American television networks spent all morning covering the funeral of Queen Elizabeth II, and if Her Majesty was just a figurehead, who reigned but not ruled, she still seems to have been more self-aware than President Biden:
REPORTER: “People are shocked by their grocery bills. What can you do better and faster?”
BIDEN: “Inflation rate month-to-month was up just an inch, hardly at all.”
The President tried to soft-peddle it, saying that, month-to-month, it was up “just an inch, hardly at all.” That would be great . . . if inflation hadn’t already been high. From The Wall Street Journal:
Consumer prices excluding food, energy rose sharply, showing broad price pressures strengthened
By Gwynn Guilford | Updated September 13, 2022 | 7:17 PM EDT
U.S. consumer prices overall rose more slowly in August from a year earlier, but increased sharply from the prior month after excluding volatile food and energy prices, showing that inflation pressures remained strong and stubborn.
The Labor Department on Tuesday reported its consumer-price index rose 8.3% in August from the same month a year ago, down from 8.5% in July and from 9.1% in June, which was the highest inflation rate in four decades. The CPI measures what consumers pay for goods and services.
Here’s where the Journal’s paywall hits, but really, everyone who cares about economics should go ahead and subscribe to it!
And I guess that President Biden doesn’t read the Journal either, because in the 60 Minutes clip, because he didn’t know July’s inflation rate, either, saying:
It was 8.2, 8.2 before.
Clearly his supervisors hadn’t clued him in.
A President in command of the facts would have both expected the question about inflation, and would have said that yes, 8.3% is too high, but at least the inflation rate had dropped a bit.
Back to the Journal:
So-called core CPI, which excludes energy and food prices, increased 6.3% in August from a year earlier, up markedly from the 5.9% rate in both June and July—a signal that broad price pressures strengthened.
On a monthly basis, the core CPI rose 0.6% in August—double July’s pace. Investors and policy makers follow core inflation closely as a reflection of broad, underlying inflation and as a predictor of future inflation.
Let’s, as the President said, “put this in perspective”: the August 2022 inflation rate of 8.3% is on top of the August 2021 inflation rate of 5.3%
Skipping further down, we come to this stark paragraph:
The average household is spending $460 more each month to buy the same basket of goods and services as last year, said Ryan Sweet, senior director of economic research at Moody’s Analytics.
Assuming 22 workdays a month, and a loss of 20% to taxes and insurance withheld, that “average household” would need a wage increase of $3.136 per hour just to break even. Do you think that happened?
Real average hourly earnings decreased 2.8 percent, seasonally adjusted, from August 2021 to August 2022. The change in real average hourly earnings combined with a decrease of 0.6 percent in the average workweek resulted in a 3.4-percent decrease in real average weekly earnings over this period.
That’s for all workers. The Bureau of Labor Statistics — same source — also broke it down for “Production and Non-supervisory Workers”:
From August 2021 to August 2022, real average hourly earnings decreased 2.4 percent, seasonally adjusted. The change in real average hourly earnings combined with a 0.9-percent decrease in the average workweek resulted in a 3.2-percent decrease in real average weekly earnings over this period.
It’s kind of amusing: the supervisors and managers saw a greater loss of real earnings, but the working-class people, the ones who feel the economic pinch more because they earn less, still lost 3.2% in real terms.
Inflation is a serious, serious problem, and it is making the American people poorer in real terms. Perhaps President Biden doesn’t realize it, now that he’s got the government paying for his seemingly every weekend trips to Rehoboth Beach, but the surge in inflation, which began almost as soon as he took office, has made life worse for the public. But hey, at least there are no mean tweets!
I was wryly amused to see these two editorial links together on the front page of The Wall Street Journal’swebsite front page Wednesday morning. As President Joe Biden wants desperately to reduce inflation, with the midterm elections just 55 days away, it demonstrates the lack of thought the Administration has put into its policies.
Investors get a reality check about prices and Fed tightening.
By The Editorial Board | Tuesday, September 13, 2022 | 6:54 PM EDT
Biden Administration officials have been claiming so confidently that inflation is under control and falling that investors may have believed it. Bad idea. Tuesday’s report on the consumer-price index for August showed inflation has remained high and sticky, and markets promptly fell out of bed.
And we mean from the top bunk. The 3.94% tumble in the Dow Jones Industrial Average was the worst day since 2020, and the declines in the S&P 500 and Nasdaq were worse. Investors apparently had believed the hopeful chatter that inflation was headed downward, and that the Federal Reserve wouldn’t need to raise interest rates so high as to court a recession. Investing lesson of the week: Never trust a politician.
Consumer prices overall rose 0.1% in August, after being flat in July. But the decline was almost entirely the result of falling energy prices. Gasoline fell 10.6% and fuel oil 5.9% in the month. That was a happy respite from the spring when gasoline prices averaged more than $5 a gallon nationwide, but prices at the pump are still up 25.6% in the last 12 months and still average $3.71 a gallon.
The larger problem is that the energy declines weren’t enough to offset price increases across nearly everything else. The 12-month inflation rate in August fell only to 8.3%, down from July’s 8.5%, but higher than the 8% to 8.1% that economists had expected.
Then there’s this, from Washington Post economics reporter and Editorial Board member Heather Long:
Here's the chart for non-supervisory workers. Their pay adjusted for inflation is -2.4% in the past year. pic.twitter.com/MUlu0S8ceL
Hmmm: “Inflation has been eating up wage gains since April 2021 and shows little sign of significant easing.” People are getting poorer in real terms, and that has been the case really since Joe Biden became President.
Joe Manchin’s deal with Democratic Senate leader Chuck Schumer isn’t looking so good for the West Virginian, and the latest evidence is a Biden Administration settlement with green groups that stops previously approved oil and gas leases.
The Interior Department last week agreed to conduct additional climate reviews for five federal oil and gas lease sales held in 2019 and 2020 that were challenged by environmental groups. Activists claimed the Trump Administration didn’t sufficiently study the climate impact of the leases under the National Environmental Policy Act (NEPA).
Rather than defend the earlier environmental reviews, the Biden Administration surrendered to their progressive friends. According to last week’s legal settlement, the climate reviews will incorporate the “social cost” of greenhouse gas emissions that could result from the leases. This takes into account indirect global costs of emissions such as property damage from natural disasters, risk of conflict over resources, reduced agricultural productivity from drought, and more.
By including the social cost in the NEPA reviews, the Administration will be able to claim the leases have a significant negative environmental impact even when they don’t and then seek to cancel them. Alternatively, the Administration could try to force oil and gas producers to mitigate their emissions by helping fund its climate agenda.
While the settlement doesn’t outright cancel the leases, it will effectively freeze their development. Interior has agreed not to approve new drilling permits or rights-of-way on the leases until it completes the climate reviews. Even after those reviews are done and if Interior allows development, green groups will still be able to challenge the reviews and leases afresh in court.
There’s more at the original. The Wall Street Journal has a serious paywall, but even if you’re not a subscriber, you can get a couple of free articles a month.
The Biden Administration wants to reduce carbon dioxide (CO2) emissions and the use of fossil fuels to do so, but freezing oil and gas extraction leases won’t do anything about that. It simply means that more oil-and-gas production will come from overseas, and less from the United States, which means more of United States’ workers money will be going to Saudi Arabia and Venezuela rather than staying at home. Even if you don’t like those evil oil corporations, it means that there will be fewer American oil company workers, workers who earn what the Biden Administration likes to call “good, union wages,” will have jobs while more men overseas will be drawing paychecks from American dollars.
All of this makes American workers poorer. The American oil rig worker who makes big bucks per hour, but is getting no hours isn’t helping his family, and isn’t helping our economy. The oilfield worker who is unemployed because the Biden Administration is throwing obstacles into American production isn’t spending money at Dunkin’ Donuts for a coffee and bagel on the work in the morning, is buying fewer clothes because his work clothes aren’t getting worn out as fast, and his lack of work affects a lot of other people downstream.
The economic measure I find most important is actually a simple one, the velocity of money. The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. The lower the velocity of money, the less positive impact a dollar has on the economy. If the gasoline you buy is extracted in Kuwait, it may cost the same amount as if it had been extracted in Texas, but the dollars spent on Kuwaiti wages disappear from our economy while the dollars spent on Texas workers stay here. The more gasoline and diesel fuel we produce in the United States, the faster he velocity of money in the United States, and the more benefits and wealth accrue to American workers and their families.
There is another part not being considered in all of this. If we assume that we can move away from an energy economy based on petroleum, as the climate change activists want, and we can power our homes and cars and economy on ‘renewable,’ non-polluting energy, the more petroleum we buy from overseas because we are producing less here during that transition, then the more of the value our natural resources we have just wasted, left in the ground with no value. We will be making ourselves poorer during the transition.
Of course, the Biden Administration’s climate change activists can’t see that part, because they never think things through, and never really consider the economic impact on American workers in their plans. But hey, the American working class are primarily conservative, primarily Republican voters, so you can’t expect the Democrats to consider them, can you?
On August 17, 2020, The Philadelphia Inquirer published a long story about the open air drug markets clustered around the infamous Kensington and East Allegheny Streets intersection, and the SEPTA station there. The newspaper even published a photo, by staff photographer Tim Tai, showing what appears to be a junkie shooting up right in front of the Allegheny Street Station on the Market Street-Frankford line. I asked, What are Mayor Jim Kenney and Police Commissioner Danielle Outlaw doing about open air drug markets in Philly?
Jasmine Albury doesn’t like to linger on Philadelphia’s streets. She and her five kids are an “in-and-out family,” she says — they leave the house only for the things they need.
“We don’t play in the parks, ever,” said Albury, who lives in North Philadelphia. “There are shootings everywhere.”
When three people last week were shot outside Willard Elementary — the Kensington school where her son is a fourth grader — Albury felt despair, she said, but certainly not shock. For many Philadelphia families, the city’s gun violence crisis means constant risk and trauma exposure in daily tasks as simple as getting children to and from school.
No part of the city is as plagued by gun violence as Kensington, largely fueled by an open-air drug market and higher rates of poverty. Law enforcement officials have said that dealers sell heroin, crack, and other drugs on more than 80 blocks in the neighborhood.
Willard is just one-quarter of a mile from the intersection of Kensington and Allegheny, the longtime hub of the area’s drug trade. A previous Inquirer analysis found that within a five-minute walk of this intersection, more than 300 people have been shot since 2015, a rate that, per square mile, is 11 times higher than the city as a whole. At this intersection and into the surrounding blocks, there are sprawling homeless encampments. People in addiction openly use drugs, and fall over into the street. There is trash and suffering as far as the eye can see.
The Philadelphia Police Department know where all of this stuff is, and know what’s going on, but won’t actually do anything about it.
How can you make any money? Zillow shows me that 827 East Hilton Street is a rowhouse on sale listed at $54,900, and the ‘z-estimate’ is lower, at $48,400.https://t.co/q2cxfMKaj2
Good question, they’re rentals and I’m a long term owner. The rent doesn’t have to be very high to cover the mortgage and I’m keeping costs as low as possible. It’s not the most profitable thing I’ve done in my life that’s for sure.
I suppose “the rent doesn’t have to be very high” is a relative thing: the rowhouse at 835 East Hilton Street is listed for rent at $1,100 a month, and, as you can see from the map, it’s just a couple of short blocks from the Allegheny Street SEPTA station.
Full disclosure: I do not know if the listed house is one of Mr Finburg’s rental units.
The inside looks decent: neat and clean, with everything freshly painted, a new, builders’ grade kitchen, and new, though (shudder!) laminate, floors. 🙂
The link for the exterior picture is from Google Maps, and Google Maps indicates that the photos of East Hilton Street were taken in August of 2021, more than a year ago. The interior photos do not show the window air conditioner hanging out of the living room window that we see in Google Maps.
I know nothing about Mr Finberg. He may be a really great guy, or he may be the way so many people view landlords, as Snidely Whiplash tying Sweet Nell to the railroad tracks. Most probably, he’s very much in the middle of those extremes, a man trying to make some money, but one who has also been willing to put his own money at risk to bring better housing to a sadly depressed area.
But until the city of Philadelphia does more, does a lot more, to clean up the entire area, there will be no real improvements for the people. Drug use is not just some victimless crime; drug use affects other people, and the decent people of Kensington are examples of just how much it does affect other people; the entire neighborhood has been destroyed, become part of the Philadelphia Badlands. That nickname did not arise out of nowhere; it came to be because Kensington and Fairhill and Strawberry Mansion and Hunting Park have been ravaged by criminal activity, criminal activity largely driven by drug dealers and junkies.
There’s the natural urge to say, well, heck, just legalize drugs and this won’t be a problem. But, as the Inquirer article cited noted:
People in addiction openly use drugs, and fall over into the street. There is trash and suffering as far as the eye can see.
One thing is obvious: Commissioner Danielle Outlaw’s Philadelphia Police, and Federal Marshals, need to make a huge sweep through Kensington, and arrest every last one of the bad guys, and the United States Attorney needs to prosecute all of those cases to the maximum extent of the law. Allowing those cases to become part of state law would mean that District Attorney Larry Krasner, who hates locking up people, or even putting them on a serious probation, would just let the arrested back on the streets.
Perhaps the Commissioner has done so little regarding the well-known open air drug markets because she understands that Mr Krasner wouldn’t prosecute seriously anyone her officers rounded up. Perhaps she figures that anyone arrested and actually taken off the streets would simply be replaced by the next ‘generation’ of bad guys, but so what? Arrest them, too! And the next ‘generation’, and the next.
If you allow dirty dishes to pile up in the kitchen around the sink, what happens? You get ants and roaches and mice and fruit flies crawling and flying around your kitchen, you get unpleasant odors wafting through the air, and eventually everything gets soiled around those dishes, around your kitchen. Well, the City of Brotherly Love, in its 70th consecutive year of one-party Democratic rule, has left the dirty dishes in the sink of Kensington, left them to rot and fester, and everybody is shocked, shocked! that the whole kitchen, and much of the house, have become dirty, smelly and dilapidated. It would have taken a lot less effort to just wash the dishes the day they were soiled, but no, now the problem is huge and nasty.
There has been much mockery of the California’s announcement that, beginning in 2035, only zero-emissions personal new vehicles could be sold in the Pyrite State, followed just a couple of days later by pleas that owners of plug-in electric vehicles not be recharged at home during peak energy use hours, and that was followed by the threat of rolling blackouts, to avoid a major collapse of the state’s power grid. If the power couldn’t be kept on during a heat wave, and people couldn’t recharge their Chevy Dolt’s when there just aren’t that many of them on the roads, how could things be handled if only plug-in electric vehicles could be sold come 2035?
Somehow, in all of that, what Patterico used to call the Los Angeles Dog Trainer managed to use 2,351 words to actually document what all of this means.
It was the sort of bold, climate-focused initiative that California has developed a reputation for — an effective ban on the sale of new gasoline-powered cars by 2035.
Now, as officials seek to fundamentally change California’s automotive culture — thereby reducing its largest source of planet-warming carbon emissions and air pollution — experts say those past initiatives may shed light on whether California’s nation-leading auto plan can work.
In Los Angeles, the dense smog that once smothered the city is regarded today as folklore. At its worst, between the 1950s and 1980s, the caustic haze was so thick that people could see only as far as a city block. It irritated people’s throats and lungs, and gave them bloodshot eyes. Back then, there were more than 200 days with unhealthy air annually, according to the Air Resources Board.
Since that time, there has been tremendous progress toward reducing smog and air pollution, much of it due to cleaner cars. The amount of smog-forming nitrogen oxides has been slashed by more than 50% in the last two decades, substantially improving public health.
But California’s progress in fighting air pollution has stagnated in recent decades, and the state is still home to the worst air pollution in the nation. The South Coast air basin — Los Angeles, Orange, Riverside and part of San Bernardino counties — has yet to meet any federal health standards for ozone levels, including the oldest measure enacted in 1979.
“If you’re looking back 70 years, we’ve done a wonderful job,” said Joe Lyou, president of the Coalition for Clean Air. “If you’re looking back over the last decade or two, not so good. And if you’re looking at the legal standards that demand that we provide healthy air for people to breathe, we’re not doing well at all.”
Naturally, I have to cut a lot of the text, to avoid plagiarism and copyright violations, but what follows next is a brief history of the state’s efforts to reduce smog produced by exhaust pipe emissions. It notes that California was the first state to require catalytic converters. Then, in 2006, the silly cap-and-trade system was introduced.
It was in 2002 that I was part of a meeting in which a cap-and-trade proposal was made at the ready-mixed concrete company for which I worked. Because the company used flyash as a pozzolan, or partial cement replacement, it would have carbon ‘credits’ for the Portland cement that was not used. Those credits could be sold to a company which was supposed to reduce its CO2 emissions, but found itself unable or unwilling to spend the money to do so. I saw it for what it was: not the reduction in CO2 emissions, but simply the moving around of money.
One of California’s landmark climate programs, cap-and-trade was initially launched in 2006 with the aim of reducing the state’s greenhouse gas emissions to 1990 levels by 2020. It exceeded expectations, and in fact reached the target four years ahead of time.
In 2017, the program was reauthorized with a much more ambitious goal: Slashing greenhouse gas emissions to 40% of 1990 levels by 2030. To get there, the program uses a system of pollution credits that essentially lets large carbon emitters buy and sell unused credits with the aim of keeping everyone at or below a certain total.
Experts say it only sort of worked. While the program has remained a key element of California’s climate strategy, emissions were down about 11% in 2020 — far from the 40% goal. What’s more, that number likely accounts for emissions reductions tied to the start of the COVID-19 pandemic.
This was a point which covered only half the issue. Yes, the panicdemic — no, not a typo, but the word I intended to use, because the biggest effect of COVID-19 was panic — would up reducing greenhouse gas emissions, but only via the mechanism of throwing millions of people out of work.
Despite California’s green reputation, it remains the seventh-highest oil producing state in the nation, extracting about 358,000 barrels per day, according to state data.
However, oil production has been declining for decades, and the California Geologic Energy Management Division, or CalGEM, reported that “more permits have been issued to plug and permanently seal existing wells than to drill new ones since 2019.” The agency issued 564 new well permits in 2021, down from 1,917 in 2020 and 2,665 in 2019.
Some experts said that’s not aggressive enough.
“This transition can’t happen too slowly, because there is a climate crisis, and there are significant public health impacts on frontline communities,” said Bahram Fazeli, director of research and policy at Communities for a Better Environment.
Although there are ambitions to phase out California’s oil and gas production completely — most recently, Gov. Gavin Newsom set his sights on 2045 — there has yet to be an official deadline such as the one for the gas car ban.
Just like the panicdemic, reducing and eventually elimination petroleum production in California doesn’t mean that gasoline and diesel will not be used; it simply means that more of the state’s residents will be thrown out of work. Perhaps Governor Newsom thinks that all of the displaced workers will simply learn to code.
For example, reducing demand without supply could mean California ends up exporting its excess oil, Meng said, while reducing supply too quickly could leave communities that rely on the industry in bad shape. In Kern County, one of the state’s top producing regions, oil and gas extraction provide as much as 20% of the area’s property tax revenue.
A few silly paragraphs then follow concerning “equity,” or the notion that trying to meet the state’s goals must not disproportionately impact disadvantaged racial and ethnic groups.
Then comes the big part.
Although phasing out gas-powered cars is one of the state’s greatest priorities, that alone won’t be enough. Driving habits must change, too, if the state expects to achieve carbon neutrality.
The state climate plan depends on motorists driving at least 12% fewer miles by 2030, and no fewer than 22% by 2045.
How, I have to ask, can the state require people to drive less, when California is the poster child for suburban sprawl?
“Highway building and sprawl go hand in hand,” said Susan Handy, a researcher at UC Davis who has studied strategies to reduce automobile dependence. “That’s true in California, and it’s also true everywhere else. When we built highways, it made it possible to develop farther from city centers than ever before. And now we’re in a situation where we’ve got these sprawling development patterns and it makes it very hard to get around by means other than the car.”
As the state’s population has risen and more cars are on the road, state officials funded highway construction and expansion to ease congestion, which ironically fostered more driving.
The only major significant decreases in miles driven occur during economic downturns and, recently, with the onset of the COVID-19 pandemic in 2020 as more people have worked remotely. However, driving has rebounded to pre-pandemic levels.
There you have it: even the very liberal Los Angeles Times has admitted that driving is necessary for the state’s economic health. You cannot reduce the transportation abilities of the people without making people poorer.
The article continues to talk about changing people’s behavior, but let’s face it: that means making them poorer. Public transportation is cited as a replacement, but public transportation is a burden and an inconvenience. You have to leave your home and walk to or drive to, depending upon the distance and weather, the bus or train or subway stop, ride in a smelly, dirty and sometimes unsafe public conveyance to the bus or train or subway stop, hoping that isn’t like the SEPTA station on Allegheny Avenue, and then walk or taxi from that station to where you work. Hope it isn’t raining!
Of course, the state will need multiple thousands and thousands of public car charging stations, and
plans to construct at least 250,000 public vehicle charging stations by the middle of the decade; 10,000 of which should be fast chargers, according to the California Public Utilities Commission.
Uhhh, the “middle of the decade” is almost here! 2025 is less than 2½ years away.
If 240,000 of those public charging stations are not 480-volt “fast chargers”, that means that people would need eight hours to recharge their vehicles. Even the fast charging stations require 45 to 75 minutes to recharge fully a vehicle that is down to 25% of battery capacity.
The state also plans to require landlords of multifamily housing units to provide residents with a means to charge electric cars, though those details are still being worked out.
Really? Great! Now, how can that be done?
There are hundreds of thousands of apartment buildings which have no designated parking for residents; how can landlords get charging stations for such buildings? More, in those “multifamily housing units” which do have designated parking places, requiring landlords to provide electric car charging facilities costs money. The Pyrite State is already one of the most expensive places to live in the country, and half of the state’s 40 million people are renters. If landlords have to plow multiple thousands of dollars into car charging stations for their tenants, rents will have to be raised to cover that cost, and rents are already increasing significantly thanks to Joe’s Bidenflation.
So much of not just California’s, but the global warming activists’ plans nationwide show two very fundamental flaws: they don’t understand economics, and they don’t understand poor people and how they have to live. California has a huge homelessness problem, and major cities which can’t keep people from living and pooping in the streets are going to be impossibly pressed to provide the infrastructure to increase electricity supply and delivery by the amount needed to meet its goals. We have already noted how the Inflation Enhancement Reduction Act’s renewal of tax credit for electric car purchases has been met with electric vehicle prices rising, because economic forces trump the good intentions of liberal legislators. California’s legislators have already voted to keep Diablo Canyon, the state’s last remaining nuclear power plant, open several years longer, because as much as the left hate nuclear power, the state needs the sparktricity.
It doesn’t matter how good or noble or necessary the state’s liberal leaders believe their intentions to be; reality cannot be denied, and what they want California to become is simply not something which can be legislated into existence. Construction takes time, often lots of time, and it takes money, usually lots of money.
But more, they believe that they can change the culture of the state in ways people do not wish to change. Who wants to take the bus to the grocery store, and have to lug grocery bags back several blocks by hand?
California’s car culture emerged because that was what the people of the Pyrite State wanted. But, then again, the left have never really cared what other people want.
The so-called Inflation Reduction Act was supposed to, you know, reduce inflation, right? A lot of people thought it was festooned with all sorts of things which had nothing to do with inflation, and one of those things was the Qualified Plug-in Electric Drive Motor Vehicle Credit:
Inflation Reduction Act of 2022
Enacted August 16, 2022
The Inflation Reduction Act of 2022 (Public Law 117-169) amends the Qualified Plug-in Electric Drive Motor Vehicle Credit (IRC 30D), now known as the Clean Vehicle Credit, and adds a new requirement for final assembly in North America that takes effect on August 16, 2022. Additional provisions will go into effect on January 1, 2023. Further guidance on these provisions is forthcoming. Find more information about the credit from the Internal Revenue Service.
List of Vehicles with Final Assembly in North America
The following table provides a list of Model Year 2022 and early Model Year 2023 vehicles with final assembly in North America based on data submitted to the National Highway Traffic Safety Administration (NHTSA) and FuelEconomy.gov as of August 1, 2022. Note that for some manufacturers, the build location may vary based on the specific vehicle, trim, or the date in the Model Year when it was produced because some models are produced in multiple locations. The build location of a particular vehicle should be confirmed by referring to its Vehicle Identification Number (VIN) using the VIN decoder below or an information label affixed to the vehicle.
As vehicle manufacturers continue to submit the applicable vehicle identification information to the relevant government agencies, this list will be updated as more information becomes available.
NOTE: Some manufacturers that have vehicles assembled in North America have reached a cap of 200,000 EV credits used and are therefore not currently eligible for the Clean Vehicle Credit.
Of course, the Europeans are just hopping mad that the tax credit only applies to vehicles whose final assembly takes place in North America, but wait until they figure out that Canada and Mexico are in North America. The Europeans would much rather put Canadians to work than Americans.
The tax credit is up to $7,500 for purchase of a new, plug-in electric, and since President Biden and his supervisors subordinates very much want to have Americans gobbling the things up, that $7,500 credit is supposed to help consumers who just can’t quite afford the things be able to say, “OK, yeah, with this tax credit, we can go ahead and buy a Ford Mustang Mach E!”
by Michael Wayland | Published Friday, August 26, 2022 | 10:59 AM EDT | Updated Friday, August 26, 2022 | 2:07 PM EDT
Ford Motor is hiking the starting prices of its electric Mustang Mach-E crossover by more than $8,000 for some models.
The increased prices will go into effect for new orders placed starting Tuesday, when order banks reopen for the 2023 model year.
Ford said the markups are due to “significant” material cost increases, continued supply chain strains and market conditions.
DETROIT – Ford Motor is hiking the starting prices of its electric Mustang Mach-E crossover by more than $8,000 for some models, as it reopens order banks for the 2023 model year.
The company on Thursday said the markups – ranging between $3,000 and $8,475, depending on the model and battery – are due to “significant material cost increases, continued strain on key supply chains, and rapidly evolving market conditions.”
The starting prices for the 2023 Mustang Mach-E will now range from about $47,000 to $70,000, up from roughly $44,000 to $62,000 for the 2022 model year. Prices exclude taxes and shipping/delivery costs.
Ford earlier this month also raised the starting prices of its electric F-150 Lightning pickup by between $6,000 and $8,500, depending on the model. The automaker cited similar reasons for those increases, specifically related to raw materials such as lithium, cobalt and nickel that are used in batteries for the vehicles.
There’s more at the original, but I’m shocked, I tell you, shocked!
Of course, the various vehicle price ranges are based on that most important characteristic: range. The ones that see price increases of ‘only’ $3,000 are the ones with the lowest battery capacity and therefore shortest range. You buy the biggest battery pack available, and you can get a listed 305 miles on a full charge. Of course, you’re also going to be getting that $8,475 price increase! We don’t know yet what the 2023 Mustang Mach E will have for a Manufacturer’s Suggested Retail Price, but the chart to the right shows MSRPs for the four versions of the 2022 model.
The “Select” model had a range of 211 miles. It was assumed that the 2023 MSRPs would see an increase anyway, but the new price hikes, well, you’d be paying $70,000 or more for the GT model.
I must say that I am amused. Who could ever have guessed that this would happen?
I’ve got to admit it: Ursula von der Leyen is a pretty cool name, almost as cool as Annemiek van Vleuten, the Dutch cyclist who won the Tour de France Femmes this year. But Mrs von der Leyen isn’t a cyclist.
The worsening energy crisis besieging Europe has laid bare the “limitations” of the electricity market and requires an “emergency intervention” to bring down soaring prices, Ursula von der Leyen has said.
“The skyrocketing electricity prices are now exposing, for different reasons, the limitations of our current electricity market design,” the European Commission president said on Monday while addressing the Bled Strategic Forum in Slovenia.
“[The market] was developed under completely different circumstances and for completely different purposes. It is no longer fit for purpose.
“That is why we, the Commission, are now working on an emergency intervention and a structural reform of the electricity market. We need a new market model for electricity that really functions and brings us back into balance.”
It wouldn’t have anything to do with the European nations supporting Ukraine in its war against Russia with more than just words, would it?
Well, part of the pain is the European Union’s regulations setting the cost of electricity:
Under this system, all electricity producers – from fossil fuels to wind and solar – bid into the market and offer power according to their production costs. The bidding starts from the cheapest resources – the renewables – and finishes with the most expensive ones, usually gas.
Since most EU countries still rely on fossil fuels to meet all their energy demands, the final price of electricity is often set by the price of gas. If gas becomes more expensive, electricity bills inevitably go up, even if clean, cheaper sources also contribute to the total energy supply.
The system was initially praised for boosting transparency and promoting the switch to green sources, but since late 2021, it has come under intense criticism.
In other words, all electric consumers are paying for sparktricity based on the cost of the most expensive means of production. That’s European socialism for you!
Of course, Russian’s invasion of Ukraine brought about swift sanctions against the bear, but the Russians hold the high cards here: Europe is dependent upon natural gas from Russia for fuel for power plants and winter heating. And much of democratic Europe is not east of the United States, but due east of Canada. Berlin, for example, is at approximately the same latitude as the southern border of Labrador. To quote Ned Stark, “Winter is coming.”
On Thursday, future gas prices at the Title Transfer Facility (TTF), the continent’s leading trading hub, reached €321 per megawatt-hour, a stratospheric figure compared to the €27 set a year ago.
The new all-time high follows a surprising announcement by Gazprom, Russia’s state-controlled energy giant, who last week said it would soon shut down Nord Stream 1 – which pipes gas from Russia to Germany – for a three-day maintenance operation, performed alongside Siemens.
Gazprom argues the pipeline must be checked for cracks, dents, leaks and other potential glitches.
European politicians have repeatedly accused the company of weaponising energy flows and exploiting technical questions as an excuse for piling pressure on countries at Vladimir Putin’s will.
Well, of course Russia is weaponizing energy flows. After all, some of the European nations are sending money and military equipment to Ukraine, to use to fight Russia. What else would you expect Russia to do? Vladimir Vladimirovich is attacking Europe that same way Europe is attacking him: economically. The only thing cannier Russia could do is keep sending limited, though slightly increasing, amounts of gas to Europe, keeping prices high but also lulling the Europeans to sleep, then, maybe around December 15th, Pow! shut it off completely.
The German government might think differently about sending military aid to Ukraine if the German people are freezing in their flats.
BERLIN — Out of President Trump’s speech at the U.N. General Assembly on Tuesday, it probably won’t be the script that will be remembered by diplomats but, rather, world leaders’ laughter, caught on camera and shared in viral videos.
One of them captured the amused reactions of the German delegation as Trump said: “Germany will become totally dependent on Russian energy if it does not immediately change course. Here in the Western Hemisphere, we are committed to maintaining our independence from the encroachment of expansionist foreign powers.”
German Foreign Minister Heiko Maas could be seen smirking alongside his colleagues.
Who’s smirking now?
It wasn’t the first time Trump had lashed out at Germany over its gas imports from Russia.
During a NATO summit in July, he took aim at the Germans for the same reason, specifically singling out a planned 800-mile pipeline beneath the Baltic Sea called Nord Stream 2. “Germany, as far as I’m concerned, is captive to Russia because it’s getting so much of its energy from Russia,” Trump told NATO Secretary General Jens Stoltenberg, also speaking on camera at the time. “We have to talk about the billions and billions of dollars that’s being paid to the country we’re supposed to be protecting you against.”
Looks like President Trump, the hated, evil reich-wing fascist, was right all along, and the Europeans were what they have so often been, wrong. I will confess to being somewhat amused.
You don’t have to somehow like Russia’s invasion of Ukraine, or hope that Vladimir Putin wins, to have been bitterly opposed to the responses of the United States and Europe: I might want Ukraine to win, to throw out the Russian invaders, but I don’t want it so much that I’m happy that the world is closer to nuclear war over it.
My good friend Robert Stacy McCain recently wrote about an article in Jezebel which claimed that normal men were going “unpartnered” because women’s “relationship standards” had been raised. Women might be willing to occasionally copulate with said lonely guys, but they weren’t really interested in anything more serious. I found the math strained, because unless you include homosexual males, the very people who ought to be excluded in an article about how normal men are having more difficulty finding women with whom to have serious relationships, the number of “partnered” men ought to equal the number of “partnered” normal women. Given that women slightly outnumber men, and that women live longer than men, the math Jezebel cited just doesn’t work out.
I was reminded of Mr McCain’s article when I read this one in The Wall Street Journal.
It is better, financially, to be married than single, as has almost always been the case. But the money gap between young married couples and singles has widened, thanks to inflation and rising home prices.
The median net worth of married couples 25 to 34 years old was nearly nine times as much as the median net worth of single households in 2019, according to the most recent data from the Federal Reserve Bank of St. Louis. In 2010, married households’ median net worth was four times as much. And now, after a spell of rapid inflation and more than two years of pandemic living, single people are getting left further behind, say economists at the Fed and elsewhere.
“This 25-to-34-year-old age is a time of transition, it’s a time of household formation, and I think it matters whether or not you can pool your financial resources with someone else,” said Lowell Ricketts, a data scientist for the Institute for Economic Equity at the St. Louis Fed.
Married people are being tested by inflation, too. It is just that they have a larger, shared cushion, often with two incomes and pooled assets. They hold a greater concentration of wealth and considerably less debt, according to research from the St. Louis Fed.
Having combined assets was particularly helpful over the past decade as many households’ wealth was compounded by rising housing prices and a strong stock market.
As people marry later, the number of sole-person households is growing, which means more single people are tackling multiple financial challenges entirely on their own. Over the past four decades, the number of sole-person households has nearly doubled, according to data from Freddie Mac. And by delaying marriage, many now struggle to access money milestones at the ages previous generations achieved them.
The article continues to tell us the woes of a 27-year-old single woman in Columbus, Ohio, who recently got a raise, which is allowing her to start saving a bit, but, for her, home ownership is still out of the question. The Journal’sphoto of her slicing zucchini in the small, cramped, and cluttered kitchen in her rental apartment says a lot: she has a roof over her head and food on her table, but she’s still living a fairly modest lifestyle. To relate this to Mr McCain’s article, I will note that the woman in question does not really meet contemporary standards of physical attractiveness.
Further down:
When it comes to building wealth via homeownership, finding a smaller starter home—once the gateway for single people becoming homeowners—remains especially difficult as prices remain high, say economists. Housing affordability in June 2022 hit its worst level since June 1989, and home prices are up 44% over the past two years, according to data from real-estate brokerage Redfin Corp. With housing prices so high and starter-home inventory so low, more single people are struggling to find affordable houses to buy.
So, what happened in 1989? An economic downturn happened, a housing market crash. Interest rates soared again, and housing prices had to fall, or houses just wouldn’t sell. An economic downturn which eventually cost the elder George Bush the presidency in the 1992 election. We saw the same thing in the early 2000s, as housing just plain skipped the 2001-2 recession — I was amazed at how much concrete we were selling for homebuilding even as the unemployment rate soared — but the sub=prime mortgage lending market collapsed in 2007-8, and people who had bought during the bubble, with adjustable-rate mortgages were defaulting at record paces.
I can see something similar in the not-too-distant future.
The Journal article continues along the theme of singles, and primarily single women, being priced out of the housing market.
This is where married couples have one of their largest advantages. Applying for a mortgage, these couples can work together to create an attractive application as well as amass the necessary money for a healthy down payment.
Single women face additional hurdles to generating wealth.
The gender wage gap begins to widen as early as three years after college graduation, a Wall Street Journal analysis found. Women also live significantly longer than men, which puts added pressure on them to finance their retirement years solo.
“These are scary times for anyone, but they’re particularly scary times, I think, for the reasons we have cited, for single women,” said Jill Gianola, a financial planner and the founder of Gianola Financial Planning.
This, you see, is the problem: social customs may have changed, customs which no longer have others asking, “What’s wrong with him?”, or her, if they don’t get married by the time they’re 22. But economic laws aren’t #woke, economic laws don’t care that you want to party hearty until you’re thirty. The reality of economics and the passage of time mean that if you are delaying adulthood, you are also delaying your economic advance. It might be more fun to take your whole paycheck and spend it wastefully, but those are years in which you should be building your career and setting yourself up for financial success later in life.
There was more in the Journal article, this time about a married couple, a couple which appear to have married a bit late, but one which were able to work out the husband’s pre-existing $10,000+ credit card debt by virtue of being serious and by the fact that they were paying for one residence for the two of them. When economic problems arise, there are two of them to work things out.
The way people behaved in our economy and our society in the 1950s might seem just horribly, horribly old fashioned and just not with it, but the simple fact is that they worked for people, because they made economic sense.
As I have previously noted in Welfare for the well-to-do, the economics proposals of the Democrats in the so-called Inflation Reduction Act are those of people who understand virtually nothing about economics. Well, now even The New York Times is noticing what I said ten days ago.
Policymakers in Washington are promoting electric vehicles as a solution to climate change. But an uncomfortable truth remains: Battery-powered cars are much too expensive for a vast majority of Americans.
But automakers have complained that the credit would apply to only a narrow slice of vehicles, at least initially, largely because of domestic sourcing requirements. And experts say broader steps are needed to make electric cars more affordable and to get enough of them on the road to put a serious dent in greenhouse gas emissions.
Of course, most car buyers aren’t buying new cars anyway. In 2021, there were 58.4 million personal cars and light-duty trucks purchased in the United States, and 43.1 million of them, 73.8%, were purchases of used cars; only 15.3 million were new cars. In 2019, before the COVID panicdemic,[1]No, that isn’t a typographical error; the ‘panic’ part of panicdemic is entirely accurate. the numbers were 59.1 million total sales, with 42.4 million, 71.7%, being used cars. The vast majority of Americans cannot afford to buy new cars, plug-in electric or otherwise.
High prices are caused by shortages of batteries, of raw materials like lithium and of components like semiconductors. Strong demand for electric vehicles from affluent buyers means that carmakers have little incentive to sell cheaper models. For low- and middle-income people who don’t have their own garages or driveways, another obstacle is the lack of enough public facilities to recharge.
One would think that a New York Times writer would know that, in densely populated cities, it isn’t just “low- and middle-income people” who might not have private garages and/or driveways. Private garages and driveways are, for the greater part, luxuries of suburban and rural areas, where people have enough space on their property for such things. Alas! So many small town and rural areas, where people do have the room for driveways and garages are also areas of lower income. People may live just as well as in wealthier cities, because the costs of living are so much lower, primarily due to housing costs, but costs-of-living differences don’t affect new car prices; a 2022 Tesla Model 3 costs just much in Mt Sterling, Kentucky as it does in Rochester, New York.
There are, naturally, other costs. As it happens, I have the private garage, complete with separate electric service, and the Knowledge, tools and skill to install an electric vehicle charging unit, but how many other people do? If someone has to hire an electrician to install that device, it could easily cost $2,000. The Federal Reserve Bank of Minneapolis noted that, just prior to the catastrophic economic response to the COVID panicdemic, 36% of Americans would have difficulty paying an unexpected $400 expense, while another 11% wouldn’t be able to pay it at all. Where are such people going to be able to pay $2,000 for an electrician to install a 220 volt, 50 amp circuit to run an electric car charger?
The bottlenecks will take years to unclog. Carmakers and suppliers of batteries and chips must build and equip new factories. Commodity suppliers have to open new mines and build refineries. Charging companies are struggling to install stations fast enough. In the meantime, electric vehicles remain largely the province of the rich.
I will admit it: I am somewhat shocked that the Times would even tell the truth about the economics of the Inflation Enhancement Reduction Act.
Only a few years ago analysts were predicting that electric vehicles would soon be as cheap to buy as gasoline cars. Given the savings on fuel and maintenance, going electric would be a no-brainer.
Instead, soaring prices of commodities like lithium, an essential ingredient in batteries, helped raise the average sticker price of an electric vehicle 14 percent last year to $66,000, $20,000 more than the average for all new cars, according to Kelley Blue Book.
And there you have it: the “analysts” had gotten it wrong . . . again.
This has been the problem all along with economic legislation in Congress and from the Administration, regardless of whether Democrats or Republicans were in charge: they never get it right! The economy isn’t a monolith, but 270 million economic actors taking literally billions of economic decisions every day, and those decisions are not always based on the things the professional economists believe they should be. Before I retired, I used to stop at a small bagel shop on my way to work, selected not because its prices were lower than the Dunkin’ Donuts a bit further down the street — they weren’t — but because it was on the right-hand side of the road and had an easy-in, easy-out parking lot, rather than Dunkin’, which was on the left-hand side, and in a somewhat more congested area.[2]Alas! That independent bagel shop is gone now, possibly due to the panicdemic, but I also attribute its closing to losing me as a customer. Economically, it was a bad decision — by a whopping 20¢ a day — but convenience-wise, it was the correct one.
This new legislation, which the left are cheering — even as many say it doesn’t go far enough — will fail to live up to its promises, because such legislation always fails to live up to the rosy promises made to pass it. The government simply cannot control the economy, and when it’s led by so many economic dummies, so many people who, despite their claims, have no flaming idea how most Americans live, there simply isn’t a prayer that the government will get it right. We don’t know how badly the Inflation Enhancement Reduction Act will fail, but we do know that it will.
By Julia Kagan | Reviewed by Lea D Uradu | Fact checked by Kirsten Rohrs Schmitt | September 30, 2021
Cash for Clunkers was a U.S. government program that provided financial incentives to car owners to trade in their old, less fuel-efficient vehicles and buy more fuel-efficient vehicles. The purpose of the program was primarily to act as an economic stimulus during the Great Recession by providing the population with monetary incentives to buy new cars, thereby increasing automobile sales, while at the same time reducing carbon emissions by replacing old vehicles with new, fuel-efficient ones.
The program, passed by a Congress controlled by Democrats and signed into law by President Barack Hussein Obama, the plan ran from June 2009 through August 24, 2009, when it ran out of money.
At the time, I called it welfare for the well-to-do, and I was right. Running during the so-called “great recession”, the only people who could afford to buy a new car were the ones whose jobs had survived the cuts, knew that their jobs were secure, and had good enough credit to qualify for a new car loan. In other words, they were the people during the “great recession” who didn’t need help from the government. Only 49% of the new vehicles sold through the cash for clunkers program were manufactured in the United States.
Now we have the ‘deal’ between Senator Joe Manchin (D-WV) and Senate Majority Leader Chuck Schumer (D-NY) on electric vehicles. From Reuters:
By David Shepardson | July 27, 2022 | 11:00 PM EDT
WASHINGTON, July 27 (Reuters) – A Senate Democratic deal includes a new $4,000 tax credit for used electric vehicles and other new tax credits and grants for automakers to retool factories to build greener cars.
The deal struck between Senate Majority Leader Chuck Schumer and Democratic Senator Joe Manchin also includes an expansion of the existing $7,500 EV tax credit as well as a new $10 billion investment tax credit to build clean-technology manufacturing facilities, according to a summary from Schumer’s office.
The bill that Schumer and Manchin agreed to also includes $2 billion in cash grants to retool existing auto manufacturing facilities “to manufacture clean vehicles, ensuring that auto manufacturing jobs stay in the communities that depend on them.”
If it becomes law, it will further provide up to $20 billion in loans to build new clean vehicle manufacturing facilities and $30 billion for additional production tax credits “to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing.”
Schumer said the Senate was expected to vote on the proposed legislation next week and it would next go to the Democratic-controlled House of Representatives.
President Joe Biden last year proposed boosting EV tax credits to up to $12,500 per vehicle — including $4,500 for union-made vehicles — and lifting a cap of 200,000 vehicles per manufacturer on the $7,500 credit. Automakers including General Motors (GM.N) and Tesla (TSLA.O) have hit the cap and are no longer eligible for the existing EV tax credit.
Toyota Motor Corp (7203.T) said this month it had hit the sales cap, which means its $7,500 credit will phase out over the next year.
Automakers have heavily lobbied for an extension of the EV tax credit, warning they cannot meet aggressive goals to cut emissions without tax incentives that make electric vehicles more cost competitive.
In other words, plug-in electric vehicles cost more than gasoline engine vehicles. But tax credits only come after you have purchased the vehicle, which means that buyers will have to pay the full (negotiated) price for them, including whatever interest payments accrue. If you couldn’t afford the car without the tax credit, you still won’t be able to afford the car with the tax credit!
The new EV tax credits would be limited to trucks, vans and SUVs with a suggested retail price of no more than $80,000 and to cars priced at no more than $55,000. They would be limited to families with adjusted gross incomes of up to $300,000 annually.
This is kind of laughable. How many people, and, for Mr Manchin, how many West Virginians, can afford to buy an $80,000 truck or a $55,000 new car? Once again, this is welfare for the well-to-do!
Limited to families with an AGI of less than $300,000? Median household income was $67,521 in 2020, down 2.9% from the 2019 median of $69,560, thanks to the idiotic COVID restrictions. Guesstimates of current median family income vary, but this estimate of $76,563 seems at least somewhat realistic.
Of course, the median household income for Senator Manchin’s constituents is just $51,615. They could really use that $7,500 tax credit, but how many outside of Charleston or Morgantown will be able to afford to buy a Tesla? In reality, Mr Manchin’s constituents will be taxed to subsidize new car purchases for federal employees in Maryland and executives in New York and Connecticut. 🙂
I found nothing stating that the bill would require, as the old cash for clunkers bill did, that the cars the well-to-do traded in for a new electric vehicle be destroyed, so while the bill, theoretically reducing carbon emissions from new cars, wouldn’t take their older, gasoline-engines off the road, but hey, if the goal is to reduce emissions, then it should. Take the newer used cars — we assume here that the people who can afford to buy a new vehicle have the newest existing cars — off the road, and that not only reduces the total emissions, but makes the used car market relatively older, meaning that those gasoline-powered vehicles will wear out sooner. In 2021, there were 43.1 million used cars purchased, versus only 15.3 million new vehicles, meaning that roughly 73.8% of all car sales were of used, not new vehicles. And the poorer the state, the higher percentage of used cars bought, simply because fewer residents can afford new.[1]Full disclosure: when we bought Mrs Pico’s 2021 Toyota Camry in June, it had been a dealer demonstrator with just 6,000 miles on it. This was the second car we bought with just dealer demo … Continue reading
As always, this act will not do what it is purported to do. It was put together by Democrats, who have virtually no understanding of economics; if they actually did understand economics, they wouldn’t be Democrats! The only question is: just how badly will it fail?
Full disclosure: when we bought Mrs Pico’s 2021 Toyota Camry in June, it had been a dealer demonstrator with just 6,000 miles on it. This was the second car we bought with just dealer demo miles. If we had bought new, well, we probably wouldn’t even have the car yet, due to supply issues.
Let’s, as the President said, “put this in perspective”: the August 2022 inflation rate of 8.3% is on top of the August 2021 inflation rate of 5.3%
