Category: California

Economic inelasticity: a measure of an economic activity’s responsiveness to price changes.  Inelastic supply is production made unresponsive to price fluctuations.

Market: the spontaneous arrangements that brings buyers and sellers together.  Markets can be constrained by natural barriers (geography, availability of resources, etc.) and interventions (government).

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Some elements of the Right are deserving of condemnation for their forays into imbecilic isolationism.  Their tariff nationalism and sophomoric hostility to our present and natural allies stagger the mind.  That said, the biggest and most persistent threat to the welfare of the nation by far is the Democratic Party and its congregation of the Left.

Nuttery has little effect without powerful, organizational patrons.  The donkey party has turned itself into the institutional home of the Left; the faculty lounge is the home seminary of the Left; and the seminary’s gospel is a fanciful, semi-religious, but material and messianic apocalyptism.  Don’t mistake this for the traditional Second Coming.  This endtime arises from glib Gaia-worship, a faith that angles to translate prophesies of doom into power.  Its doctrine is in actuality an ideology and the attendant politics amounts to a missionary zeal for conversion, forcible or voluntary.

But the appeal of this new faith is limited.  Unlike Christianity that has a natural allure to all groups – the equality of all souls – this substitute creed is most attractive to the demographic product of its seminaries (college graduates), who are most prominently, but not solely, the degreed halfwits in the super zips (codes).  Their half-wittedness is the fruit of the degraded and narrow education in the tenets of this debased secular faith.  These people aren’t trained to question their assumptions.  They are zealots that occupy the cultural commanding heights to influence and obtain office to force their form of salvation on the reluctant.

Church/state separation be damned, they declare war on prosperity, independent consumer choices, entire industries, and the Constitution while they herd the population into cramped dwellings, ev’s, and mass transit.  Freedom is the freedom to live only their way.  I’m reminded of Orwell’s 1984:

“War is peace.
Freedom is slavery.
Ignorance is strength.”

And so the zealots march off and into elected office, the staffs of the elected, government employment, techie enterprises, the corporate boardroom, ad agencies, the press, law firms, Hollywood, and into the teacher corps of our schools – what G.K. Chesterton called the “chattering classes”.

The fruit of their endeavors, among other things, is a disfigured economic life, and more misery than what would occur without them running the show.  Supply and demand get malformed, made inflexible to the unexpected twists and turns of existence.  A pandemic hits and, voilà, we have empty store shelves, supply chain disruptions, inflation, a suppressed work ethic, fiscal insolvency, and the doldrums’ persistence into the foreseeable future.

That’s the thing, it doesn’t take much to maul the gears of an economy and hamper recovery.  Demand remains pretty consistent (inelastic) for things like fossil fuels, rising with growth, and only declining when a recession hits, with its lost jobs and business closures.  Not good.  Supply is hamstrung (made inelastic) to respond to the demands of prosperity after the imposition of utopia.  Not good.

 

And utopia is what it’s all about.  Wherever the Dems hold sway in the halls of power – local, state, federal – they are running full speed toward their mirage of eco-nirvana.  Democrat state-level fiefdoms are famous for it.  The grid is target numero uno.  California concocted its 100 Percent Clean Energy Act to command the state’s electricity to be carbon-free by 2045.  Washington State’s Clean Energy Transformation Act commands its utilities to be carbon neutral in eight years.  New York passed the Climate Leadership and Community Protection Act that commands a net-zero economy by 2050.  Hawaii jumps into the fray with its House Bill 623 that commands a 100% renewable energy grid by California’s year.  They are declarations of war on fossil fuels, and the energy supply gets bulldozed.

 

Notice the use of the word “command”, as in “command economy”?  Karl Marx would be proud.

These lords of the state capital have jerry-rigged all manner of means to achieve the desired end.  All of them, however, take the same tack of regulating traditional energy to death.  Jerry Brown (as in jerry-rigged) and Gavin Newsom of the not-so-golden state are gung-ho.  Brown, after signing the previously mentioned ukase, boasted, “California is committed to doing whatever is necessary to meet the existential threat of climate change.”  There you have it: semi-theological apocalyptics combined with a newly inaugurated command economy.

Not to be outdone, Governors Cuomo and Hochul of New York read from the same prayer book.  They, like the suzerains of the San Diego-to-San Francisco corridor (the rest of the state has little political pull), are enthusiasts for bans and regulatory dead weights.  No fracking, no new permits, no new gas hookups for homes, and no pipelines.  Thus, the residents of New York and anybody east of them get the privilege of paying six times more for natural gas than, say, the lucky folks of Texas or Louisiana.  No pipelines are allowed across the empire state to possibly carry the fuel the 400 miles from the Marcellus Shale.  Instead, it must be shipped from distant kleptocracies.

The same price penalty applies to everyone living in California.  Like everything else in the state – housing, electricity, food, cars, you name it – gasoline runs at a buck-and-half clip above the national average ($5.85 vs. $4.33/gal.) for the commuters on Newsom’s roads, which happen to be among the worst in the nation.  What a deal?  The “bargain” combines a doom-premium (“existential threat of climate change”) in the form of high taxes and exorbitantly priced energy with crappy pavement.  No wonder it’s hard to find a U-Haul to flee the state.  Demand has outstripped supply.

If it’s obviously such a great deal for the country, with the utopians professing to be on the same team with the angels, why do they have to wallow in falsehoods?  In Biden-speak, he said on March 14, “Make no mistake, the current spike in gas prices is largely the fault of Vladimir Putin — it has nothing to do with the American Rescue Plan.”  Translation: It ain’t me!  But it is . . . to a great degree.  He’s doing his best to make energy supplies inelastic and prone to shocks, whether it be a virus run amok or Putin’s dream of a Greater Russia.

The only truism in his corner is cause-and-delayed-effect.  Societies don’t operate like toggle switches – instant-on/instant-off.  It takes time for policy changes to translate into behavior and effects, both positive and negative.  Time is necessary for people to get their act together in the form of land, labor, capital, and entrepreneurship.  Since California is his model, the complete effect of Biden’s pummeling of the energy sector will take years for the whole country to fully feel California’s chronically high energy rates, blackouts, shortages, stagflation, deteriorating roads, trains to nowhere, and bottomless spending on expensive-but-decrepit mass transit, and, lest we forget, the brewing campaign against homes with yards (single-family residential).  No space privacy for you and your kids, peasants!

Likewise, it took a number of years for the widespread use of fracking beginning around 2011 and the repeal of the ban on the export of domestic crude in 2015 to turn into Trump’s bluster about energy independence and the US as net exporter.  Sometimes, occupying the seat of power at the moment of good times is sufficient to enjoy the afterglow of public adulation.

But Trump and Congressional Republicans are actually deserving of praise because they greased the economic skids instead of throwing sand in the gears as Biden and the donkey party are currently doing.  The thinking of Republicans is in the right place.  For the R’s, pipelines (XL, Dakota Access) are a good deal.  For the R’s, drilling on public lands is a great thing for supply and cheap prices.  For the R’s, subsidy briberies for solar and wind and the purchase of Teslas are viewed correctly as an assault on freedom and the public purse, and move us closer to a grid that operates with all the reliability of a utility in Lagos, Nigeria, or California.  Not good.

You can only get so much out of wind and solar. It’s called low energy density, an inherent characteristic of the two.  As a result, low density must be compensated by the construction of vast plantations of panels and forests of huge propeller towers marring the earth’s surface.  Lurking behind the scenes is natural-gas peaker plants to deal with the erratic production (the wind and sun are variable).  The whole mammoth charade demands colossal sunk costs in redesigning the grid and the development of a storage system to make the massive contraption the complete energy source for your Netflix streaming addiction.  Wouldn’t it be much easier with fewer lost opportunities (i.e., opportunity cost, the real meaning of the word “cost”) to clean up fossil fuels?

Certainly, Biden and the episcopate of the Church of Climate Change are aware of the monstrous costs and disruptions.  It’s just that they don’t care.  When you’re a believer, you’re a believer.  And so, when American voters let Biden and company into command of the executive branch, they are going to get the full effect of the reunion of church and state, California style.  It’s Henry VIII’s Act of Supremacy all over again.

He didn’t disappoint the faithful from the get-go.  Fresh from the chilly inauguration on the west front of the Capitol, Biden ordered an assault on domestic crude oil production by halting new leases, permits, and mining on federal lands, onshore, offshore, anywhere under federal control.  Chad Padgett, former senior executive for BLM in Alaska, put it succinctly when he described an Interior Department memo, pursuant to Biden’s ukase, barring the issuance of “any onshore or offshore fossil fuel authorization, including but not limited to a lease, amendment to a lease, affirmative extension of a lease, contract, or other agreement, or permit to drill.”  Half the 23 million acres of the Alaska National Petroleum Preserve was made off-limits.  Authority over the process was centralized in the hands of Commissar Laura Daniel Davis, then-acting assistant secretary for Lands and Minerals at BLM, creating industrial death from bureaucratic atherosclerosis.  Now, inelasticity applies to bureaucracy’s arteries as well as energy supplies.

Biden’s recent blame-Putin schtick to avoid responsibility for his stake in the mess rings hollow.  Having spent his entire career in demagoguery and electoral pandering, the guy exhibits little understanding of enterprise of the free variety.  People in the real world of business look over the horizon before they sink big bank on a venture.  What they see into the near future, and maybe beyond, is Biden’s declaration in a 2020 debate:

“No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill, period. Ends.”

Can’t get much plainer than that.  The delay normally accompanying a policy is reduced when demagogic hostility is combined with the accelerant of pandemic-inspired cuts in production at a time of quick recovery from the nightmare.  Why invest in an industry that the donkey party and its administration declared to be the equivalent of kiddie porn?

That’s not all.  We’ll enjoy the benefits of California’s sclerotic supplies alongside California’s high-priced everything.  All of this will be wrapped in an increasingly feudal way of life.  As in the old Soviet Union, a new aristocracy of the party and its nomenklatura will ride on top of a beleaguered class of commoners.  Thank you, Democrats.

 

RogerG