Climate Change and Economics

To embezzle  -verb: to steal or misappropriate (money placed in one’s trust or belonging to the organization for which one works).

We can agree that this is a bad thing.  It is interesting to notice that it is a complete idea.  Everyone knows.  The embezzler and embezzled are equally knowledgeable.  There is however a middle time when the event is incomplete.  Not everyone yet knows everything.

John Kenneth Galbraith talked about it Chapter VIII of his classic volume, “The Great Crash 1929.

“Weeks, months or years may elapse between the commission of the crime and its discovery. (This is a period, incidentally, when the embezzler has his gain and the man who has been embezzled, oddly enough, feels no loss. There is a net increase in psychic wealth.) At any given time there exists an inventory of undiscovered embezzlement in – or more precisely not in – the country’s business and banks. This inventory – it should perhaps be called the bezzle.”

Half an embezzle?

In our time, suppose the government misappropriates our money by way of taxation to carry out a scheme that is not in our interest.  It likely would not rise to the level of embezzlement but it is clearly in the mid zone where not everyone knows what is happening or has happened.

An example of a bezzle  could be Ontario’s Green Energy program or the UN’s climate change agenda.  Has the science been manipulated to reach a certain conclusion?  Maybe, but it is hard to tell.

One of the indicators that it may be manipulated is the exclusive use of a study by the U.S. National Oceanic and Atmospheric Administration.  There are nine longitudinal studies of temperature histories but this one alone gets the publicity.  Why?  The other eight show a hiatus of increasing temperature since 2000 and this one does not.  Worse the purveyors of the study have, so far, refused to supply their raw data and their method of analyzing it.  I don’t love cynics but it is easy sometimes to make the conversion from skeptic.

There is  hope though.  We may come to the point where the bezzle shrinks.  Galbraith commented on that.

” [the bezzle]…. varies in size with the business cycle. In good times people are relaxed, trusting, and money is plentiful. But even though money is plentiful, there are always many people who need more. Under these circumstances the rate of embezzlement grows, the rate of discovery falls off, and the bezzle increases rapidly. In depression all this is reversed. Money is watched with a narrow, suspicious eye. The man who handles it is assumed to be dishonest until he proves himself otherwise. Audits are penetrating and meticulous. Commercial morality is enormously improved. The bezzle shrinks.”

Eventually there will be too little money available.  It will be interesting to see how and when the “penetrating audits” are carried out.  It will be even more interesting to see how the miscreants are treated.

It is always wrong to spend time and money to solve a problem that either does not exist or is misunderstood.

Don Shaughnessy is a retired partner in an international public accounting firm and is now with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.


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