Tag Archives: politics

A Burgeoning Economy

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According to President Joe Biden (D) and his Treasury Secretary, Janet Yellen (D), our economy is burgeoning, prosperous, a Valhalla of growth, fairness, and optimism.

This is what the Progressive-Democrats’ Valhalla looks like in the real world:

  • US inflation reached 7.9% by February 2022 and had been…burgeoning…since fall 2021
  • US inflation currently is above 8%
  • before the pandemic, inequality was falling as wages rose faster for low-income workers than they did for the affluent amid healthy growth [note that after the pandemic has been the Biden reign]
  • the US economy contracted by about 1% of GDP in the first six months of this year, even as real wages were falling
  • real average hourly earnings declined 3% over the 12 months through July
  • real average weekly earnings declined by 3.6%
  • real average earnings have fallen 4.2% since Mr Biden took office

But wait—aren’t gasoline prices falling now? Sure they are, but they’re still very much higher than before Biden took office, and they’re falling because demand is falling: we can’t afford to drive as much as we did pre-Biden reign.

For Biden to call this terrific is for him to expound from his Newspeak Dictionary.

YGTBSM

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Another installment, this one from Canada—Vancouver, BC.

That city has a brand new fire engine. It’s all electric: not a drop of evil hydrocarbon in it for fuel or any other power. Never mind that it can’t function as a fire engine. It’s ALL ELECTRIC. Yay.

[T]he new e-truck will cost $300,000 more than a comparable diesel model, pump 40 per cent less water and have such a short range (30 km) because of its enormous weight that it will have to have backup diesel power in case it runs out of juice on the way to a blaze.
But, the city points out, it won’t give off diesel fumes and will be much quieter than existing diesel fire trucks.

Jayjuz.

They’d have done better with a horse-drawn, hand-powered pumper.

More here.

H/t Ralph Schwarz

Russia is Not a State Sponsor of Terror

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Or at least President Joe Biden (D) is too timid to say so out loud, or officially, which would bring a round of additional sanctions against Russia.

Biden, asked by a reporter on Monday if he would blacklist Russia as a terrorist state, said simply, “no,” after months of non-committal answers from senior officials.

Biden expanded on that the next day, through his Press Secretary, Karine Jean-Pierre:

She said the designation would hamper aid delivery to parts of war-ravaged Ukraine or prevent aid groups and companies from taking part in a deal brokered by the United Nations and Türkiye to ship badly needed grain from Ukraine’s blockaded ports.
“It would also undercut our unprecedented multilateral [coalition] that has been so effective to holding Putin accountable and could also undermine our ability to support Ukraine” in negotiations, she told reporters.

In other words, Biden is afraid of what Putin might do in response to such a designation. Or worse, Biden is afraid of his own imaginings of what Putin might do.

Windfall Taxes

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With rising (finally) interest rates in Europe, European governments are starting to hatch what they’re pleased to call windfall tax plans.

European banks have started to reap higher profits from rising interest rates—and governments are already starting to clamp down on them.
In Spain, the government has laid out plans to tax lenders on their rising income and use the money to alleviate higher living costs for the population. Hungary has imposed a similar measure, and the Czech Republic, where inflation is above 17%, is also considering such a move. In Poland, where mortgages carry variable rates that are quickly rising, the government placed a moratorium on repayments to help borrowers.

Nor is this tax hatch limited to banks.

In other areas too, European governments are acting quickly when judging companies to be earning abnormally large profits. The UK has said it would introduce a windfall tax on energy companies, and Spain is imposing a similar levy as well as the new tax on banks.

Usw.

As usual, I have questions.

Define “windfall.” No glittering generalities, what constitutes a windfall profit, and based on what economic theory?

When does a windfall profit stop being windfall and becomes the normal level of profit? Again, no glittering generalities; be specific.

Related to that: discriminate between the new, reasonably steady state level of profit and “excess profit.” To do this discrimination it is, of course, necessary to define “excess profit,” with that definition devoid of glittering generalities and supported by clearly identified economic theory.

Back to windfall profit becoming the normal profit level. Does that recognition necessarily mean the prior “windfall” assessment was mistaken? If so, would that mean that the money collected as windfall taxes were mistakenly collected and a refund owed?

And finally, how many politicians will confront those questions? How many of those actually will offer concrete, measurable answers?

Will the West Proceed?

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In the face of the Group of Seven Club’s moves to impose a price cap on Russian crude exports globally, Russian President Vladimir Putin now threatens

to curtail the export of grain from Ukraine and said Moscow was ready to extend its rationing of natural-gas exports and cut off oil and refined products if the West went ahead….

And

Mr Putin said Wednesday that Russia had contractual obligations on energy deliveries but would reconsider them if a price cap were imposed.
“We simply will not fulfill [our contracts]. In general, we will not deliver anything if it contradicts our interests,” he told an audience of officials and business leaders. “We will not deliver gas, nor oil, nor coal, nor heating fuel. We will not deliver anything.”

This would result in temporary near-term pain for the West, to be sure, with winter a few months away. But it would result in permanent and disastrous pain for Russia.

Near-term for the West: that winter (which so far looks to be relatively mild, but weather forecasts…), and tight supplies of natural gas being squirreled away, along with iffy potentials for bringing recently shut down nuclear power plants back on line and keeping others scheduled for closure on line.

Temporary: Europe can find other sources of natural gas, oil, and coal (including, regarding the first two, plussing up North Sea production and building additional pipelines) for their power production plants and move away from Russian sources altogether and permanently. Especially if the West can get President Joe Biden (D) out of the way of American oil and natural gas production and export.

Long-term pain for Putin: he needs a minimum of $70-$80 oil in order to pay for his war against Ukraine—replacing equipment combat losses, providing food, fuel, ammunition, and other consumables for his surviving forces—along with the rest of his economy, which is almost entirely extractive, which potentiates his long-term vulnerability.

Permanent: he’ll have lost permanently his Western markets, leaving him with selling into the People’s Republic of China—and President Xi Jining will be forcing his own purchase price on Putin, a price made the firmer by the PRC’s own current economic strait. Further, those sales will require PRC assistance to develop: new Siberian oil and natural gas wells and pipelines (presently nearly non-existent) to deliver well output to the PRC. All of which will exacerbate Russia’s subordination to the PRC.

Aside: it’s true that Putin has markets in India and Turkey, but with Turkey, drastic as that nation’s needs are, its economy is too small to take up much of Putin’s oil. India has too ready access to too many alternative markets to be taken for much of a ride by Putin.

The salient question is whether the West has the stomach for what it takes to achieve victory. The jury is still out on that. Especially given who’s the nominal leader of the West.