Tag Archives: economics

Get Rid of the EV Subsidy Altogether

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Allied and friendly governments object to the Biden administration’s battery-operated car tax subsidy requirements that these vehicles be assembled substantially in the US or they’re not eligible for the subsidy. That puts battery-operated cars assembled in Europe, Japan, and the Republic of Korea at a substantial disadvantage in the competition for sales in the US.

They’re right, but for a different reason than they think.

The Biden administration should get rid of the battery-operated car subsidies altogether. If battery-operated cars truly were ready for market, they’d need no subsidy: Americans would buy them on the merits of the cars. If we don’t want them, or don’t want them in large numbers, government intervention (via subsidies here) is no more appropriate than is government intervention in any other section of our free market marketplace.

Full stop.

Why Not?

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Commerce Secretary Gina Raimondo (D) doesn’t want the US to decouple our trade or our trade relationship with the People’s Republic of China. It’s sufficient, she claims in all seriousness to safeguard [our] technology to ensure [our] economic competitiveness.

It’s important that we get the bilateral economic relationship right, not just by protecting but also by actively promoting our economic interests in trade. We are not seeking the decoupling from China.

Why not? There’s a broader concern here, that Raimondo and the Biden administration at large, carefully ignore than merely protecting our technology and technology advantages. That larger concern is our independence of action on the world stage in “competition” with a nation with the avowed goal of overtaking and supplanting the US in the world—of conquering us, whether overtly or functionally.

That goal, that threat is given concrete, measurable effect by the PRC’s

  • flooding the US with fentanyl and flooding Mexico with the components of fentanyl so that nation can flood US with fentanyl
  • our dependence on PRC for Critical Items in our supply chain
    • rare earths, which the PRC already has used in an attempt to extort Japan
    • lithium
    • cobalt
    • intermediate components in assembly of computer chips, computers, cell phones
  • overt threats against friends and allies, , Republic of China, Japan and Republic of Korea (East China Sea), nations rimming South China Sea
  • 2017 National Intelligence Law that makes every PRC company a spy for the PRC government and for the CCP
  • support for the barbarian’s invasion of Ukraine

Trade with the PRC funds their military development against that goal of replacing us.

The PRC is an enemy nation, and we should be doing nothing at all to support its economy, its economic adventurism around the world, its intelligence-gathering efforts, its own technological development, its military expansion and expansionism.

That requires decoupling altogether.

Child Tax Credit

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And other tax credits. Scott Hodge was one of the developers of the Child Tax Credit more than 25 years ago, and today he thinks the idea—well intended as it was—turns out to be bad tax and social policy (did I hear a sotto voce “unintended consequences?”).

His Monday Wall Street Journal op-ed went into detail on how the child tax credit, along with the subsequent proliferation of tax credits, turned out to be heavily counterproductive, reducing family prosperity through reducing the number of workers—who are family members—in the work force and thereby reducing overall GDP.

But the kicker of his piece was his closer.

No wonder the IRS is dysfunctional—it’s not equipped to be a social-service agency.
The “put money in people’s pockets” approach of the child tax credit might have been good politics, but 25 years’ experience shows it was bad policy. The country needs a tax agenda that promotes growth and opportunity, not handouts and redistribution.

Indeed.

The best tax agenda for growth and opportunity promotion begins with taking our tax code, and so the IRS, out of the social engineering milieu altogether. Tax collections should be limited (at the Federal level at least; although State tax codes would benefit from similar changes) to the Constitutionally mandated purposes of pay[ing] the Debts and provid[ing] for the common Defence and general Welfare of the United States. Keeping in mind, too, that the general Welfare of the United States is itself limited to the items enumerated in our Constitution’s Article I, Section 8.

That tax agenda concludes with enacting a tax code that eliminates business income taxes altogether (keeping in mind that it’s the business’ customers who pay the lion’s share of those taxes, anyway, in the form of higher prices, while the rest of us pay in the form of reduced innovation and fewer jobs). That adjustment needs to go along with setting a single flat tax rate on all personal income from any source, with no deductions, credits, subsidies, surcharges, or any of the other froo-froo currently extant in our existing byzantine and mendacious tax code.

In Which a Judge Gets It (Mostly) Right

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Judge Reed O’Connor of the US District Court for the Northern District of Texas ruled at the end of the summer that the Obamacare requirement that health coverage providers must provide coverage for particular aspects of health care—and do so at no cost to the individual being covered—was unconstitutional. He’s currently considering whether to make his ruling permanent and if so, whether to make his ruling applicable only to the litigants in the particular case or to make it nationwide. (As an aside, I have trouble seeing how a ruling of unconstitutionality can have any range less than national.)

Michael Cannon, Cato Institute’s Director of Health Policy Studies, testified as an expert witness in the case that

People have a right to choose whether and what kind of health insurance they need and want. The government shouldn’t be requiring people to buy coverage of any service, whether preventive or otherwise.

O’Connor’s ruling to that extent would be partially correct. However, Government also shouldn’t be dictating to private companies what they must or must not produce. That’s textbook fascism.

There’s also no authority in our Constitution for government to determine what private companies can and cannot produce.

They Should Take Him Up on His Offer

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Many California local jurisdiction officials dispute with California Governor Gavin Newsom (D) over which has the larger responsibility for the homelessness rampant in those jurisdictions and what action should be taken to mitigate the problem. As a result of the dispute,

Mr Newsom recently put a temporary freeze on $1 billion of state grants for city and county homelessness programs. He also rejected a slate of proposals from local officials outlining how they would spend the money, saying the measures would have reduced homelessness statewide by 2% between 2020 and 2024, which he deemed inadequate.

In response,

Mayors and county officials, meanwhile, have said they need the Newsom administration to provide reliable, recurring revenue streams and a cohesive statewide framework to address the issue.

No, they don’t. City and county officials need to reassess their own spending priorities and their own ordinances regarding housing, employment, and homelessness and make their own adjustments. Nor should they be holding out for a Statewide “framework” for the problem: each local area has its own unique set of homeless problems, even if there might be considerable overlap among the areas.

Then these city and county officials need to accept Newsom’s generous offer to step back from interfering in city and county governance; they should accept his withholding from them of State funding.

The less State funding a city or county takes from the State government, the less hold on the city or county the State has and the weaker the ability of the State to dictate behaviors to the city or county government. This would be a relative increase in city and county power relative to the State and a net gain for the individual liberties of the local residents and the State citizens resident in there.

What’s not to like?