Tag Archives: political economy

Inadequate Electricity Infrastructure

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There is a move afoot, spearheaded by a number of car companies, to expand the number of battery car charging stations in the US. iSeeCars.com says that planned expansion is inadequate. The company’s Executive Analyst Karl Brauer:

[E]ach of these fast chargers can cost $50,000 or more to install, and this joint effort claims it will utilize 100 percent renewable energy to power the new chargers, which can only mean higher costs for each unit[.]

And that’s just for a few midwestern States.

Bauer is right about the infrastructure’s inadequacy, but the shortfall is much deeper than just battery cars’ electricity demands.

Our electrical infrastructure is inadequate because it’s built on antiquated wiring/cabling, too few and too restricted fossil fuel-powered generating stations; too few generating stations of any sort; lack of spares, particularly transformers and transformer parts and fluids; poor-to-nonexistent (still!) cybersecurity; and on and on.

Those shortfalls need to be filled regardless of the number of battery cars and trucks are on the road.

A Rich Property Transfer Tax

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Chicago, already a heavily taxed city, is looking at increasing the tax it claims on the sale of properties valued at more than $1 million. It’s no tweak, either: the increase would be from the current 0.75% to 2.65%. Even so, it’s projected (more like hoped IMNSHO) to raise $163 million per year. The money ostensibly is to be explicitly earmarked for construction of (and, presumably, conversion of existing structures for) permanent supportive housing units for the homeless.

I have questions.

Chicago—Cook County—is losing population at a high rate.

Cook County lost more population than almost any other county in the nation, with the exception of Los Angeles County, from July 2021 to July 2022, according to U.S. Census Bureau estimates released March 30.
The leading cause of the drop was 94,344 residents who moved out of Cook County during the year, completely driving the county’s population to shrink by 68,314 residents.

With the city undergoing such high net outmigration for greener [sic] regions, who’s going to be buying those rich properties? Not folks in the surrounding counties; those regions are losing population, also, and not into Chicago. No one in his right mind is moving into Cook and surrounding counties. Sales are going to fall off year by year, and the sales that do occur are going to be at increasingly lower prices, reducing the number of million-dollar properties that exist, much less that are up for resale.

I have a downstream question, too. What properties does the city plan to seize for the construction/conversion? What does the city plan to do with the residents who will be displaced by this construction/conversion?

American Worker Shortage

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The Wall Street Journal‘s editors have taken note of our nation’s workforce problem and its relation to our immigration problem.

The birth rate has been sliding for years, and it’s about to translate into a shrinking labor force. By 2040, according to a study out this week, America could have more than six million fewer working-age people than in 2022. The only way to counter the domestic trend is by attracting workers from abroad.

One thing that would help with this worker shortage would be to raise the Social Security full retirement age to 70, or even 75. When Social Security was first developed at a national level, some 85 years ago, full retirement was 65, the worker:retiree ratio was 7:1, and life expectancy in retirement was on the order of 7 years. Today, the worker:retiree ratio is less that 3:1 and falling, and life expectancy in retirement is on the order of 15-20 years. Raising the retirement age would increase the number of workers in the labor force.

That by itself, though, would be only a Band-Aid fix outside the strong benefit it would provide to Social Security survival.

What’s far more broadly needed is to build the “big, beautiful wall” all along our southern border, pierced every mile with a border crossing station through which legitimate immigrants and guest workers could enter (and the latter leave), with that combined with a vastly streamlined legal immigration system that removed visa quotas, sped up vetting of immigrant wannabes, and applied requirements that the immigrant wannabes have economic value to add to our nation.

Even that, though, would be insufficient as a stand-alone fix. Our tax regime and our welfare program badly want reform. With lower tax rates on individuals and businesses, there’s more incentive to work and to hire. That incentive can be further expanded by eliminating the areas of overlap among our welfare programs (which will include eliminating some programs and combining parts of others into single programs) and adding work requirements to remaining programs.

When Did History Begin?

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According to members of the Progressive-Democratic Party, it began in 2022. Take, for instance, the Progressive-Democrat Congresswoman from Pennsylvania, Chrissy Houlahan.

As inflation cools, it’s important to think about how far we’ve come since the crisis brought on by the COVID-19 pandemic and the invasion of Ukraine by Russia.

How far we’ve come:

At this time last year, due to the efforts of the Biden administration and congressional Democrats as we emerged from the pandemic, we were seeing strong economic growth, historically low unemployment, and large wage increases, particularly for low and middle-income workers.

What we were seeing at this time last year was the beginning of an Obama-esque slow recovery from the booming economy that already was expanding rapidly as we came out of the Wuhan Virus situation in the summer and fall of 2020 in that history that exists before this time last year.

What we are seeing since this time last year is the recovery to that latter half of 2020’s historic unemployment—for women, blacks, and Hispanics, especially—due to the recovery of jobs lost during the Wuhan Virus situation, and very few new jobs created.

What we are seeing since this time last year has been declining real wages in the face of Party-driven inflation as those wage increases—which Houlahan knows are only nominal, but chooses to elide—paled in the face of inflation. Only in the last month did nominal wage increases exceed inflation, and that’s far too soon to know whether this one time is the start of a trend or merely a one-off.

What we are seeing over the last two years is a widening of the wage gap between whites and minorities as that slow recovery and Party’s racist and sexist identity politics limit who gets back into those recovered jobs. That wage gap had narrowed significantly over the four years through 2020, as folks on the lower rungs—especially minorities and single mothers—actually got jobs (that historically low unemployment rate extant in 2020 and before) and had income. And their wages rose—nominally and in real terms—faster than did the wages of the middle and upper classes.

However, Americans were still experiencing high prices.

Yes, we are. And we will relative to our incomes for some years. Inflation may finally be coming back down—it’s still higher, though, than it was at the end of the prior administration, over two years ago—but as Houlahan admitted, inflation is a rate of price increase, it is not the prices themselves. The prices Party’s inflation drove up will not come back down.

One factor that contributes to those high prices in addition to overall inflation is the cost of energy. That has become even more expensive with Party’s open war on fossil fuel-based energy, and its effort to eliminate that industry altogether. They don’t care that energy is at the heart of the cost of production (and so at the heart of the cost of us ordinary Americans‘ purchases, especially for those of us on the lower economic rungs, below Houlahan’s middle class).

It’s certainly true that supply chain disruptions have contributed, also, to higher prices. However, the prior administration, and American businesses on their own, had already been working to revamp our supply chains to re-anchor them in more stable, more favorable locations. The disruptions of the barbarian’s invasion of Ukraine also have contributed. But that invasion was encouraged to start by the Progressive-Democrat-run Biden administration’s open timidity in the face of terrorists in western Asia and in the face of the barbarian chieftain in the Kremlin.

New Democrat, same as the old Democrat.

BLM and Fairness to the Taxpayer

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The Bureau of Land Management is moving finalize its two-yr-old effort to increase the minimum price oil and gas developers must pay to lease Federal land for oil and gas development by five times: from $2 per acre to $10 per acre. BLM also wants to increase the minimum bond those developers must pay from $10,000 to $150,000.

Those increases, on their faces, look like chump change, but those minima are for miniscule fields that are far too small even to think about drilling an exploratory well. Also included in the BLM’s move are these cost increases and production limitations:

  • reduce the primary term for new onshore leases from 10 years to five years, even though a significant percentage of leases require more than five years to start producing. For example, recent data shows that 37% of leases in New Mexico started production more than five years after authorization.
  • raise annual rental rates to $3/acre for the first two years, and then $5/acre, increasing costs by at least $123 million per year.
  • eliminate authority to grant royalty relief in difficult times or national emergency.
  • raise the minimum inspection fees each operator will pay annually to anywhere from $800-$11,300 per lease, varying by lease.

And this:

  • impose a new $10,000/mile annual fee for water depths greater than 500 feet; and $1,000/mile for water depths less than 500 feet. There are approximately 26,000 miles of pipelines in the offshore with about 12,600 miles in waters less than 400 feet and 13,700 miles in waters greater than 400 feet. Increased annual costs would total about $149 million.

The BLM claims that these increases aim[] to ensure fairness to the taxpayer.

That’s silly.

What would be fair to us taxpayers, and especially to those of us ordinary Americans on the bottom rungs of our economy who pay little or no taxes, would be to not do those increases—none of us will see a cent of those cost increases. We will, though, pay even more for our energy—home heating and cooling, fuel for our cars and for the shippers’ trucks. No, the money from those increases will go to the Biden administration’s special interests.