Tag Archives: #Economics

Posted on by

Now Our Betters want you to charge your Chevy Dolt at work, not a home. That's going to cost you more money.

A 2019 Chevy Bolt electric vehicle caught fire at a home in Cherokee County, Georgia, on Sept. 13. Source: Cherokee County Fire Department. Click to enlarge.

Perhaps I am stepping on William Teach’s toes with this one, but when this article appeared in my Google feed, it was too much of an opportunity on which to pass. I did check first to make sure Mr Teach hadn’t already written on the subject! From Stanford University:

Charging cars at home at night is not the way to go, Stanford study finds

The move to electric vehicles will result in large costs for generating, transmitting, and storing more power. Shifting current EV charging from home to work and night to day could cut costs and help the grid, according to a new Stanford study.

by Mark Golden | Thursday, September 22, 2022

The vast majority of electric vehicle owners charge their cars at home in the evening or overnight. We’re doing it wrong, according to a new Stanford study.

In March, the research team published a paper on a model they created for charging demand that can be applied to an array of populations and other factors. In the new study, published Sept. 22 in Nature Energy, they applied their model to the whole of the Western United States and examined the stress the region’s electric grid will come under by 2035 from growing EV ownership. In a little over a decade, they found, rapid EV growth alone could increase peak electricity demand by up to 25%, assuming a continued dominance of residential, nighttime charging.

To limit the high costs of all that new capacity for generating and storing electricity, the researchers say, drivers should move to daytime charging at work or public charging stations, which would also reduce greenhouse gas emissions. This finding has policy and investment implications for the region and its utilities, especially since California moved in late August to ban sales of gasoline-powered cars and light trucks starting in 2035.

“We encourage policymakers to consider utility rates that encourage day charging and incentivize investment in charging infrastructure to shift drivers from home to work for charging,” said the study’s co-senior author, Ram Rajagopal, an associate professor of civil and environmental engineering at Stanford.

There’s more at the original, and there’s no paywall to stymie you.

The authors believe that people should charge their Teslas and Chevy Dolts at work, rather than at home. Great idea, except there is no guarantee that your employer is going to add the infrastructure, and if he does, he’s going to need to recoup that cost: he’s going to charge employees for using the at-work charging stations, for both the installation costs and the sparktricity used.

One of the problems is the extreme egocentrism of the authors. It’s far too easy for people to think of their situations as the only situations. When they have an assigned parking space at a prestigious university, they might not consider that far more people work at places like Seven/Eleven, where management isn’t likely to run the power lines and install the stations for their minimum wage employees — who can’t afford a plug-in electric vehicle in the first place — to use. Perhaps they are unfamiliar with trades employees, who go to different jobsites across their area.

Once 50% of cars on the road are powered by electricity in the Western U.S. – of which about half the population lives in California – more than 5.4 gigawatts of energy storage would be needed if charging habits follow their current course. That’s the capacity equivalent of 5 large nuclear power reactors. A big shift to charging at work instead of home would reduce the storage needed for EVs to 4.2 gigawatts.

Storage capacity is a huge issue: solar plants generate exactly zero electricity at night, which means that charging your plug-in electric car after you get home from work means that most of the charging will be done after sundown. That means you will be drawing power not from the hundred-acre solar farm, but from the batteries to store the electricity the solar farm generated during the day.

More, electricity generated and going into the battery system before going to your home is less efficient than going from the solar plant directly to your home; there is increased energy loss due to the second stop.

Another issue with electricity pricing design is charging commercial and industrial customers big fees based on their peak electricity use. This can disincentivize employers from installing chargers, especially once half or more of their employees have EVs. The research team compared several scenarios of charging infrastructure availability, along with several different residential time-of-use rates and commercial demand charges. Some rate changes made the situation at the grid level worse, while others improved it. Nevertheless, a scenario of having charging infrastructure that encourages more daytime charging and less home charging provided the biggest benefits, the study found.

It also means that charging your car at work means that you will be paying not the residential power rate, which normally drops after 11:00 PM, but the commercial rate your employer is paying. It will cost you more to charge at work than at home, not even counting the charges the employer will have to put in place to pay for the employee charging stations.

It seems as though the global warming climate change emergency activists all had this great idea, that everyone should drive a plug-in electric car — excluding, of course, the activists who don’t think people should have privately owned vehicles in the first place — but they never really thought through the problems.

Posted on by

What a surprise! Lithium prices are increasing as countries push electric cars.

In the episode “Mudd’s Women” in the original series Star Trek, Harry Mudd and the three women he was taking to sell as wives to settlers are detoured to a planet inhabited solely by dilithium crystals miners. Captain Mudd tells the three women that they’ll now be wives to “lithium miners, rich lithium miners”. Who knew that this might actually be prescient?

As President Biden and his supervisors Administration push zero-emission automobiles, and have proposed to ban the sale of gasoline-or-diesel-powered personal vehicles by 2035, many people have said that this could only drive up the cost of such vehicles. 2035 is still a long (?) way off, but sales of electric vehicles in China are already having an effect. From The Wall Street Journal:

Electric-Car Demand Pushes Lithium Prices to Records

Driven by a surge in Chinese electric-vehicles sales, the sharp rise in a key commodity for batteries could slow adoption of EVs globally

By Joe Wallace and Hardika Singh | Wednesday, September 21, 2022 | 5:30 AM EDT

Surging prices for lithium are intensifying a race between auto makers to lock up supplies and raising concerns that a shortage of the battery metal could slow the adoption of electric vehicles.

Lithium carbonate prices in China, the benchmark in the fast-growing market, stand at about $71,000 a metric ton, according to price-assessment firm Benchmark Mineral Intelligence. That is almost four times as high as a year ago and just below the record set this March in yuan terms.

Lithium is an outlier in commodity markets that have broadly retreated in recent months, reflecting gloom over an economic outlook dimmed by the Federal Reserve’s interest-rate increases and stuttering growth in China and Europe. Brent crude oil and copper—commodities used throughout industry and transportation—have fallen about 15% and 7%, respectively, this quarter. Even European natural-gas prices, propelled higher for much of 2022 by Russia’s move to cut supplies, have dropped by 10% over the past month.

But lithium keeps rising, driven by a pickup in electric-vehicles sales in China, the world’s biggest market for EVs. Car purchases jumped after Shanghai eased Covid-19 lockdowns in June, juicing demand for lithium-ion batteries. The China Passenger Car Association forecasts six million new EVs will be sold in the country this year, double the 2021 level.

“Lithium is really following the Chinese EV market and that’s just taking off,” said Edward Meir, a metals consultant at brokerage ED&F Capital Markets. “This is a preview of what could await us in the U.S.”

Draining supplies further, power outages caused by a heat wave in central China curbed output of refined lithium carbonate and hydroxide, which go into battery cathodes. Suppliers in Sichuan province—which has a third of China’s lithium processing capacity—closed factories for several days and ran down inventories to meet their sales commitments, said Rystad Energy analyst Susan Zou.

There’s a lot more at the original.

The final quoted paragraph notes a temporary problem, though one which could always recur. But the steadily increasing demand for lithium, something the proposed policies in the United States will only exacerbate, is not going to be a temporary thing.

Plug-in electric vehicles are already expensive. In Economics 101 theory, increased demand generates increased production and supply, which should bring the costs of electric cars down, but that’s theory only. The basic theory does not account for shortages of essential materials for increasing production and supply, and the lithium shortage will not be the only one which will force the prices of electric cars higher. For example, as the demand for electricity greatly increases, and more transmission lines are needed to get the required power to homes across the nation, the price of the aluminum used in power transmission lines. The price of aluminum is already increasing, due to the increased demand for canned goods, and it can only go higher.

No one who knows the first thing about economics can be surprised at this, but it sometimes appears that the environmentalists don’t know that first thing. One thing is certain: they don’t actually care about the economics of what they want, and don’t care about how the costs of their proposals will affect Other people, especially the working-class people of this country.

Posted on by

The Dummkopf from Delaware really doesn’t have a clue Enjoy paying your heating bills this winter!

We noted, on September 19th, that President Joe Biden said that we should put things in perspective, that the “inflation rate, month-to-month, was up just an inch, hardly at all”, that we’re in the position where for the last several months it hasn’t spiked, “we’re basically even.”

Well, our distinguished President doesn’t have to worry about paying his heating bills this winter, but most Americans do:

A cheery fire in our wood stove in Jim Thorpe, December 18, 2016.

Here’s how much more you’ll pay to heat your home this winter

By Kelly Hayes | Tuesday, September 20, 2022 \ 11:41 AM EDT

Americans are likely going to pay more to heat their home over the winter months.

The average cost of heating a household is set to increase by 17.2% this winter, compared to winter last year, according to a forecast by the National Energy Assistance Directors Association (NEADA), an educational and policy organization for federal programs that help low-income families pay their utility bills.

The article was illustrated with a nice, stock photo of a cheerily burning wood fire in a nice, upscale home fireplace, but I figured that, using my own photo from our previous home, was wiser for copyright purposes. Alas! Mrs Pico absolutely vetoed a wood-burning stove in our current house, because she says they make too much of a mess, so, to supplement the heat, and be a backup for when the sparktricity goes out — something not that infrequent here, and can be for several days out here in the country — we installed a propane fireplace.

The group expects the average winter heating bill to increase from $1,025 to $1,202, which would be the highest figure in over a decade.

U.S. residential electric bills are also forecast to increase 7.5% from 2021, according to the U.S. Energy Information Administration’s latest short-term outlook.

There’s more at the original.

Gas fireplace in my computer room/den.

Mr Biden is wealthy, and even if he did have to pay his own electricity and gas bills — which, for his private homes, he does — the increased costs would be an insignificant matter to him. But an extra $177 for the average working-class family? That’s a big bite. In the past, I’d have compared that $177 to a week’s trip to the grocery store, but now that’s barely half a week!

Let’s tell the truth here: for all of their protestations that they care about ordinary Americans, the Democrats really don’t understand us. The Washington elites have plenty of money, and the increases in energy costs simply don’t matter that much to them. Their proposals to fight global warming climate change will add thousands to people’s electricity bills, because so much new infrastructure will have to be built to support the greatly increased demand for electricity as people have to charge their Chevy Dolts at home. Phasing out reliable, fossil-fuel burning power plants and replacing them with solar and wind power generating facilities will cost big bucks.

By 2050, the US will demand nearly 90% more power than it did in 2018, in a scenario in which all new passenger vehicles sold by 2030 are electric and buildings and factories also aggressively electrify, according to an analysis by Nikit Abhyankar, a senior scientist at the Goldman School of Public Policy at the University of California, Berkeley.

Different scenarios will lead to a smaller increase in demand, but any changes which require more energy not from fossil fuels are going to lead to a huge increase in demand. Yet the projected increases in home heating costs are coming without any significant global warming climate change policies additions to current costs.

Perhaps President Biden doesn’t personally understand this, but his advisors certainly do, but that doesn’t matter: they just don’t care about what you have to pay, as long as they get their way.

Posted on by

Bidenflation The American working class are primarily Republican voters, so you can't expect the Biden Administration to consider them, can you?

I was wryly amused to see these two editorial links together on the front page of The Wall Street Journal’s website 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.

Another Inflation Jolt for Markets

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:

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.

Then there was this:

Biden Freezes Oil and Gas Leases

Calling Joe Manchin: Interior uses ‘sue and settle’ to suspend Trump-era approvals.

By The Editorial Board | Tuesday, September 13, 2022 | 6:53 PM EDT

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?

Posted on by

Well, imagine that! As the Feds add tax credits to buy plug in electric cars, manufacturers raise the prices of them

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!”

Oops!

Ford hikes price of electric Mustang Mach-E by as much as $8,475 due to ‘significant’ battery cost increases

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 Mach-E is the latest electric vehicle to experience a price increase, as raw material costs for batteries for electric vehicles more than doubled during the coronavirus pandemic.

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?

Posted on by

Economics aren’t #woke

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.

Inflation Widens Married Couples’ Money Lead Over Their Single Friends

Rapidly rising prices and more than two years of living in a pandemic increase the financial stress on those without pooled assets

by Julia Carpenter | Tuesday, August 16, 2022 | 7:14 AM EDT

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’s photo 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.

Posted on by

Welfare for the well-to-do Joe Manchin's deal will have his West Virginia constituents helping to pay for electric vehicle purchases by Rhode Islanders!

Remember “Cash for clunkers”? From Investopedia:

Cash for Clunkers

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:

U.S. Senate Democratic deal would expand EV tax credits

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.

Also see: William Teach: NY Times: Democrats “Inflation” Plan May Lower Costs Sometime In The Future

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?

References

References
↑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 miles. If we had bought new, well, we probably wouldn’t even have the car yet, due to supply issues.
Posted on by

Recession! The Biden Administration won’t admit it, but people know it

To absolutely no one’s surprise, second quarter Gross Domestic Product figures came in showing real economic contraction. From The Wall Street Journal:

U.S. GDP Fell at 0.9% Annual Rate in Second Quarter

The economy contracted after shrinking earlier in the year, held back by rising inflation and interest rates—marking a recession in many eyes

by Harriet Torry | Thursday, July 28, 2022 | 8:47 AM EDT

The U.S. economy shrank for a second quarter in a row—a common definition of recession—as businesses trimmed their inventories, the housing market buckled under rising interest rates, and high inflation took steam out of consumer spending.

Gross domestic product, a broad measure of the goods and services produced across the economy, fell at an inflation and seasonally adjusted annual rate of 0.9% in the second quarter, the Commerce Department said Thursday. That marked a deterioration from the 1.6% rate of contraction recorded in the first three months of 2022.

The report indicated the economy met a commonly used definition of recession—two straight quarters of declining economic output.

The official arbiter of recessions in the U.S. is the National Bureau of Economic Research, which defines one as a significant decline in economic activity, spread across the economy for more than a few months. Its Business Cycle Dating Committee considers factors including employment, output, retail sales, and household income — and it usually doesn’t make a recession determination until long after the fact.

The GDP report offered some discouraging signs, and underscored the challenges facing U.S. businesses, consumers and policy makers—including high inflation, weakening consumer sentiment and supply-chain volatility.

Emphasis mine.

So, the Biden Administration, eager as it is to use a subjective rather than objective measure of inflation, gets some political cover from the National Bureau of Economic Research, a private organization headquartered in — drum roll, please! — Cambridge, Massachusetts.

From Wikipedia:

In September 2010, after a conference call with its Business Cycle Dating Committee, the NBER declared that the Great Recession in the United States had officially ended in 2009 and lasted from December 2007 to June 2009. In response, a number of newspapers wrote that the majority of Americans did not believe the recession was over, mainly because they were still struggling and because the country still faced high unemployment. However, the NBER release had noted that “In determining that a trough occurred in June 2009, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month. A recession is a period of falling economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. The trough marks the end of the declining phase and the start of the rising phase of the business cycle.”

So, the eight economists who decide if the U.S. is in a recession using these markers declared that the 2007-2009 “Great Recession” ended 15 months after they saw the signs that it did. That’s the political cover the Biden Administration believe will take them through November 8th, election day.

But it won’t work. With a 9.1% annualized inflation rate in June, Americans don’t need dry statistics to tell them when we’re in a recession; they can feel it, in their wallets, and in their bones.

The Federal Reserve’s Board of Governors raised their base interest rates another 0.75% just yesterday, in an attempt to fight the high inflation rate, and signaled that another rate hike would probably occur.

The very low unemployment rate is what is giving the Democrats hope that this isn’t a ‘real’ recession.

GDP is measured in dollars, and spending increased across the board, as it does almost every quarter. That’s why inflation is calculated in, to keep spending numbers from obscuring actual economic growth. Yes, inflation completely wiped out the growth in spending, but there’s more to it than just that: while inflation was 9.1% in June, wage growth was much smaller, 5.1%. Consumers spent more, but their wages did not keep up with what they had to spend; the average American is poorer, in real terms, than he was a year ago.

Bidenomics has been a disaster for Americans, but, not to worry, at least he’s not sending out any mean tweets!

Posted on by

Economics writer Eduardo Porter wants gasoline to rise back to $5.00 per gallon It's for our own good, don't you know?

A bit hard to read, due to the glare from the sun, but this was the price at the station closest to my home, on Wednesday, July 20, 2022, $3.999 per gallon. It has been as high as $4.699 per gallon.

Just because you are having difficulty paying your bills doesn’t mean you shouldn’t have to pay more for gasoline!

Eduardo Porter is a Bloomberg Opinion columnist covering Latin America, US economic policy and immigration. He is the author of “American Poison: How Racial Hostility Destroyed Our Promise” and “The Price of Everything: Finding Method in the Madness of What Things Cost.” A prolific writer on economic matters, I have, sadly, been unable to find a link to his net worth, but it’s obvious that he’s reasonably well-to-do, with gigs with Bloomberg, The New York Times, and The Washington Post. It’s also obvious that he doesn’t really care about how people earning less than he does live.

The Earth Wants Biden to Keep Gas Prices High

There’s one bold move President Biden could make to curb climate change: Find a way to put a $5-a-gallon floor on gasoline prices.

by Eduardo Porter | Wednesday, July 20, 2022 | 10:10 AM EDT | Updated: July 20, 2022 | 11:34 AM EDT

When President Joe Biden visits the decommissioned coal-fired Brayton Point power plant in Somerset, Massachusetts, on Wednesday afternoon to lay out his planned executive actions on climate, his allies will be looking for bold initiatives. As Oregon’s Senator Jeff Merkley put it to the Washington Post, the impasse in the Senate created by Senator Joe Manchin’s blocking of his environmental agenda “unchains the president from waiting for Congress to act.”

Continue reading →