Energy Subsidies

Mr [Congressman Dave, R, WA] Reichert is co-sponsoring legislation to extend the PTC [Production Tax Credit] because the subsidies “reduce electricity costs and create jobs.”

But what jobs? Lower costs for whom? Who do you think pays that subsidy? Three years later, there still aren’t any in significant number. Electricity costs aren’t lower for the producers, and Reichert still hasn’t explained who’s paying for those subsidies (answer: we taxpayers are).

Mr [Congressman Steve, R, IA] King, who likes to advertise himself as a principled conservative, his line is that “Iowa is a wind energy success story” that only needs the federal government to “provide stable, low tax rates.”

Artificial Markets

The Car Battery and battery car industries are two, and the situation hasn’t gotten any better in the three years since Mike Ramsey’s piece in The Wall Street Journal.

Since 2009, the Obama administration has awarded more than $1 billion to American companies to make advanced batteries for electric vehicles. Halfway to a six-year goal of producing one million electric and plug-in hybrid vehicles, auto makers are barely at 50,000 cars.

Two of those companies, in fact, have since gone bankrupt: Fisker Automotive and A123 Systems now are wholly owned by People’s Republic of China’s Wanxiang Group Corporation. Without repaying us American taxpayers.

Overcomplexifying

That’s what the Federal Reserve is doing.

Many Federal Reserve officials entered 2015 thinking they likely would start raising short-term interest rates by midyear. That idea got put on ice after a winter economic slowdown, partly attributed to the dollar’s rapid rise in previous months.

And

Fed officials say they won’t act until they see more labor-market improvement and are confident that inflation will rise toward their 2% goal.

Wrong.

Oil and Pricing

From a recent Wall Street Journal article:

“If OPEC or Saudi Arabia or anyone else wants to call” the US to curtail production, “there is no one to call,” said Amos Hochstein, coordinator for international energy affairs at the US State Department, in May. “You will have to call 4,000 companies operating in the United States as producers. For the first time, there is an element of real free market.”

Indeed. It’s about time, too. Now all we have to do is get rid of the export limits.

Symptoms

The headline for Greg Ip’s piece in The Wall Street Journal pretty much says it all:

In a Slow Economy, Negative Quarters Shouldn’t Surprise

No, they shouldn’t. But their frequent occurrence without the economy formally falling into recession is dispositively symptomatic of a slow economy. When economic progress is running at a sound 3.5% GDP growth year-on-year, a one quarter slowing of growth rate by, say, 1.5 per centage points—a common enough occurrence in an economy—would drop GDP’s year-on-year number to 2%. On the other hand, when economic progress is bumping along at that anemic 2% for its longer term, a 1.5 point drop takes growth to near zero. In the workaday volatile world of economics, a quarter’s slowing by 2 or 2.5 points—less common, but far from unheard of—moves the year-on-year number to outright shrinkage from merely slowed growth.

Business Investing

US businesses, feeling heat from activist investors, are slashing long-term spending and returning billions of dollars to shareholders, a fundamental shift in the way they are deploying capital.

Data show a broad array of companies have been plowing more cash into dividends and stock buybacks, while spending less on investments such as new factories and research and development.

As the trend picks up steam, so too has debate about whether activist investors—who take sizable stakes in companies, then agitate for changes they think will boost share prices—have caused companies to tilt too far toward short-term rewards.

Funny Thing

…about competition and private cost control.

The Saudis and their OPEC colleagues, at the start of the shale and fracking revolution last year, made an overt decision to keep their own production up, which would allow prices to drop (much of OPEC—especially Saudi Arabia—had lots of cash reserves with which to handle the drop), which would kill American deep drilling and put those competitors out of business, restoring price control to OPEC.

However.

The US shale industry is by necessity becoming more efficient than ever. Low oil prices have become an opportunity. The Saudis have lit a fire under producers to trim the fat, deploy new productivity-boosting technologies and zero in on the most productive geology.

Government Imperative to Regulate

This time in the commercial space industry. There is a bill slowly wending its way through the House that would limit—or not—regulation of the nascent commercial space industry. This is a bill that would

…extend and update federal protection for commercial launches from some potential liability involving property damage or personal injuries and fatalities on the ground. The legislation [also would bar] the Federal Aviation Administration from closely regulating fledgling space-tourism ventures for up to 10 more years….

There’s a hint about the wrong mindset there. The hint is clarified by the bill’s supporters’ attitude. They [emphasis added]

What’s in Your Food?

It’s not PC to ask or to know, according to the World Trade Organization.

The World Trade Organization (WTO) just ruled that America’s popular country-of-origin labeling law (COOL) enacted in 2008 violates global trade standards because it erects a trade barrier to US meat imports from countries like Canada and Mexico.

Japanese customers don’t get to know that the beef they’re thinking about buying came from the US. Nor do PRC diners. Nor do American customers get to know that their beef is coming from Canada.

Such knowledge constitutes a trade barrier, don’t you know.

Featherbedding?

To paraphrase a Democrat’s remark, never let a tragedy go to waste.

The union for Amtrak’s locomotive engineers urged the railroad on Tuesday to put a second crew member at the controls of trains on the busy Northeast Corridor, where a derailment killed eight people and injured more than 200 others.

Of course. Never mind that an existing technology, cheaper than adding an unneeded employee, should have been in place, and will be in place after this accident.

The featherbedding contained in this union urging is made manifest in the union’s own statement: