200 (Clueless) Economists Demand The EU Incorporate Climate In Economic Models

Authored by Mike Shedlock via MishTalk.com,

200 clueless and very biased economists demand more of the policies that had led to a collapse in the support of Greens all across the EU.

How to Make Models Worse

Eurointelligence explains How to Make Models Worse

A group of economists has written a letter to the European Commission that it should change its economic models to take climate policies into account. If climate were an important factor in macroeconomic performance over the forecasting horizon, usually a year or two, then so it should. But it isn’t.

We are no slouches ourselves when it comes to criticising general equilibrium based economic models, the kind of which the Commission uses. Our argument is that these models are worse than useless. Not only do they get it wrong all the time. The massive forecasting errors guide policymakers into making wrong decisions. A specimen of one such Commission forecast came out yesterday. We recall an analyst – obviously not in the employ of the Commission – who once took it upon himself to check the forecast against the actual data. He came up with a correlation coefficient of zero. This is quite hard to achieve even if you tried to.

The argument by the 200 economists goes in a complete different direction. They don’t care about accuracy. They want to introduce even more bias.

Their main argument is that current models favour market-based over regulation-based solutions. If that were the reason for the models’ poor performance, we would accept this argument. But again, this is not the case. The purpose of a change in model is to introduce a positive bias in favour of climate change investment, presumably because electorates are pushing in the other direction.

The letter is testimony to ongoing delusions amongst economists that they are in charge of economic policy and that their models really matter to the world. We are seeing central banks, like the ECB, are starting to distance themselves from those models because of chronically poor performance.

It’s notable that the economists are not at all interested in the Truth. They want biased models to produce a certain outcome.

Unaccountable Regimes

“Unaccountable regimes always end up like this”

Thanks @guyverhofstadt for explaining farmer protests in nearly every EU country

— Mike “Mish” Shedlock (@MishGEA) February 18, 2024

Guy Maurice Marie Louise Verhofstadt is a former prime minister of Belgium, the European Parliament Brexit Coordinator, Chair of the Brexit Steering Group, and current member of the European Parliament.

The image he posted was from 2014.

Inadvertently, Verhofstadt explains the farmer protests in the EU.

Frustration Grows

AP News reports An EU farmer’s frustration grows with every click of the mouse

On a farm in northern Belgium, not far from the hundreds of tractors blocking Europe’s second-biggest port to demand more respect for farmers, Bart Dochy was switching on his computer, waiting for a government program to load with maps of his land next to empty digital boxes demanding to be filled with statistics on fertilizer, pesticides, production and harvesting.

Over morning coffee, his father, Frans Dochy, 82, remembers how, in his youth, he would harvest beets out of the cold, thick earth by hand for hours. Yet, he says, 2024 bookkeeping “would have driven me off the farm long ago.”

He sees how his son has to register the arrival of any artificial manure within seven days. “And it has to be done even at the busiest times on the field, of course,” said Bart Dochy. “Then it has to be registered exactly how it is spread on every single little plot of land — how many kilos and how it is distributed,” he explained, going through some of the thick folders in his office. “And with the smallest error, there are fines.”

What really gets Dochy is when bureaucratic deadlines are imposed on him, for example if certain crops or green fertilizers need to be sown by Sep. 1. “If the last week of August is unbelievably rainy, you will not be able to sow this properly. But you are nevertheless obliged to sow. Otherwise, you may be faced with a fine,” he said.

Cultural Enrichment

Apologies offered, but we feel obliged to interrupt this post on climate with a brief message on cultural enrichment.

Eritrean African immigrants burn down The Hague, Netherlands.

Right-wing alarmism over immigration turned out to be accurate, while left-wing alarmism over climate did not.

For most W. Europeans, the biggest issue of “warming” will be their burning neighborhoods as a result of decades long failing immigration policies. https://t.co/G5I8wuOptC

— Ralph Schoellhammer (@Raphfel) February 18, 2024

Now that you are aware of the urgent need for more cultural enrichment, we now return to our scheduled program.

Welcome to Greenlash

The Guardian comments Farmers are in revolt and Europe’s climate policies are crumbling. Welcome to the Age of ‘Greenlash’

Ursula von der Leyen surrendered to angry farmers last week faster than you could shake a pitchfork or dump a tractor-load of manure outside the European parliament. The European Commission president, expected to announce her candidacy for a second term heading the EU executive next week, told lawmakers that the commission was withdrawing a bill to halve the use of chemical pesticides by 2030 and would hold more consultations instead.

The proposed measure was a key plank in the commission’s European Green Deal and its Farm to Fork strategy, intended to make the EU carbon-neutral by 2050, make agriculture more environmentally friendly and preserve biodiversity.

Von der Leyen’s sudden U-turn on one of her signature policies was not just an attempt to defuse a spreading continent-wide rural revolt over rising fuel costs, burdensome environmental regulations, retailers’ price squeezes and cheap imports. It was also a sign of growing panic among the EU’s mainstream parties over the seemingly inexorable rise of far-right nationalists ahead of the June elections.

I have seen unpublished opinion polling conducted for the European parliament in January that showed Eurosceptic, sovereigntist or populist parties have taken the lead in eight of the 27 EU members, and are in second place in four more. Moreover, the countries where the far right is polling most strongly include those with the most seats in the legislature – Germany, France, Italy, Poland, Romania and the Netherlands.

In the Netherlands, farmer discontent over curbs on nitrogen emissions led to the sudden rise of the Farmer-Citizen Movement, a party that came from nowhere to win the most votes in regional elections last March. Many of those protest voters have since switched to Wilders’ Freedom party, which topped the poll in a general election in November and has gained more ground since then.

Recent polling suggests that the ecologists are set to lose up to one-third of their 72 seats in the 720-member legislature due to the “greenlash”.

Yes, Guy Verhofstadt, unaccountable regimes always end up like this:

Germany industrial production via St. Louis Fed, chart by Mish.

Please note Germany’s Industrial Superpower Days are Over, a Green Victory?

And in the US, The True Costs of Net Zero Are Becoming Impossible to Hide

Biden’s Wind Tax

In the US, manufacturers have yet to stand up to idiotic Biden regulations, mostly because they have received tax incentives that hide the true costs.

But the actual costs are difficult to hide now that subsidies won’t hide the true cost. So Biden’s schemes are unraveling.

It’s increasingly difficult for Biden and the EU to hide the true costs of net zero mandates.