Tag: Bob Diamond

Are you negligent, incompetent or complicit?

A guest post from Martin Lack points to the crux of the issue of denying man-caused climate change.

Introduction

I saw this post on Martin’s Blog Lack of Environment the day after I wrote a piece called In praise of fairness.  In my piece I mentioned the sad case of Mr. Bob Diamond and Martin continued with the theme in such a manner that I wanted to republish his article in full.  Here it is.

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Are you negligent, incompetent or complicit?

This was a question posed to former Barclays CEO Bob Diamond this week, when he appeared before a Parliamentary Select Committee of MPs on Wednesday. It is a question that I would like to ask Dr Richard Lindzen… In fact, I have asked the question and – just as Bob Diamond did – he has refused to answer it… Here is the evidence on which you should decide for yourself:

Many readers will recall that, following my visit to London to hear Lindzen speak to a room full of fake sceptics in the Palace of Westminster on 22 February this year, I attempted to get some answers to questions. Unfortunately, I failed. I have been particularly frustrated by one thing; possibly the most misleading aspect of Lindzen’s entire presentation – a combination of graphs of recent atmospheric CO2 and temperature data that was mysteriously omitted from the PDF of the presentation that was initially posted on the Internet.  Although Lindzen never answered any of my questions, he did insert this slide into the PDF of his presentation despite my pointing out to him – MIT and the AGU – that it was essentially meaningless (as the y-axes could be stretched to show either correlation or no correlation as preferred by the speaker).

Here is a screenshot of the misleading graph from the video of the presentation:

Misrepresentation of data?
Steeply inclined Keeling curve versus apparently non-correlating temperature – if you stretched the temperature axis enough it would appear to correlate quite well. Therefore slide neither proves not disproves anything.

This bears more than a passing resemblance to the World Climate Widget – a very similar-looking combination of graphs (i.e. manipulated to suggest that there is no correlation between recent atmospheric CO2 and temperature data) – that can be downloaded as a widget from Anthony Watts’ Watts Up With That? (WUWT) misinformation blog.

If you go to the WUWT widget page, you will find the two graphs in both of these images (above and right) are there presented separately. However, to prove my point – that anyone using these graphs to try and prove there is no correlation between long-term CO2 and temperature changes – just look at what happens when you take the graph of University of Alabama at Huntsville (UAH) global lower atmosphere data as used by WUWT (i.e. cooler than surface temperature data) and stretch it:

Clearing the fog of data misrepresentation created by Lindzen et al. - Note the clear upward trend in the temperature graph on the left (it was there all the time).
Clearing the fog of data misrepresentation created by Lindzen et al. – Note the clear upward trend in the temperature graph on the left (it was there all the time).

Therefore, for anyone – including Lindzen – to try and use the original combination of graphs to suggest there is no correlation between CO2 and temperature, this suggests that they are either negligent, incompetent, or deliberately trying to mislead people. For many people who are not scientists to be fooled by this is understandable but, for a prominent scientist like Lindzen to make this mistake – and not apologise for doing so – is unforgivable. Furthermore, it would seem that, no matter how many times he is criticised, he just keeps repeating the same old mistakes: Skeptical Science: Lindzen and Choi 2011 – Party Like It’s 2009

It would appear that, despite the best efforts of the majority of prominent climate scientists, Lindzen’s London Illusions are still fooling a lot of people. If you follow that last link, it will take you to the website of what I prefer to call The Global Wonky Policy Foundation, where it is reported that only 43% of the British adult population felt able to agree with the following statement: “Global warming is a fact and is mostly caused by emissions from vehicles and industrial facilities”.

It has been suggested to me that this question is carefully phrased to deter people from saying “yes” (i.e. they might agree that warming is occurring and/or that humans are the primary cause; but they might not agree that vehicles and factories are the primary source of emissions). However, this is ‘clutching at straws’ in my opinion; and leaves me wondering what percentage of the population would feel able to agree with this statement:

“The sunrise is a fact and is mostly caused by the Earth not being flat and spinning once a day whilst orbiting the Sun”…?

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I’m very grateful to Martin for allowing me to republish this.

In praise of fairness.

An original idea that shouldn’t be regarded as innovative.

We live in interesting times!  Whenever I use that phrase, and it seems to slip from my lips too often these days, I am reminded of the ancient Chinese curse, “May you live in interesting times!”

There are a goodly number of countries that have legislation that ‘impose’ a minimum wage for employees.  Here in the USA, the Federal level for 2012 is $7.25 per hour but it isn’t necessarily the same across all States.  Based on a 40-hour working week, 50 weeks a year, that comes to a gross of $14,500 for the full year.

Let’s contrast that with a person who has been in the news recently, Mr. Bob Diamond, Chief Executive of Barclays.

As the BBC reported on the 2nd July,

Mr Diamond has said he will not take a bonus for this year as a result of the scandal.

It is not the first time the 60-year-old Boston-born former academic – he began his career as a university lecturer – has made the headlines.

Mr Diamond was previously best-known for his huge wealth: last year he topped the list of the highest-paid chief executives in the FTSE 100.

‘Unacceptable face’

In 2011 Mr Diamond earned £20.9m, comprising salary, bonuses and share options, and he is reported to have a personal wealth of £105m.

There has long been controversy about the amount he earns.

In 2010, Lord Mandelson described him as the “unacceptable face of banking”, saying he had taken a £63m salary for “deal-making and shuffling paper around”.

Barclays dismissed the figure as “total fiction” saying that his salary as head of Barclays Capital was actually £250,000.

BBC business editor Robert Peston said he believed Mr Diamond had earned £6m in 2009 from a long-term incentive scheme and £27m from selling his stake in a Barclays-owned business that had been sold.

So whether he earns £20.9m, £6m or even £250,000 frankly makes no difference to the fact that the gap between what the poorest may earn and the sorts of monies that are given to Mr. Diamond and his like is just plain wrong.  [And since writing this on Monday, the news broke on Tuesday morning that Mr. Diamond is now unemployed.]  Don’t often quote the bible in Learning from Dogs but 2 Corinthians 8:13-15 is irresistible (King James Version),

Our desire is not that others might be relieved while you are hard pressed, but that there might be equality.  At the present time your plenty will supply what they need, so that in turn their plenty will supply what you need. The goal is equality, as it is written: “The one who gathered much did not have too much, and the one who gathered little did not have too little.” [my emphasis]

I subscribe to Naked Capitalism and the other day there was a deeply interesting article about France pushing for a maximum wage.  Let me take the liberty of quoting all of it,

SUNDAY, JULY 1, 2012

France Pushing for a Maximum Wage; Will Others Follow?

A reader pointed out a news item we missed, namely, that the new government in France is trying to implement a maximum wage for the employees of state-owned companies. From the Financial Times:

France’s new socialist government has launched a crackdown on excessive corporate pay by promising to slash the wages of chief executives at companies in which it owns a controlling stake, including EDF, the nuclear power group.

In a departure from the more boardroom-friendly approach of the previous right-of-centre administration, newly elected president François Hollande wants to cap the salary of company leaders at 20 times that of their lowest-paid worker.

According to Jean-Marc Ayrault, prime minister, the measure would be imposed on chief executives at groups such as EDF’s Henri Proglio and Luc Oursel at Areva, the nuclear engineering group. Their pay would fall about 70 per cent and 50 per cent respectively should the plan be cleared by lawyers and implemented in full…

France is unusual in that it still owns large stakes in many of its biggest global companies, ranging from GDF Suez, the gas utility; to Renault, the carmaker; and EADS, parent group of passenger jet maker Airbus.

Of course, in the US, we have companies feeding so heavily at the government trough that they hardly deserve the label of being private, but the idea that the public might legitimately have reason to want to rein in ever-rising executive pay is treated as a rabid radical idea.

From Doug’s post:

For those, however, receiving bailouts, deposit insurance, government guarantees, tax breaks, tax credits, other forms of public financing, government contracts of any sort – and so on – the top paid person cannot receive more than twenty-five times the bottom paid person. This ratio, by the way, is what business visionary Peter Drucker recommended as most effective for organization performance as well as society. It also echoes Jim Collins who, in his book Good To Great, found that the most effective top leaders are paid more modestly than unsuccessful ones. And, critically, it is a ratio that is in line with various European and other nations that have dramatically lower income inequality than the United States.

In other words, the French proposal isn’t that big a change from existing norms, at least in most other advanced economics (ex the UK, which has also moved strongly in the direction of US top level pay). But despite the overwhelming evidence that corporate performance is if anything negatively correlated with CEO pay, the myth of the superstar CEO and the practical obstacles to shareholder intervention (too fragmented; too many built in protections for incumbent management, like staggered director terms; major free rider problems if any investor tries to discipline extractive CEO and C level pay, which means it’s easier to sell than protest) means ideas like this are unlikely to get even a hearing in the US.  Let the looting continue!

As Patrice Ayme commented on that Naked Capitalism article, “France will pass the 20 to 1 law, as the socialists control the entire state, senate, National Assembly, Regions, big cities, etc. Only the French Constitutional Court could stop it.  That’s unlikely, why?  Because one cannot have a minimum wage, without a maximum wage. It’s not a question of philosophy, but of mathematics.”

Let me go back and requote this,

 …. the top paid person cannot receive more than twenty-five times the bottom paid person. This ratio, by the way, is what business visionary Peter Drucker recommended as most effective for organization performance as well as society. It also echoes Jim Collins who, in his book Good To Great, found that the most effective top leaders are paid more modestly than unsuccessful ones. And, critically, it is a ratio that is in line with various European and other nations that have dramatically lower income inequality than the United States.

Thus if society was to embrace this approach to fairness, in America the top paid person in 2012 in the USA would be on 25 times the minimum wage level of $14,500 a year or, in other words, $362,500 a year.

I’m not a raving liberal but I am bound to say that this sits pretty well with me.  How about you?

As I opened, an original idea that shouldn’t be regarded as innovative.