Category Archives: political economy

Retreating from Net-Zero?

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That’s the claim of The Wall Street Journal editors.

The climate policy retreat is accelerating as Citigroup, Bank of America, and Morgan Stanley this week joined an exodus from the Net-Zero Banking Alliance. Energy reality can bite.

The “retreat” consists of five banks out of the 140 that are members of the NZBA, a gang of banks sworn to refuse the business of any enterprise that isn’t sufficiently climate-sensitive and -activist enough to suit the syndicate. It’s true enough that the five are major players in the world of banking, but they’re still only five.

The editors wrote, also, that mutual fund manager Vanguard had pulled out of the Net Zero Asset Managers pledge. That’s one out of 350 enterprises that took that pledge. The editors wrote further that JPMorgan Asset Management, BlackRock, and State Street Global Advisors have left Climate Action 100+, a collection of some 600 investors who pressure businesses to comply. Three are part of this “retreat.”

However.

Leaving these syndicates and changing their ways of climate-woke behaviors are two different things. We need to see these banks’, investors’, and business’ altered behaviors over some period of time before it’s believable that they’ve changed more than their public rhetoric.

A Flat Tax

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Steve Forbes, Chairman and Editor-in-Chief of Forbes Media, and Stephen Moore, a Heritage Foundation economist, proposed last Monday.

Collapsing the personal-income and corporate tax rates to 15% would have huge economic benefits. America would suddenly have one of the lowest tax rates in the world, resulting in trillions of dollars of new capital flow and a spike in take-home pay.

And this:

The simplicity of a flat tax would reduce the deadweight costs associated with tax compliance—and the headaches. The White House Office of Information and Regulatory Affairs calculates that Americans spent almost eight billion hours filling out tax forms in 2024.

Using a naïve estimate of 97.2 million households (and even more naively assuming all households pay taxes, which provides an upper bound on the number of households relevant here), that works out to over 80 hours per household—two working weeks—of tax compliance labor.

This, too:

The Tax Foundation estimates that this cost the economy $413 billion in lost productivity, and the Internal Revenue Service estimates that we spent $133 billion on out-of-pocket compliance costs.

That’s $4,250 per year in lost productivity for each household, with an added $1,370 per year per household of unreimbursed spending just to comply with current tax law. Most households could find other uses for those $5,620.

Still, I don’t think Forbes and Moore go far enough.

I’d add getting rid of the corporate income tax altogether. Business’ customers pay the bulk of those taxes, anyway, rather than the taxed business; for the taxed business, the tax is just another cost center to be covered proximately through product/service pricing and indirectly through reduced spending on innovation, expansion, hiring, and raises.

Forbes and Moore suggest getting rid of some deductions, but I’d go farther here, too. Get rid of all deductions, subsidies, and credits, too, and tax all income from all sources as ordinary income. Let businesses make their expansion and financing decisions based on purely business and market criteria instead of having to game the tax implications of borrowing or stock issuances. Individuals also would go back to making their spending and investing decisions based on what’s good for their individual/family situations instead of having to game a byzantine tax system in the course of their decisions.

And those optimal decisions would include how to use those $5,620.

One More Reason…

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…to stop doing business in New York. This time, it’s the State’s move to tax energy producers who sell their fossil fuel products in the State on the risible basis of those producers’ (global) CO2 production over the years 2000 through 2018. Never mind that, as the Wall Street Journal‘s editors put it,

It’s impossible to determine a company’s contribution to climate change since the effects of CO2 emissions on temperature and natural disasters are mediated by myriad variables.

New York’s bureaucrats will make their assessments anyway, and those assessments will be, of necessity, wholly arbitrary. Then there’s this, too, which New York’s government personages consider irrelevant:

Most fossil-fuel emissions stem from their combustion rather than production….

The fossil fuel energy producers shouldn’t waste time litigating this in court, even though they’d likely win given the plethora of court decisions that hold moves like New York’s illegal.

These folks should simply stop selling their products in New York, and that should include no longer selling their products to utilities that provide electricity- and natural gas-related energy in New York. They’ll save more money that way, money that could be used for innovation and better fossil-fuel-related products for their other customers.

Nor will New Yorkers be harmed by the withdrawal. They have plenty of energy flowing from all those “green” and “renewable” energy sources. And those nuclear reactors on the horizon. The State government’s personages assure us so.

Food Stamps and Consumer Choice

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A Wall Street Journal article on soda companies and their lobbying efforts to keep their drinks eligible for the Federal Supplemental Nutrition Assistance Program and related programs closed with this bit:

The Republican Party has long been divided over policing what people on food stamps eat. Some GOP lawmakers favor consumer choice.

For instance, Congressman Frank Lucas (R, OK), of the House Agriculture Committee:

I believe in educating consumers on what is in their best interest. I’ve always had a hard time telling people what they cannot have.

I agree with Lucas regarding Government dictating to consumers what they can—or must—buy and what they cannot or must not buy. However, Lucas and his ilk need to better understand who the consumer is in the present case.

The consumer in the milieu of welfare programs like SNAP is not the welfare recipient. That person merely is picking out welfare package handouts. The consumer, the one who’s actually doing the buying, or not, of those package contents, is us taxpayers. We’re the ones paying for—buying—the food stamp products, in the particular case, with our tax remittals. That food stamp recipients can pick and choose among the variety of food packages we purchase for them in no way alters this fundamental fact.

It’s absolutely the case that we should be the ones deciding what we buy with our tax money, what we buy for inclusion in those package varieties, not the recipients of our welfare packages.

More Progressive-Democrat Lies

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This time by Jennifer Granholm, Energy Secretary for the Progressive-Democrat President Joe Biden. The Wall Street Journal‘s editors are too timid polite to characterize her claims as anything other than “she’s wrong,” but as one of those So Much Smarter Than Us, Granholm knew and knows better; she is lying to us. Here are the unhappy totals (sorry, Jack Brickhouse), prompted by a just-released DoE report on the effects of exporting liquified natural gas.

  • Granholm: exporting more LNG would boost US natural gas, electricity, and product prices.
  • Her Lie Exposed: US gas prices are hovering near record lows even as exports have surged. That’s because growing US production has more than offset domestic demand.
  • G: more US exports aren’t needed since the world will soon be awash in gas.
  • L: Europeans and Japanese disagree, and the DOE study stresses that “US LNG has played a role in enhancing supply security for markets looking to reduce coal in their energy mix while prioritizing both renewables and gas.”
  • G: US LNG would “displace more renewables than coal globally.”
  • L: The study finds that US LNG would mostly displace fossil fuels and at most increase global CO2 emissions cumulatively by 0.05% through 2050.

This is yet another reason why we wouldn’t have nice things under the reign of the Progressive-Democratic Party.