URLs du Jour


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  • Much Like The SALT Deduction. George Will points out the … well, I'd call it hypocrisy, but hypocrisy presumes a certain standard of virtue, and I think we're beyond even paying lip service to any sort of standards. Anyway: Biden’s EV tax credits redistribute wealth … upward.

    Presidential gravitas swamped Michigan this week when Joe Biden announced that, regarding electric vehicles (EVs), the nation was at both an “inflection point” and a “crossroads.” After he remakes the automobile industry, his speechwriting shop should be next.

    Hitherto known as “Amtrak Joe,” the president told Michiganders he is “a car guy,” which was well-received by automobile executives and autoworkers pleased by his industrial policy promoting EVs. This, like all his policies, is, he says, climate policy, and serves racial “equity” (by improving urban air quality).

    What the White House calls a “fact sheet” says Biden’s administration will “support market demand” for EVs by “driving demand” with “point-of-sale incentives” to encourage “deployment” of EVs. Translation: Subsidies, including tax credits for purchasers, will fiddle the market by lowering EV prices enough to manufacture a demand sufficient to justify manufacturing the vehicles in quantities that the administration says are vital for the planet. Biden even wants $15 billion to build 500,000 EV charging stations. When U.S. automobile sales exploded from 8 million vehicles on U.S. roads in 1920 to 23 million in 1930 without tax credits, the private sector, responding to real rather than synthetic demand, built sufficient gas stations.

    Just a something-I-noticed aside: there's a Tesla charging station in Seabrook NH, with relatively easy access from I-95.

    It's approximately 4600 crow-flies feet from the Seabrook nuclear power station.

    Assuming that a lot of the electrons going into your Tesla come from the nuke: congratulations, tree-hugger, your driving is very low-carbon.

    (Before anyone writes: yeah, I know that power stations produce AC, and the electrons used just wiggle back and forth in the connecting wires. So those Tesla-charging electrons are not "from" the nuke.)

  • But When Your Theology Must Be Advanced "By Any Means Necessary"… Bjørn Lomborg suggests The courts are no place to combat climate change.

    Despite intense climate worries, electorates have been unwilling to spend the trillions needed to cut emissions dramatically. That is why climate campaigners have increasingly pursued a new strategy: forcing climate policy through courts. Across the world, the UN now counts at least 1,550 such climate cases in 38 countries and more than a thousand just in the U.S., often filed by young people invoking a fear for their future. Unfortunately, such cases undermine democracy, harm the poor and sidetrack us from smarter ways to fix the climate.

    Since the beginning of climate negotiations, it has been hard to compel governments to make large promises and deliver on them. The UN estimated just before COVID that despite immense climate focus, the world’s actual emissions were indistinguishable from a world without climate policy.

    This is because strong climate policy is enormously expensive and delivers minuscule climate benefits. President Biden has promised to spend $500 billion annually on climate policy. Yet his much-lauded pledge to double Obama’s promised reductions, even if fully delivered and maintained throughout this century, will provide little climate benefit. Run on the standard UN climate model, Biden’s new promise will at best reduce global warming by 0.07°F by the end of the century, delivering just 2% of the global climate target.

    The lawyers will do OK, though. They'll be able to buy Teslas!

  • That Helicopter Never Flies Over My House. Arnold Kling writes on The Helicopter Drop.

    When I studied economics in graduate school, we were taught a thought-experiment called the “helicopter drop.” Suppose that GDP, the value of all goods and services produced in the economy, is $1 trillion, and the government drops $100 billion in currency out of helicopter. What happens?

    The simplest answer is to note that while the helicopter drop increases paper wealth, the economy is still producing the same amount of output. So it seems likely that when everything settles prices will be 10 percent higher than they were before the Helicopter Drop.

    This Helicopter Drop thought-experiment guides my thinking today. I often read about price increases in the economy as if they were idiosyncratic events. An odd lumber shortage here, a strange jump in used car prices there. An article about inflation might go through an entire litany of examples like this without once talking about a Helicopter Drop.

    But in 2020, the U.S. Budget deficit was 17.9 percent of GDP (source here) and in 2021 it will be 9.8 percent of GDP. According to the helicopter drop model, this should raise prices by more than 25 percent.

    Arnold notes that the Helicopter Drop model doesn't always work. At least not immediately. But at the bottom of the article, he notes the easy availability of I-Bonds. Currently returning 3.54%. Unfortunately the interest earnings are subject to Federal tax. Also unfortunately, your I-Bond purcheses are limited to $10K/year.

    And you have to trust Uncle Stupid to keep his promises.

  • And the Google LFOD News Alert was triggered by an article in The Atlantic about Vermont's Republican Governor Phil Scott. It's fairly glowing, because Scott is pretty liberal, opposed Trump, gets along with Democrats. (In Vermont, you pretty much have to.)

    LFOD comes in later in the article:

    To the extent that Democrats criticize Scott’s leadership, they do so not for the decisions he made but for the credit he’s received for the success of a small, rural state with a relatively homogeneous population. “Vermonters have been social distancing since 1791,” Cummings told me, repeating a joke that’s been going around the state. “It’s not surprising that we did well.” Vermont’s liberal politics and respect for government also gave it an advantage, Garrison Nelson, a professor emeritus at the University of Vermont, told me. “Vermonters are compliant. We’re not New Hampshire, with their ‘live free or die’ bullshit,” he cracked.

    Well, damn you, Professor Nelson. The "bullshit" was inspired by retired General John Stark. Whose nickname is The Hero of Bennington.

    That's Bennington Vermont, Prof.

Last Modified 2021-06-03 9:18 AM EST