I am not well-versed in dendroclimatology, but I believe this issue is described here and is uncontroversial:
Briffa, K.R., Schweingruber, F.H., Jones, P.D., Osborn, T.J., Shiyatov, S.G. and Vaganov, E.A., 1998
"Reduced sensitivity of recent tree growth to temperature at high northern latitudes."
Nature 391, 678-682 (R)
Basically, since tree-ring density is influenced by temperature, you can use it to reconstruct temperatures. I believe the data set in question uses maximum latewood density (MXD), which accorded well with instrumental temperature readings until 1960, at which point they begin to show a decline in temperature while thermometers show an increase. The proposed solution is simply: Don't use the reconstructed temperatures after 1960, since they're wrong.
We're being asked to believe that starting around 1960 tree rings "suddenly" no longer reflected local temperatures, so we shouldn't rely on them after 1960.
Doesn't this also imply that looking backward tree rings might be untrustworthy any earlier than some starting date? That in fact tree rings might work for a while, then vary for a while, then work again? How can anybody honestly claim that SOME tree ring evidence is usable and SOME is not -- and they know exactly which is which?
My bet would be the thermometers are wrong and the tree rings right. See, e.g.,
I would assume that if thermometer data is available, it is being used.
As for trusting tree ring data, this is an entirely different issue from this "Climate Gate" affair. That was, btw., an internal email, so nobody was supposed to trust anything. It was scientists exchanging some data. Surely it is allowed to LOOK at tree ring data.
Briffa, K.R., Schweingruber, F.H., Jones, P.D., Osborn, T.J., Shiyatov, S.G. and Vaganov, E.A., 1998 "Reduced sensitivity of recent tree growth to temperature at high northern latitudes." Nature 391, 678-682 (R)
Basically, since tree-ring density is influenced by temperature, you can use it to reconstruct temperatures. I believe the data set in question uses maximum latewood density (MXD), which accorded well with instrumental temperature readings until 1960, at which point they begin to show a decline in temperature while thermometers show an increase. The proposed solution is simply: Don't use the reconstructed temperatures after 1960, since they're wrong.