Category Archives: political economy

US EVs and Critical Supply Chain Inputs

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Stephen Wilmot’s lede in his Wall Street Journal piece lays out a major outcome of the tariffs proposed by Progressive-Democratic President Joe Biden on a variety of EV inputs sourced from the People’s Republic of China.

Making cheap electric vehicles in America is getting even tougher.

And

Based on a crude calculation, the tariff increase could theoretically add roughly $1,000 to costs per standard-range Model 3—not unaffordable, but inconvenient when Tesla is desperate to remove costs wherever possible.

There are moves afoot that seek to alter that sourcing.

A response more in the spirit of US government policy would be to bring LFP [Lithium-Iron-Phosphate] battery production onshore.

And

One of the strings attached to the $7,500 tax credit available for EV purchases as part of the Inflation Reduction Act is now that no battery materials can come from a “foreign entity of concern,” a designation that includes China.

The problem with those kinds of moves, though, is that they’re woefully incomplete. The original input to those products is lithium, and the vast majority of that is mined in the PRC, and the vast majority of the lithium that is mined is refined in the PRC—including being shipped from non-PRC mines to the PRC for refining. It’s functionally the same for nickel, another major component of EV batteries (LFP batteries aren’t yet ready for prime time), the only difference is that most of the nickel is mined in PRC-owned mines in Africa.

Leave aside the idea of whether battery cars are anything other than another form of personal transportation, like the various external combustion engine-powered cars we’ve tried out over the years, or the original battery cars of a bit over 100 years ago.

The situation extends far beyond some battery inputs. Leaving ourselves dependent on an enemy nation for any of the Critical Item inputs to our economy is far more than an inconvenience, and far more expensive than just dollars spent on alternative sources. Our national security, our national freedom, depend on eliminating that dependence.

Trading with the Enemy

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A letter writer in The Wall Street Journal‘s Sunday Letters section put it succinctly regarding free global trade:

I support free global trade except with countries that cheat and steal and use slave labor.

He wrote that in the context of his decrial of the People’s Republic of China as attempting to rule all of Asia and the global economy.

The PRC’s goal is broader than that; PRC President Xi Jinping has said in so many words that his goal for the PRC is to supplant the US as the world’s sole superpower, which would give the PRC the political, economic, and military power to control our own national actions.

From that, I would add to the letter-writer’s criteria for free global trade: no trade, free or otherwise (beyond, perhaps, non-critical commodity goods), with enemy nations. That would include Russia, Iran, and northern Korea, as well as the PRC.

An aside (but not too far over): it’s common to decry northern Korea’s use of slave labor, but I submit that that is something of a misnomer. Using slave labor implies that other laborers aren’t slaves, holding their jobs—or not—voluntarily. In northern Korea, though, all of the unfortunates resident there—every single one of them—are slaves of the thugs that rule over that gang territory.

A Legislative Proposal

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Congresswoman and House Energy and Commerce Committee Chairman Cathy McMorris Rodgers (R, WA) and Committee Ranking Member Frank Pallone Jr (D, NJ) described a bill they’re proposing that would purport to reform Internet controls and Big Tech’s control over those controls.

Our measure…would require Big Tech and others to work with Congress over 18 months to evaluate and enact a new legal framework that will allow for free speech and innovation while also encouraging these companies to be good stewards of their platforms. Our bill gives Big Tech a choice: work with Congress to ensure the internet is a safe, healthy place for good, or lose Section 230 protections entirely.

18 months is far too long, with far too much time and opportunity for Big Tech to weasel-word saccharine pseudo-reform.

Better would be to give them 6 months, with a hard deadline written into this legislation: satisfactory reform of 230, or 230 is rescinded. A Critical Item that must be included in this proposed legislation is a concrete, publicly measurable definition of “satisfactory reform.”

Another, Highly Useful Item, that could be beneficially included in the bill’s Purpose paragraph, would be a clear and blunt statement that the bill is intended to supplement parental responsibility for their children’s time and activity on the Internet; it does not replace that responsibility.

Coddling Scofflaws

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Alysia Finley has another of her cogent opinion pieces, this one centered on the failure of Progressives in the several government levels and at our colleges and universities to punish miscreants and how widespread those Leftist protections of misbehaviors are. One set of consequences of the coddling jumped out at me.

If they forget to pay other bills, the government has their backs. The Consumer Financial Protection Bureau has effectively capped all credit-card late fees at $8. The CFPB also plans to cap bank overdraft fees at a nominal amount, meaning spendthrifts needn’t worry about getting penalized for overdrawing their checking accounts. And if they don’t want to pay rent, cities including New York and Los Angeles have imposed regulations that make it prohibitively difficult to evict tenants.

Finley was writing specifically about…misbehaving…students at Columbia, but the failures generalize, as do the consequences of excusing the failures.

“Forgetting” to pay bills will have consequences with the local merchants, including the major chains, all of whose establishments are locally run.

Being “late” paying off credit card debt will lead to difficulty getting a credit card renewed and in getting another credit card: getting access to credit will be harder and more expensive. The availability for scofflaws of cards other than prepaid, and at higher rates, will become emphasized. Credit difficulty goes beyond the card, too; it’ll expand to access to mortgages and access to rent (landlords run their own credit checks), among other credit needs.

Overdrawing checking accounts as a matter of routine will lead to closed checking accounts, difficulty opening any other checking accounts, and more trouble with local merchants who will start refusing to accept checks from folks who routinely bounce them. And this: banks and merchants heretofore would treat a bounced check as a mistake rather than the kiting felony that it is, charge the fee, and everyone moved on. No more. Those who frequently bounce checks will find themselves more likely to be charged with the felony.

Making tenant eviction over nonpayment of rent will make it more difficult for renters to rent in the first place, greatly increase the initial deposits required, and reduce the amount of houses and apartments available to rent at all.

All of that, too, will increase the cost of credit and of housing for the rest of us.

The Planned Racism of the Illinois State Legislature

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An Illinois legislatively created commission established…to come up with ways to make appropriations to state universities more “equitable” has issued a report delineating how to achieve that.

…lawmakers would determine how much funding a school deserves. They would do this using a variable called the “adequacy target,” which takes into account the school’s mission and enrollment as well as the programs it offers. … Larger amounts would be set aside for groups the commission considers underenrolled—say, with a $6,000 bonus for each enrolled black student, $4,000 for each enrolled low-income student, and $2,000 for each enrolled rural student.

And

The commission pretends that universities charge different prices for different races. Specifically, the plan wants lawmakers to assume that universities will charge minority students a lower tuition rate than whites and Asians, regardless of income.

And so on.

No. This intrinsically racist plan will only codify the inability of minority students to compete in higher ed and subsequently in the work force and in the managerial teams that manage enterprise work forces.

To increase minorities’ educational opportunities and improve their education in Illinois’ colleges and universities, these legislators must lose their DEI sewage. Beyond that, they must take the currently politically unpopular steps of divesting themselves of their teachers unions yokes, and then move decisively to expand parents’ school choices by making K-12—kindergarten, elementary, junior high, and high school—charter and voucher schools, whether privately or publicly run, ubiquitous throughout the State.

And this: to the extent that Illinois insists on using its tax code for social engineering purposes, it should reallocate its existing tax collections toward having school-directed taxes follow the student rather than remaining trapped—along with minority students—in failing public schools. Beyond that, additional existing tax collections should be placed into a fund for providing education scholarships to all students whose parents wish to transfer their children out of failing schools and into different, better performing schools.

Waiting until post-high school to begin even to pretend to address educational failure is far too late to have any serious effect.

For Illinois, I’m not holding my breath.