Category Archives: Economics

Miscellaneous economy stuff

Not Entirely

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The Wall Street Journal‘s headline lays out the claim:

Elite Colleges Have a Looming Money Problem

The article goes on:

[T]here are financial problems below the surface that could emerge if the bull market stumbles and especially if some proposed Trump administration policies are enacted.

And this:

…Ivy League endowment returns, which could have been worth 20% more since the 2008 financial crisis if invested in a classic stock and bond mix.

We all could have done better. That’s irrelevant. The bare fact is these endowments, as the table of Ivy League endowments below shows, are plenty big enough, and they’re still growing, for all the temporary losses of the Panic of 2008.

*Per Wikipedia, a/o June 2023
**Calculated from undergrad + grad student enrollment

It’s all crocodile tears. If the schools were truly worried about their dwindling endowments—just $1 billion could fund 100 professorships or permanently cover tuition for 100 students—they could cut the claptrap and waste out of their expense structures. Those structures include such…foolishnesses…as bloated management teams that include a plethora of DEI staff and Inquisition bureaucracies designed to convict a male student on the basis of a female student’s bare accusation.

No, these schools have rich endowments; they’re not financially challenged. They just might lose their access to the Federal feedbag. Which they should anyway.

More Progressive-Democrat Lies

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This time by Jennifer Granholm, Energy Secretary for the Progressive-Democrat President Joe Biden. The Wall Street Journal‘s editors are too timid polite to characterize her claims as anything other than “she’s wrong,” but as one of those So Much Smarter Than Us, Granholm knew and knows better; she is lying to us. Here are the unhappy totals (sorry, Jack Brickhouse), prompted by a just-released DoE report on the effects of exporting liquified natural gas.

  • Granholm: exporting more LNG would boost US natural gas, electricity, and product prices.
  • Her Lie Exposed: US gas prices are hovering near record lows even as exports have surged. That’s because growing US production has more than offset domestic demand.
  • G: more US exports aren’t needed since the world will soon be awash in gas.
  • L: Europeans and Japanese disagree, and the DOE study stresses that “US LNG has played a role in enhancing supply security for markets looking to reduce coal in their energy mix while prioritizing both renewables and gas.”
  • G: US LNG would “displace more renewables than coal globally.”
  • L: The study finds that US LNG would mostly displace fossil fuels and at most increase global CO2 emissions cumulatively by 0.05% through 2050.

This is yet another reason why we wouldn’t have nice things under the reign of the Progressive-Democratic Party.

“Our Question is: Why?”

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That’s The Wall Street Journal editors’ question, and it’s mine, too, regarding further interest rate cuts. The editors posit a number of reasons for not cutting further, but mine is simpler. It’s a refrain I’ve done before.

Inflation, which is the Fed’s Directed Operational Requirement, already is within noise distance of its longtime 2% target, and now is bouncing around noisily. The Fed’s target benchmark interest rate setting already is at a level historically consistent with its 2% target. It’s time for the Fed to sit down and be quiet and let the market bounce around, as it does and as it self-corrects. The bouncing, within very broad limits, is just the noise of a free market operating normally and prosperously.

Blame Someone Else

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Safeway is closing one of its San Francisco stores due to concerns about high crime rates and employee and customer safety in that store’s neighborhood. Oh, the hue and cry.

The Reverand Erris Edgerly, for instance, is crying foul.

It’s obvious the community has been struggling, but to just up and leave without calling a meeting, with no alternative for groceries, is upsetting. There was no community outreach at all.

It’s obvious that the crime rate in Edgerly’s community has been out of control for quite some time and the safety of his community members has been in the wind for all that time. From that, it’s just as obvious that community “leaders,” like the good Reverand, have contributed nothing useful to mitigating the situation (in truth, the city has done nothing, also, but that doesn’t excuse the community’s “leaders”).

Outreach would have been just more chit-chat and worse than pointless: advance notice of the store’s closing would have been too likely to trigger an accelerated spate of break-ins and lootings, exposing the store’s employees and customers to even more danger in that end game.

Maybe the Edgerlys of the neighborhood should look in a mirror to find some of the folks with whom to…outreach.

Prop Up That Industry

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German Chancellor Olaf Scholz wants more government pressure on support for battery cars, their manufacture, and their sale to an uninterested public.

German chancellor Olaf Scholz has called for the introduction of Europe-wide measures to increase uptake of electric vehicles, in a speech at Ford Motor Corp’s factory in Cologne, just weeks after the US car maker outlined plans to lay off 4,000 of its European workers.
In the speech at Ford’s EV factory on Tuesday, Scholz argued Germany should work to facilitate the “leap forward” towards “electromobility” by providing “support” for the country’s car industry, including by subsidizing energy costs for EV battery makers.

And this bit of contradiction:

Scholz said the support for the car industry should also aim to protect worker’s jobs….

He can’t have it both ways, except through government-mandated featherbedding. It takes fewer workers to build an electric motor and a battery car than it does an ICE motor and an ICE-powered car. It takes fewer suppliers to supply fewer parts, and fewer employees at each supplier, to provide the simpler components of a battery car than the more complex components of an ICE car.

The ripples go on from there: secondarily, all those mom-and-pop stores—diners, grocery stores, bars, entertainment venues, and so on—will get fewer customers from those smaller work forces at the EV factories and supplier plants, resulting in fewer mom-and-pops and fewer employees in surviving mom-and-pops.

No. If the battery car industry still needs overt government fiscal subsidies and mandates aimed at pressuring consumers to spend their own money on even subsidized battery cars, those vehicles and that industry aren’t ready for operation.

The only legitimate support for battery cars is the consumers’ interest in buying them in a free, competitive market shorn of government pressures. That interest isn’t yet there.