Tag Archives: political economy

Resist

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That’s what the tech industry honchoes are doing vis-à-vis Republican moves to cut or eliminate altogether clean energy tax credits. They want to maintain their handouts.

The Data Center Coalition, a group that includes Microsoft, Alphabet’s Google, Amazon.com and Meta Platforms, recently made its pitch in a letter to Senate Majority Leader John Thune (R, SD), according to a copy viewed by The Wall Street Journal. The group asked him to preserve tax credits and loan funding that would be aggressively phased out in the version of the bill passed by the House of Representatives last month.
The bill is fueling industry concerns about rising prices and power shortages if planned investments don’t materialize.

There’s this, too:

The House bill would require solar, wind, and other projects to begin construction within 60 days of the measure’s enactment to receive tax credits. It would also require the projects to come online by 2028, setting a hard cutoff for any projects placed in service after that year. Under current law, the tax credits phase out over four years, starting in either 2032 or when the US power sector’s greenhouse-gas emissions fall to a quarter of their 2022 levels—whichever comes later.

Here’s the thing, though. This isn’t so much a rescission of the tax credits or removal of “loan funding” as it is a requirement that recipients not dilly-dally about their performance. To get/keep the credits and funding, they actually have to start doing the things—begin construction, for instance—required to “earn” the handouts. Then they have to stop slow-walking their performance, pocketing the money money without anything to show, and instead complete their promised project and bring their “clean-energy” facility on line by a date certain.

Their worry about rising prices and power shortages is a valid concern, but that’s not effectively addressed with tax credits or government loans for their projects. That’s effectively addressed by getting government regulations out of the way of fossil fuel-sourced energy. Natural gas is about as clean as it gets, even counting the fiction that atmospheric CO2—plant food—is a pollutant. Oil-based energy production is nearly as clean, as is modern coal-based energy. The actual pollutants from burning coal have long been cleaned up be well-established technologies.

Fossil fuel-sourced energy is lower priced in no small part because it’s utterly reliable, producing energy whether or not the sun is shining or the wind is blowing, and those fossil fuel facilities need no expensive, themselves polluting from mining through disposal, battery storage that lasts only a very few hours into a long-term weather or night-time outage.

Clean energy facilities don’t need the tax credits or artificial government loans any more than do fossil fuel facilities. When they’re ready for market, the market will call for them without taxpayer money being donated to them. The proper resistance is a pushback and retention of the tax credit cuts and rescissions.

Is Harvard Worth Saving?

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That’s the question The Wall Street Journal asked, ironically, on D-Day. The news outlet also asked “How?” but I’m setting that aside as irrelevant: Harvard doesn’t need saving, at least not financially.

Harvard has that $53+ billion endowment, with its annualized return on that endowment of roughly 11% over the last 50-ish years. The question proceeds from the false premise that it needs saving.

Harvard doesn’t need our taxpayer money. More than that, if it no longer gets our money, it’ll be free of government strictures on what it does with the money it receives—the school can do whatever it wants, politically and scholastically, including reforming itself and ridding itself of its institutional antisemitic behavior and ridding itself of those in its employ or student population who act overtly on their own antisemitic behavior, illegalities like seizing and occupying buildings, denying its owners their own property; vandalizing those buildings and others on campus; openly denying Jewish students access to their classes; overtly threatening Jewish students with violence and delivering that violence; and actively denying those who disagree with them their own rights to free speech. That’s the short subset of a very long list.

Or Harvard can choose to continue those bigotries, absent government funding and attached strings. With either choice, though, it cannot continue—must not be allowed to continue—the illegal behaviors in which so many of the school’s bigots openly engage. A school that chooses to continue those behaviors and to condone them among its population doesn’t deserve saving, even with its own money.

A Reason to Help the PRC

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President Xi Jinping set a goal, which he called in typical PRC cutesy fashion, Healthy China 2030, to raise PRC citizenry life expectancy to 79 by 2030, a goal he achieved in 2016. He also wants to improve health care so that all mainland Chinese can live longer, healthier lives in their dotage.

This is a goal well worth us supporting the PRC on.

This is, after all, a nation with a fertility rate of 1.55, which compares with a replacement birth rate—the rate needed just to maintain a nation’s population at its current level, but not growing or shrinking—of 2.1.

This is a nation with a currently aging population, and that will continue to age due to that broadly inadequate fertility rate.

This is a nation with an elderly dependency rate—the ratio of the elderly population per 100 people of working age—of 20.7 and growing rapidly.

The is a nation with a potential support ratio—the number of working-age people for each elderly person—of 4.8 and shrinking rapidly, the inexorable effect of that very low fertility rate.

Helping the PRC to help its elderly to live longer and more healthily not only is a moral imperative, it’s a strategic political objective, too. The growing old folks population with its increasing longevity, coupled with that shrinking labor force, makes the aging population increasingly dependent on government handouts. That shrinking labor force, though, produces increasingly less output and so sends increasingly less revenue to government to redistribute to its aging population. It’s an open question whether automation and robots can maintain or increase production enough to produce the revenue needed for that redistribution.

We should be helping that population grow ever older, healthier, and longer-lived. That will speed the economic dislocation from that aging, and possibly push it into economic collapse. That’s an outcome for an enemy nation that wouldn’t be all bad for us.

Yes, Do That

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A letter-writer in Friday’s WSJ Letters section wants us to stop calling degrees useless and, instead, encourage students to follow their bliss in their courses of study.

He cited principles of education that learning thinking is as important as learning facts and arithmetic. He’s right on this. He also cited statistics that indicate that most formally trained STEM graduates find work in other than STEM fields. Stipulated.

He closed, though, with this:

But if most STEM students leave their field, shouldn’t we stop labelling programs as “useless” and instead encourage students to develop their intellectual strength by studying whichever field they find most interesting?

Yes, do that. But also do this: require each college (including colleges within universities) to publish the median and mean wage/salary incomes at the five year post graduation mark for each major offered, and require each college to be the primary lender to its students or sole guarantor of other lending facilities’ loans to the college’s students.

Let each student know in advance his likely income from following his “most interesting” course of study along with his cost for pursuing that course.

Hindsight and Foresight

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“Four major automakers” are worried about having to shut down some production lines, even whole factories, as a result of the People’s Republic of China’s cutting the US off from rare earths and processed rare earths produced in the PRC.

The hindsight is that these companies and so many other American companies, including those producing for our national defense systems, should have, years ago, moved their supply chains out of the PRC. There are lots of sources of rare earths, plenty of them domestic, and many companies outside the PRC that process rare earths into things like magnets. Hindsight includes the US government, which just as long ago, should have removed regulatory and other impediments to moving supply chain production into the US. These impediments include in the present case, restrictions on mining rare earths and restrictions on factories to process mined rare earths into useful products.

In the present, though, this is what those auto companies are contemplating:

Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work because the restrictions only cover magnets, not finished parts, the people said.

This is abject, begging for mercy on bended knee, surrender to a nation that is an enemy of ours, committed to replacing and dominating us. Suck it up, buttercups. The PRC is waging economic war against us and has been for years. It’s time to stop bowing and scraping to it and fight back.

In May, industry groups representing most major automakers and parts suppliers told the Trump administration that vehicle production could be reduced or shut down imminently without more rare-earth components from China.
“While efforts are underway to bolster supply chains and suppliers of these elements outside of China, this will take additional time and will not alleviate the immediate shortage of elements vital for automotive components used to produce vehicles here at home,’ said the letter, which was signed by the heads of the Alliance for Automotive Innovation and MEMA, the Vehicle Suppliers Association.

“Efforts are underway.” What efforts, exactly? If any of those efforts are serious, push the pace on the transition.

The foresight is that our government must close that gaping loophole and cut off all imports from the PRC. The cutoff of rare earth exports to the US by the PRC, in contravention to last month’s deal that got tariffs on the PRC reduced so drastically, is a clear demonstration that the PRC’s commitments are worthless. It’s time to stop relying on them.

The shift of our supply chains out of the PRC will be disruptive and expensive, as the auto companies are discovering in the aftermath of their years of chasing the PRC market and productions. That’s only in the near-term, though. Foresight includes considering the disruption and expense of our nation being economically (and so politically) dominated by the PRC.