. We all breathe the
same air. Lets get our act together, fix this problem and fight
Governor Schwarzenegger signed the Global Warming Solutions Act, requiring
California to reduce its greenhouse gas emissions 25 percent by 2020.
recognized that it was so important that we should not argue over philosophy
that we Republicans believe in this and we Democrats believe in this
and get nothing done, he said. We did it carefully. ... We gave
it enough ramp-up time to start in the year 2012 and by the year 2020 we want
to hit that level. I am a business-friendly guy. Im all about economic
growth. I am not here to harm businesses. I am here to make businesses boom,
but lets also protect our environment. Lets make our air clean.
Lets make our water clean. And lets fight global warming because
we know now that this is a major danger, that this is not a debate anymore.
son, the Dartmouth graduate
A young New England lad goes off to private school, but about 1/3
of the way through the semester, he has gambled away all of the money his parents
Then he gets an
idea. He calls his daddy. "Dad," he says, "you won't believe
the wonders that modern education is coming up with! Why, they actually have
a program here at Dartmouth that will teach our dog Ol' Blue how to talk!"
amazing," his father says. "How do I get him in that program?"
him down here with $1,000" the boy says. "I'll get him into the course."
So, his father sends the dog and the $1,000. About 2/3 way through the semester,
the money runs out. The boy calls his father again.
Ol' Blue doing, son," his father asks.
Dad, he's talking up a storm," he says, "but you just won't believe
this, they've had such good results with this program that they've implemented
a new one to teach the animals how to READ!"
says his father, "No kidding! What do I have to do to get him in that program?"
Just send $2,500,
I'll get him in the class." His father sends the money.
The boy now has
a problem. At the end of the year, his father will find out that the dog can
neither talk, nor read. So he shoots the dog.
When he gets home
at the end of the semester, his father is all excited. "Where's Ol' Blue?
I just can't wait to see him talk and read something!"
the boy says, "I have some grim news. Yesterday morning, just before we
left to drive home, Ol' Blue was in the living room kicked back in the recliner,
reading the Wall Street Journal, like he usually does. Then he turned to me
and asked, 'So, is your daddy still messin' around with that little redhead
who lives in town?'
The father says,
"I hope you SHOT that son of a bitch before he talks to your Mother!"
"I sure did,
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