Tag Archives: markets

Why Would We Want To?

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Toyota Motor North America’s COO, Jack Hollis, has a plan for how Trump Can Get EVs Back on Track. The question is why would Trump, or any of us average Americans, want to? Hollis’ subheadline is promising:

Ditch the mandates and subsidies. Let consumer choice drive the market.

Then he goes off the rails.

Our approach provides consumers with many choices: hybrids, plug-in hybrids, fuel-cell electric, and battery-electric vehicles. We believe this is the best way to achieve meaningful emissions reductions while meeting customer needs.

What about the emissions from mining, transporting, smelting, transporting, transforming into relevant parts, transporting, assembling into the final vehicle that occur in the production of lithium, cobalt, nickel, copper—and all that oil that’s used for plastic materials production?

What about the other forms of pollution—from mining to spent battery disposal: all those tailings, the handling of those intrinsically toxic metals (lithium, cobalt, nickel, even copper), the pollution of landfills by all that lithium, cobalt, nickel in those spent batteries?

What about the false claim that atmospheric CO2—plant food—is a pollutant in the first place? That’s never addressed except via the pseudo-science of an erstwhile head of the EPA; this is an underlying assumption that is made only tacitly and conclusorily?

All of these are blithely elided by the pushers of EVs and the punishers of internal combustion engine-powered vehicles.

I haven’t even gotten to the need to expand our electric grid to support the demands a sound EV market would impose. We need to expand, upgrade, and harden our electric grid, along with our electricity production capabilities, for a whole host of reasons beyond just supporting battery-charging.

That brings me back to my opening question: why would we want to put EVs on any sort of track, much less on Hollis’ original one? Ditch the mandates and subsidies, and let consumer choice drive the market, indeed. Add into the free market decision that heretofore omitted information regarding the intrinsically destructive nature of EV production and disposal.

The Left loves to talk about externalities and the need for pricing them into the final product—except when that’s inconvenient to their demands on the rest of us.

Stop Treating These in Isolation

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Richard Rubin thinks he has an approach to Republicans’ desire to cut taxes:

To pass a bill without Democrats, GOP lawmakers seek agreement on the deficit number

That’s the subheadline for his article. He then opens his piece with this:

As Republicans prepare the party-line tax bill at the core of their 2025 agenda, the key to everything is, simply, “The Number.”
The Number is the maximum budget deficit increase that Republicans are willing to tolerate as they extend tax cuts scheduled to expire after 2025 and advance the rest of President-elect Donald Trump’s plans. To unlock the gate to the legislative fast track that lets them sidestep Democratic objections, Republicans must agree, with virtually no defections, on The Number.

But that’s only part of the matter, and as long as Republicans—either party, come to that—insist on treating taxes in isolation, they’ll continue to fail. The plain fact is that Republicans don’t have to agree on any deficit Number; what they need to agree on instead is a Number that represents any value in the interval from zero to budget surplus.

That, of course, also would require them to agree on spending cuts that bring that overall spending down to within the expected (dynamically projected) revenues realized from the tax cuts.

There are two ways those revenues will grow on net from the from this sort of budget move. One is the well-known increase in overall economic activity that results simply from tax rate cuts. These leave more money in the hands of private economy players—individuals, households, and the businesses they own and operate. It’s been repeatedly demonstrated that those players allocate their spending far more efficiently than anything a government can achieve.

The other way revenues increase, though, is less frequently discussed, even as it’s closely related to tax cuts. This is that, with less government spending, there is less competition for the resources—labor, raw materials, finished and semi-finished products—that private enterprises need for their own operation. With that resource competition from Government greatly reduced, the prices for those resources come down, and private businesses can more easily and cheaply acquire what they need. Private enterprise competition then increases and overall economic activity increases, overlaying the increase from simply reducing taxes, and a positive feedback loop develops among increasing production, lowering prices, increasing private demand, increasing employment, and increasing innovation. And net increasing revenues to Government.

Those two outcomes achieve one other item of critical economic, and political, and security importance. It provides an opportunity to commit those budget surpluses to paying down our national debt.

Of course, the Progressive-Democratic Party is going to quibble over any spending cut and tax cut, all the while objecting to either altogether, so to get these done even temporarily, Republicans will have to do them through legislative reconciliation.

That, in turn—both the taxing and the spending reductions—will require the Republicans’ Chaos Caucus to leave off their ego-driven their-way-or-nothing-at-all obstructionism and agree to compromises that move things in their direction, even if not everything all at once.

And get Republicans like Senator James Lankford (R, OK) to shape up or at least stay out of the way. According to him:

We’re not going to have something that’s going to have zero deficit impact. That’s not going to happen[.]

On that score, the Chaos Caucus is right. There need to be spending cuts to achieve outright deficit elimination and actual surplus.

Gaslighting and Misapprehension

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The People’s Republic of China’s solar panel production industry is running into a glut problem that is seriously depressing prices, to the point that in the current shakeout, many of the PRC-domiciled companies may not survive.

One place where panel prices remain elevated is the United States (thank you, Federal regulations and continued dependence on overseas component supplies), and one PRC-domiciled company that’s likely to survive is LONGi Green Energy Technology Co, Ltd, headquartered in Xi’an, the provincial capital of Shaanxi. In an effort to get around US strictures on PRC companies, LONGi has become a 49% owner of the joint venture (with Invenergy, headquartered in Chicago) of Illuminate USA, and the venture has opened a factory in Pataskala, OH.

The good folks of Pataskala are concerned about LONGi’s connections with the Chinese Communist Party, and Congresswoman Carol Miller (R, WV) has proposed more general legislation that would seek to prevent PRC companies from getting clean-energy subsidies.

Naturally, Zhong Baoshen, LONGi’s Chairman, objects, and herein lies the gaslighting. He insists that LONGi is a private company, and he then tries to distract by pointing out that Illuminate USA is a private company.

That fact is, there is no such thing as a private company in the PRC. Under that nation’s 2017 National Intelligence law, all PRC-domiciled companies are at the beck of the government’s intelligence community to use all of a company’s resources to conduct espionage whenever and targeting whatever the intelligence community decides it wants.

That leads to the misapprehension: too many entities—private companies in the US, politicians at all of the several US governmental hierarchies—actually believe that blandishment that private PRC companies really are private and have no connection whatsoever with any arm of the PRC government.

Government Investment Nanny

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The Federal government regulates who it will permit to invest in private investments—startups, pre-IPO opportunities, loans to private companies, and the like. These are highly risky investments, and they have high payoff possibilities, even if those possibilities are low. The Feds limit those who it permits into these private opportunities to folks with $1 million in net assets, not including their primary home residence, or at least $200,000 in yearly income, or $300,000 for a joint household.

Now there’s a move afoot to add a government-regulated glorified intelligence test as an alternative path for investors to make these investments.

A group of lawmakers has proposed legislation that would allow any investor capable of passing an exam to buy private securities—an array of investments like shares in pre-IPO startups or loans to private companies that are considered riskier because they have looser disclosure rules than public securities and can be harder, and sometimes impossible, to sell in a pinch.

Passing an exam as a prerequisite to being allowed to invest in a class of securities—passing an exam as a prerequisite to being allowed to vote in an election. That Jim Crow era requirement has long since been done away with. Except now Congressmen want to revive the practice for investing.

Private securities—meaning outside the scope of government regulation. This is something far too many politicians can’t stand; it limits their power to dictate to us; it limits their power, period.

The idea is that the ability to make these high-risk, high-reward bets should be open to all sophisticated investors, not just those with the biggest bank accounts.

Of course the definition of who’s sufficiently sophisticated, the definition of “sophisticated” itself is carefully left to government personages.

Patrick Woodall, Americans for Financial Reform‘s Managing Director for Policy (AFR is vehemently pushing for even more government regulation of our financial decisions):

Knowledge cannot protect people from the potential losses if they invest in risky, opaque, and illiquid, private offerings[.]

Neither can government. Nor should government try. The decision to run those risks are ours alone.

This is nanny-state-ism intruding into us private citizens’ own affairs far beyond regulation of public company-related investments. Companies are private rather than publicly owned explicitly to get out from under the government’s thumb, and citizens invest here—or would if we could—explicitly to stay out from under the government’s thumb—especially when that thumb operates, according to government, for our own good.

No.

We average Americans do not need government protections from ourselves. We are fully capable of making our own decisions, and we are fully capable of handling, and fully and responsible for, the outcomes of our decisions. We are not wards of the state, much as one of our major political parties is bent on reducing us to that condition.

The Professors Have a Thought

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Charles Silver, Civil Procedure Professor at University of Texas Austin’s School of Law, and David Hyman, Professor of Health Law & Policy at Georgetown Law, have an idea on how to improve Medicare, and it doesn’t even include cutting Medicare or raising taxes. Here’s their straightforward solution:

Rather than pay providers, Congress should give Medicare money directly to enrollees, as it does with Social Security. The government should deposit each enrollee’s subsidy into a health savings account, letting seniors decide what they need and how much they are willing to pay. By reducing the government’s role, this reform would eliminate most forms of healthcare fraud, waste, and abuse immediately, saving hundreds of billions of dollars.
The reform would also significantly improve healthcare. When patients pay for it directly—as they do for cosmetic surgery, Lasik, over-the-counter medications, and other elective procedures not covered by insurance—things work well.

Such a move likely would increase the number and range of doctors available to seniors, also. Large numbers of doctors, for a variety of reasons, currently won’t take patients who are on Medicare. Among those reasons are Medicare’s reimbursements to doctors being so low that many doctors lose money on Medicare patients, and Medicare’s slow rate of payments. With patients paying their doctors directly, albeit with Medicare dollars, those doctors would be paid promptly and wouldn’t have to worry about taking a loss on the appointment.

Letting people be responsible for their own decisions. What a concept.

The professors’ thought is a very good one.