Tag Archives: markets

Rebuilding San Francisco?

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San Francisco is moving to alter certain requirements and political priorities in order to increase residential housing construction. San Francisco even has changed some actual rules so developers can build market-rate apartments with fewer requirements to provide affordable housing. One project coming out of these moves is this one:

In what would be the city’s most ambitious residential development in several years, local property developer Bayhill Ventures last month announced plans for a 71-story rental tower in San Francisco’s ailing financial district.

Cabrini Green come to San Fran, degentrifying the financial district? Only with the critical difference that this area will have even fewer police with which to enforce laws and keep folks safe than Chicago provided Cabrini Green.

It’s not certain that that outcome will be realized. However, the construction comes inside an established environment of a reduced police force; laws decriminalizing, among others, drugs and shoplifting; and prosecutors reluctant to prosecute. (Yes, I’m aware that San Francisco residents recalled an especially egregious non-prosecuting prosecutor, but his replacement is better only compared with that low bar.)

We’ll see.

“Emergency Powers”

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Progressive-Democratic President Joe Biden has invoked the Defense Production Act of 1950 as an excuse to pour more of our tax dollars into his global warming foolishness. He’s using the Act to pump $169 million into nine projects across 15 sites nationwide in an effort to accelerate electric heat pump manufacturing. There are some serious problems with this. In no particular order:

Biden claims that heat pumps only use electricity; they don’t burn coal or oil or natural gas. That’s a disingenuously narrow view of the situation. Heat pumps do use only electricity at their point of use. However, that electricity comes from somewhere—primarily coal- and natural gas-fired electricity generating stations. At the times the heat pumps are needed the most—in the depths of heating and cooling seasons—”green” energy sources generally aren’t available: at night, when the sun doesn’t shine; when the sky is overcast, and sunlight is limited; when the wind isn’t blowing enough or is blowing too strongly. This is a shortfall that’s disastrously exacerbated by Biden’s open effort to destroy our hydrocarbon-sourced energy industry. Oil-, natural gas-, and coal-fired power plants are reliable, efficient, and don’t care about sun or wind.

Further, heat pumps get increasingly inefficient where temperatures are routinely cold and where temperatures are routinely hot. They work, after all, by trying to pump heat (hence the name of the devices) from inside the house to the hot outside for cooling, or by trying to pump heat from the cold outside into the house for heating.

Another problem is that the Defense Production Act was passed to support government-managed manufacturing (for good or ill) during times of conflict. We’re not at war with anybody now, and haven’t been for a few years—not since the fight against terrorists in Afghanistan, when Biden made his panic-ridden exit from that. Using the Act as an excuse for funding global warming-related matters is an abuse of the Act that warrants its heavy modification, if not outright rescission.

Yet another problem flows from Biden’s claim that his invocation is to boost domestic production of these heat pumps, especially by domestic manufacturers.

These awards will grow domestic manufacturing, create good-paying jobs, and boost American competitiveness in industries of the future.

Yet he’s pouring those millions into companies like Copeland, Honeywell International, Mitsubishi Electric, and York International Corporation.

Mitsubishi is a Japanese company, headquartered in Tokyo. York is wholly owned by Johnson Controls, and Johnson, while claiming to be an American company, is headquartered and domiciled in Cork, Ireland. That’s a lot of “domestic” manufacturing money—our tax dollars—going to foreign companies. Even if they do the actual manufacturing in the US, they’ll be taking off their (significant) cuts in Tokyo and Cork on the way by.

Customer Choice

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New Mexico’s Progressive-Democrat Governor Michelle Lujan Grisham has gotten to be enacted rules mandating battery cars and trucks in New Mexico.

Starting in calendar year 2026, 43% of all new passenger cars and light-duty trucks shipped to New Mexico auto dealerships by national auto manufacturers must be zero emission vehicles. Similarly, beginning in calendar year 2026, 15% of all new commercial heavy-duty trucks shipped to New Mexico auto dealerships by national auto manufacturers must be zero emission vehicles. These percentages gradually increase over time.

“Increase over time:” by 2031, those 43% rise to 82%. By 2034, the minima for Ford F-250, Ford F-450, and tractor-trailer type trucks rise to 55%, 75%, and 40%, respectively.

Disingenuously, Lujan Grisham says regarding those limits on choice,

The adoption of these rules is a victory for customer choice….

That’s the Progressive-Democrat’s definition of customer choice: the State taking on the burden of choosing, thereby relieving its subjects citizens of that burden.

No. I decline to use Lujan Grisham’s Newspeak Dictionary. I’ll stay with American English dictionaries and their definitions of “customer choice:” us ordinary Americans acting on our own selections.

That choice is clear, too, for the good citizens of New Mexico, who’ve already made theirs: less than 1% of the 650,000 vehicles registered in New Mexico, despite tax credits, are EVs. Those good citizens do, however, need to select better at the next ballot box.

Contract Discipline

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Amtrak is in the hole to the tune of $140 million in maintenance costs for its current fleet of trains because the contractor Amtrak hired to build and deliver uprated replacement trains is having trouble with testing requirements and production defects and so is nearly three years late on delivery.

Amtrak is also losing even more revenue in anticipated ticket sales from the new, larger trains that were supposed to enter service in 2021. And the railroad is missing out on other revenue because some older Acela units have been pulled from service to be cannibalized for spare parts.

One way for our government to deal with such things is with fixed price contracts, under which the contractor gets a sum of money and must satisfy the production requirements of the contract within that sum. These contracts, though, don’t make the contractee whole from the contractor’s failure.

Here’s another way: write into the contract that the contractor is responsible for the contractee’s maintenance and other costs attributable to the contractor’s failure to meet deadlines. Such a move would make future contractors, e.g., France-based Alstom in the Amtrak case, responsible for Amtrak’s $140 million, and more, inflicted on it by Alstom’s failure to perform. If no contractor is willing to incur that risk, that contractor need have no business from the government at all.

Federalism and State Taxes

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A Wall Street Journal editorial opens with this:

One great benefit of America’s federalist Constitution is policy competition among the states. Voters in Florida don’t have to live under New York’s laws, and Americans and businesses can vote with their feet by moving across state lines.

The editors proceeded to a description of State-level tax laws and the mobility of us Americans and our businesses in leaving States with high taxes in favor of States with, often markedly, lower taxes. But that lede overstates the case.

Federalism applies, often, with State taxes, but State-level business regulations are a different matter. It’s only necessary to see the outsize impact on our auto industry, for instance, or our pork industry, that California’s regulations have on vehicle requirements and on how hogs must be raised to see the lack of federalism in our regulatory environment.

With specific regard to California’s fuel requirements, there’s this from the Federal government’s EPA:

The Clean Air Act allows California to seek a waiver of the preemption which prohibits states from enacting emission standards for new motor vehicles.

The Federal government has long granted that waiver, and during the Biden administration, the feds made their latest move—overtly to refuse to rescind the waiver, effectively nationalizing a State regulation at the expense of federalism.

On the California’s hog-raising regulation, the Supreme Court upheld that regulation, which mandated the minimum space in which hogs must be raised, anywhere in the United States, in order for them to be marketable in California. The Court nationalized this State-level regulation—again at the expense of federalism.

If we’re going to preserve our federalist structure of governance, federalism must be restored to State regulations, as well as State-level taxes. Don’t look for any of that to happen under any Progressive-Democratic Party-dominated Federal government, though.