Cato At Liberty

I’ve watched the congressional hearings on the IRS scandal, and like others, have been appalled at the glib performance of former IRS Commissioner, Douglas Shulman. Shulman isn’t taking an ounce of blame for the mess even though he headed the agency from 2008 to 2012. Dana Milbank reviews his slippery and rather arrogant performance in the Washington Post today.

Unfortunately, we can’t fire the Bush-appointee and Democratic-donor Shulman because he’s already escaped to the private sector. But we can fire other misbehaving IRS workers when we unravel the mystery of who ordered the political targeting.

Politico wrote yesterday that “heads won’t roll at the IRS.” The article is right that it is very difficult to fire federal workers, and I’ve written about the extremely low federal firing rate. The article says that 8,755 people were fired last year. But that was out of 2.1 million civilian federal employees, or just 0.4 percent of the total.

Politico notes that strong civil service protections are a big hurdle to firing. But just as  important, I think, has been the unwillingness of federal managers to put the time and effort into removals. It’s much easier for managers to move troublesome employees off to a quiet office to get them out of the way, or to transfer them out of their section.

Also note that it is the firing rate of poor performers that is especially low in the federal government, meaning workers who are lazy or produce poor work. One barrier to their firing is that managers often give these workers good performance reviews because they don’t want to rock the boat.

However, a larger number of federal workers are fired for misconduct—such as willfully ignoring laws and regulations—and that is what we are talking about with the IRS scandal. Recent incidents in the beleaguered Transportation Security Administration (TSA) indicate that federal workers can be fired for misconduct:

• 400 TSA workers have been fired for stealing items from passenger bags.
• 5 TSA employees in Fort Myers were fired for violating screening rules.
• 28 TSA workers in Honolulu were fired for violating screening rules.
• The TSA proposed firing 25 workers in Newark for screening failures, and 4 were eventually removed.
• The TSA proposed firing 12 workers at the Charlotte airport.

Aside from the thefts, the other TSA firings seem to have been for actions no more troublesome than that of IRS employees. IRS employees were apparently not just failing to follow proper protocol, but were proactively inventing new procedures that undermined fundamental rules for nonpartisan, neutral, and fair treatment of taxpayers.

So far President Obama has “fired” acting IRS Commissioner Steven Miller, although Miller had planned to retire in June anyway. But more heads should roll in the IRS scandal, and despite Politco’s cautionary note, I’m guessing that they will roll.

While doing some historical studies in preparation for an article in Cato’s Regulation magazine, we found that we  once discovered the information equivalent of antimatter, namely, “anti-information”.

This breakthrough came  when we were reviewing the first “National Assessment” of climate change impacts in the United States in the 21st century, published by the U.S. Global Change Research Program (USGCRP) in 2000.  The Assessments are mandated by the Global Change Research Act of 1990.  According to that law, they are, among other things, for “the Environmental Protection Agency for use in the formulation of a coordinated national policy on global climate change…”

One cannot project future climate without some type of model for what it will be.  In this case, the USGCRP examined a suite of nine climate models and selected two for the Assessment. One was the Canadian Climate Model, which forecast the most extreme warming for the 21st century of all models, and the other was from the Hadley Center at the U.K Met Office, which predicted the greatest changes in precipitation.

We thought this odd and were told by the USGCRP that they wanted to examine the plausible limits of climate change. Fair enough, we said, but we also noted that there was no test of whether the models could simulate even of the most rudimentary climate behavior in past (20th) century.

So, we tested them on ten-year running means of annual temperature over the lower 48 states.

One standard method used to determine the utility of a model is to compare the “residuals”, or the differences between what is predicted and what is observed, to the original data.  Specifically, if the variability of the residuals is less than that of the raw data, then the model has explained a portion of the behavior of the raw data and the model can continue to be tested and entertained.

A model can’t do worse than explaining nothing, right?

Not these models!  The differences between their predictions and the observed temperatures were significantly greater (by a factor of two) than what one would get just applying random numbers.

Ponder this:  Suppose there is a multiple choice test, asking for the correct temperature forecast for 100 temperature observations, and there were four choices. Using random numbers, you would average one-in-four correct, or 25%. But the models in the National Assessment somehow could only get 12.5%!

“No information”—a random number simulation—yields 25% correct in this example, which means that anything less is anti-information. It seems impossible, but it happened.

We informed the USGCRP of this problem when we discovered it, and they wrote back that we were right, and then they went on to publish their Assessment, undisturbed that they were basing it models that had just done the impossible.

The AP reports some bad news for anyone seeking a little security and predictability in the US and global energy markets:

Energy Secretary Ernest Moniz said Tuesday he will delay final decisions on about 20 applications to export liquefied natural gas until he reviews studies by the Energy Department and others on what impact the exports would have on domestic natural gas supplies and prices.

Moniz, who was sworn in Tuesday as the nation’s new energy chief, said he promised during his confirmation hearing that he would “review what’s out there” before acting on proposals to export natural gas. Among the things Moniz said he wants to review is whether the data in the studies are outdated.

A study commissioned by the Energy Department concluded last year that exporting natural gas would benefit the U.S. economy even if it led to higher domestic prices for the fuel.

The AP adds that Secretary Moniz justified this delay as his “commitment” to Senate Energy Committee Chairman Ron Wyden (D-Ore.) who opposes natural gas exports and has criticized the DOE study.  Moniz’s statement comes just days after his department (quietly, on a Friday) approved one pending export application—moving the grand total of approvals to two out of 20 total applications, most of which have been sitting on DOE’s desk for several years now.

And who says the U.S. government isn’t swift and efficient?

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