Tag Archives: political economy

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.

I Have a Question

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A Swiss Parliamentary report that is a post mortem on the demise as an independent enterprise of Switzerland-headquartered Credit Suisse blames lax controls by the Swiss Financial Market Supervisory Authority for the bank’s failure, a laxity that occurred despite that same agency’s repeated investigations into the growing weaknesses and failures to perform in the bank. The report also identifies weak bank management and managers as a major contributor to the failure.

Part of the correction to Credit Suisse’s failure was forcing Switzerland-headquarted UBS to “acquire” Credit Suisse. Only now, too, is the regulator proposing increasing capital holding requirements at UBS.

The report is largely correct on the agency reasons for the failure. Whether the forced acquisition works remains an open question: not enough time has passed to make that determination.

My question is this: why did Credit Suisse need saving at all, even if as a subordinate entity owned by another bank?

Leave aside my disdain for Government dictating to private enterprises what they must buy (or not buy), and leave aside the fact that our own government’s hands are unclean in that regard, vis., the Obama administration diktats during the Panic of 2008.

Why not let Credit Suisse simply fail and reorganize itself through bankruptcy or disappear altogether? Given the report’s identification of the weakness of the management team that was running Credit Suisse into the ground, the bank’s unfettered failure would have been an object lesson pour l’encouragement des autres that no bank, no business entity, was zu groß zum Scheitern.

Certainly the turmoil from the bank’s outright failure would have been large, but even at that, the outcome would have done far more to strengthen the Swiss banking system and its larger economy, and done it for a much longer duration.

“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.

How Can He Trust Them?

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Former President and current President-elect Donald Trump (R) is being inundated with visits from CEOs who in the past have castigated him, his policies, his character, his integrity, even censoring him outrageously (excuse the redundancy). Some are even throwing millions of dollars at him his inaugural fund.

Titans of the business world are rushing to make inroads with the president-elect, gambling that personal relationships with the next occupant of the Oval Office will help their bottom lines and spare them from Trump’s wrath.
In the weeks since the election, Trump and his advisers have been flooded with calls from C-suite executives who are eager to get face time with the President-elect and his team at Mar-a-Lago, the private Florida club where the transition team conducts much of its planning for the second term.

Even as they smile in his face, though, they’ve already shown their true colors with their prior attacks. They’re only mouthing words of approbation today in hopes of avoiding the consequences of their disingenuosity.

How can Trump trust them? He can’t. He can use them, but he should keep in mind an old maxim: keep his friends close and his enemies closer.

At bottom,

Il capo d’azienda e mobile, qual piuma al vento
In pianto o in riso è mensognero

Not Necessarily

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The Supreme Court has the case of Seven County Infrastructure Coalition v Eagle County, which concerns an 88-mile railway bringing oil and farm goods out of rural Utah. It’s wholly contained within Utah. Colorado’s Eagle County is suing to block the Utah railway on the claim that the National Environmental Policy Act required the Surface Transportation Board to

analyze possible impacts as far away as the Gulf Coast, where the exported oil might be refined, and the environmental effects of “long-term employment and commercial activity” resulting from the railway.

The DC Circuit (! not the 10th Circuit, which includes both Utah and Colorado) agreed with Eagle County, which is why the case now is in front of the Supreme Court.

The Seven County argument is that

it shouldn’t have to analyze the environmental impact of anything not directly associated with railroads. It should be responsible only for the “proximate effects” of development over which it has regulatory authority.

The WSJ editors went on at length about why and how circuit ruling should be reversed, but they began with this:

[E]stablishing a predictable principle to guide future decisions about infrastructure development and prevent further litigation will be difficult. Litigants will have to parry a barrage of unpredictable hypotheticals….

Not necessarily. The guiding principle is clearly laid out by the Seven Counties: if the alleged environmental impact of a thing isn’t directly associated with that thing, there’s no analysis needed of that allegation. Full stop.

Regarding those “unpredictables,” there already is case law barring speculative lawsuits. Indeed, the Supreme Court already has repeatedly held that agencies needn’t consider indirect and unpredictable impact, most recently in Department of Transportation v Public Citizen. If litigation still gets out of hand, SLAP sanctions are available.

Eagle County’s case is just another of those quibbles for interference’s sake that the Court needs to stoutly chastise along with reversing the DC Circuit’s ruling.