Tag Archives: political economy

“It’s Paid For”

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That’s the Biden-Harris reconciliation bill that the House passed a version of Friday morning that’s “paid for.” And, no, that’s not Joe Biden’s quote—he said the bill would cost zero, which of course contradicts the headline quote, there being nothing for which to pay.

It’s Treasury Secretary Janet Yellen who said that when the CBO report on the bill was published before the House vote. Here’s her claim as cited by yahoo!news:

[T]he Built Back Better (BBB) Act is “fully paid for, and in fact will reduce our nation’s debt over time….”

What the CBO said, in summary:

The CBO determined the spending bill would add $367 billion to the federal deficit over 10 years, not including the IRS plan’s impact. Separately, the nonpartisan agency determined increased IRS tax enforcement would generate about $127 billion in new revenue, far below the $400 billion estimate touted by the Treasury Department and the White House.

Not only is the Biden-Harris administration disregarding out of touch with what us average Americans need or want, critical segments of this administration are out of touch with reality.

Fannie, Freddie, and the Housing Bubble

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The Federal National Mortgage Association, Fannie Mae, and the Federal Home Loan Mortgage Corporation, Freddie Mac, are about to start backstopping million-dollar mortgage loans. The rationale rationalization for this is that the jump is a

reflection of the rapid appreciation in home prices nationally over the past year.
The increase may make it easier and cheaper for some borrowers to buy a home….

But such a move only creates a vicious circle of rising prices into an already growing bubble.

But, but—Steve Walsh, President of Scout Mortgage in Scottsdale, AZ, says,

Housing prices are expensive. I don’t believe these people are looking for a castle, just a three-bedroom house with a backyard[.]

Well, NSS. How does Walsh think those prices for what used to be an ordinary home got to be so high?

There’s this bit on that:

By law, the loan limits are updated annually using a formula that factors in average housing-price increases nationwide.

Nothing like building in guaranteed inflation.

One way to slow the growth of this housing bubble would be for the Federal government to stop guaranteeing such high prices and price growth through its mechanism of guaranteeing or otherwise backing such enormous loans and loan growth.

Granted, that would be hard for the Feds to achieve, since the folks who can afford such enormous prices are the largest donors to Government’s politicians. However, “hard” means “possible.”

Build Back Better is Good

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Jason Furman, ex-Chairman of ex-President Barack Obama’s (D) White House Council of Economic Advisers and currently a Harvard Professor of something styled “Practice,” is all about the Biden-Harris reconciliation collection of policies known as Build Back Better.

He even wrote this in all seriousness in his piece in Tuesday’s Wall Street Journal:

Build Back Better would have a minuscule impact on inflation over the medium and long term.

Even were that true, though, in the short term where most of us live, especially the lower middle class and poor among us who live especially short-term—paycheck to paycheck—we’re facing not just inflation, which is a rate, but actual steady-state higher prices; higher prices which will last into Furman’s medium and long terms, and beyond.

Meanwhile, wages won’t rise fast enough to reduce those higher prices to the status quo ante‘s buying power any time soon, leaving our lower middle class and poor worse off in Furman’s medium and longer term, and beyond.

That wage rise, further, will be held back by Biden-Harris’ and Progressive-Democrats’ penchant for regulation, which will hinder the rise in productivity that’s necessary to facilitate wages’ rise.

Furman knows this full well; he’s one of the Smart Ones of the Left.

Cutting Your Home’s Carbon Footprint

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Alberto Cervantes and Katherine Blunt had a piece on this subject in Saturday’s Wall Street Journal.

It’s a piece that I can only characterize as virtue-signaling. Their opening paragraph has this:

What does a lower-carbon home look like?… It uses heat pumps for heating and cooling, solar panels and batteries for electricity generation and storage, induction ranges for cooking and chargers for electric vehicles.

What they seem a pains to elide, though, are associated, unavoidable carbon footprints (as always, granting (which I do not, except arguendo) carbon footprints matter) and really nasty pollution.

What is the carbon footprint from the manufacture of heat pumps, solar panels, and batteries?

What is the carbon footprint from mining the raw materials? The carbon footprint from their transformation into the components for those heat pumps, solar panels, and batteries?

What is the carbon footprint from transporting materials from each prior stage of mining and manufacture to the next stage and ultimately to the end-use location?

What about the pollution from mining the ores necessary for these items’ components? The lithium, nickel, cadmium, and other battery metals are especially toxic to mine—and not only the metals, the mining tailings also are strongly polluting.

What about the toxic pollution from disposal of spent batteries—those toxic metals still are in those batteries that no longer work due to the simple nature of batteries aging and fading out of usefulness?

Energy efficiency always is a plus, if only from an economic perspective. But our goal should be energy efficiency, not limits on permitted energy.

We Need It

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One of the arguments Progressive-Democrats are using to rationalize their claimed need to pass their spendiferous reconciliation bill is one being advanced by Congresswoman Debbie Dingell (D, MI), this time via a Friday interview with Martha MacCallum on her The Story. Huge spending subsidies for child care is necessary because folks can’t otherwise afford it, so they can’t go back to work.

What Progressive-Democrats refuse to address, though—including Dingell (and MacCallum shied away from asking Dingell about it)—is that pre-pandemic, folks could afford child care, the unemployment rate was solidly below 4%, and the labor force participation rate was two per centage points higher than today.

What’s changed? I mean, besides lockdowns, which we now know was a mistake, yet Progressive-Democrats still demand them, and Progressive-Democrats having gained power and insist on throwing money at an economy that cannot absorb it without historically high inflation.