Category Archives: Economics

Miscellaneous economy stuff

The Evils of Dynamic Pricing

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At least according to Massachusetts’ Progressive-Democrat Senator Elizabeth Warren.

To hear Senator Elizabeth Warren tell it, dynamic pricing is the biggest scam since Madoff. She has her war bonnet in a twist at the idea that brick-and-mortar retailers could do what e-commerce sellers have been doing for decades.

The trouble with her position is that all pricing in a free market economy is dynamic, as Hennessey pointed out in his article. Warren is pretending that she’s only talking about prices being changed in “real time,” but she carefully declines to specify what time frame constitutes “real time.”

The only time frame within which it would be wrong to change pricing, though, is between price agreement and delivery of the product to the specific purchaser, as illustrated in a couple of dumba** TV ads involving pizza delivery and hamburger joint ordering (even though the latter’s price changes occur before the customer makes his order).

Canceling dynamic pricing, though, is strongly consistent with the Senator’s socialist goal of government controlling production, which would give, also, control over pricing to government.

Next up: Warren comes out against dynamic pricing in the stock and bond markets. That’s the epitome of prices changing across traders, where one trader gets one price, and another trader gets another for the same product. That’s a fast-moving environment, though, where traders acting at different times, even measured in seconds, will get differing prices, and an environment (now slightly different from dynamic pricing per se) where traders offer different prices within the same bid-ask spread. Even in the stock and bond market, though, the agreed prices don’t change in the time between acceptance and fulfillment. But a freely operating stock or bond market (much less both) is anathema to a socialist.

Rationing Energy

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It seems that the cost of energy to end users—us average Americans and our businesses—is higher in Progressive-Democrat-run States than in Republican-run ones.

Always On Energy Research and the Institute for Energy Research…completed an analysis of electricity rates and found that residents of blue states see higher electricity bills than those of red states.

Tom Pyle, Institute for Energy Research President:

While there are many factors that influence electricity rates, the one constant we see is that states that have pursued climate or net-zero policies above all else have some of the highest rates in the country[.]

For example,

California mandates 100% carbon-free electricity by 2045 and operates a cap-and-trade program, while its average electricity price has climbed from 16.6 to 27.6 cents per kilowatt-hour since 2018 [2nd highest in the US]. New York requires a zero-emissions grid by 2040, and its average price has risen from 14.8 to 21.6 cents per kilowatt-hour [8th highest in the US][.]

Other Progressive-Democrat States, from the report:

  • Hawaii’s average electricity price was 35.72 cents per kilowatt-hour in 2025, highest in the US (excluding DC)
  • Rhode Island’s average electricity price was 25.86 cents per kilowatt-hour in 2025, 3rd highest
  • Connecticut’s average electricity price was 25.68 cents per kilowatt-hour in 2025, 4th highest
  • Massachusetts’s average electricity price was 25.56 cents per kilowatt-hour in 2025, 5th highest

By contrast,

  • North Dakota’s average electricity price was 8.2 cents per kilowatt-hour in 2025, 51st highest—lowest in the US, even including DC
  • Oklahoma’s average electricity price was 9.5 cents per kilowatt-hour in 2025, lowest in the US, back to not counting DC
  • Louisiana’s average electricity price was 9.5 cents per kilowatt-hour in 2025, 2nd lowest
  • Nebraska’s average electricity price was 9.55 cents per kilowatt-hour in 2025, 3rd lowest
  • Idaho’s average electricity price was 9.74 cents per kilowatt-hour in 2025, 4th lowest
  • Wyoming’s average electricity price was 9.75 cents per kilowatt-hour in 2025, 5th lowest

Beyond mere rankings, those are some pretty significant dollar differences in costs.

Mandating “green” sources for producing energy, which results in increasingly unreliable energy production and delivery, which results in increasingly unreliable energy at the end user level—that’s functionally rationing energy, even if that’s not the goal of the green funding industry, although the goal of the climate funding industry affirmatively goes much farther: the bankrupting of hydrocarbon-sourced energy producers. The only distinction here is that the rationing isn’t on the demand and price side, rather it’s on the supply side.

And as any pupil in a high school economics class understands, limiting supply without concomitant reduction in demand—via whatever mechanism—produces increasing prices to those end users.

This is what Progressive-Democrats running those blue States studiously ignore as they blithely enact mandate after mandate to use more “green” energy, use less hydrocarbon energy, limit atmospheric CO2 emissions, participate in cap and trade emissions programs, or some combination of them all.

Markets and Refs

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Greg Ip has a problem with Kevin Warsh’s so-far performance as the new Fed Chair.

Warsh’s analogy of the Fed simply calling balls and strikes, borrowed from future Supreme Court Chief Justice John Roberts, doesn’t work. The Fed isn’t a neutral umpire, it is the most important player in the game.

I have a problem with Ip’s problem. He went on.

Markets respond not just to data but how they think the Fed will respond to data. Investors plug each new bit of information into the Fed’s assumed “reaction function,” which then spits out the appropriate interest rate.

That’s part of what needs to change: “markets”—which is to say investors and business management teams—need to respond to the actual economy, not what one or another arm of government (however independent or not that arm might be) is doing. They need to stop playing the ref so much and work from the economy a whole lot more. It’ll take a bit for them to learn that and then how to do that.

The Fed doesn’t have a role refereeing the markets, in any event. The Fed’s job is to maintain price stability and employment stability, which it does by setting its benchmarks at levels consistent with its long term inflation goal. Its role does not include manipulating the market’s response to those benchmark rate moves.

What He Said

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A letter-writer in WSJ‘s Wednesday Letters section had this:

China’s consumer economy is bound by families’ overinvestment in property. In the absence of a thriving retail stock market, the life savings of two or three generations are poured into housing.
With grandma’s nest egg and mom and dad’s retirement tied up in a young couple’s first home, even a slight chill in property valuations causes an arctic frost on consumer sentiment.

Yep.

Compare and contrast that with John Adams’ definition of Happiness.

“Democrats fall for Socialism Again”

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That’s the headline of a WSJ op-ed, and it misconstrues the Progressive-Democratic Party’s ideology.

Party and its Democratic Party ancestor have long favored socialism, at least since Woodrow Wilson’s attempt to nationalize American factories “east of the Mississippi River,” holding onto them until the Supreme Court made him give them back. That came shortly after one of the founders of the modern Progressive movement campaigned for President on nationalizing our railroads. Government ownership of the means of production is a core tenet of socialism.

Party continued that with subsequent Democratic Party actions presuming to dictate to those producers what wages they must pay and what prices for their produce they would be allowed to charge.

The modern Progressive-Democratic Party has continued that push for Central Government to control our nation’s economy with its constant demands for private enterprises to produce what Party wants produced and attempts at curtailing production by enterprises of which Party disapproves. Capping success, determining who would be allowed a measure of success, and redistribution of the results of such success as is allowed is another core tenet.

Party is now being more open about its preference for socialism with its enthusiastic embrace of the Democratic Socialists of America and their inclusion into the center of Party.