Category Archives: Economics

Miscellaneous economy stuff

A Good Move

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Finally.

The Biden administration has granted a waiver to the Jones Act so American shippers can ship diesel fuel directly from American refiners to Puerto Rico, which desperately needs the fuel—still—after Fiona ran over it.

Homeland Security Secretary Alejandro Mayorkas said in a statement that the administration granted the “temporary and targeted” waiver to “ensure that the people of Puerto Rico have sufficient diesel to run generators needed for electricity and the functioning critical facilities as they recover from Hurricane Fiona.”

Finally, because the Biden administration should have granted this waiver preemptively a month ago, if not sooner: they knew the hurricane was going to do serious damage to the territory—which still hasn’t fully recovered from the prior hurricane—whether or not this hurricane ran over the island. Worse, this administration had been sitting on a request for the waiver since 20 September, when BP asked for it for just this reason.

It would be even better if President Joe Biden (D) granted a broader and longer-lasting waiver so New England States could get the natural gas, oil, diesel fuel, gasoline, and so on that they so desperately need and for which they must pay especially exorbitant prices to foreign entities to get.

New England also could get these energies overland, but for the Progressive-Democratic regimes running New York. Those regimes have blocked development of a natural gas pipeline from Pennsylvania into New England that must transit New York, and they have block development of that part of the Marcellus Formation that lies under New York—which obstruction inflates energy costs not only for New England’s citizens, but for all the rest of us citizens, as well.

An Energy Crisis

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New England may face one this winter. Too many who should know better are laying this prospect off to Russia’s invasion of Ukraine.

There are more proximate origins of the risk. One is the Biden administration’s naked war on our nation’s overall domestic energy production industry, including canceling pipeline projects in progress and denying permits for other pipelines—including one from Canada down into New England—canceling drilling leases and slow-walking permits (or outright denying them) to drill on other leases, withdrawing Federal lands from any sort of fossil fuel exploration or development, and on and on.

But that is only backdrop, and corrections to those failures would have no immediate effect on New England’s risk.

A more immediate origin is the domestic blockade of energy to New England, which consists of two barriers. One is ex-Governor Andrew Cuomo’s (D) decision to block a natural gas pipeline from Pennsylvania to New England, a pipeline that would have transited New York, coupled with Cuomo’s decision to deny development from within New York of the Marcellus Formation, a shale formation rich in, among other things, natural gas. These decisions have been upheld, and enthusiastically so, by current New York Governor Kathy Hochul (D). New England’s energy needs be damned.

The other barrier from the blockade is the Jones Act, a century-old law that in pertinent part mandates that goods (for instance, oil and natural gas) carried from one American port (vis., a Gulf Coast refinery) to another American port (vis., Portsmouth, NH, or Portland, ME) must be via an American freighter.

These barriers already have combined to force New England to buy its natural gas from…Russia. Which is the only way the barbarian’s invasion of Ukraine enters into the problem at all.

Immediate and mid-term solutions should be obvious: waive the Jones Act restrictions on energy shipments into New England, something well within the authority of President Joe Biden (D). Given the state of American ship building capacity, this cabotage aspect of the Act should be rescinded altogether, but that would require Congress to do.

Another, more mid-term, solution would be for New York to get out of the way of exploitation of Marcellus and to allow pipeline shipments of natural gas into New England from Pennsylvania. That, though, will require replacement of the Progressive-Democratic Party-run State government with a more balanced and Conservative and Republican Party-run government.

Only an Inch

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That’s how much President Joe Biden (D) said inflation rose, after it rose more than 8% in August.

It’s about to get worse.

Earlier this month, the NEADA [National Energy Assistance Directors Association] projected that the average cost to heat a home would increase by 17.2% since last winter, rising from $1,025 to $1,202. Heating oil costs will jump an estimated 54% to $1,876, while natural gas costs may increase 24% to $709, according to the NEADA.

Nick Loris, Public Policy‘s C3 Solutions Vice President, emphasized the impact on those in the lower economic strata—”folks” Biden pretends so piously to care about:

[M]ore money dedicated to paying for heat means fewer resources are essential for human well-being[.]

And that means

…will be regressive, hurting the poor the most since they spend a higher percentage of their budget on energy costs[.]

I suppose that’s only another inch of increase in Biden’s mind, though, so it’s all good.

European Union Sanctions on Russia

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Another round is in the offing, possibly this week or next. And there’s this hopeful claim of the EU:

EU officials say privately and publicly that the sanctions are inflicting serious damage on Russia’s economy and military….

No doubt sanctions are an important part of a necessary “all of the above” suite of moves to support Ukraine in its defense against the barbarian. But are they strong enough themselves? Will the new round be materially stronger?

After all: how many battalions have the sanctions forced Putin to withdraw from Ukraine? How many battalions have the sanctions in concert with other moves forced the barbarian to withdraw?

Zero.

The pain inflicted on the barbarian isn’t enough. It needs to be orders of magnitude stronger. The sanctions have to be orders of magnitude stronger. The only places in the world with which the barbarian should be allowed to do business of any sort are withing Russia and with the PRC, northern Korea, and Iran. And those need to be tightened down, also.

Right Idea, but…

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…details in the implementation will matter, also. Competition always drives costs to a level approaching the cost of production, and that’s to the good, not only of consumers but for competitors and others looking to enter the market, as well.

However.

On Monday, [Congresswoman and MD Mariannette (R, IA)] Miller-Meeks along with three of her colleagues introduced a bill titled the “Biologics Competition Act,” which seeks “to evaluate the process by which interchangeable biological products are approved to be used in pharmaceuticals.”
“So in essence, what we’re trying to get is biosimilar drugs that are the same chemically—that they have an equivalency to let those be prescribed as generic drugs, which would bring down the cost of medication[.]”

There’s a reason generics, in general, are delayed in getting authorization to be marketed: to allow the drug’s initial developer(s) time to recoup the costs of development and to begin realizing profit, and thereby encourage further drug development.

Such permission delays would need to apply to the biosimilar drugs, too. With a fillip: defining how much change is necessary while remaining biosimilar without leaving the required change so trivial that the new drug is an outright plagiary with only a token item grafted on.

That may well be the eye of a needle—passable, but with difficulty, especially when trying to write down a specific law. Worth going for, though, absolutely.