Subsidiarity Economics. The times more or less locally, Part XV. The 2% solution?

 August 9, 2023

3%

That is what inflation has fallen to.

The target rate is nonsensically 2%, which still robs workers of their wages.  Given the recent inflation, a more sensical target would be at or about 0%, or better yet a slight deflationary rate of 1%.

That's the core inflationary rate, by the way. Real inflation is at about 4.1%.

The US is banning private equity investment in China and investment in some Chinese technology companies.

August 12, 2023

The EPA estimates that by 2055 most petroleum fueled vehicles will have attrited off the road.

August 16, 2023

From the Oil City News:

CASPER, Wyo. — Rocky Mountain Power, the state’s largest electric utility, is proposing to raise its energy rates by 29.2%.

August 24, 2023

Before more consolidation of everything is just what we needed:

Subway sandwich chain sells itself to Dunkin’ owner Roark Capital

August 27, 2023

France will spend €200 million to destroy excess wine in hopes of shoring up the struggling wine industry.  Wine consumption in Europe has been falling, while production increasing.

September 7, 2023

Chinese exports, upon which that nation depends, have decreased every month of 2023.  China's economy is dependent upon exports and there is serious discussion on the country going into a recession.

September 11, 2023

Alexandria Ocasio-Cortez faced severe criticism from her constituents, after sharing a video on Instagram from the Kiwi left-wing Aotearoa Liberation League that accredited rising prices solely to corporations and described the discussion surrounding inflation as propaganda.

When I read the headline, I actually wondered if she'd reposted something of Robert Reich's. . . 

The bloom has really been off AoC's rose in recent months.

Trump has been heard at campaign dinners indicating that if re elected he will cut taxes, which are too low to start with, and use tariffs as a trade weapon.

September 15, 2023

The United Auto Workers are out on strike.

September 20, 2023

Ford Motors in Canada reached a deal with is union to avoid a strike there.

Republican infighting kept two budget bills from advancing there.

Cont:  

A drought in Spain has caused a 50% increase in the price of olive oil, which in turn is causing a spike in olive oil theft.

September 27, 2023

The Writers Guild of America has reached an accommodation with the entertainment industry and has ended its strike.

U.S. regulators and seventeen states have sued Amazon on Tuesday over allegations it uses its position in the economy to inflate prices.

The Senate has drafted a stopgap funding bill it will likely pass, but there's no certainty the dysfunctional House of Representatives will.

September 28, 2023

Kevin McCarthy, prisoner of GOP populists, will not take up the Senate bill to fund the government, making a shutdown impossible to avoid.

The House of Representatives is, quite frankly, dysfunctional.

And given this, we will close out this edition of Subsidiarity Economics, even though its barely gone, and start one focused on that theme.

But not before noting that the U.S. economy recently grew 2.1%.

October 1, 2023.

Crisis postponed. 

The following crisis that is:

Subsidiarity Economics. The Shutdown edition.

September 28, 2023

Kevin McCarthy, prisoner of GOP populists, will not take up the Senate bill to fund the government, making a shutdown impossible to avoid.

The House of Representatives is, quite frankly, dysfunctional.

And given this, we will close out this edition of Subsidiarity Economics, even though its barely gone, and start one focused on that theme.

Kevin McCarthy should hang his head in shame.

What all will close, assuming that the House doesn't get its act together today, isn't clear. Some things will, but "vital" things apparently will not.  Some Federal employees will be asked to work without pay, which is interesting, as working without pay is involuntary servitude, and was banned by a post Civil War constitutional amendment.

Congress, oddly, will get paid. 

The mail will continue to be delivered, as the U.S. Post Office funds itself.

Arizona and Utah have voted to spend state funds to keep their National Parks open.  Senator John Barrasso asked the Secretary of the Interior to use park entry fees to do the same.

Fat Bear Week is off due to the dysfunctional House of Representatives having been taken hostage by populists.

Government contracts and modifications to contracts will not be issued.

Medicaid will continue to be paid. Medicare will continue on.

The FHA will have limited staff and loans it processes will be delayed.

The SBA will shut down.

The ATF might not process background checks, which may lead to a complete halt on the sale of firearms by licensed firearm's dealers.

The latter is the thing that Wyomingites are likely to complain about right away.  People in industries supported by tourism are likely to notice the closure of the parks rapidly.

All of this, of course, is because this will be a managed shut down, which is really a limited shutdown or a slow-down.  If things continue for some time, and this time they might, a real shutdown may creep in, which Wyomingites, in spite of apparently disdaining the Federal Government, would really feel.  A closure of the airports, for example, could be expected at some point, And a cessation of petroleum production on Federal lands due to a lack of Federal oversight.  Perhaps a cessation of grazing on the Federal domain for the same reason.  And a lack of highway funds.

None of that will happen rapidly, of course.  Or maybe at all.

September 30, 2023.

We’re likely to avert a shutdown, but the clown show continues

Let the grousing now being.

Not from Reich, with whom I obviously have a love/hate relationship, but from the MAGA far right out in the hinterlands, who will be outraged, outraged I tell you, and they'll tell you on their way from the television to the refirgerator for a Coors Lite (can't touch that Bud, of course) who would, they'll say, have enjoyed the shutdown. . .right up until they didn't, and then somehow, it would have been the Democrats fault.Congress passed a 45-day stopgap spending bill yesterday.  In doing so, Speaker McCarthy noted:

We’re going to be adults in the room. And we’re going to keep government open.

Well now he has 45 days to see if he can do that.

The bill omitted funding for Ukraine.  President Biden noted that in his address regarding the stopgap bill.

Tonight, bipartisan majorities in the House and Senate voted to keep the government open, preventing an unnecessary crisis that would have inflicted needless pain on millions of hardworking Americans. This bill ensures that active-duty troops will continue to get paid, travelers will be spared airport delays, millions of women and children will continue to have access to vital nutrition assistance, and so much more. This is good news for the American people.

 

But I want to be clear: we should never have been in this position in the first place. Just a few months ago, Speaker McCarthy and I reached a budget agreement to avoid precisely this type of manufactured crisis. For weeks, extreme House Republicans tried to walk away from that deal by demanding drastic cuts that would have been devastating for millions of Americans. They failed.

 

While the Speaker and the overwhelming majority of Congress have been steadfast in their support for Ukraine, there is no new funding in this agreement to continue that support. We cannot under any circumstances allow American support for Ukraine to be interrupted. I fully expect the Speaker will keep his commitment to the people of Ukraine and secure passage of the support needed to help Ukraine at this critical moment.

McCarthy had to rely on Democrats to pass the bill, and will now surely face an effort aimed at his removal by his hard right. 

October 4, 2023

Facebook's parent company Meta is laying off 11,000 employees.

October 5, 2023

75,000 Kaiser Permanente employees went on strike Wednesday. Staffing levels are an issue.

October 8, 2023

California has put into effect a law requiring  requires public and private US businesses with revenues greater than $1 billion operating in California to report their emissions comprehensively.

October 9, 2023

Workers for Mack Truck are going out on a UAW strike.

October 11, 2023

The UAW's strike has expanded to include a Ford plant in Kentucky.

October 15, 2023

The price of oil has jumped 6% since April.

October 24, 2023

Icelandic women are on strike for wage equality.

October 27, 2023

The economy grew by 4.9% last quarter.

October 28, 2023

Governor Gordon sounded climate alarm bells in a speech at Harvard this past week, noting that Wyoming needed to decarbonize. This caused the Wyoming Freedom Caucus to freak out.

October 31, 2023

The United Auto Workers has scored a major victory.

It’s still awaiting a vote by union members, but it’s a big deal – a 25% wage increase over the 4 ½ years of the contract, cost-of-living increases that will further ratchet up hourly pay, the right to strike over plant closures, and a quicker time to reach top pay.

Robert Reich.

November 2, 2023

Headline:

Union sets its sights on Tesla

November 5, 2023

Voters in Maine are voting on a referendum to replace the state's two electric companies with consumer-owned Pine Tree Power Company.

The proposal goes to the polls on Tuesday.  It states:

The official ballot title is as follows:[12]

“ QUESTION 3: An Act to Create the Pine Tree Power Company, a Nonprofit, Customer-owned Utility. Do you want to create a new power company governed by an elected board to acquire and operate existing for-profit electricity transmission and distribution facilities in Maine?

[13]

”

Ballot summary

The official ballot summary is as follows:[14]

“ This initiated bill creates the Pine Tree Power Company, a privately operated, nonprofit, consumer-owned utility controlled by a board the majority of the members of which are elected. The company's purposes are to provide for its customer-owners in this State reliable, affordable electric transmission and distribution services and to help the State meet its climate, energy and connectivity goals in the most rapid and affordable manner possible.

The Pine Tree Power Company is not permitted to use general obligation bonds or tax dollars of the State. The company finances itself by issuing debt against its future revenues to purchase the facilities of investor-owned electric transmission and distribution utilities in the State. The fair market value of the acquisition is either negotiated or determined by a refereed process. The Pine Tree Power Company Board contracts a nongovernmental team to operate the facilities, and the operations team is required to retain all workers of the purchased utilities.

The company is subject to property taxation and must pay property tax in the same manner as an investor-owned transmission and distribution utility. The company is subject to ratemaking and other oversight by the Public Utilities Commission and is required to administer programs for net energy billing, nonwires alternatives, supply procurement and low-income assistance programs.

The company is governed by a board of 13 members, 7 of whom are each elected to represent State Senate districts, as well as 6 designated expert members. The board is subject to freedom of access laws and to laws preventing conflicts of interest.

The initiated bill also directs the Public Utilities Commission beginning January 1, 2025 to find a transmission and distribution utility unfit to serve and to direct the sale of the utility if the utility meets certain criteria. [13]

”

Fiscal impact statement

The official fiscal impact statement is as follows:[14]

“

This citizen initiative creates the Pine Tree Power Company (PTPC), a privately operated, nonprofit, consumer-owned transmission and distribution utility. It establishes a process for the PTPC to purchase the assets of an investor-owned electric transmission and distribution facility operating in the State. The PTPC will be subject to oversite by the Public Utilities Commission (PUC) as a consumer-owned utility. It is important to clarify that this fiscal impact statement does not attempt to quantify or include the cost to the PTPC to purchase and operate a decertified utility. The purchase is anticipated to be financed through the issuance of bonds and the debt service costs of those bonds and the costs of operation will be funded through utility rates charged to the consumers.

The PUC has indicated that its additional regulatory authority will require 3 Staff Attorney positions and 6 Utility Analyst positions at a projected cost of $1,294,169 in the first year and $2,275,349 in subsequent years. Since the PUC is funded by an assessment set to produce sufficient revenue for the expenditures allocated by the Legislature for operating the PUC, the increased expenditures will require a corresponding increase in revenue from assessments on transmission and distribution utilities. These costs may be passed on to electric utility customers through scheduled rate cases in the future.

The initiative also requires that no earlier than January 1, 2025, the PUC shall decertify investor-owned electric transmission and distribution utilities operating in the State that fail to meet criteria established in this initiative. This action, combined with provisions designed to force the utilities subject to decertification to sell assets to the PTPC, may result in litigation. Any litigation costs may be passed on to consumers.

The 7 elected members of a 13-person governing board may participate in the Maine Clean Elections program. The Commission on Governmental Ethics and Election Practices estimates that up to 11 candidates may choose to use the program in the first election cycle after the PTPC is established for a cost to the Commission of $335,450 from April through June in the first fiscal year and $273,750 from July through October in the second fiscal year. Qualifying contributions from candidates are anticipated to generate additional revenue of $13,900 in the first year and $9,900 in the second fiscal year. Subsequent election cycles are estimated to require payments to candidates of $110,764 or $166,145, depending on whether 2 or 3 board members are being elected.

Additional costs to any state agencies and departments that provide assistance and counsel to the board, and to the Office of the Attorney General to make recommendations regarding a code of ethics for members of the board, can be absorbed within existing budgeted resources and will not require additional funding.

Since the PTPC will be exempt from income taxes, the State will see a decrease in General Fund revenue from the corporate income taxes that are currently being paid by the investor-owned utilities currently operating in the State. Confidentiality of tax records prevents disclosure of the amounts of tax paid by the existing utilities that will be decertified if this initiative is approved. However, some of this income tax revenue loss could be offset to the extent that the non-governmental entity contracted by the PTPC for certain operations has taxable income. The PTPC will still be subject to property taxes, so municipal property tax revenues are not expected to be significantly impacted unless there is a change in the location of facilities. [13]

November 9, 2023

The Air Force wants Congress to restrict the placement of wind farms near nuclear missle silos.

November 10, 2023

Moody’s Investors Service is revising the outlook on the U.S. government’s ratings to negative from stable but affirming the long-term issuer and senior unsecured rating at AAA.

Lest anyone doubt, this is bad for the economy and reflects a years long inability to get the deficit under control.

November 21, 2023

Ontario Knife Co. was sold to Blue Ridge Knives and all 56 employees at its Frankliville, New  York plant lost their jobs as a result.  Blue Ridge owns 800 brand names.

Last prior edition:

Subsidiarity Economics. The times more or less locally, Part XIV. And now back to our regularly scheduled programming.

Subsidiarity Economics. The times more or less locally, Part XI. The Waiting for a Train Edition

December 1, 2022

The House of Representatives voted to impose the results of negotiations between railroad companies and unions that were reached last September, but rejected subsequently by the four of the twelve unions that were involved.

An agreement had been reached which featured a 24% pay increase, but it omitted an increase in paid sick leave.  Existing sick leave is apparently very limited, one or two days, and the railroads did not budge on this.

For this reason, the House passed a separate bill that also increased the paid sick leave to seven days.  So two bills go on to the Senate.  It's clear at least one will pass, it'll be interesting to see if they both do.

December 1, cont:

Statement from President Joe Biden on Congressional Action to Avert a Rail Shutdown

On Tuesday, I met with Congressional leaders from both parties and told them that Congress needed to move quickly to avert a rail shutdown and economic catastrophe for our nation. Now, I want to thank Congressional leadership who supported the bill and the overwhelming majority of Senators and Representatives in both parties who voted to avert a rail shutdown. Congress’ decisive action ensures that we will avoid the impending, devastating economic consequences for workers, families, and communities across the country. Communities will maintain access to clean drinking water. Farmers and ranchers will continue to be able to bring food to market and feed their livestock. And hundreds of thousands of Americans in a number of industries will keep their jobs. I will sign the bill into law as soon as Congress sends it to my desk.

Working together, we have spared this country a Christmas catastrophe in our grocery stores, in our workplaces, and in our communities.

I know that many in Congress shared my reluctance to override the union ratification procedures. But in this case, the consequences of a shutdown were just too great for working families all across the country. And, the agreement will raise workers’ wages by 24%, increase health care benefits, and preserve two person crews.

I have long been a supporter of paid sick leave for workers in all industries – not just the rail industry – and my fight for that critical benefit continues.

This week’s bipartisan action pulls our economy back from the brink of a devastating shutdown that would have hurt millions of families and union workers in countless industries. Our economy is growing and inflation is moderating, and this rail agreement will continue our progress to build an economy from the bottom up and middle out.

All of Wyoming's current Congressional representation voted in favor of the bill.

December 2, 2022

The bill without the sick leave was signed into law.

December 3, 2022

The EU and the G7 have placed a price cap on Russian oil of $60/bbl.  Russian oil is actually currently under that price.  West Texas is $80/bbl.

December 13, 2022

Gasoline at the pump locally has returned to its price of a year ago, but diesel has not.

And the price of oil has returned to what it was a year ago.  Given this, it's at the price where the U.S. Government had determined to start purchasing reserve stocks.

Bottlenecks, it's claimed, in the diesel distribution supply chain are causing it to decline more slowly.

I'm sure we'll see people come on Twitter to proclaim the drop. . 

December 14, 2022

Scientists at the Lawrence Livermore National Laboratory have made a breakthrough in fusion.

Not so much that this will be used to generate electricity tomorrow, but things are headed in that direction.  When achieved, and it will be, it'll render all current forms of generating energy obsolete. 

December 16, 2022

Governor Gordon, following a Federal lead, bans TikTok on state devices.

Governor Gordon Bans TikTok on State Devices due to Cybersecurity Concerns

December 15, 2022

CHEYENNE, Wyo. – Governor Mark Gordon has announced a ban on TikTok from all state electronic devices and networks to address cybersecurity concerns that have been raised by the app’s foreign ownership and the potential influence of foreign governments.

In a memo addressed to all state employees, the Governor directed that TikTok will be permanently removed, and access blocked, from all state government electronic devices and networks. This ban extends to all state-issued cell phones, laptops, tablets, desktop computers and other information technology equipment capable of internet connectivity.

“Maintaining robust cybersecurity is a shared responsibility, and Wyoming is committed to identifying threats that could impact public safety,” Governor Gordon said. “The potential for foreign governments to access information collected by TikTok is extremely troubling.”

The Governor’s announcement means Wyoming joins at least 12 other states that have banned TikTok from state devices.

The Governor’s memo also directs the State’s Enterprise Technology Services, Wyoming Office of Homeland Security and the Wyoming Information Analysis Team to conduct a coordinated review of any other technology-based threats posed to State government networks.

A copy of the Governor’s memo is attached and may be found here.

--END--

It actually wouldn't have occurred to me that TikTok was on any state devices, but it probably is.

Sad headline in the tribune:

Casper Horseheads summer collegiate baseball team ceases operations

Pro and semi pro baseball doesn't seem to stick here.

From the New York Times:

New York is banning pet stores from selling dogs, cats and rabbits. Gov. Kathy Hochul signed legislation on Thursday that prohibits the sale of pets raised by commercial breeders who, animal rights groups say, keep them in poor conditions.

And also this:

A Sign That Tuition Is Too High: Some Colleges Are Slashing It in Half

Colby-Sawyer in New Hampshire has reduced its tuition to $17,500 a year, from about $46,000. But the cut is also a recognition that few pay the list price.

December 17, 2022

The Canyon City Spuds will relocate to Mike Lansing Field this upcoming baseball season.  They are located in Caldwell Idaho.

December 20, 2022

Hiring problems have caused railroads to idle engines and rail cars, causing "embargoes" on coal and grains.  Power companies have complained about it, as the reduced shipping means that they are now operating with less of a coal supply than required.

January 5, 2023

Amazon is laying off 18,000 employees, a sure sign of a slow-down in the economy.

January 8, 2023

In its headline front page article the Tribune has a graft today showing that US demand for coal has fallen from 451,000,000 short tons to 147,000,000 short tons since 2008.

That's a shocking figure, but it fits in with what we've already explored here:

Coal: Understanding the time line of an industry

53,000

and here:

“What we are basically seeing is the beginning of the end of coal mining in southwestern Wyoming, which has gone on since before statehood.”

In spite of this trend having politicized, and the desire in some quarters of the state to bury their heads in the sand on this one, the trend is irreversible.

January 28, 2023

The Biden Admnistartion has targeted a 100% aviation transfer to biofuels by 2050.

From Reuters:

WASHINGTON, Jan 27 (Reuters) - Two dozen U.S. Senate Republicans warned Democratic President Joe Biden on Friday that they would not support increasing the federal debt ceiling without at least an equal amount of spending cuts to government programs or structural reform.

This comes as a bit of a surprise as this has been, so far, concentrated in the House. 

February 6, 2023

I'm going to close this edition out in anticipation of the State of the Union Address.  People got a little bit of a preview of that, however, when President Biden spoke at the recent Democratic Convention.

As we just noted, in the blog mirror item by Robert Reich, Joe Biden's economy is in a new phase.  Inflation remains high, but has been going down, and we are at the lowest unemployment rate since the end of the Vietnam War.

Last Prior Edition:

Subsidiarity Economics. The times more or less locally, Part X. The Camp Stove Edition.