Just in time for today’s release of my and Bill Watson’s new PA, “Regulatory Protectionism: A Hidden Threat to Free Trade” comes a feature article [$] in the specialist trade (in both senses of the word) publication, Inside U.S. Trade on the likely obstacles to a U.S‑EU preferential trade agreement (a recent Cato event also hosted a discussion on this topic). And, in an inadvertent PR coup for us, it focusses almost entirely on how regulations and other non-tariff barriers (NTBs) in each economy might inhibit a successful result to negotiations: 

The shifting nature of domestic policies and agricultural trade between the United States and the European Union over the last several decades means that while some traditional trade irritants are no longer present, others have been introduced that will likely prove difficult to unravel in the context of trans-Atlantic bilateral negotiations. Whereas bilateral trade irritants previously centered on export subsidies and competition in third markets for commodities like wheat, now the disagreements primarily relate to non-tariff barriers (NTBs), including divergent scientific standards, food safety regulations and other issues that are hindrances to bilateral trade… But the difficulty in negotiating these issues is that, because they ostensibly relate to consumer health and safety, governments cannot easily make “trade-offs,” as they can with tariffs. Observers believe that this is the chief reason that the talks over agriculture promise to be so difficult.

Indeed. As we discuss in our paper, tariffs and other conventional trade barriers have fallen over the years, so the barriers that remain are more regulatory in nature, and more sensitive to negotiate. What we’re essentially left with is the difficult issues. They get to the heart of national sovereignty and, on a practical level, require the participation of regulatory administrators who may have very little or no trade negotiation knowledge or experience. They also have little incentive to concede their power. Whereas trade negotiators are paid to, well, negotiate, regulators are paid to inhibit commerce. They face asymmetric rewards: a huge fuss if something goes wrong, not many kudos if they remove the reins and let commerce thrive. Under those conditions, it should be no surprise that they are risk-averse. So this trade agreement will not be easy to complete. In the meantime, though, there is much the United States can do to limit the ability of regulators to shackle the economy with burdensome—and potentially illegal—requirements that limit choice and expose American businesses to retaliatory sanctions. For example, ensure WTO obligations are taken seriously and adhered to. From our paper: 

Prior to implementing a new regulation, federal agencies should be required to evaluate the possibility that less trade-restrictive alternatives could meet regulatory goals as effectively as their preferred proposal. Also, the U.S. government should not dilute or bypass the multilateral rules of the WTO through bilateral or regional negotiations that accept managed protectionism. This paper uses a number of recent examples of protectionist regulations to show that the enemies of regulatory protectionism are transparency and vigilance. Policymakers should be skeptical of regulatory proposals backed by the target domestic industry and of proposals that lack a plausible theory of market failure.

Read the whole thing here. And if you are in D.C. or near a computer next Thursday, watch our event to launch the paper.

Ohio Reps. Ron Young (R‑Leroy Twp.) and Andy Thompson (R‑Marietta), and Missouri Sen. John Lamping (R‑St. Louis County), have introduced legislation—we call it the Health Care Freedom Act 2.0—that would suspend the licenses of insurance carriers who accept federal subsidies through one of the Patient Protection and Affordable Care Act’s (PPACA) health insurance Exchanges. At first glance, that might seem to conflict with or otherwise be preempted by the PPACA. Neither is the case. Instead, the HCFA 2.0 would require the IRS to implement the PPACA as Congress intended.

Here’s why. Under the PPACA, if an employer doesn’t purchase a government-prescribed level of health benefits, some of its workers may become eligible to purchase subsidized coverage through a health insurance “exchange.” When the IRS issues the subsidy to an insurance company on behalf of one of those workers, that payment triggers penalties against the employer. Firms with 100 employees could face penalties as high as $140,000.

Congress authorized those subsides, and therefore those penalties, only in states that establish a health insurance Exchange. If a state defers that task to the federal government, as 33 states including Missouri and Ohio have done, the PPACA clearly provides that there can be no subsidies and therefore no penalties against employers. The IRS has nevertheless announced it will implement those subsidies and penalties in the 33 states that have refused to establish Exchanges. Applying those measures in non-establishing states violates the clear language of the PPACA and congressional intent. See Jonathan H. Adler and Michael F. Cannon, “Taxation Without Representation: The Illegal IRS Rule to Expand Tax Credits Under the PPACA,” Health Matrix: Journal of Law-Medicine 23 (2013): 119–195.

Whether legal or illegal, those penalties also violate the freedoms protected by the Health Care Freedom Amendment to Ohio’s Constitution, and Missouri’s original Health Care Freedom Act, which voters in each state ratified by overwhelming majorities. The Ohio (HB 91) and Missouri (SB 473) bills would protect employers and workers from those penalties, and thereby uphold the freedoms enshrined in Missouri statute and Ohio’s Constitution, by suspending the licenses of insurance carriers that accept those subsidies.

The question arises whether the PPACA would preempt such a law. It does not. The HCFA 2.0 neither conflicts with federal law, nor attempts to nullify federal law, nor is preempted by federal law.

The HCFA 2.0 concerns a field of law—insurance licensure—that has traditionally been a province of the states under their police powers. In preemption cases, courts “start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.” Wyeth v. Levine, 129 S. Ct. 1187, 1194–95 (2009). Courts then must determine whether the state law in question is nevertheless trumped by express or implied federal preemption.

Express Preemption

The PPACA does not expressly preempt state powers to determine the conditions for licensure. On the contrary, it expressly reaffirms those powers. Section 1321(d) provides that the Act preempts only those state laws “that … prevent the application of the provisions of this title.” 42 USC § 18041(d). At the same time, the PPACA requires that in order to sell through an Exchange, health insurance issuers must be “licensed and in good standing to offer health insurance coverage in each State in which such issuer offers health insurance coverage under this title.” 42 USC § 18021(a)(1)(C)(1). This requirement shows the PPACA does not preempt states’ powers to determine the conditions for licensure. Quite the contrary: the Act’s nod to state licensure shows that the states’ exercise of those powers does not “prevent the application of the provisions of this title.”

Implied Preemption

Nor does the PPACA imply preemption of the HCFA 2.0’s use of those powers. The Supreme Court recently observed that “[i]mplied preemption analysis does not justify a ‘free-wheeling judicial inquiry into whether a state statute is in tension with federal objectives.’” Instead, the Court’s “precedents ‘establish that a high threshold must be met if a state law is to be pre-empted for conflicting with the purposes of a federal Act.’” Chamber of Commerce of the United States v. Whiting, 131 S. Ct. 1968, 1985 (2011). 

First, that high threshold cannot be met here, because the HCFA 2.0 effectuates, rather than conflicts with, Congress’s purpose. The PPACA clearly provides, and Congress clearly intended, that the above-mentioned subsidies and employer taxes would take effect only in states that establish an Exchange. The HCFA 2.0 would prevent the IRS from applying, in Missouri and Ohio, subsidies and taxes that Congress did not want the IRS to apply in states like Missouri and Ohio. The bill is thus consistent with Congress’ purpose, and therefore not preempted by the PPACA.

Second, the PPACA in no way whatsoever mandates that these subsidies must exist in every state. The Act specifically guarantees, “No individual, company, business, nonprofit entity, or health insurance issuer offering group or individual health insurance coverage shall be required to participate in any Federal health insurance program created under this Act … or in any Federal health insurance program expanded by this Act … and there shall be no penalty or fine imposed upon any such issuer for choosing not to participate in such programs.” 42 U.S.C. § 18115. Individuals, employers, and health insurance issuers are free to refuse these and other subsidies, just as states retain the power to block them if they violate the public policy of the state. The Supreme Court has held that states may adopt safeguards for individual liberty that exceed federal protections. PruneYard Shopping Center v. Robins, 447 U.S. 74, 83 (1980). Ohio’s Health Care Freedom Amendment and Missouri’s existing Health Care Freedom Act are two such safeguards.

Third, like physician-assisted suicide in Oregon, which the Supreme Court ruled could not be preempted by federal law, the power of states to determine the conditions of licensure for insurance carriers cannot be displaced by implied preemption without “effect[ing] a radical shift of authority from the States to the Federal Government to define general standards of medical practice in every locality.” Gonzales v. Oregon, 546 U.S. 243, 275 (2006).

As noted above, the HCFA 2.0 is not preempted by the PPACA precisely because it would require the IRS to apply the PPACA as written. The most interesting aspect of the debate over this legislation is that ObamaCare supporters do not want the PPACA to be implemented as written. What does that tell us?

Editor’s note: This post was co-authored with Christina Sandefur, a staff attorney at the Goldwater Institute’s Scharf-Norton Center for Constitutional Litigation, and is cross-posted at the Goldwater Institute’s blog.

Last Friday, Colonel Gian Gentile, an award-winning historian, associate professor of history, and director of the military history program at the U.S. Military Academy at West Point, spoke at the Cato Institute about the misapplication of counterinsurgency in Afghanistan for the purpose of destroying al Qaeda. In a new Cato video, conducted with Cato multimedia director Caleb Brown, Colonel Gentile elaborates on America’s narrow aim of defeating al Qaeda. He also explains how that aim can be pursued without a costly, multi-decade, troop-heavy campaign, and puts the application of counterinsurgency doctrine in a historical context.

On a slightly different note, mainly for those readers concerned about leaving the Taliban unmolested, the United States and its coalition allies have come to accept the region’s geopolitical landscape, in which it seems there is no way to avoid the Taliban and other anti-Afghan government forces becoming part of some future political order. Consider this statement by Philip Mudd, the former deputy director of the CIA’s Counterterrorist Center and the FBI’s National Security Branch: “On September 12, 2001, can you imagine asking the question: Is the Taliban really a threat? Today, 12 years later, I’d say, well clearly it’s not a threat!”

Food for thought. Check out the video below.

Using data stolen from service providers in the Cook Islands and the British Virgin Islands, the Washington Post published a supposed exposé of Americans who do business in so-called tax havens.

Since I’m the self-appointed defender of low-tax jurisdictions in Washington, this caught my attention. Thomas Jefferson wasn’t joking when he warned that “eternal vigilance is the price of liberty.” I’m constantly fighting against anti-tax haven schemes that would undermine tax competition, financial privacy, and fiscal sovereignty.

Even if it means a bunch of international bureaucrats threaten to toss me in a Mexican jail or a Treasury Department official says I’m being disloyal to America. Or, in this case, if it simply means I’m debunking demagoguery.

The supposedly earth-shattering highlight of the article is that some Americans linked to offshore companies and trusts have run afoul of the legal system.

Among the 4,000 U.S. individuals listed in the records, at least 30 are American citizens accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct.

But the real revelation is that people in the offshore world must be unusually honest. Fewer than 1 percent of them have been named in a lawsuit, much less been involved with a criminal case.

This is just a wild guess, but I’m quite confident that you would find far more evidence of misbehavior if you took a random sample of 4,000 Americans from just about any cross-section of the population.

We know we would find a greater propensity for bad behavior if we examined 4,000 politicians. And I assume that would be true for journalists as well. And folks on Wall Street. And realtors. And plumbers. Perhaps even think tank employees. Anyhow, you get the point.

Citing a couple of anecdotes, the reporter then tries to imply that low-tax jurisdictions somehow lend themselves to criminal activity.

Fraud experts say offshore bank accounts and companies are vital to the operation of complex financial crimes. Allen Stanford, who ran a $7 billion Ponzi scheme, used a bank he controlled in Antigua. Bernard Madoff, who ran the largest Ponzi scheme in U.S. history, used a series of offshore “feeder funds” to fuel the growth of his multibillion-dollar house of cards.

The Allen Stanford case was a genuine black eye for the offshore world, but it’s absurd to link Madoff’s criminality to tax havens. The offshore funds that invested with Madoff were victimized in the same way that many onshore funds lost money.

Moreover, there’s no evidence in this article — or from any other source to my knowledge — suggesting that financial impropriety is more likely in low-tax jurisdictions.

We then get some “hard” numbers.

Today, there are between 50 and 60 offshore financial centers around the world holding untold billions of dollars at a time of historic U.S. deficits and forced budget cuts. Groups that monitor tax issues estimate that between $8 trillion and $32 trillion in private global wealth is parked offshore.

So we have offshore wealth of somewhere “between $8 trillion and $32 trillion”? With that level of precision, or lack thereof, perhaps you now understand why the make-believe numbers about alleged tax evasion are about as credible as a revenue estimate from the Joint Committee on Taxation.

Speaking of make-believe numbers, the article mentions one of Washington’s worst lawmakers, a Senator who pushed through a law that has united the world against the United States.

Sen. Carl M. Levin (D‑Mich.) has been holding hearings and conducting investigations into the offshore world for nearly three decades. In 2010, Congress passed the Foreign Account Tax Compliance Act requiring that U.S. taxpayers report foreign assets to the government and foreign institutions alert the IRS when Americans open accounts.

He justifies bad policy by claiming that there’s a pot of gold at the end of the tax haven rainbow.

“We can’t afford to lose tens of billions of dollars a year to tax-avoidance schemes,” Levin said. “And many of these schemes involve the shift of U.S. corporate tax revenues earned here in the U.S. to offshore tax havens.”

But FATCA is predicted to collected less than $1 billion per year, and it probably will lose revenue once you include Laffer Curve effects such as lower investment in the American economy from overseas.

The most interesting part of the article, as least from a personal perspective, is that the Center for Freedom and Prosperity is listed as one of the “powerful lobbying interests” fighting to preserve tax competition.

The efforts by Levin and other lawmakers have been opposed by powerful lobbying interests, including the banking and accounting industries and a little-known nonprofit group called the Center for Freedom and Prosperity. CF&P was founded by Daniel J. Mitchell, a former Senate Finance Committee staffer who works as a tax expert for the Cato Institute, and Andrew Quinlan, who was a senior economic analyst for the Republican National Committee before helping start the center. …The center argues that unfettered access to offshore havens leads to lower taxes and more prosperity.

Having helped to start the organization, I wish CF&P was powerful. The Center has never had a budget of more than $250,000 per year, so it truly is a David vs. Goliath battle when we go up against bloated and over-funded bureaucracies such as the IRS and the Paris-based Organization for Economic Cooperation and Development.

The reporter somehow thinks it is big news that the Center has tried to raise money from the business community in low-tax jurisdictions.

According to records reviewed by The Post and ICIJ, the organization’s fundraising pleas have been circulated to offshore entities that make millions by providing anonymity for wealthy clients, many of them U.S. citizens.

Unfortunately, even though these offshore entities supposedly “make millions,” I’m embarrassed to say that CF&P has not been able to convince them that it makes sense to support an organization dedicated to protecting tax competition, financial privacy, and fiscal sovereignty.

But maybe that will change now that the OECD has launched a new attack on tax planning by multinational firms.

Let’s close by returning to the policy issue. The article quotes me defending the right of jurisdictions to determine their own fiscal affairs.

Mitchell, the co-founder of CF&P, added that nations shouldn’t be telling other countries how to conduct their affairs and noted that the United States is one of the worst offenders in the world when it comes to corporate secrecy.

My only gripe is that the reporter mischaracterizes my position. Yes, there are several states that are “tax havens” because of their efficient and confidential incorporation laws, but that means America is “one of the best providers,” not “one of the worst offenders.”

This is something to celebrate. I’m glad the United States is a safe haven for the oppressed people of the world. That’s great news for our economy. I just wish we also were a tax haven for American citizens.

“The United States is one of the biggest tax havens in the world,” Mitchell said. “In general, the United States is impervious to fishing expeditions here, and then the United States turns around and says, ‘Allow us to do fishing expeditions in your country.’”

But I’m not a hypocrite. Other nations should have the sovereign right to maintain pro-growth tax and privacy laws as well.

Other nations shouldn’t feel obliged to enforce bad American tax law, any more than we should feel obliged to enforce any of their bad laws.

P.S. You probably won’t be surprised to learn that “onshore” nations are much more susceptible to dirty money than “offshore” jurisdictions. Which is why you have a hard time finding any tax havens on this map showing the nations with the most money laundering.

P.P.S. On the topic of tax havens, you won’t be surprised to learn that Senator Levin is not the only dishonest demagogue in Washington. If you pay close attention around 1:25 and 2:25 of this video, you’ll see that the current resident of 1600 Pennsylvania Avenue also has an unfortunate tendency to play fast and loose with the truth.

When it comes to reporting on the Small Business Administration, it seems to me that most journalists simply assume that if a government agency exists to “help” small businesses then it must be good. So I was pleased to read a weekend piece from two investigative journalists with the Dayton Daily News that challenges the conventional wisdom on the SBA. 

As the reporters explain, the SBA’s main job is to back loans issued by private lenders to small businesses that couldn’t get financing on market terms. The result is that taxpayers end up holding the bag when these naturally riskier loans go bad. 

And quite a few go bad as this Cato essay on the Small Business Administration explains. 

Lenders have little skin in the game so for them it’s heads they win, tails they win. Thus it was shocking – absolutely shocking – that a representative from the SBA and the head of the Ohio Bankers Association provided the reporters with the most favorable quotes.  

The entire piece is worth reading, but the authors did a particularly good job of turning the spotlight on the racket that exists between the SBA, lenders, and national franchisors: 

Franchises are major consumers of SBA loans, according to the Daily News analysis — and sub sandwich franchises top the list. Subway and Quiznos franchises dominated the list of businesses borrowing the government guaranteed loans. Subway franchises took out at least 4,649 of the 7(a) loans since the beginning of 1990, the data show, while Quiznos took out 2,586. 

But the battle of the sub shops went in drastically different directions, according to the loan data. While Subway borrowed more than 2,000 more loans than Quiznos, its loan failure rate was about one-fifth of Quiznos restaurants. Only 4.8 percent of Subway franchise SBA loans were charged off as of the end of February, while almost a quarter — 23.4 percent — of Quiznos franchise loans ended in failure and were discharged to the Treasury. 

Quiznos also led all franchises with $43.5 million in defaulted loan guarantees that SBA had to pay the lending banks. Cold Stone Creamery was second with $29.6 million, followed by Days Inn with $16.9 million and Ramada Inn with $14.3 million.

The sub shops also dominate the nine-county Dayton region in numbers of SBA loans, but the disparity is even more stark. While Subway franchises took out more than twice as many 7(a) loans as Quiznos (35 to 16), only one Subway loan (2.9 percent) failed and was charged off compared to six (37.5 percent) of the Quiznos loans. 

Nationwide, the 50 franchises that cost the SBA the most totaled more than $411 million in discharged loans. 

Corporate franchisors such as Quiznos and Subway contract with individual owners to operate the business, but some corporations take a bigger share of the profits than others.

Quiznos’ cut from its operators makes it harder for them to be profitable, said Robert Purvin, chief executive officer for the American Association of Franchises and Dealers. 

“My bet is lurking behind every failure there is price gouging to the franchisee,” said Purvin. “We’ve been after SBA for years to make no loans to franchisors that are bad players.” 

He said the SBA is essentially subsidizing these big corporate franchisors because the loan money is often used to pay the franchise fees, royalties and sometimes payments on leases controlled by the franchisor. 

What does it say about the state of American capitalism that federal policymakers think it is necessary and proper for the government to subsidize the creation of more Subway shops? 

The defaults and wasted capital aside, it is a quote from the Ohio chapter of the National Federation of Independent Business that gets to the fundamental problem with government-backed lending: 

“Many small business owners see this as an unnecessary program of government intrusion, of picking winners and losers,” said Roger Geiger, Ohio chapter executive director of the National Federation of Independent Business. “They most certainly wonder how equitable it is when it’s their tax dollars being used to fund what could potentially be a competing business.”

As former Sen. Scott Brown (R‑MA) demonstrated a couple of years ago, the average policymaker doesn’t grasp that there are major problems with the federal government picking winners and losers in the market. 

Or else they just don’t care. 

The inconvenient truth is that from the SBA’s inception it has existed for politicians to show that they “care” about small businesses. For politicians who support economic policies that are destructive to businesses small and large, demonstrating support for the SBA allows them to pretend otherwise. 

Her greatness as a political leader aside, and her penetrating moral critique of socialism and communism (so closely intertwined with that greatness) also aside, Margaret Thatcher was almost infinitely quotable. On the economic folly she fought so tenaciously: “The problem with socialism is that you eventually run out of other people’s money.” On popularity: “If you just set out to be liked, you would be prepared to compromise on anything at any time, and you would achieve nothing.” On productiveness and the charitable instinct: “No one would remember the Good Samaritan if he’d only had good intentions; he had money as well.” On the hostile press: “If my critics saw me walking over the Thames they would say it was because I couldn’t swim.” And many others, some of the best collected at the U.K. Spectator. 

If you have time to read only one longer Thatcher article today, you could do worse than this terrific, anecdote-filled 2011 Vanity Fair piece by her biographer Charles Moore. Like so many others, Moore is fascinated by Thatcher’s force of personality, which so often drew adjectives like “steely” and “indomitable.” Thatcher, like Ronald Reagan, was entirely willing to reinvent herself on a personal level more than once, in the “self-made” manner that is often seen as particularly American. Thus as she approached the world stage, she studied how to dress and speak the part, taking lessons (at the suggestion of Sir Laurence Olivier) from the speech coach at the National Theater. 

Pro-intellectual, Thatcher was one of the first to spot the potential of think tanks: 

Her greatest political mentor, Sir Keith Joseph, was almost perfect in her eyes, being intellectual, good-looking, Jewish, and upper-class [four categories she approved of]. … He diagnosed — and blamed himself for — a British postwar disease of socialism, state intervention, debauched currency, weakened incentives, and overly powerful trade unions. The Tories, he declared, had been complicit in all of this… They must devise a new strategy, he said, and he set up a think tank, called the Centre for Policy Studies, to do so. Margaret Thatcher became its vice chairman and his disciple.

Thatcher made many mistakes, but often learned from them and eventually revised her views, as when she concluded that she had been too enthusiastic about the project of European integration: “We have not successfully rolled back the frontiers of the state in Britain only to see them re-imposed at a European level, with a European super-state exercising a new dominance from Brussels.”

“I am extraordinarily patient, provided I get my own way in the end,” Thatcher memorably remarked. And mostly she did, to the benefit of Britain and the world.

The Current Wisdom is a series of monthly articles in which Patrick J. Michaels, director of the Center for the Study of Science, reviews interesting items on global warming in the scientific literature that may not have received the media attention that they deserved, or have been misinterpreted in the popular press.

In this Current Wisdom we report further on our ongoing effort to prepare comments on the latest, greatest (or, more aptly, most recent, most indecent) edition of the government’s assessment of climate change impacts in the United States (if you are interested in submitting your own comments, you should hurry, because the public comment period closes on this Friday, April 12).

A disturbing yet ubiquitous aspect of the current draft National Climate Assessment (and for that matter, both earlier editions of the NCA) is the use of future projections of climate change before demonstrating that they work in the recent past, as greenhouse-gas concentrations have increased.

Discussions of future impacts from changes in precipitation resulting from human emissions of greenhouse gases are everywhere in the report and they are usually bad—increased droughts, floods, and longer dry spells, for example. The NCA folks weren’t quite so enthusiastic at generating many forecasts of salutary changes. Perhaps Dr. Pangloss is their spiritual adviser. 

NCA’s precipitation forecasts turn out to be uglier than Candide’s fair Cunegonde became. Do the models accurately simulate past changes that have been observed? If the answer is “no,” then the whole impact exercise is meaningless because the models provide no reliable information about what the future may bring.

The answer isn’t just “no.” It’s NO, NON, ONAY, NEIN.

Back in 2007, Xuebin Zhang and colleagues compared large-scale observations of precipitation changes with climate model emulations. They looked at the observed behavior within latitude bands in which the modeled precipitation changes were more or less of the same character.

While Zhang et al. (2007) concluded globally that they had detected an anthropogenic influence on the overall latitudinal patterns of precipitation trends (that is, the climate model trends were of the same sign as the observed trends), in the latitude band that includes the majority of the United States population a mismatch between model projections and precipitation trends was found (Figure 1). In that band, the climate models predicted a downward trend in precipitation, while observations show an upwards trend.

More recently, Beena Sarojini and colleagues (2012) examined the performance of a new (and supposedly improved) crop of climate models and found much the same as Zhang et al. (2007).

Sarojini et al. (2012) found little if any anthropogenic climate change signal in either the annual or seasonal observed precipitation trends in land areas in the latitude band which contains the majority of the U.S. (Figure 2). Instead they found that the natural influence on precipitation over land areas with observations in the 30 to 60N latitude band is indistinguishable from the natural+anthropogenic signal indicating that anthropogenic forcing has played no detectable role in the evolution of seasonal precipitation in this latitude band either in seasonal or annual totals.

Obviously, climate models whose hindcasts differ in sign from what is observed (Zhang et al., 2007), or which indicate that human influences are indistinguishable from natural changes (Sarojini et al., 2012) possess no skill in identifying a human-induced climate signal on observed precipitation across the U.S. and therefore should not be used to make future projections.

And while Zhang et al. (2007) and Sarojini et al. (2012) looked only at the match within latitude bands, just-published research by a team led by Debbie Polson ( 2013) showed more specific results.

Across the U.S., Polson et al. (2013) find that for most of the country during all seasons, that the sign of the observed precipitation changes (since 1950) differs from the sign of the climate model projected changes (Figure 3).

We are beginning to sound like a broken record here, but again, it is impossible to present reliable future projections for precipitations changes across the U.S. (seasonal or annual) from a collection of climate models which largely cannot even get the sign (much less the magnitude) of the observed changes correct.

Here is our recommendation to the NCA author team:

“Unless/​until the GCMs can be demonstrated to accurately capture observed characteristics (spatial and temporal patterns and magnitudes) of precipitation changes across the U.S., all discussion from the NCA concerning future patterns of precipitation change should be removed.”

Or as the late Johnnie Cochran so simply put it, “if [the glove] doesn’t fit, you must acquit.”

References:

Polson, D., G. Hegerl, X. Zhang, and T. Osborn, 2013. Causes of Robust Seasonal Land Precipitation Changes. Journal of Climate, doi:10.1175/JCLI-D-12–00474.1, in press.

Sarojini, B.B., et al., 2012. Fingerprints of changes in annual and seasonal precipitation from CMIP5 models over land and ocean. Geophysical Research Letters, 39, L21706, doi: 10.1029/2012GL053373.

Zhang, X., et al., 2007. Detection of human influence on twentieth-century precipitation trends, Nature, 448, 461–465, doi:10.1038/nature06025.