This Is Not A Surprise To Most Of Us

MRCTV is reporting today on an interesting choice of words by Vice-Presidential candidate Kamala Harris during a broadcast targeting Hispanic voters in Arizona.

The article reports:

Kamala Harris may have just let out a Freudian slip – and if anyone’s upset by it, it won’t be her political opponents.

The California senator, who is running to be Joe Biden’s vice president should the pair win the election in November, seemed to momentarily place herself at the top of the ticket in an odd moment during a virtual round table Monday, encouraging voters to cast their ballot for “A Harris administration, together with Joe Biden.”

“A Harris administration, together with Joe Biden as the president of the United States…the Biden/Harris administration will provide access to $100 billion in low-interest loans and investments from minority business owners,” Harris awkwardly claimed.

If Joe Biden is president, why is it the Harris administration? Who is pulling the strings?

Steven Hayward at Power Line Blog notes:

I’m betting the Secret Service is taking resumes of food tasters right about now.

The article at MRCTV concludes:

Harris’ mix-up between herself and the man who is actually running for president is also in line with many concerns on the right over Biden’s age, mental acuity and physical ability to do the job of POTUS, with many saying that a vote for Biden is really a vote for Harris if and when Biden becomes unable to hold the office.

When you consider Kamala Harris’ record as California Attorney General, the thought of her in the White House is troubling. Her prosecution of cases was very uneven and often appeared to be politically motivated.

When Life Gives You Lemons…

I think we all admire people who are able to turn a difficult situation into something enjoyable. The good news story of the week illustrates that principle.

Yesterday Steven Hayward posted an article at Power Line Blog that illustrates one aspect of the coronavirus lock-down that most of us had not considered.

The article reports:

But no, by far the the best stand-up-and-cheer-for-‘Murica story this week is “Team Allegedly Sets New ‘Cannonball Run’ Record on Empty Highways During Coronavirus Lockdown.” Now that’s making the best of the bad situation, American-style! Me, I’m getting three weeks to the gallon on my car right now, and so admire and envy the lust for speed on the open road.

But it sets me to wondering whether the American economy will put the pedal to the metal when the lockdown ends, such that we’ll experience an economic Cannonball Run. We’re in uncharted territory, but unfortunately I wouldn’t bet big on a big boom coming out the other side.

Let’s consider one tiny bit of microeconomic data, and one bit of lagging macroeconomic data, that ought to make us worry. The microeconomic data is my own monthly credit card statement. For the first time in my life, I’m looking forward to getting my monthly credit card statement later this month. I’ve been too busy to check online, but I expect I’ll have a credit balance for the first time ever, on account of all the plane fights and hotel rooms I’ve had canceled and refunded over the last month, on top of the restaurant meals I’m not having and other retail purchases. I’m not even buying many books at the moment, since Amazon and other online sellers are delaying book shipments in favor of more urgent items (though for me, what could be more urgent than another book?).

Unfortunately the article ends on a discouraging note:

The point is, even if 80 percent of the pre-crisis economy comes back by mid-summer, you’re still looking at a major recession, if not a near depression. Mauldin, by the way, has been predicting for the last couple years that a recession would see the federal budget deficit soar to $2 trillion. Now that would be regarded as “the good old days.” This year’s federal budget deficit is more likely to be over $4 trillion. And that may be optimistic.

I am hoping he is wrong. What we may see is a slingshot effect–people who have been holding on to their money because of uncertainty may feel comfortable spending some of what they have been holding on to. There will also be the desire to get out of the house–go anywhere! The American economy is consumer driven. If the consumers come out of hiding when the lock-down ends, I believe the economy will recover by the fall. I am also hopeful that various areas of the economy will begin to open up in the very near future. A lot of what has gone on under this pandemic is illegal under the U.S. Constitution. The thing I fear more than an economic downturn is the precedents that are being set that may pave the way for limiting the God-given rights of Americans.

Karma Anyone?

A lot of elected officials have never worked in the private sector. This impacts their view of economics and how it works. Often people who support liberal ideas have not had enough economic experience to understand that ideas that may sound wonderful may not work out as planned.  A recent example of this is a bookstore owner in New York City.

Yesterday Steven Hayward posted an article on Power Line Blog about Chris Doeblin, the owner of Book Culture, a four-location independent bookseller in New York City. The bookstore has a reputation of being a progressive bookstore.

The owner of the bookstore is quoted in the article:

“Our four stores are in danger of closing soon and we need financial assistance or investment on an interim basis to help us find our footing. This is true in spite of the fact that business has been good and we are widely supported and appreciated,” [owner Chris Doeblin] wrote. “In the last 30 months the payroll costs for Book Culture have risen by 50% and it has been difficult to adapt quickly enough. We have now made the structural changes to our company and the cuts that will allow us to move ahead profitably once we find the financial resources we need.”

The operative statement in that quote is that the payroll costs have risen by 50%. The article explains:

Doeblin blamed payroll cost increases on the city’s minimum wage raise, which he says increased hourly wages for his employees “from $10 to $15.25 since December 2016” and forced him to initiate layoffs and reorganizing.

Now Doeblin has a solution for the problem, which further confirms his lack of understanding of how economics and the free market work:

Doeblin explained to Gothamist what he believes the business needs to survive, and his larger ambitions to try to help other small businesses stay alive in an ever-changing city: “I think we need at least $500K in a term loan but I hope to find $750K to a $1M,” he said. “I would like the city to immediately [guarantee] such a loan and then embark on a serious plan to improve the odds of small business in New York. I would like to be on that panel too, because there is a lack of creative optimistic thinking and action.”

This illustrates the reason we need to teach economics and the principles of the free market in high schools and colleges.

A Well-Deserved Honor

Steven Hayward posted an article at Power Line Blog today about a Presidential Medal of Freedom that President Trump will be awarding to Arthur Laffer, the father of the Laffer Curve.

So what is the Laffer Curve. The International Finance website defines it as follows:

The term “ Laffer Curve” was coined by Jude Wanniski (former associate editor of the The Wall Street Journal) in 1978 when Wanniski penned an article named “Taxes, Revenues and the Laffer Curve”. In December 1974, Wanniski who was the associate editor of The Wall Street Journal along with Arthur Laffer, Professor at the Chicago University, Donald Rumsfeld ( Chief of Staff of to President Gerald Ford) and Dickey Cheney (Rumsfeld’s deputy) were discussing President Ford’s WIN (Whip Inflation Now)  proposal for tax increases at a restaurant in Washington, Laffer grabbed a napkin and a pen and sketched  a curve on the napkin illustrating the tradeoff between tax rates and tax revenues, Wanniski later named it as the “Laffer Curve”.  A humble and honest academician who served Former U.S. President Ronald Reagan’s Economic Advisory Board, Arthur credited the theory to 14th century Muslim scholar Ibn Khaldun and eminent Economist John Maynard Keynes.

This is what the Laffer Curve looks like:

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The “Laffer Curve” is a theoretical curve showing the relationship between applied income tax rate and the resulting government revenue. The theory propagates the following points:

    • A tax rate of zero would result in zero government revenue
    • A tax rate of 100% will also result in zero government revenue
    • As the tax rate increases to above zero, there is an increase in the revenues of the government
    • As the tax rate continues to increase, the resultant increase in government revenue begins to slow
    • At a particular point the curve peaks and turns back towards the horizontal axis

The Laffer Curve is the reason that the federal government will collect more tax revenue this year despite the fact that President Trump lowered taxes. When taxes are raised, those with the money to hire good tax accountants find a way to avoid paying high taxes and tax revenues go down. Those of us without good tax accountants (usually the middle class) are stuck paying the increased taxes. The spending power of the middle class decreases, and the economy slows down. When the middle class has more money to spend, the economy does well.

Congratulations, Arthur Lapper. The recognition is well deserved.

Another Global Threat Down The Drain

Steven Hayward posted an article at Power Line yesterday about some recent research on deforestation. It seems that it is not happening.

The article reports:

I have noted from time to time the data from the United Nations Global Forest Resource Assessment (UNGFRA) that has found that deforestation stopped at least 25 years ago, and that net reforestation has been taking place.

But the UN data is not as good as one would like. This week, however, Naturemagazine published a major new studywith much more precise measurements and analysis than the UNGFRA based on 35 years’ worth of satellite imagery, and it finds that since 1982 global forest cover has increasedby 7.2 percent, or 2.24 million kilometers.

The article includes information from the study:

Changes in land use and land cover considerably alter the Earth’s energy balance and biogeochemical cycles, which contributes to climate change and—in turn—affects land surface properties and the provision of ecosystem services. However, quantification of global land change is lacking. Here we analyse 35 years’ worth of satellite data and provide a comprehensive record of global land-change dynamics during the period 1982–2016. We show that—contrary to the prevailing view that forest area has declined globally—tree cover has increased by 2.24 million km2 (+7.1% relative to the 1982 level). This overall net gain is the result of a net loss in the tropics being outweighed by a net gain in the extratropics. Global bare ground cover has decreased by 1.16 million km2 (−3.1%), most notably in agricultural regions in Asia. Of all land changes, 60% are associated with direct human activities and 40% with indirect drivers such as climate change. Land-use change exhibits regional dominance, including tropical deforestation and agricultural expansion, temperate reforestation or afforestation, cropland intensification and urbanization. Consistently across all climate domains, montane systems have gained tree cover and many arid and semi-arid ecosystems have lost vegetation cover. The mapped land changes and the driver attributions reflect a human-dominated Earth system.

In addition to the reforestation of the earth, global warming has slowed down since 1999.

In 2014, the BBC reported:

Scientists have struggled to explain the so-called pause that began in 1999, despite ever increasing levels of CO2 in the atmosphere.

The latest theory says that a naturally occurring 30-year cycle in the Atlantic Ocean is behind the slowdown.

The researchers says this slow-moving current could continue to divert heat into the deep seas for another decade.

However, they caution that global temperatures are likely to increase rapidly when the cycle flips to a warmer phase.

I guess those who study the earth and its climate have not yet figured out all of the answers.

It Sounds Good–It Just Isn’t True

Steven Hayward posted an article at Power Line today about a conversation with a supporter of green energy. The green energy supporter was speaking about a hotel they had invested in that had gone entirely to solar power.

The article reports:

…Knowing that the sun actually goes down and stops supplying electrons, I asked the obvious question:

“So, is the hotel disconnected from the grid?”

You don’t need to guess what the answer was, and why the claim that any building is “100 percent powered by renewables” (like Apple) is the epitome of fake news. Whereupon this Klimatista explained that before long we’ll have these terrific batteries that we can charge up during the daytime to supply our electricity over night. Problem solved! The planet is saved!

Although electricity is indeed the best and most efficient form of power in the abstract, I’m always amazed that no one bothers to ask a simple question: assuming we can get the cost of better batteries down, and increase their functionality (charging time, etc), has anyone‚ Bueller? Bueller?—bothered to do the materials calculations of increasing our battery production at least 1000-fold (just for the United States)? Ever seen what a lithium mine looks like, let alone all of the other materials required for batteries? How many new lithium, cobalt, and copper mines are we going to need to scale up 1,000x?

The article then goes on to explain the negative side of green energy:

The technical journal article that explains this, “Bulk Energy Storage Increases United States Electricity Systems Emissions” in Environmental Science & Technology, is unfortunately behind a paywall, but Dave Roberts—a deep greenie (the founder of what he calls “Climate Hawks”) summarizes the study in plain English for us in “Batteries Have a Dirty Secret” at Vox:

[E]nergy storage has a dirty secret. The way it’s typically used in the US today, it enables more fossil-fueled energy and higher carbon emissions. Emissions are higher today than they would have been if no storage had ever been deployed in the US . . .

I guess this green energy thing needs a little more work.

Happy Birthday, Mustang

This week Mustang turns 50. She looks pretty good for her age:

Yes, I know that’s a 2010, but that’s the picture I like!

Steven Hayward posted an article at Power Line about Mustang’s birthday (with a few comments on her history).

The article included the question, “Which gives off more air pollution, a 1969 Mustang parked in a driveway with the motor off or a  2013 Mustang, roaring down the road at 60 mph?”

The answer is surprising:

If you’re very clever (or keep up with Matt Ridley), you’ll know the answer is that the parked 1969 Mustang gives off more air pollution, in the form of unburned hydrocarbons evaporating through the old-school carbuerator and unsealed gas tank caps (among other places).  A good object lesson in the advancement of engine technology.  And the fact that the real heroes of environmental improvement were engineers with pocket protectors more than hippie environmentalists.

Amazing.

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The Use Of Coal Has A Positive Impact On The Environment???

Steven Hayward posted an article at Power Line today about the increase in the use of coal to generate electricity. The article includes the following chart:

It seems that the environmentalists are caught between a rock and a hard place–they don’t approve of coal and they don’t approve of fracking, which results in cheap natural gas that generates electricity in a more environmentally friendly way than coal.

The article points out that India regards the use of coal to generate electricity as its path to prosperity. Even worse, coal-generated electricity has cut pollution in India because it reduces the use of small wood-fueled cookstoves.  According to a recent global health study, small wood-fueled cookstoves are the largest environmental health threat in developing nations.

So where are we? Environmentalists are doing their best to shut down coal plants in America, despite the fact that the global warming scare is pretty much over. Developing countries are using coal because it creates less of an environmental problem than small wood-fueled cookstoves. Natural gas, the clean alternative to coal in electricity production is out of favor with environmentalists because it is obtained by fracking. So what are we supposed to do?

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