Lone Candle
Champion of Truth
How Much Of The Gasoline Price Surge Is President Biden’s Fault? Robert Rapier. 2022 3 13. Forbes. https://www.forbes.com/sites/rrapier/2022/03/13/how-much-of-the-gasoline-price-surge-is-president-bidens-fault/?sh=31618bce7c8b 4 reasons high gas prices aren’t Joe Biden’s fault—and one critical way he’s adding to the problem Will Daniel. 2022 6 8. Fortune. https://www.yahoo.com/video/4-reasons-high-gas-prices-090000545.html
https://www.politico.com/news/2022/07/27/what-fed-rate-increases-really-mean-00048042
“Fuel taxes paid by motorists are collected in the federal Highway Trust Fund, which is then spent building and maintaining the roads and bridges those same drivers use. The federal gas taxes, excluding the tax on diesel, make up about 60 percent of tax revenue dedicated to the Highway Trust Fund.
Fairness demands charging drivers for the roads. The only alternative would be to require nonmotorists to subsidize driving infrastructure for them.
A user fee-like fuel tax also keeps road spending in line with demand for roads. It’s harder to fund bridges to nowhere if people’s fuel consumption, and the taxes they pay on it, aren’t generating enough revenue for new projects.
Suspending the gas tax, therefore, makes road spending less fair and less efficient. It would also be fiscally costly. Road construction and maintenance don’t become free just because gas prices are high. Suspending the gas tax only gives road users a break from paying for it.”
“Inflation isn’t getting much better: Consumer prices surged again in June, reaching a new four-decade high as many Americans are already feeling frustrated with higher costs denting their budgets.
The US Consumer Price Index (CPI), which measures the change in prices for goods and services, rose 9.1 percent from a year earlier and 1.3 percent from May, according to Labor Department data released on Wednesday.
The new numbers mean the Federal Reserve is likely to continue aggressively raising interest rates, making it more expensive to borrow money in the hope that Americans will spend less. The jump in inflation is bad news for President Joe Biden, whose approval ratings are stubbornly low. And although gas prices have started to drop in recent weeks, economists and forecasters warn that the situation might not significantly improve for some time, making it harder for people to afford essentials like housing and groceries.”
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“Nearly everything grew more expensive, but the price gains were mainly fueled by an increase in energy, food, and shelter costs, which have been climbing for months amid supply chain disruptions and Russia’s invasion of Ukraine. Energy prices drove most of the gains, with gas prices up 11.2 percent in June from the month before. Food prices increased 1 percent as consumers paid more for cereal, dairy products, fruits and vegetables, and other items at the grocery store.
Core prices, which exclude volatile food and energy costs, rose an uncomfortably high 0.7 percent from May to June, a slightly bigger increase compared to the month before, when core prices jumped 0.6 percent.”
“Sri Lanka’s economy is in free fall. The country doesn’t have enough money to buy essentials: food, medicine, and especially fuel. Buses can’t run, schools can’t open. The economic crisis was years in the making because of mismanagement, but terror attacks in 2019, and later the Covid-19 pandemic, which shriveled Sri Lanka’s tourist economy, pushed it to the brink.
But the domestic political turmoil unfolding in Sri Lanka also links back to the instability across the globe, including the war in Ukraine and all of its consequences.”
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“I tend to believe in markets, but I will say that markets for basic necessities like food, these are not markets you want to operate according to cold economic logic. The market for food is not a market where you want to wind up at the end of the sale with no available supply. We can’t have that because we need to have buffers in the system precisely because of events like the ones we’ve seen. And so if that’s physical grain reserves, [or] if it’s governments willing to use what they call virtual reserves, which are basically governments, in a coordinated fashion, intervening in markets to short these futures contracts to drive prices back down.
There are things that can be done. It’s just going to take an investment of resources and, I think, broader awareness of the enlightened self-interest that it does not make the United States any safer and more prosperous to exist in the world where many of our trading partners and many of our strategic partners around the world are facing instability because they can’t feed their populations.”
“as the export bans bite over the coming months, Russia will start to crave banned goods that are essential for its military and domestic economy. The Kremlin will also want to replenish its war chest with revenue from sales of sanctioned products — from coal and oil to caviar — to willing buyers overseas.
That means, sooner or later, Moscow will go sanctions busting.”
“You try to explain two broad things about sustained economic growth: why it started when it did (in the mid-18th century) and why it started where it did (England). Let’s start with the when. What took so long? Humans invented agriculture maybe 10,000 years ago. Why did it take 9,800 years or so for that to lead to real economic growth?”
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“This is one of the key questions in all of economics. Its answer is central to why some countries grew rich while others have not. The simplest answer is that economic growth occurred only after the rate of technological innovation became highly sustained. Without sustained technological innovation, any one-off economic improvement will not lead to sustained growth. Incomes will rise in the short run, but over time people will have more babies and those babies will eat up all the economic surplus. This is known as the “Malthusian trap,” after Thomas Malthus, a British clergyman of the late 18th century. This Malthusian logic explains the pre-industrial world pretty well.”
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“The question is why it took so long for the rate of technological innovation to grow as it did. This is one of the central questions we attempt to answer in this book. And there is not one “silver bullet” answer. For one, sustained innovation requires institutions that limit confiscation by the government (and protect other property rights more generally). But most societies in world history were weak on this dimension.
Sustained innovation also requires cultural values that support innovation and encourage understanding of how the world works. Societies in which work is looked down upon are unlikely to experience sustained innovation.
Ultimately (and this matters for the acceleration in growth we observe from the late 19th to the 20th centuries), it also helps if families limit the number of children they have. This does not necessarily contribute to innovation, but it does mean that innovation will more quickly translate into growth.
Most societies in world history had none of these features, let alone all of them. It took a while for all of these preconditions to coalesce in one nation. But once it did, economic growth took off.”
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“[In our view], the decisive break responsible for industrialization rests on developments that seem to be only indirectly connected to the story of colonial exploitation. But future work might change my opinion on this subject.”
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“On the one hand, the sugar economy boomed in the 17th and 18th centuries, and cotton was the major input into the textile factories at the center of Britain’s industrialization. These crops were produced with slave and coerced labor.
On the other hand, the evidence is fairly weak of a connection between the products of exploited labor and the innovations that were central to the onset of modern economic growth. This is not to deny a connection between the two, and reasonable people disagree over the relevant counterfactuals. Had there been no slave labor in the New World, would the Lancashire factories have been able to get enough cheap cotton to make innovation worthwhile? Would innovation have been possible with more expensive cotton of different quality from other parts of the world?
Our book leads to the conclusion that there is no silver bullet explanation for why the world became rich. Colonization likely played some role, and it likely played a much greater role in keeping large parts of the formerly colonized world poor. But there are many key features of the onset of growth that cannot really be accounted for by colonization. Most importantly, explaining how the world became rich requires an explanation for why the rate of technological change rose so rapidly. Colonization may have played an indirect role in this process, but there are many other causes we highlight that were much more direct and relevant.”
“Here’s a big number: $44 trillion.
That’s how much of the world’s total economic output is dependent on animals and ecosystems, according to the World Economic Forum. Insects pollinate commercial crops, coral reefs protect coastal buildings, wetlands purify water, and all of those services — and more — help fuel economic growth.
If the economy is embedded in nature, then the global decline of wildlife and ecosystems is a risk for companies and investors alike. If insects vanish from farmland, say, farmers might have to pay to import pollinators or produce less, which hurts their bottom lines. That’s one reason why WEF ranks “biodiversity loss” as the third most severe risk to the economy over the next decade, after failure to act on climate change and extreme weather.”
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“Three-quarters of the world’s food crops (and a third of global crop production) depend to some extent on pollination from birds, bees, and many other insects and small animals. And some insect populations have fallen by more than 70 percent in just a few decades. In fact, there are farmers in California who already pay to import bees because there aren’t enough local pollinators. That could eat into investor returns.”
“Tariffs raise prices. That is literally the thing they do.”
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“Tariffs, by design, raise prices.”
“It’s undoubtedly true that international trade, like all forms of market competition, disrupts some American companies and workers that, through government protection, formerly had the U.S. market to themselves. However, the economic case for free trade remains rock solid. American consumers (who are also American workers, by the way) gain from new access to goods and services at lower prices and in greater varieties. These gains come not only from foreign-made items but also from similar domestic ones that are now forced to compete with imports on price and quality. Studies show that trade’s “consumer surplus” is far more significant than a few cents on the proverbial cheap T-shirt. Recently, for example, several economists have found that falling prices caused by Chinese imports into the United States during the 2000s generated hundreds of thousands of dollars in consumer benefits for each American job potentially displaced by the China Shock—the equivalent of giving every American “$260 in extra spending per year for the rest of their lives.” Similar gains occur outside the United States: European consumers, for example, save €60 billion per year (about $64 billion) from lower tariffs resulting from the European Union’s entry into the WTO. Studies also uniformly find that these benefits—again contrary to the conventional wisdom—tend to disproportionately aid the poor and the middle class, who have tighter budgets and concentrate their spending on tradable sectors like food, clothing, footwear, and consumer electronics.
The consumer gains from trade are a big reason why Americans today work far fewer hours to own more and better essentials than at any prior time in history. Dartmouth economist Bruce Sacerdote finds that lower-income Americans’ overall consumption (adjusted for inflation) increased by 62 percent to 164 percent between 1960 and 2015, not fully accounting for improvements in quality. In other words, poorer Americans today can consume about twice as many goods and services as their 1960 counterparts, and expanded international trade is undeniably a big reason why.
Additionally, domestic companies and farmers gain financially from exporting their products”
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“American companies also gain from foreign direct investment”
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“the supply chain crisis? Another miss. For starters, multinational corporations and consumers have been adjusting their practices—diversifying suppliers, building inventories, investing in new capacity, altering spending patterns—since COVID first hit. Keeping trade and investment lanes free from government interference helps facilitate this adjustment. Just as important, there’s scant evidence that reshoring supply chains would help the country withstand future economic shocks. Two recent studies (one from the OECD and another from German research network CESifo) found, for example, that an economic shock abroad would hit a “decoupled” U.S. economy just about as hard (in terms of stability or welfare) as our current, globally integrated one. Any meager benefits, moreover, would come with major costs: Insulation from foreign shocks makes a nation more susceptible to domestic shocks (say, a freak ice storm in Texas) and intensifies any resulting pain because local supply chains adapt more slowly than global ones.”