Tag Archives: political economy

One More Reason…

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…to stop doing business in New York. This time, it’s the State’s move to tax energy producers who sell their fossil fuel products in the State on the risible basis of those producers’ (global) CO2 production over the years 2000 through 2018. Never mind that, as the Wall Street Journal‘s editors put it,

It’s impossible to determine a company’s contribution to climate change since the effects of CO2 emissions on temperature and natural disasters are mediated by myriad variables.

New York’s bureaucrats will make their assessments anyway, and those assessments will be, of necessity, wholly arbitrary. Then there’s this, too, which New York’s government personages consider irrelevant:

Most fossil-fuel emissions stem from their combustion rather than production….

The fossil fuel energy producers shouldn’t waste time litigating this in court, even though they’d likely win given the plethora of court decisions that hold moves like New York’s illegal.

These folks should simply stop selling their products in New York, and that should include no longer selling their products to utilities that provide electricity- and natural gas-related energy in New York. They’ll save more money that way, money that could be used for innovation and better fossil-fuel-related products for their other customers.

Nor will New Yorkers be harmed by the withdrawal. They have plenty of energy flowing from all those “green” and “renewable” energy sources. And those nuclear reactors on the horizon. The State government’s personages assure us so.

Food Stamps and Consumer Choice

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A Wall Street Journal article on soda companies and their lobbying efforts to keep their drinks eligible for the Federal Supplemental Nutrition Assistance Program and related programs closed with this bit:

The Republican Party has long been divided over policing what people on food stamps eat. Some GOP lawmakers favor consumer choice.

For instance, Congressman Frank Lucas (R, OK), of the House Agriculture Committee:

I believe in educating consumers on what is in their best interest. I’ve always had a hard time telling people what they cannot have.

I agree with Lucas regarding Government dictating to consumers what they can—or must—buy and what they cannot or must not buy. However, Lucas and his ilk need to better understand who the consumer is in the present case.

The consumer in the milieu of welfare programs like SNAP is not the welfare recipient. That person merely is picking out welfare package handouts. The consumer, the one who’s actually doing the buying, or not, of those package contents, is us taxpayers. We’re the ones paying for—buying—the food stamp products, in the particular case, with our tax remittals. That food stamp recipients can pick and choose among the variety of food packages we purchase for them in no way alters this fundamental fact.

It’s absolutely the case that we should be the ones deciding what we buy with our tax money, what we buy for inclusion in those package varieties, not the recipients of our welfare packages.

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.