“One of the most damaging legacies of the intersection between racism and fossil fuels is how highways were built to cut through Latino and Black communities. The Federal-Aid Highway Act of 1956 alone displaced more than 1 million people, according to the Department of Transportation. People who remained near these roads, overwhelmingly communities of color, were exposed to more fine particulate matter from the tailpipes of cars and trucks.
That legacy lingers today. A mountain of research has shown how Black people nationwide are exposed to more damaging pollution from construction, power plants, roads, and industry than white people.
The Inflation Reduction Act includes a federal infusion of cash for community projects aimed at addressing some of the harmful effects of these projects. There is $3 billion marked for Neighborhood Access and Equity Grants, in addition to $1 billion already approved under the bipartisan infrastructure law last fall.
The money can be used for many things, including improving walkability, capping wells, installing noise barriers, and reducing the urban heat island effect. But one way communities could use the funding is to just remove a road, highway, or other types of damaging infrastructure. They can also reconnect communities divided by highways in other ways: “multi-use trails, regional greenways, or active transportation networks and spines.””
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“Slashing climate emissions requires doing two things at once: electrifying things like cars and stoves that typically run on fossil fuels, while also cleaning up fossil fuels in the power sector so that pollution doesn’t just come from another source. That’s the reason the US will have to shut down its last 172 coal plants within the decade to finally make good on its climate promises.
One surprising policy to help with this transition made it into the final bill, even though it needed Sen. Joe Manchin’s (D-WV) sign-off: $10 billion in direct payments to rural electric co-ops that pay for the cost of a clean energy transition. The USDA will administer direct payments for these co-ops to retire coal-fired power plants.
Many of the last coal plants standing are serving rural communities. E&E News noted that “about 32 percent of the power that supplies co-ops nationwide came from coal in 2019.” Investor-owned utilities, by contrast, generated 19 percent of their electricity from coal in 2020.
These rural co-ops, which are collectively owned and governed by the communities they serve, have moved away from coal slowly more for economic reasons than political ones. These coal plants tend to be newer, and the communities they serve may be more risk-averse to transitioning to renewables because they have to pay directly for the cost of the transition.
But before rural communities can even think about transitioning to solar and wind, first they have to shut down the coal plants. And that can be expensive because it includes paying off any debts. (A separate $5 billion Department of Energy program in the bill offers loans that lower debts and costs for privately owned utilities to transition to renewables.)”
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“The more controversial part of the bill is its funding of carbon capture for oil, coal, and industrial sites. Typically, these technologies have been used to just pump CO2 back in the ground for more drilling, rather than to do anything about the climate crisis. Still, prevailing climate science shows that some of this technology is probably needed to address the harder-to-decarbonize parts of the economy. So the federal funding for scaling new technologies could manage to go a long way over the long term.”
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“the act includes $20 billion for “climate-smart” agriculture, which could help farmers store more carbon in their soil and plants.
Part of that money, for example, will go toward an initiative called the Conservation Stewardship Program, which essentially pays farmers to make their land more environmentally friendly, such as by planting cover crops. Cover crops, planted when the ground would otherwise be fallow, are one way to increase a farm’s potential to store carbon (and can also help avoid emissions).
Another $5 billion in funding goes toward preventing wildfires and protecting old-growth forests, which are rich in carbon. This is critical because the US is expected to lose more of its natural carbon sinks over time under business-as-usual scenarios.”
“The main idea behind AT&T’s acquisition of what was then-called Warner Media — first announced in 2016 but not finished until 2018 — was that the phone company could turn HBO into its own Netflix and that Wall Street would reward AT&T for owning its own Netflix. So in 2021, when it became clear that investors didn’t care about AT&T’s media foray, the company flipped a switch and dumped its entertainment assets to Discovery, the cable TV programmer best known for reality shows like 90 Day Fiancé.
But now Discovery has multiple problems. For starters, it has $53 billion in debt, much of it taken on with the Warner deal. Which means instead of spending aggressively to take on Netflix and Disney, it has to look under couch cushions for change, and David Zaslav, the CEO of the newly combined company, has promised Wall Street he’ll find $3 billion in cost savings … somewhere.
But the bigger problem is one that everyone in streaming — including Netflix — is grappling with now: Wall Street no longer likes Netflix. Netflix’s stock, which got as high as $700 last fall, is now down 50 percent because Netflix’s 10-year record rocketship growth appears over: During the first six months of this year, it actually lost subscribers. So now Wall Street, which had encouraged media companies to adopt Netflix’s growth-first, profits-maybe-later strategy, wants them to change course. (One important exemption from this: Amazon and Apple, which are tech companies dabbling in media, so they can basically spend whatever they want on programming: See Amazon’s Rings Of Power — a gazillion-dollar Lord of the Rings prequel that is very much supposed to be Amazon’s Game of Thrones. Not coincidentally, it will debut a couple weeks after House of the Dragon.)”
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“Discovery plans to merge its streaming service with HBO Max sometime next year. Which means that at some point you’ll have the ability to subscribe to something that includes both House of the Dragon and Dr. Pimple Popper, a Discovery reality show that’s just what you think it’s about. You can turn up your nose at that pairing — or you can acknowledge that it’s a lot like TV used to be, when in order to subscribe to HBO, you also had to get a package of cable channels that were nothing like HBO. Streaming’s not going anywhere, but the cable TV model is going to stick around for a while longer, too.”
“The latest Consumer Price Index (CPI) by the Bureau of Labor Statistics (BLS) shows that prices ticked up by 0.1 percent for urban consumers in August, for an annualized increase of 8.3 percent for the year. The marginal increase in inflation comes in spite of fuel costs falling 10.3 percent last month.
“Increases in the shelter, food, and medical care indexes were the largest of many contributors to the broad-based monthly all items increase,” said the BLS in its news release today. The latest CPI numbers show a 0.7 percent increase in shelter costs in August and 6.2 percent over the past year.
The BLS measures both cash rents paid by tenants and something called Owners’ Equivalent Rent—a measurement of how much an owner-occupied home could be rented for. The bureau doesn’t include home prices in the CPI.
Spot rents reported by listing companies are growing at an even faster rate. Apartment List reports a 7.2 percent increase in rental prices so far this year. That’s moderate compared to the 17.6 percent increase in rents the company reported in 2021. It’s still well above pre-pandemic increases from 3.4 percent and 2.3 percent in 2018 and 2019 respectively.
Rents plunged during 2020, driven by an urban exodus from high-cost coastal metros like New York City, San Francisco, Los Angeles, and Seattle. Many of those same cities are where rents are growing the fastest—alongside many of the Sun Belt metros where people fled to during the pandemic.
That suggests at least a partial reset of migration patterns during the pandemic. People are returning to the city (although not necessarily to the office).
The upshot is that the country’s housing affordability struggles aren’t going anywhere. Some analysts warn that they’re likely to get worse.”
“Immigrants are 80 percent more likely than native-born Americans to found a firm, according to a study released this May by researchers from the Massachusetts Institute of Technology. But more than that, a report released this week by the National Foundation for American Policy (NFAP) indicates that immigrants are disproportionately responsible for starting high-value companies.
According to the NFAP, a nonprofit that researches trade and immigration, immigrants have started 319 of 582, or 55 percent, of America’s privately-held startups valued at $1 billion or more. Over two-thirds of the 582 companies “were founded or cofounded by immigrants or the children of immigrants,” notes the NFAP. For comparison, approximately 14 percent of America’s population is foreign-born.
Together, the immigrant-founded companies are valued at $1.2 trillion and employ 859 people on average. Elon Musk’s SpaceX has the largest valuation at $125 billion, employing 12,000 workers; Gopuff, a food delivery service valued at $15 billion, has 15,000 employees; Stripe, a payment platform valued at $95 billion, employs 7,000; and Instacart, a grocery delivery service valued at $39 billion, has 3,000 workers.
These findings are notable, the NFAP points out, since “there is generally no reliable way under U.S. immigration law for foreign nationals to start a business and remain in the country after founding a company.” A large share of the immigrant startup founders came to the country as refugees, on family-sponsored green cards, or through employment-based pathways for other companies.
“Our employment-based pathways for immigrant entrepreneurship are so poorly designed, migrant businesses are often associated with non–employment based pathways,” points out Sam Peak, an immigration policy analyst at Americans for Prosperity. Peak notes that refugees “have the highest rates of entrepreneurship of any other immigrant group,” and family-based migration, “especially among siblings, is also strongly tied to new business formation.”
Lawmakers have introduced a number of measures this year meant to bring more entrepreneurial and highly educated immigrants to the United States, but many of these have been included in—and eventually stripped from—larger bills.”
“To armchair economists, industrial policy seems like a solution for the country’s economic woes: “Infuse money into Industry A, add trade protections for Industry B, protect workers in Industry C from automation, and the economy will soar! New technology will arrive sooner, domestic firms will outcompete foreigners, and steady employment will ensure a chicken in every pot.” That indeed was the thinking behind Depression-era policies which extended that crisis by seven years.
Economies are not deterministic like physics or chemistry. You can’t pull a lever to achieve a particular effect. A better analog is biological or ecological systems, where there are second- and third-order effects to any given stimulus.
Think about the reintroduction of wolves to Yellowstone National Park: Increased predatory pressure keeps elk herds on the move, leaving more young willow trees for beavers. Growing beaver populations dam more waterways, altering the habitat and spurring additional difficult-to-predict effects. That’s economic policy: You must plan for unexpected downstream effects (pun intended).
That thinking has been missing in Congress this past month. I don’t know what microchip subsidies or a mistitled inflation-fighting bill will ultimately do, but neither do our elected officials.
Compounding the problem is that people, not some agnostic supercomputer, determine which industries and companies are considered worthy of a boost. Humans are subject to influence and pressure, turning industrial policy into a contest of who can secure the most government favoritism—a political game of Hungry Hungry Hippos.
Policies protecting companies from competitive pressure, like subsidies or tariffs, allow them to take their eye off the ball. This “X-inefficiency” means they’re less efficient and pay less attention to customers’ desires.”
“The bill also puts restrictions on which EVs can qualify. Starting in 2024, an EV that qualifies for the full rebate amount must source at least 40 percent of its battery’s components—including minerals such as lithium, cobalt, manganese, and graphite—from either the U.S. or a country with which the U.S. has a trade agreement. Also starting in 2024, no minerals can be sourced from a “foreign entity of concern,” such as China.
The stipulation was part of a compromise with Sen. Joe Manchin (D–W.Va.), whose support was critical to the bill’s passage. Manchin insisted that the bill take a hard line on China, telling reporters: “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains. I’m not going to do it.”
But 60–80 percent of EV batteries’ mineral ingredients are controlled by China. That country currently produces 76 percent of the world’s lithium-ion batteries, while the U.S. produces only 8 percent. Despite ambitious plans to scale up, the U.S. and Europe together will likely account for only about a quarter of total global production of EV component minerals by 2030.”
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“Politico suggests that the government can simply get around these strictures by issuing waivers, much as it has done for steel tariffs. In practice, steel waivers incentivized cronyism, with Washington bureaucrats picking and choosing which companies received waivers and which did not. And if a law has problems, surely the best place to deal with that is in the text of the legislation itself, not an unstated hope that the administrative state will fix the issues when they arise.”
“Steering clear of disaster required some 20 straight hours of talks beginning Wednesday that taxed Labor Department coffee supplies, kept West Wing office lights burning through the early hours and left everyone involved bleary-eyed and largely sleepless.”
“many Fed watchers say some of the root causes of inflation lie outside the central bank’s control, like the U.S. labor shortage, global supply chain snags and Russia’s war on Ukraine. They’re raising concern that higher rates could crimp growth without leading to much relief on prices — a point that Sen. Elizabeth Warren (D-Mass.) has hammered away at Powell for months.”
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“Markets are expecting rates to rise nearly 2 more percentage points by the end of the year. That would bring them to a level that is more normal by historical standards — the Fed’s main borrowing rate would sit above 4 percent — but is staggeringly high compared to the near-zero rates that have mostly prevailed for more than a decade.”
“Despite the bill’s name, independent analysts have found it will have virtually no impact on inflation. In reality, it is a pared-down version of what Biden originally pitched as the “Build Back Better” plan—it leaves aside much of the original bill’s spending, but it maintains a huge corporate tax increase, huge spending on green energy initiatives, and a plan to swell the ranks of IRS agents. What was originally a roughly $4 trillion proposal that would have relied heavily on borrowing ended up being something of a rarity in Washington: a bill that will raise more revenue than it spends.
And where will it get that revenue? Quite possibly from you. Households earning as little as $50,000 annually are more likely to see a tax increase than a tax break from the legislation.
In the final hours before the House vote, the Joint Committee on Taxation (JCT) completed a breakdown of how the bill’s corporate tax increases would affect households at various income levels. The JTC, a nonpartisan number-crunching agency within Congress, found that households earning between $50,000 and $75,000 are more likely to see a tax increase than a tax decrease next year.
Higher-earning households are more likely to see tax increases, but households earning more than $1 million next year are actually far more likely than lower-earning households to get a tax break.
That fits with what The Tax Foundation, a tax policy think tank, found when it analyzed the bill. The Inflation Reduction Act will “would also reduce average after-tax incomes for taxpayers across every income quintile over the long run,” the Tax Foundation reported on Wednesday. Those tax increases will reduce long-term economic output by about 0.2 percent and could eliminate 29,000 jobs, the group found.”
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” Tax increases on corporations get passed along from the board room table to the kitchen table in a variety of ways: lower pay for workers, higher prices for consumers, and smaller investment returns for shareholders.”
“Housing keeps getting more expensive — and even though new data shows that overall price increases are slowing down, surging rent prices underscore how difficult it could be to bring inflation under control.
Prices were 8.3 percent higher in August compared to a year before, according to the Consumer Price Index report released on Tuesday. That’s slower than it was the month before, when inflation climbed 8.5 percent, but it’s still uncomfortably high for consumers and policymakers. Prices picked up 0.1 percent from July to August.
One of the biggest drivers of inflation has been higher rent prices. According to data from Zillow, the typical US monthly rent was $2,090 in August, up 12.3 percent from a year before. That is much higher than it was before the pandemic — in February 2020, the nation’s average rent was $1,660.
According to the CPI report, shelter prices — which include rent, lodging away from home, and household insurance — rose 0.7 percent in August from the month before, the biggest monthly jump since 1991. The rent index by itself also increased 0.7 percent from July, and was up 6.7 percent from a year ago.”
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“Sarah House, a senior economist at Wells Fargo, said that rent prices could be decelerating as supply improves and landlords start to “get a little bit more realistic” about how much they can charge before they see more pushback from renters. But she said that rent prices in the CPI measure tend to move slowly, so it could take time for the government data to reflect the price deceleration that private-sector data may already be picking up.
That’s largely because the government data also takes into account existing rentals, while many private data sources only examine prices for new leases to capture current market conditions. Since rents typically change when leases expire, which tends to happen annually, this can lead to a lag in government data.
“I think we’re close to beginning to see a slowdown in the monthly rate of the price gain,” House said. “But it’s still likely to remain pretty strong in a historical sense for some time.”
Omair Sharif, the founder and president of research firm Inflation Insights, also said rent price gains could slow in the coming months as the CPI measure eventually catches up to private-sector data.
“Around the end of this year into the first quarter of next year, we should probably start to see the CPI data start to mimic more closely what we’re seeing in terms of that deceleration,” Sharif said.
A deceleration in rental price growth could help bring down overall inflation closer to the Fed’s goal of 2 percent annual inflation. Although prices for rent, food, and medical care climbed in August, prices for gasoline, used cars, and airline fares dropped.
Still, mortgage rates have skyrocketed to their highest levels since 2008 and home prices remain much higher than they were before the pandemic. That has made it harder for people to afford monthly payments, leading to some potential homebuyers being priced out of the market. If people continue renting rather than buying, that could drive up demand for rentals and keep prices high.”