“Well, Joe Manchin wasn’t intent on completely destroying Joe Biden’s economic agenda after all. After the bipartisan CHIPS Act passed, the recalcitrant West Virginia senator immediately announced that he was open to a reconciliation bill.”
I think this is unfair to Manchin. While Manchin’s first outburst over BBB seemed genuine (and somewhat sympathetic, given the fact that he made his wishes clear at the start of negotiations, and was dragged through the mud by lefties with no concept of how difficult winning is in West Virginia), I think it is quite likely that the second time Manchin “killed” the Democrat’s reconciliation hopes was a feint.
Mitch McConnell made it quite clear that Democrats would have to choose between CHIPS and a BBB-style reconciliation bill. He only assented to CHIPS being bipartisan because Manchin baited him into believing that the reconciliation bill was dead.
This is why Manchin announced the deal as soon as CHIPS was passed, and not before, and is a masterclass in political gamesmanship. Having a maverick on your side can be frustrating, but it is also a useful tool. Democrats could stand to be more grateful towards the Senator who wins in 70-30 Trump country.
Did you read that New Yorker article about the Congressional staffers rebelling and telling Biden and Schumer to strip Manchin of his committee assignments, and just generally stop sucking their thumbs and saying "there's nothing we can do"? I wonder how much that played into it.
Yes. I highly doubt the sourcing for that article.
First, I know some Senate staffers, and while they are tight-lipped, none took this particularly seriously. It was a publicity stunt that actually interfered with negotiations. (And had more House staffers than Senate staffers.)
Second, the only people in recent memory to be stripped of their committee assignments are Steve King and Marjory Taylor Greene. This is not something you just do to somebody. Even Republicans have committee assignments. Would Manchin get his back if he switched parties?
Third, Manchin was fully willing to tank BBB just because he was ticked off. He won in a 70-30 Trump state. Committee assignments aren’t leverage, because Manchin could just choose to retire and permanently fuck the Democrats chances of keeping the Senate.
The leverage proposed in that article is unrealistic and the author is far too credible of someone trying to boost their own career.
In fact, that article and your comment are excellent examples of my point. Be more grateful to Manchin.
Largely agree on the overall points here. Another relatively more minor change I'd love is for the EV incentives to extend beyond EVs to other forms of mobility, and notably eBikes. They're really starting to catch on, even in car-centric areas, and with even just a fraction of the help we're giving people to buy EVs, could accelerate that much faster.
"Government investment is inflationary in the short term and deflationary in the medium term"
The unspoken assumptions behind this statement speak volumes about Noah's worldview. Government investment in needed infrastructure can be deflationary. If there are no ports, and no private parties will build port facilities, government investment in building ports can indeed be deflationary by reducing costs for trade. But we already have quite a lot of ports, and I doubt we need more. If there are no decent roads connecting the country, government investment in roads can be deflationary by reducing costs of trade and transportation. But we already have a lot of roads, and returns from more roads will be marginal at best. If rivers move large amounts of potential energy that is not tapped, while posing flood risks, water projects can provide cheap electricity and flood control that protects property and lives. But, we've already done about all the water projects that are worth doing, and a lot of small projects are being dismantled to return rivers to more natural states.
But, most government "investment" is really just funneling large amounts of money to interest groups that are part of a political coalition. Obama's "investment" in education was really about giving colleges and education unions more money for more salaries and union members. Biden's "investment" in green energy is really about directing lots of money to the various companies and organizations that make "green" equipment. No amount of government subsidy will change the basic economics of energy: green energy is more expensive than conventional, and increasing the share of energy provided by "green" sources comes at higher and higher costs. It's true that massive subsidies for solar and wind energy will likely lead to more construction of solar and wind energy facilities. After all, we've seen this approach in Germany, Spain, and the UK as well as in the US. None of this has led to lower energy costs.
I must confess to being somewhat bemused at the way people in Noah's area treat "dealing with climate change". A few years ago, stopping warming at 1.5C was absolutely crucial to maintaining an livable world, and the only way to achieve this was by eliminating all greenhouse gas emissions by 2030. Now, the goal is to get to Net Zero by 2050, even though there's no strategy for doing so. Practically, most targets seem to aim for reductions of 10% or 20% in 10 years, which are actually pretty aggressive targets. But, if we need 100% reduction to avert catastrophe, why claim success at spending huge amounts of money to get only a fraction of what we need?
It seems to me that, for most people pursuing climate change strategies, the goal isn't to prevent climate change, or to mitigate the effects of climate change, but to pursue an anti-industrial, anti-consumer, anti-market agenda more reminiscent of 1960s hippies than anything else.
“But we already have quite a lot of ports, and I doubt we need more.”
This, at least, is untrue. Restrictions on foreign dredging boats, a lack of investment, and bad unions have meant that US ports are far behind the world technologically and in terms of capacity. This is at least partially responsible for recent supply chain shocks.
Also, green energy is cheaper than oil and gas in some situations, and including subsidies for fossil fuel companies (which are greater than those for renewable energy), is consistently cheaper than oil and gas. This is why Texas has significant wind farms, or why most states have significant hydropower.
In fact, while the cost of oil and gas generation fluctuates around oil prices, the cost of wind and solar has decreased exponentially, by its own version of Moore’s Law.
While I agree that far too many progressives market wage subsidies as investment, your accusation that this is the purpose or the effect of dealing with climate change is immensely stupid. Climate change is expensive, dealing with it ahead of time is less expensive.
What you describe for ports is not a need for investment, but maintenance. Maintenance is always important, and generally neglected in public works. If this bill actually authorizes needed maintenance, that's good. I don't know the specifics, but money appropriated through politics is generally for splashy projects that give good photo opportunities, not for dull things like dredging.
I know Noah claims that green energy is often cheaper than fossil fuels, but all the studies I've read making this claim include current subsidies for renewables in their calculations. It's certainly true that green energy is cheaper if you subsidize it enough, but that's a different point. I'll grant that hydropower is often cost effective, but all the good hydro opportunities have been exploited - hydro is not the path to a green energy future. But, the picture is worse than this for renewables: under current conditions, and any conceivable future, we need to have a conventional generation system as backup because renewables are not reliable and not storable. If you include the cost of building and maintaining fossil fuel generation as a backup, a system heavily reliant on renewables looks even more expensive. And, Texas has significant wind farms because the federal government pays wind farm developers to build wind farms, not because they're cost effective.
You claim that there are subsidies for fossil fuel companies, but all the specifics I've seen for this claim refer to things like allowing LIFO cost accounting, which is allowed for all companies in the US, or to foreign governments like Iran and Egypt that subsidize oil prices for their citizens. If you know of any "real" subsidies for fossil fuels in the US, please let me know.
You are correct that the cost of wind and solar has decreased. It is conceivable that they may decrease enough to make them cost effective in some situations without direct subsidies. But, without a solution for storage (which is not even in concept stage beyond a few web enthusiasts), an all-renewable energy system is not possible. Unless you're willing to live with a system that features regular blackouts.
Your confidence in the pure intentions of Democratic lawmakers and Progressive activists is touching. I will stipulate that most of these people don't see climate change programs as primarily giveaways to favored industries. I merely claim that is the effect - that impacts on climate change will be minimal (by the activists' standards), at great cost, with substantial profits going to companies in the "right" industries.
I will agree that climate change will (likely) be expensive. If you want cost effectiveness, it makes much more sense to "invest" in mitigation like improved water supplies, flood control, soil conservation, and habitat preservation, than to invest immense resources into prevention measures that will (again, by the activists' claims) be ineffective.
I don't think the issue was lack of ports, but rather difficulty in getting ships unloaded, which may have been mainly driven by inability to get trucks in and out of ports.
If Biden tries to build new ports, I expect he'll run into great political opposition from the people who operate the current ports and the politicians who represent them. But, you never know.
Ok that is why that particular supply issue was fixed.
Going broader though poor infrastructure beyond ports leads to economic supply problems.
The American Association of Civil Engineers produce a report card on US civil infrastructure every couple of years. Obama (with Furman?) began to take notice of this in his second term and I think it appeared in the later budgets. But it was dropped since then.
It is seen as a fiscul stimilus spend but it also is a supply side benefit.
However you are right that it becomes a political difficulty. Still it should be in the budget no matter the party.
Our host had a post on Bidenomics from last year. He does mention civil works in the Biden budget which I missed. I have just joined this newsletter so I am afraid I missed that.
"green energy is more expensive than conventional, and increasing the share of energy provided by "green" sources comes at higher and higher costs." Interesting that you say this, when from what I read renewables are now cheaper than fossil fuels, and getting cheaper. I use 100% renewables here in California and the cost is, according to PG&E, almost exactly the same as conventional.
Where do you read that renewables are cheaper than fossil fuels? When you do, click through to the source information, and read how they do the calculations. Every time I've done this, you come across something like "assumes current federal subsidy policies" or "assumes lower required Return on Investment for renewable projects". These are indicators that subsidies are included, and are critical to making renewables appear cheaper.
Regardless of what PG&E says, I strongly doubt you're using 100% renewables. How much electricity do you use at night? Where does it come from?
Solar has decent shot to be/become cheaper than conventional energy (manufacturing costs keep comes down, efficiency goes up, can be distributed and save on transmission loss / network costs, etc.). Wind am much more skeptical - main way to increase efficiency of these things is to build them bigger which quickly runs into space / noise pollution / maintenance cost and other issues. As for storage agree it's a big issue right now. Lots of people working on solutions, one may or may not be found in near future, but it's not something that necessarily dooms renewables forever.
You did not mention the painfully obvious that there’s a trade off between unemployment and inflation.
We are having a very weird recession: the unemployment is extremely low at 3.6%, “help wanted” signs all over the town. And you and me are paying for their wages. You can’t completely blame inflation on Putin’s invasion on Ukraine or China’s “zero Covid” policy.
Both Trump and Biden administrations seem to prioritize and actively brag about having low unemployment. This really make me wonder, does America in 2022 still have enough social cohesion to handle, say, 10% unemployment without some prolonged nationwide riot? At least that’s my theory, a bit conspiratorial maybe, on the bipartisan obsession over low unemployment rate?
Maybe it’s a good time to deliberately make the 10% unemployment happen, just like a painful exercise that is ultimately good to the nation's health? . One good effect of the Great Depression is that US exposed and weeded out it’s extremist elements (Nazis, Communists) and maybe that laid foundation for its ultimate victory in WWII?
Well, essentially it is the take of Elon Musk when he talked about the good sides of a recession, I am just focusing on the political instead of economic aspect.
I am from China where no recessions happened in the past 40 years due to active government intervention to smooth the recession out. And now we seem to be facing a catastrophe that is both economic and could already be political. In the end it is futile to "smooth out" business cycles.
The economic policy of both Republicans and Democrats after 2008 really has a Chinese feel to it, in that no recessions are actually allowed to happen. Interest rate was close to zero for a long, long time. There should have been recessions in 2015/2016 and 2020 but they never really happened. To someone raised in China it just screams of the Party slogan of "Stability triumphs everything" and feels unlike the fearless stereotype of USA. I don't recall such timidity during, say the 2000 dot.com bubble. Don't you feel that there is something wrong when almost all the big corporations in 2009 are still around in 2022?
My understanding of American politics is that the 2008 recession was a serious blow to the legitimacy of the American political system, hence Tea Party and later MAGA on the right and OWS and later Bernie/AOC on the left... And maybe that affected the elite's decision making process? Again maybe just my conspiratorial thinking...
I like the deal overall, from both a politics and policy standpoint. It pushes us in the general direction of fighting costs, and not in the "dumb" way of disincentivizing consumption, but in the "smart" way of increasing supply. It's Supply-Side-Progressivism writ large.
But I am curious about how these individual provisions will hash out in terms of "unintended consequences". The stuff about drug price rebates hints that there are a number of kludge-y or kludge-ish policies that could end up undermining long-term reform.
Also of note is that it doesn't seem to include increasing the cap on med school slots, which could be the single biggest policy to reduce health care costs.
Love the 15% minimum corporate tax! I'm all for paid-for subsidies and maybe this will help rebuild trust (people hate seeing Amazon not pay taxes). I hope they will do the >$400k tax increases to do housing and other investments in their lame duck session. It's a real shame they didn't start out this way. They could have accomplished so much more. 2021 is going to go down as a historic political disaster and a complete misread of their mandate from the 2020 election.
One of the reasons Manchin called off BBB was its size causing inflation. This latest is quoted at 360 billion. I thought BBB was coming in at 3 trillion. So he has certainly gained there.
The Act could be called the Larry Summers' Redemption Act -- he has some moves to correct. Then, better than "telling" people to live differently, how about teaching them better, more fair, ways to live, K-16? Just think, it would circumvent those "ruinous costs", save the planet, and give people a better basis for decision-making than they get now, either from the markets or education! It's called Human Ecology.
Do you really think that the idea people vary as to their idea of what makes for happiness is sex linked? Surely everyone doesn't have to think the same way for you, even if they are women?
Here’s *my* problem with all this concern specifically about inflation. (Not exactly targeted at you, Noah, but bear with me)
This round of inflation has had so many drivers, it’s been dizzying. But it hasn’t actually changed any of the fundamentals of the world or national economies. Once the drivers go away and the supply shocks lessen, inflation might disappear on paper, but we’re still going to be stuck with a general cost crisis.
If the war stops, COVID subsides, and China stabilizes by 2025, we’re basically just back to 2019’s baseline, with the only notable exception that the cost crisis actually got WORSE in the intervening years.
It’s entirely possible that none of those things happen, and the invasion represented the cementing of a regime shift in global economic trends that was kicked off by COVID. But either way, the answer for improving the future is to fix the cost crisis.
So I’m happy to brand it all as inflation-fighting right now if that’s what passes supply-side-progressive legislation, but we can’t let the branding exercise take our eyes off the ball just because inflation is a political third rail. Fighting inflation is a valuable long-term political goal only insofar as it keeps Mouthbreathing-Americans from doing stupid @%&*ing shit that worsens our long-running domestic political crisis (dysfunction+authoritarianism) or the global crisis of the Second Cold War.
Care to elaborate? Are you saying we should declare war on them? Feels like you should be more clear with your advocacy to start a war between nuclear-armed powers.
A defeat is a military failing to achieve its objectives and retreating or surrendering.
Russia's doing a great job of screwing itself. It's an international pariah, the economy is in shambles and the gains it has made are in parts of Ukraine that have large ethnic Russian populations ... and will need 1-2 generations to rebuild. NATO is enlarging and Europe is rallying against a common enemy.
If Noah would outright say, "the U.S./NATO should declare war on Russia," meaning that Americans and Europeans become belligerents in the conflict, he would have done so.
> The best solution to this is to have a national health insurer that can negotiate down prices for every health service, the way Medicare currently negotiates down prices for the subset of services it buys. Another possible solution is price controls for health services, like those employed in Japan.
An obvious way this could fail (as it has in parts of Europe) is if the government sets the price controls/'negotiated prices' substantially lower than the international market rate (or, perhaps, just doesn't adjust them for inflation), causing many doctors to emigrate to somewhere with a higher salary and leaving the US with a large undersupply of doctors.
Yeah, but doctors are absurdly paid high in USA, if is happens as you suggested, I would call it step in the right direction.
Also, biggest reason doctors are absurdly paid high in USA is that they have act like a cartel, extremely limiting the number of people who can practice medicine. Neither this bill nor any other bill that I know is changing now.
Licensure creates a ton of friction if doctors want to change countries. The bigger shortage risk is that fewer young people will decide that the cost of entry and brutal training is worth it. Spending hundreds of thousands, working 80 hr weeks, and giving up your 20s to be pigeonholed into a very specific job isn't exactly a great recruiting ad.
“Well, Joe Manchin wasn’t intent on completely destroying Joe Biden’s economic agenda after all. After the bipartisan CHIPS Act passed, the recalcitrant West Virginia senator immediately announced that he was open to a reconciliation bill.”
I think this is unfair to Manchin. While Manchin’s first outburst over BBB seemed genuine (and somewhat sympathetic, given the fact that he made his wishes clear at the start of negotiations, and was dragged through the mud by lefties with no concept of how difficult winning is in West Virginia), I think it is quite likely that the second time Manchin “killed” the Democrat’s reconciliation hopes was a feint.
Mitch McConnell made it quite clear that Democrats would have to choose between CHIPS and a BBB-style reconciliation bill. He only assented to CHIPS being bipartisan because Manchin baited him into believing that the reconciliation bill was dead.
This is why Manchin announced the deal as soon as CHIPS was passed, and not before, and is a masterclass in political gamesmanship. Having a maverick on your side can be frustrating, but it is also a useful tool. Democrats could stand to be more grateful towards the Senator who wins in 70-30 Trump country.
Did you read that New Yorker article about the Congressional staffers rebelling and telling Biden and Schumer to strip Manchin of his committee assignments, and just generally stop sucking their thumbs and saying "there's nothing we can do"? I wonder how much that played into it.
Yes. I highly doubt the sourcing for that article.
First, I know some Senate staffers, and while they are tight-lipped, none took this particularly seriously. It was a publicity stunt that actually interfered with negotiations. (And had more House staffers than Senate staffers.)
Second, the only people in recent memory to be stripped of their committee assignments are Steve King and Marjory Taylor Greene. This is not something you just do to somebody. Even Republicans have committee assignments. Would Manchin get his back if he switched parties?
Third, Manchin was fully willing to tank BBB just because he was ticked off. He won in a 70-30 Trump state. Committee assignments aren’t leverage, because Manchin could just choose to retire and permanently fuck the Democrats chances of keeping the Senate.
The leverage proposed in that article is unrealistic and the author is far too credible of someone trying to boost their own career.
In fact, that article and your comment are excellent examples of my point. Be more grateful to Manchin.
Gosh.
1. Good … but still has to pass
2. We need the housing elements!!
Largely agree on the overall points here. Another relatively more minor change I'd love is for the EV incentives to extend beyond EVs to other forms of mobility, and notably eBikes. They're really starting to catch on, even in car-centric areas, and with even just a fraction of the help we're giving people to buy EVs, could accelerate that much faster.
I'm not a representative conservative...but I really really really like this bill.
Almost everything in it is reasonable, and I think it will appeal to a lot of the middle-of-the-road voters.
Dems should be thanking Manchin for saving the progressives from themselves.
"Government investment is inflationary in the short term and deflationary in the medium term"
The unspoken assumptions behind this statement speak volumes about Noah's worldview. Government investment in needed infrastructure can be deflationary. If there are no ports, and no private parties will build port facilities, government investment in building ports can indeed be deflationary by reducing costs for trade. But we already have quite a lot of ports, and I doubt we need more. If there are no decent roads connecting the country, government investment in roads can be deflationary by reducing costs of trade and transportation. But we already have a lot of roads, and returns from more roads will be marginal at best. If rivers move large amounts of potential energy that is not tapped, while posing flood risks, water projects can provide cheap electricity and flood control that protects property and lives. But, we've already done about all the water projects that are worth doing, and a lot of small projects are being dismantled to return rivers to more natural states.
But, most government "investment" is really just funneling large amounts of money to interest groups that are part of a political coalition. Obama's "investment" in education was really about giving colleges and education unions more money for more salaries and union members. Biden's "investment" in green energy is really about directing lots of money to the various companies and organizations that make "green" equipment. No amount of government subsidy will change the basic economics of energy: green energy is more expensive than conventional, and increasing the share of energy provided by "green" sources comes at higher and higher costs. It's true that massive subsidies for solar and wind energy will likely lead to more construction of solar and wind energy facilities. After all, we've seen this approach in Germany, Spain, and the UK as well as in the US. None of this has led to lower energy costs.
I must confess to being somewhat bemused at the way people in Noah's area treat "dealing with climate change". A few years ago, stopping warming at 1.5C was absolutely crucial to maintaining an livable world, and the only way to achieve this was by eliminating all greenhouse gas emissions by 2030. Now, the goal is to get to Net Zero by 2050, even though there's no strategy for doing so. Practically, most targets seem to aim for reductions of 10% or 20% in 10 years, which are actually pretty aggressive targets. But, if we need 100% reduction to avert catastrophe, why claim success at spending huge amounts of money to get only a fraction of what we need?
It seems to me that, for most people pursuing climate change strategies, the goal isn't to prevent climate change, or to mitigate the effects of climate change, but to pursue an anti-industrial, anti-consumer, anti-market agenda more reminiscent of 1960s hippies than anything else.
“But we already have quite a lot of ports, and I doubt we need more.”
This, at least, is untrue. Restrictions on foreign dredging boats, a lack of investment, and bad unions have meant that US ports are far behind the world technologically and in terms of capacity. This is at least partially responsible for recent supply chain shocks.
Also, green energy is cheaper than oil and gas in some situations, and including subsidies for fossil fuel companies (which are greater than those for renewable energy), is consistently cheaper than oil and gas. This is why Texas has significant wind farms, or why most states have significant hydropower.
In fact, while the cost of oil and gas generation fluctuates around oil prices, the cost of wind and solar has decreased exponentially, by its own version of Moore’s Law.
While I agree that far too many progressives market wage subsidies as investment, your accusation that this is the purpose or the effect of dealing with climate change is immensely stupid. Climate change is expensive, dealing with it ahead of time is less expensive.
Thanks. I'll take your points in order.
What you describe for ports is not a need for investment, but maintenance. Maintenance is always important, and generally neglected in public works. If this bill actually authorizes needed maintenance, that's good. I don't know the specifics, but money appropriated through politics is generally for splashy projects that give good photo opportunities, not for dull things like dredging.
I know Noah claims that green energy is often cheaper than fossil fuels, but all the studies I've read making this claim include current subsidies for renewables in their calculations. It's certainly true that green energy is cheaper if you subsidize it enough, but that's a different point. I'll grant that hydropower is often cost effective, but all the good hydro opportunities have been exploited - hydro is not the path to a green energy future. But, the picture is worse than this for renewables: under current conditions, and any conceivable future, we need to have a conventional generation system as backup because renewables are not reliable and not storable. If you include the cost of building and maintaining fossil fuel generation as a backup, a system heavily reliant on renewables looks even more expensive. And, Texas has significant wind farms because the federal government pays wind farm developers to build wind farms, not because they're cost effective.
You claim that there are subsidies for fossil fuel companies, but all the specifics I've seen for this claim refer to things like allowing LIFO cost accounting, which is allowed for all companies in the US, or to foreign governments like Iran and Egypt that subsidize oil prices for their citizens. If you know of any "real" subsidies for fossil fuels in the US, please let me know.
You are correct that the cost of wind and solar has decreased. It is conceivable that they may decrease enough to make them cost effective in some situations without direct subsidies. But, without a solution for storage (which is not even in concept stage beyond a few web enthusiasts), an all-renewable energy system is not possible. Unless you're willing to live with a system that features regular blackouts.
Your confidence in the pure intentions of Democratic lawmakers and Progressive activists is touching. I will stipulate that most of these people don't see climate change programs as primarily giveaways to favored industries. I merely claim that is the effect - that impacts on climate change will be minimal (by the activists' standards), at great cost, with substantial profits going to companies in the "right" industries.
I will agree that climate change will (likely) be expensive. If you want cost effectiveness, it makes much more sense to "invest" in mitigation like improved water supplies, flood control, soil conservation, and habitat preservation, than to invest immense resources into prevention measures that will (again, by the activists' claims) be ineffective.
A minor aside on the fossil fuel backup issue.
Shell has been moving resources into wind farms at considerable scale (see https://www.shell.com/energy-and-innovation/new-energies/wind/our-wind-projects.html). They realise that windfarms lock in the need for natural gas as backup.
What you will not, I think, find anywhere on their sites is a reference to nuclear power.
Do the recent supply problems not show the need for new ports?
I know the problems have been largely fixed but it reminded me of the neglect of Africa infrastucture since independence and the subsequent problems.
I don't think the issue was lack of ports, but rather difficulty in getting ships unloaded, which may have been mainly driven by inability to get trucks in and out of ports.
If Biden tries to build new ports, I expect he'll run into great political opposition from the people who operate the current ports and the politicians who represent them. But, you never know.
Ok that is why that particular supply issue was fixed.
Going broader though poor infrastructure beyond ports leads to economic supply problems.
The American Association of Civil Engineers produce a report card on US civil infrastructure every couple of years. Obama (with Furman?) began to take notice of this in his second term and I think it appeared in the later budgets. But it was dropped since then.
It is seen as a fiscul stimilus spend but it also is a supply side benefit.
However you are right that it becomes a political difficulty. Still it should be in the budget no matter the party.
Oops my bad.
Our host had a post on Bidenomics from last year. He does mention civil works in the Biden budget which I missed. I have just joined this newsletter so I am afraid I missed that.
"green energy is more expensive than conventional, and increasing the share of energy provided by "green" sources comes at higher and higher costs." Interesting that you say this, when from what I read renewables are now cheaper than fossil fuels, and getting cheaper. I use 100% renewables here in California and the cost is, according to PG&E, almost exactly the same as conventional.
Where do you read that renewables are cheaper than fossil fuels? When you do, click through to the source information, and read how they do the calculations. Every time I've done this, you come across something like "assumes current federal subsidy policies" or "assumes lower required Return on Investment for renewable projects". These are indicators that subsidies are included, and are critical to making renewables appear cheaper.
Regardless of what PG&E says, I strongly doubt you're using 100% renewables. How much electricity do you use at night? Where does it come from?
Solar has decent shot to be/become cheaper than conventional energy (manufacturing costs keep comes down, efficiency goes up, can be distributed and save on transmission loss / network costs, etc.). Wind am much more skeptical - main way to increase efficiency of these things is to build them bigger which quickly runs into space / noise pollution / maintenance cost and other issues. As for storage agree it's a big issue right now. Lots of people working on solutions, one may or may not be found in near future, but it's not something that necessarily dooms renewables forever.
You did not mention the painfully obvious that there’s a trade off between unemployment and inflation.
We are having a very weird recession: the unemployment is extremely low at 3.6%, “help wanted” signs all over the town. And you and me are paying for their wages. You can’t completely blame inflation on Putin’s invasion on Ukraine or China’s “zero Covid” policy.
Both Trump and Biden administrations seem to prioritize and actively brag about having low unemployment. This really make me wonder, does America in 2022 still have enough social cohesion to handle, say, 10% unemployment without some prolonged nationwide riot? At least that’s my theory, a bit conspiratorial maybe, on the bipartisan obsession over low unemployment rate?
Maybe it’s a good time to deliberately make the 10% unemployment happen, just like a painful exercise that is ultimately good to the nation's health? . One good effect of the Great Depression is that US exposed and weeded out it’s extremist elements (Nazis, Communists) and maybe that laid foundation for its ultimate victory in WWII?
"We need high unemployment so I don't have to pay their high wages and we can weed out the Nazis" is, an interesting take.
Well, essentially it is the take of Elon Musk when he talked about the good sides of a recession, I am just focusing on the political instead of economic aspect.
I am from China where no recessions happened in the past 40 years due to active government intervention to smooth the recession out. And now we seem to be facing a catastrophe that is both economic and could already be political. In the end it is futile to "smooth out" business cycles.
The economic policy of both Republicans and Democrats after 2008 really has a Chinese feel to it, in that no recessions are actually allowed to happen. Interest rate was close to zero for a long, long time. There should have been recessions in 2015/2016 and 2020 but they never really happened. To someone raised in China it just screams of the Party slogan of "Stability triumphs everything" and feels unlike the fearless stereotype of USA. I don't recall such timidity during, say the 2000 dot.com bubble. Don't you feel that there is something wrong when almost all the big corporations in 2009 are still around in 2022?
My understanding of American politics is that the 2008 recession was a serious blow to the legitimacy of the American political system, hence Tea Party and later MAGA on the right and OWS and later Bernie/AOC on the left... And maybe that affected the elite's decision making process? Again maybe just my conspiratorial thinking...
I like the deal overall, from both a politics and policy standpoint. It pushes us in the general direction of fighting costs, and not in the "dumb" way of disincentivizing consumption, but in the "smart" way of increasing supply. It's Supply-Side-Progressivism writ large.
But I am curious about how these individual provisions will hash out in terms of "unintended consequences". The stuff about drug price rebates hints that there are a number of kludge-y or kludge-ish policies that could end up undermining long-term reform.
Also of note is that it doesn't seem to include increasing the cap on med school slots, which could be the single biggest policy to reduce health care costs.
Noah, are you sure that "reform[ing] the way permits are granted for new projects" is in the Inflation Reduction Act? I've read elsewhere (e.g. https://www.utilitydive.com/news/manchin-backs-bill-climate-spending-hydrogen/628303/) that this was a mere agreement by Schumer to advance unspecified legislation on that in the near future.
We don't know exactly what's in the act yet, as the full text hasn't been released.
Then what's this?
https://www.democrats.senate.gov/inflation-reduction-act-of-2022
Love the 15% minimum corporate tax! I'm all for paid-for subsidies and maybe this will help rebuild trust (people hate seeing Amazon not pay taxes). I hope they will do the >$400k tax increases to do housing and other investments in their lame duck session. It's a real shame they didn't start out this way. They could have accomplished so much more. 2021 is going to go down as a historic political disaster and a complete misread of their mandate from the 2020 election.
One of the reasons Manchin called off BBB was its size causing inflation. This latest is quoted at 360 billion. I thought BBB was coming in at 3 trillion. So he has certainly gained there.
Spending is not investing no matter how you spin it
https://chrishedges.substack.com/p/the-dawn-of-the-apocalypse
what do you think of this guy?
The Act could be called the Larry Summers' Redemption Act -- he has some moves to correct. Then, better than "telling" people to live differently, how about teaching them better, more fair, ways to live, K-16? Just think, it would circumvent those "ruinous costs", save the planet, and give people a better basis for decision-making than they get now, either from the markets or education! It's called Human Ecology.
Your idea of "better, more fair" ways to live and mine might differ. As might those of a large majority of Americans.
All true -- a given. Can I inquire if you are a man?
Do you really think that the idea people vary as to their idea of what makes for happiness is sex linked? Surely everyone doesn't have to think the same way for you, even if they are women?
Here’s *my* problem with all this concern specifically about inflation. (Not exactly targeted at you, Noah, but bear with me)
This round of inflation has had so many drivers, it’s been dizzying. But it hasn’t actually changed any of the fundamentals of the world or national economies. Once the drivers go away and the supply shocks lessen, inflation might disappear on paper, but we’re still going to be stuck with a general cost crisis.
If the war stops, COVID subsides, and China stabilizes by 2025, we’re basically just back to 2019’s baseline, with the only notable exception that the cost crisis actually got WORSE in the intervening years.
It’s entirely possible that none of those things happen, and the invasion represented the cementing of a regime shift in global economic trends that was kicked off by COVID. But either way, the answer for improving the future is to fix the cost crisis.
So I’m happy to brand it all as inflation-fighting right now if that’s what passes supply-side-progressive legislation, but we can’t let the branding exercise take our eyes off the ball just because inflation is a political third rail. Fighting inflation is a valuable long-term political goal only insofar as it keeps Mouthbreathing-Americans from doing stupid @%&*ing shit that worsens our long-running domestic political crisis (dysfunction+authoritarianism) or the global crisis of the Second Cold War.
What do you mean “defeat Russia”? Defeat them militarily?
Yes.
Care to elaborate? Are you saying we should declare war on them? Feels like you should be more clear with your advocacy to start a war between nuclear-armed powers.
Noah's writings on the subject show he wants Russia to withdraw from Ukraine battered and humiliated. Not "Ukraine is worth waging WWIII."
He literally just said he wants the US to defeat Russia "militarily." It's the comment above yours.
Everyone knows Ukraine is a proxy war between Russia and US-led Nato. If Russia is forced to retreat, they've been defeated militarily by the US.
So, we should fight Russia is what you're saying?
A defeat is a military failing to achieve its objectives and retreating or surrendering.
Russia's doing a great job of screwing itself. It's an international pariah, the economy is in shambles and the gains it has made are in parts of Ukraine that have large ethnic Russian populations ... and will need 1-2 generations to rebuild. NATO is enlarging and Europe is rallying against a common enemy.
If Noah would outright say, "the U.S./NATO should declare war on Russia," meaning that Americans and Europeans become belligerents in the conflict, he would have done so.
"The US should defeat Russia militarily" = "The US should win a war against Russia." IDK what to tell you, it's pretty obvious.
> The best solution to this is to have a national health insurer that can negotiate down prices for every health service, the way Medicare currently negotiates down prices for the subset of services it buys. Another possible solution is price controls for health services, like those employed in Japan.
An obvious way this could fail (as it has in parts of Europe) is if the government sets the price controls/'negotiated prices' substantially lower than the international market rate (or, perhaps, just doesn't adjust them for inflation), causing many doctors to emigrate to somewhere with a higher salary and leaving the US with a large undersupply of doctors.
Yeah, but doctors are absurdly paid high in USA, if is happens as you suggested, I would call it step in the right direction.
Also, biggest reason doctors are absurdly paid high in USA is that they have act like a cartel, extremely limiting the number of people who can practice medicine. Neither this bill nor any other bill that I know is changing now.
Licensure creates a ton of friction if doctors want to change countries. The bigger shortage risk is that fewer young people will decide that the cost of entry and brutal training is worth it. Spending hundreds of thousands, working 80 hr weeks, and giving up your 20s to be pigeonholed into a very specific job isn't exactly a great recruiting ad.