Tag Archives: markets

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.

Mandating Supply in the Absence of Demand

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What could go wrong? Look at Progressive-Democrat President Joe Biden’s mandate, through his Energy Department (run by the Secretary who thought it hilarious that we should—or could—produce more oil), that American automakers—Ford, GM, and Stellantis—make only battery cars by 2032. Along the way, look at his Energy Department’s proposed new rule:

The Energy Department in the spring proposed to eliminate the 6.67 multiplier….
Detroit auto makers would be slammed harder than foreign competitors by the regulatory changes because pick-ups and SUVs make up a larger share of their fleet sales. “The average projected compliance cost per vehicle for the D3 is $2,151, while non-D3 auto manufacturers only see an increase of $546 per vehicle,” the Big Three recently told the Energy Department.

That multiplier was an early regulation that made it possible to impute (however accurately or inaccurately) the miles per gallon achieved by internal combustion engines—itself subject to increasingly higher requirements under successive ED regulations—to the “mileage” achieved by battery cars. ED’s proposed rule change—under that D3 regime—essentially eliminates the mileage equivalent multiplier.

Combined with Biden’s requirement that our automakers make only battery cars by 10 (now 9) years from now, results in this outcome:

[U]nder the Energy Department’s proposal, it could make more sense to pay the government penalties than to increase production of EVs that don’t sell. This may be why GM is now throttling EV production, as Ford has also done.

It’s cheaper for the manufacturers to non-comply and pay the vig than it is for them to produce and pay the even bigger cost of not selling a government-required product the buyers—us ordinary Americans—don’t want and won’t buy.

And what does that preference for violating a law say about a culture of routine law-breaking?

Biden and his Progressive-Democratic Party syndicate can’t even get Rule by Law right, much less live within the dreary and inconvenient process of operating within the law—Rule of Law. And we Americans pay the price of that.

Backwards

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Progressive-Democrat President Joe Biden has given in to the Venezuelan President Nicolás Maduro administration.

The Biden administration struck a deal Wednesday with Venezuela in which its socialist government will allowing [sic] more competitive elections in exchange for the US easing sanctions on the Venezuelan oil and gas sector.

This is backwards. The Venezuelan government should be required to hold—successfully and without incident—free elections before the sanctions get lifted. This order of events only puts more money int the hands of the thugs running the nation.

Unfortunately, this sort of foolish trust of thugs is all too typical of the Progressive-Democratic Party.