Tag Archives: political economy

The First Move Should Be…

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The incoming Trump administration is looking spring-loaded to begin mining the sea bed for minerals that are just lying around waiting to be scooped up and harvested. The new Congress looks ready to support that.

Last month, the House of Representatives passed its annual defense funding bill, which included a provision instructing the secretary of defense to provide a feasibility study on whether minerals from the deep sea could be processed within the US.
That follows a number of cabinet appointments by Trump seen as friendly to deep-sea mining. Elise Stefanik, Marco Rubio, Howard Lutnick, and William McGinley have all been nominated for positions on the president-elect’s team and have all previously voiced support for ocean mining.

Aside from the benefits of mining the sea floors, including those on our continental shelf and elsewhere in our Exclusive Economic Zone, our first move, or at least a very early move, should be the floor of the South China Sea, which is rife with minerals, especially those critical to energy, to any energy transitions, to computing, to defense-related technologies, and so on.

We also should move to help our friends and those who would be friends around the rim of the Sea do their own sea bed mining within their Exclusive Economic Zones and help mediate disputes among those nations over whose EEZ applies where and how to deal with the claimed overlaps.

The People’s Republic of China will protest most loudly and aggressively, but it’s long past time their seizure and occupation of these international waters and the waters in those EEZs gets answered and the PRC pushed back into its own waters.

SALT Tax

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Short, brief, sweet, and redundant.

One thing threatening serious tax reform—which is to say making permanent the tax rate reductions that otherwise expire near the end of this year, reducing those rates further, and flattening the rates further—is the kerfuffle over the SALT (State And Local Tax) tax deduction cap, currently at $10,000.

I sympathize with the Representatives and Senators, especially the Republican ones, in those States most impacted by the cap. Their wealthier constituents want the cap raised significantly if not eliminated. These politicians, though, must understand that as members of our national Congress, their responsibilities to our nation as a whole runs a very close second to their responsibilities to those individual constituencies.

The business of cap raising/eliminating is nonsense for a couple of reasons. One is that there is no reason at all for the rest of us taxpayers to subsidize those in States with profligate spending and already high taxes. Those Congressmen would do better using their Federal influence and bully pulpit to convince their State and local governments to mend their spendthrift ways and lower their tax rates—the latter which several States (tellingly, mostly Republican led) already have done or are doing.

The other reason is that, aside from empirical evidence that lowering tax rates actually increases revenues to the Federal government from the increased private economic activity that results from more money being left in the hands of us private citizens, revenue reductions—if any—from lowered tax rates is easily covered by reduced spending in general and reduced, if not eliminated, subsidies and tax credits for “green” energy solar and windmill farms, battery cars, federal deductions for non-federal tax collections, and other such tax engineering froo-froo.

Indeed, with sufficiently reduced spending, badly needed increased spending on national defense still could occur.

Raising the SALT tax cap wouldn’t be tax reform, it would be tax deform. In fact, reform here would be eliminating the SALT deduction altogether.

An Independent Greenland’s Budget

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Amid President-elect Donald Trump’s (R) rhetoric regarding buying Greenland from Denmark, there is concern in Greenland about that, but maybe not so much. Greenland already is a largely self-governing island within the Kingdom of Denmark. Greenland already has been pushing for independence, and the Danish government, along with its monarch, is open to considering that, given sufficient interest in independence on the part of Greenlanders.

Greenlanders strongly want independence, they don’t want to be part of the US, but they are highly interested in a closer relationship with us than is politically possible as long as they’re part of the Kingdom—another factor underlying their push for outright independence.

One concern about independence is that with independence, the annual $600 million in transfers from Denmark to Greenland, roughly half the current Greenlandic budget, would stop. What to do about that?

Greenland is rich in a broad variety of natural resources, from oil and natural gas to rare earth minerals to graphite to uranium to precious stones, and on and on. These resources remain largely untapped. The fishing waters around Greenland and in what would become an independent Greenland’s Exclusive Economic Zone also are rich.

Extraction royalties from mining those land based natural resources would easily fill the budget gap, and more. Alaska has been paying dividends to its citizens for nearly 50 years just from oil and natural gas extraction. Texas charges a severance tax—its extraction royalty—on natural gas, oil, and condensate (a byproduct of natural gas production with its own commercial value) production. That tax covers a significant fraction of Texas’ annual budget. With proper (Greenlandic) management the fisheries (and undersea minerals) in Greenland’s EEZ would become another source of national revenue.

Greenland’s budget would more than make up for the loss of Denmark transfers with its own extraction royalties and exploitation fees—which needn’t be all that high to put the nation’s budget well into the black. A trade arrangement with the US that addressed all, or even most, of that would be highly beneficial to both nations.

Beyond that, the US is highly concerned about Russia’s and People’s Republic of China’s moves in the region and in the polar seas and so is interested in expanding existing bases and adding more. Basing rights could come with fees for Greenland, also.

A freely negotiated trade and basing arrangement with an independent Greenland would be a winning arrangement all around. That also would be more revenue positive for us than taking on Greenland as a territory, or even a protectorate.

So What?

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Fred Krupp, President of the Environmental Defense Fund, is worried that if the incoming Trump administration cuts off subsidies for battery cars, we’ll be ceding battery car leadership to the People’s Republic of China.

Leave aside the fact that our battery car component supply chain (as with so many other of our industry production) remains dependent on the PRC. Pushing battery cars on Americans will increase our dependence on that enemy nation.

Be that as it may, Americans don’t want battery cars. This is demonstrated by the continued need for government subsidies—the tax monies us average Americans remit to our Federal government—in an ongoing effort to con us into buying them anyway, along with outgoing Biden administration efforts to dragoon us into buying these white elephants by raising fuel and emission “standards” to usurious levels intended to ban ICE vehicles.

More than that, satisfying the so-called need for battery cars, the blandishments of left-wing climate Know Betters like the EDF notwithstanding, will not have any material effect whatsoever on slowing the non-existent existential climate crisis that the climatistas are on about.

The subsidies are a waste of our tax money and badly want elimination.

Let the PRC be saddled with—dare I say hobbled by—that transportation dead end and its enormous costs.

Self-Driving Cars

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This Luddite remains strongly opposed to letting robots drive me around. However, the software that runs one version of a robot car, that package “guiding” Tesla’s latest iteration of its Full-Self Driving car, version 13.2, is a vast improvement of past efforts, according to BARRON’S.

Absent from the testing, though, at least as publicly reported, is how well 13.2 handles random (and frequent) traffic violations by the cars of other drivers that would endanger the occupants of the FSD or pedestrians or other vehicles. Such violations include the relatively minor, such as speeding; as well as the more dangerous wobbly bicycle(s) and inattentive bicyclists; pedestrians darting, at the last moment even, in front of the FSD in his last ditch effort to cross the road; crossing traffic running the red light or stop sign; oncoming traffic deciding to make a left turn at the last moment; the list is extensive.

Other risks are mostly in the residential neighborhood: the toddler in front of a parked car at the last moment darting into the street and the small pet under that parked car making the last moment dart into the street.

Many of those situations are difficult enough for a human driver to answer, often too difficult and the collision occurs.

Any robot-driven car needs to be able to handle those random situations at least as well as any experienced human driver.

Then there’s the classic moral paradox, usually cast in terms of a railroad exercise regarding which track to be switched to given the certainty of some measure of death regardless of the choice. Those choices occur on roads with cars and trucks, also, and they’re often badly handled by the human drivers involved. What can we expect from robot software?

To repeat: I remain strongly opposed to letting robots drive me around. The software involved is improving, but enough so? What constitutes sufficient improvement? At the least, satisfactory handling of the above situations.