Category Archives: Economics

Miscellaneous economy stuff

India vs PRC

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The Wall Street Journal has an interesting piece comparing the People’s Republic of China’s economic future with India’s. In the second paragraph (the semi-lede?), there’s this:

The country’s population surpassed China’s last year. More than half of Indians are under 25.

A couple of graphs from the CIA World Factbook put the two nation’s population structures in sharp relief, and at this stage of the two nations’ economic development, those structures are their future.

This is the structure of India’s population (scroll down a skosh):

This is the structure of the PRC’s population (again, scroll a tad):

India’s population of new workers is growing, so the nation’s economic capacity is capable of growing. The PRC’s population of new workers is shrinking. Not only is the PRC incapable of growing very much, economically, it’s becoming and will continue to become increasingly difficult to support its old folks, even as that portion of the nation’s population continues to grow.

Bank Capital Requirements

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The Federal Reserve is looking hard at increasing the amount of capital that banks must hold in the Fed’s effort to boost bank liquidity, or their ability to handle sharply increased withdrawal rates.

There is pushback against this proposal, including objections that it might make it harder for banks to lend to folks on the lower economic tiers, even that it might make American banks less competitive than foreign competitors. That last often (not always) is just political Newspeak for “be more like Europe.”

However, the problem can be preempted—or at least pushed a considerable way down the road, allowing for more thought—by doing something different that IMNSHO is a better move, anyway.

Rather than increasing capital requirements, require all banks to mark to market (semiannually? quarterly?) all of the debt instruments the banks hold in satisfaction of existing capital requirements.

Then leave that requirement in place for some period of time (5 years, say) in order to get a serious look at how well, or poorly, that requirement supports bank liquidity during economic downturns.

You’ve Formed Your Opinion on EVs. Now Let Me Change It.

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That’s the headline on Dan Neil’s Wall Street Journal paeon to the battery-powered car. In his piece, he acknowledges the past and current shortcomings of Electric Vehicles, but he lays those off to car company marketing rather than to actual performance.

My mind isn’t as made up as Neil’s headline implies; nevertheless, challenge accepted.

I drove a Ford Fusion Hybrid for a number of years, and it was a fine car. However, the battery price premium was enormous, and the reduction in trunk capacity to make room for the battery was just as enormous.

I replaced it with an ICE Fusion, and that car was just as peppy and responsive as the Hybrid (peppiness and responsiveness was one of Neil’s touts regarding battery-powered cars), and I had decent trunk capacity.

I’d get a Hybrid again, were the battery premium actually to come down decently.

I won’t buy a purely battery-powered car until a number of criteria are met:

  • the battery has to be chargeable to a 400-mile range in the same minimal time that I can fill my ICE gasoline tank to a 400-mile range
  • the battery premium must come down. The 14% reduction Neil claims is from a hugely high price
  • the battery’s lifetime must be at least as many years as I drive my cars, and as many miles
  • the battery must stop suffering so significantly from cold temperatures. The battery in my ICE that powers my car’s starter motor also suffers, but it only needs to crank the engine. If needs be, I can get a jump start. The EV’s battery is its motive source, and that motor can’t be jump-started; its power source must be “refueled”
  • the battery must be disposable/recyclable with far less environmental damage done or risk of damage done than is the case today

EV prices are coming down, as Neil claims? Show that after EV subsidies are stopped, and EV buyers pay actual market prices. No one should have to pay tax money because someone else bought an EV.

Probably Won’t Be Invited Back

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Newly elected Argentina President Javier Milei was invited to the World Economic Forum. He had some things to say while he was there.

Today I’m here to tell you that the Western world is in danger. And it is in danger because those who are supposed to have defended the values of the West are co-opted by a vision of the world that inevitably leads to socialism and thereby to poverty[.]

And

Unfortunately, in recent decades, motivated by some well-meaning individuals willing to help others, and others motivated by the wish to belong to a privileged caste, the main leaders of the Western world have abandoned the model of freedom for different versions of what we call collectivism. We’re here to tell you that collectivist experiments are never the solution to the problems that afflict the citizens of the world, rather they are the root cause.
Do believe me, no one [is] in a better place than us Argentines to testify to these two points[.]

And this:

The case of Argentina is an empirical demonstration that—no matter how rich you may be, or how much you may have in terms of natural resources…or how many bars of gold you may have in the central bank—if measures are adopted that hinder the free function of markets, free competition, free price systems, if you hinder trade, if you attack private property, the only possible fate is poverty.

And this, moving in a slightly different direction:

I would like to leave a message for all businesspeople here…you are social benefactors, you’re heroes[.]
Let no one tell you that your ambition is immoral. If you make money, it’s because you offer a better product at a better price.

The WEF persons probably won’t have him in to any more of their assemblages.

Frank Fleming added this regarding our own administrations’ [sic] failures at successive WEF confabs:

Why can’t we get a guy like this in America? This is supposed to be our thing[.]

Unfortunately, those motivated by the wish to belong to a privileged caste vastly outnumber those well-meaning individuals willing to help others, and so the damage that flows from gatherings like the WEF will continue.

A complete transcript of Milei’s speech can be read here. A video of his speech can be viewed here on Disclose.tv’s X account (@disclosetv).

Western Battery-Car Adoption Anxiety

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The Wall Street Journal ran an article centered on how “western anxiety about Chinese EVs could prove self-defeating,” with a subheadline that summarized the thesis:

The US and Europe risk slowing electric-vehicle adoption by excluding Chinese suppliers from subsidies and raising tariffs

I have a hard time seeing the downside to slowing battery car adoption. Leave aside the tremendous drain that charging all those battery cars (assuming widespread adoption) would have on our already near or at capacity electric power grid and generating capacity for that grid.

Battery cars are tremendously polluting and damaging to our environment, from dirt in the ground to end-of-life battery disposal. Mining the metals—lithium, nickel, cobalt, copper, and on and on, metals that are used in far greater quantity in battery cars than in gasoline- diesel- or natural gas-powered vehicles—is extremely damaging, both from the toxicity of the metals themselves and from the toxicity of the tailings from the mining operations.

Processing those metals into battery-car-usable components is intensely energy demanding (have I mentioned the strains on anyone’s electricity grid?).

Disposing of those so-far unrecyclable dead batteries at their end of life is enormously polluting as they leach out of even the most well-kept landfills.

The risk is that the West cuts off its nose to spite its face. Slow down the shift to EVs too much to build local supply chains and give domestic manufacturers time to adapt, and Chinese technology might simply pull farther ahead….

Meh.

The technologies involved are useful, they should be pursued apace, and the supply chain problems need to be worked for a host of different reasons. However, it’s a Good Thing that battery cars are not being rapidly incorporated into our transportation systems.