Category: Economy

Final Second Quarter GDP Estimate Remained Unchanged at 2.1%

The third and final estimate for real gross domestic product (GDP) in the second quarter of 2023 was unrevised. It showed that the U.S. economy grew at an annual rate of 2.1%, according to the Bureau of Economic Analysis (BEA).

Compared to the first quarter, the deceleration in real GDP in the second quarter primarily reflected a slowdown in consumer spending, a downturn in exports and a deceleration in federal government spending that were partly offset by an upturn in private inventory investment, an acceleration in nonresidential fixed investment, and a smaller decrease in residential investment.

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The Biden Admin Just Declared ‘War on Consumers’

In the Biden administration’s whole-of-government attempt to force a transition to supposedly “green” and ethical energy that’s anything but — just ask the whales off the coast of New England or forced/child laborers in EV battery supply chains in Africa — another department is jumping into the crusade.

On Tuesday morning, the U.S. Department of the Treasury released its “Principles for Net-Zero Financing & Investment” to press ahead with “best practices for private sector financial institutions that have made net-zero commitments and promote consistency and credibility in approaches to implementing them.”

These principles, the Treasury Department and Secretary Janet Yellen say, are key to “supporting the mobilization of more private sector capital to address the physical and economic impacts of climate change and to seize on the historic economic opportunity presented by the green transition.”

To that end, Yellen and her department heralded “a number of announcements from civil society including a $340 million commitment” from the likes of the Bezos Earth Fund, Bloomberg Philanthropies, Climate Arc, ClimateWorks, Hewlett Foundation, and Sequoia Climate Foundation over the next three years “to support the continued development of research, data availability, and technical resources intended to help financial institutions develop and execute robust, voluntary net-zero commitments” and “facilitate the transition planning efforts of non-financial sectors of the economy.”

According to the Treasury Department, the “climate crisis is propelling a massive economic shift and is hitting the most vulnerable countries and communities first and hardest” and there’s an “increasing demand for technologies, products, and services that will reduce greenhouse gas emissions, support a clean energy future, and help adapt to a changing climate across all sectors.” Notably, however, that demand is not high enough to see the market move truly voluntarily to meet it. As such, “[i]n the United States, government support is playing a role in accelerating this transition,” the Treasury Department admitted as it pushes for more net-zero agreements and investment, as seen in the principles released on Tuesday.

“This announcement from the Department of the Treasury forcing financial institutions to adopt net-zero principles should come as no surprise to American consumers as the Biden Administration openly declares war on consumers,” reacted Will Hild, the executive director of Consumers’ Research.

“Treasury Secretary Yellen, with her announcement of these new net-zero principals at the Bloom Transition Finance Action Forum, has made it abundantly clear that the Treasury Department is working with and for ESG activists like Michael Bloomberg to make the Glasgow Financial Alliance for Net Zero (GFANZ) goals for financial institutions into U.S. government policy, leaving consumers with nothing,” Hild added. “The Biden Administration is littered with former BlackRock employees such as Brian Deese and Eric Van Nostrand who are pushing these liberal, progressive, net-zero, and ESG policies on Americans, rather than focusing on reducing costs at the grocery store and gas pump and tamping down inflation.”

“Make no mistake, the Biden administration is running cover for the financial industry’s net zero cartel, protecting megalomaniac CEOs like Larry Fink and leaving consumers with nothing,” said Hild.

As summarized by the Treasury Department, the principles established to reinforce the woke, economically damaging priorities of the left are:

PRINCIPLE 1: A financial institution’s net-zero commitment (commitment) is a declaration of intent to work toward the reduction of greenhouse gas emissions. Treasury recommends that commitments be in line with limiting the increase in the global average temperature to 1.5°C. To be credible, this declaration should be accompanied or followed by the development and execution of a net-zero transition plan.

PRINCIPLE 2: Financial institutions should consider transition finance, managed phaseout, and climate solutions practices when deciding how to realize their commitments.

PRINCIPLE 3: Financial institutions should establish credible metrics and targets and endeavor, over time, for all relevant financing, investment, and advisory services to have associated metrics and targets.

PRINCIPLE 4: Financial institutions should assess client and portfolio company alignment to their (i.e., financial institutions’) targets and to limiting the increase in the global average temperature to 1.5°C.

PRINCIPLE 5: Financial institutions should align engagement practices — with clients, portfolio companies, and other stakeholders — to their commitments.

PRINCIPLE 6: Financial institutions should develop and execute an implementation strategy that integrates the goals of their commitments into relevant aspects of their businesses and operating procedures.

PRINCIPLE 7: Financial institutions should establish robust governance processes to provide oversight of the implementation of their commitments.

PRINCIPLE 8: Financial institutions should, in the context of activities associated with their net-zero transition plans, account for environmental justice and environmental impacts, where applicable.

PRINCIPLE 9: Financial institutions should be transparent about their commitments and progress towards them.

The voluntary net-zero commitments the Biden administration is seeking to foist on the private sector, however, may put companies which join them in legal jeopardy.

As Townhall has reported previously, state attorneys general from across the U.S. have put insurance and financial service companies on notice that their net-zero commitments may constitute a violation of antitrust and consumer protection laws.

One recent letter to signatories of a net-zero commitment led by Tennessee Attorney General Jonathan Skrmetti noted how such net-zero alliances see companies “colluding to limit consumer choices and manipulate market outcomes in support of international climate activists,” moves that “could violate [his state’s] antitrust and consumer protection laws.” As AG Skrmetti rightfully noted, “[d]ecisions about energy policy should be made by our elected representatives, not by transnational corporate alliances.”

Already, an earlier warning to insurance signatories to a net-zero pact saw several companies back out of the agreement rather than face additional scrutiny from state attorneys general for their activities that may have constituted antitrust violations.

Despite such warnings about net-zero priorities being potentially in violation of state law, the Biden administration and its climate alarmist allies in the private and nonprofit sector are plunging ahead with more agreements — an unsurprising development from the administration that has not allowed federal law or the U.S. Constitution curb its ambitions, leading to a series of high-profile losses before the Supreme Court for its attempts to force an energy transition.

EVs Are Supposed to Be Cheap to Maintain—Our Kia EV6 Isn’t So Far
The EV6’s first service visit left us scratching our heads and $200 poorer.

Our 2022 Kia EV6 recently went in for its first scheduled service, something we initially assumed would be an easy, mundane task. Electric vehicles, after all, have simple powertrains with fewer moving parts than their gas-powered counterparts—and no oil changes! This is supposed to make EVs cheaper to maintain. So you can imagine my surprise when it came time to pick up our EV6 and I was slapped with a $230 invoice. Thank goodness for company credit cards.

The shocking bill capped off what began as a crummy Sunday morning. While I was loading the EV6 for a day at the beach with my pup, I noticed a completely flat driver’s side rear tire thanks to a screw. It was in a spot on the tread that looked patchable, but since the EV6 doesn’t have a spare tire (only a liquid seal kit that would’ve ruined the tire), I decided to take advantage of Kia’s free roadside assistance and have it towed to my local dealership with a service department that was open on Sundays. Big kudos to them for that.

Requesting roadside service was easy and quick, with the tow truck arriving at my house within 30 minutes. Once we arrived at the dealership, it was quickly determined the tire was not patchable and needed to be replaced. Thankfully, they had one in stock. Our EV6 was just a few hundred miles away from needing its first service, so I requested to have that done while I was there.

According to the owner’s manual, the 8,000-mile service includes a tire rotation and inspection. The list of items to inspect includes brakes, suspension, drive shafts, the 12-volt battery, in-cabin air filter, and more. Nothing out of the ordinary. Which is why we left scratching our heads at the $230 bill, including an “EV service port cleaner” procedure that I didn’t request but was performed nonetheless for $51. If we subtract that interesting port cleaning service, the total for this routine service visit was $179. Still a pretty penny for what amounted to a peek under the frunk and shuffling around a few tires (one of which was getting worked on anyway).

We appreciate this dealership taking us in on a Sunday and Kia’s quick and free roadside tow, but the excessive service cost soured the experience. Thankfully, our encounter appears to be an anomaly. For starters, the same service performed on our otherwise identical long-term Hyundai Ioniq 5 only set us back about $50. And numerous EV6 forums show other owners paying anywhere between $20 and $50 for the first service. We found none over $100, and some were complimentary. Which is what it should be. What better way to build rapport and loyalty than providing free inspections? If such a dealership exists in the L.A. area, we’ll be sure to go there for our next service visit.

 

Evergrande.

The news was all over the media. The default wasn’t yesterday; they got in trouble in 2021 and had sought a “moratorium” in the first week of 2022!

So how is it that nobody gave a crap for the last two years? You’d be carried out on your shield by now and long-ago eaten by worms if you shorted the US market into the original default 2 years ago.

Witness Lahaina. HE, the power company, spent basically all of their money on “green” initiatives rather than basic maintenance and hardening to reduce wildfire risk. They were trading close to $40 before the fires and yesterday touched close to $10; a wild-eyed 75% collapse. That’s a utility and of course now there is a serious financial risk from lawsuits — richly-deserved, if the article in the WSJ is all factual.

But that’s a microcosm of all the distortions that have been embedded in the so-called “green economy”; the virus was also part of it, and the government had their foot on the scale in the “rah-rah” side of it because everyone loves a higher stock market.

The problem is that how you got it matters.

If you got it because the company expanded its business organically, it beat others in the market because they were at least two of “better, faster, cheaper” then you’ve got a sustainable and reasonable price.

If you got it because the government subsidized bad behavior — uneconomic things that cannot work over time because they violate the laws of thermodynamics and are predicated on feelings and political promises then you get a crash because there is nothing under any of the so-called “improvement” beyond hot air.

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Don’t Throw Away Those Silica Gel Packets! Here Are 14 Smart Ways to Reuse Them.

Those tiny little packs of dessicant that come in your new pack of shoes or your vitamins have many uses around your home. Anywhere that moisture is a problem, silica gel packets can help alleviate the issue. Keep them stored in an airtight container away from pets and children (they are a choking hazard) and whip them out in the following scenarios.

Around the Kitchen
  • Keep vitamins from moisture damage. (It’s good to just keep those silica packs that come in the vitamin containers; save them once the vitamins are finished.)
  • Keep dry food and pet food fresh and crispy with a silica gel pack taped to the lid of your storage container.
  • Put a few silica gel packs in the bottom of your clothes hamper to absorb moisture from clothes or damp towels.
  • A pack of silica gel will help dry out wet shoes or boots.

Around the House

  • Reduce condensation on windows by setting a silica gel pack on the window sill. (Remember to keep them away from children and pets)
  • Help dry out a non-water-resistant cell phone by putting it in a sealed bag with several silica gel packs.
  • Protect important documents and photos from moisture with a silica gel pack inside the box or file cabinet.
  • Boxes of paper memories — like old papers, photos or notebooks — in storage? Silica gel packs stored in the same container will adsorb moisture.
  • Store silica gel packs with your tools to help prevent rust damage.
  • Store some in your medicine cabinet if you keep medication in there. The silica gel packs will help keep humidity down.
  • Keep razors from moisture damage by storing them in a sealed container with a silica gel pack.
  • Placing a few silica gel packs between your dashboard and windshield in the car will help keep fogging to a minimum.

When You Travel

  • Keep luggage dry while it’s in storage by tossing a silica gel pack in each suitcase.
  • Toss a few silica gel packs in a Ziploc bag if you can’t dry your bathing suit before packing it.

Bonus Tip: To “reactivate” silica gel packs that are saturated with moisture, place them on a baking sheet in a 200 degree oven away from the heating element for two hours.

Economic Expert: ‘Transitory’ Inflation Enters 31st Month, and It’s Not Going Away.

“Our income is falling even as the thieves who took away our prosperity continue to masquerade as people we can trust to solve the problems that they created,” Jeffrey Tucker observes soberly about America’s economic and monetary situation.

Tucker, Brownstone Institute founder and president, wrote an op-ed that was published Friday in The Epoch Times. He noted that the inflation problem continues and the dollar is likely to lose half its value by the 2030s. Basically, Biden’s economic policies and the Federal Reserve created a crisis, and it’s not getting any better.

“The Consumer Price Index came out this morning and it showed no improvement over last month,” Tucker wrote. “It is still rocking at 3.2 percent with new strength in food and medicine. The sticky index is frustratingly high too at 5.4 percent.”

As we face the 31st month of “transitory” inflation, we’ve also have almost that long a period in the Federal Reserve’s “war on inflation by raising rates higher and faster than in the whole history of the institution,” Tucker continued. “That said, in real terms, federal funds rates are still barely above zero. That’s because inflation is still rocking and eating away the dollar’s purchasing power.”

The purchasing power of the U.S. dollar is declining at a somewhat less rapid rate than it was as of a year ago, Tucker noted. But the dollar is still declining, not hitting the Fed’s target. “Prices are nowhere near going back to 2019 levels but instead it all keeps getting worse,” he wrote. “We have now lost 16 cents from its value at the start of Trump’s last year of his presidency. The mad money printing has taken a terrible toll. All of the value of the transfer payments from 2020 and 2021 have completely vanished.”

According to Tucker, “the Fed has done everything it knows to do in order to bring this under control,” although the Fed also created the problem to begin with by “enabling” a Congressionally-authorized spending spree. And the “clean-up” after the “fire” didn’t go particularly well; we all know that from our own experience. Tucker gave a technical explanation of velocity, or “a measure of the pace at which money is spent,” and how the pace of spending now is fueling inflation and is not likely to improve soon. But velocity isn’t under the Fed’s control, either.

Tucker insisted, “If velocity continues to increase like this, we are looking at years of price increases at 3 percent and higher. And that is presuming no sudden surprises.” Unfortunately, he noted, Americans seem to be getting used to the inflation pain. It hurts, but we’re starting to accept it as normal. That’s how “transitory inflation” turns into a permanent state of affairs, Tucker stated:

At the current pace of decline, we can expect the 2020 dollar to keep falling in value, so that it will be worth half its value by the time we reach the 2030s. Keep in mind that this is a tax that wrecks the standard of living of the middle class and the poor while enriching the people and institutions that can afford to endure the storm…

This is exactly what has happened to gas prices. In the long sweep, it has only increased in price but right now it feels not so bad. This is entirely in your head. The reality is that you are being pillaged.

Gas prices could eventually reach their old highs but by this time, you will have been so bruised and bloodied that you will be no longer screaming in pain. In short, our masters are trying to acculturate us to suffering so that we will no longer have the strength to protest.

One thing Tucker does not address is how the dollar is weakening internationally even as the Chinese yuan rises, and multiple countries start to turn from the U.S. dollar as standard world reserve currency. Could that “de-dollarization” pushed by Communist China also spell serious trouble for the future value of the dollar? Probably.

Ultimately, however, the conclusion is the same: it’s ordinary Americans who suffer most from inflation and the dollar’s loss of value.

 Lilly and Scowcroft Were Wrong in 1989. Let’s Not Be Wrong in 2023
A Lifeline to China is a Mistake.

Brent Scowcroft was a great American, as was Lawrence Eagleburger. Both served our country well throughout their lives. Except once.

June 4th, 1989, the Communist Party of China unleashed a slaughter and then round-up of activists and students who had bravely demanded a more democratic China. Less than 6 weeks later, while bodies of students were still in Beijing morgues, Scowcroft and Eagleburger, encouraged by James Lilly, and of course with the full backing of then President George H. Bush, undertook a secret mission to Beijing to let the butchers know, “we’ve got your back”.

Alternative historical timelines are somewhat useless, however, judgments about the actions of government officials are open to scrutiny, and I am more than willing to argue that the olive branch along with the tarp, to cover the bodies of the Tiananmen students, delivered by Mr. Eagleburger and Mr. Scowcroft, was a mistake. China was on the ropes, the Soviet Union was going down fast, and what could have been the end of the Communist Party, or at least a serious shake-up, was an opportunity missed for reasons that really don’t add up, other than then President Bush, and policy hands like Ambassador James Lilly, thought stability in China was preferred over change. A move where the only recorded beneficiary was the Carlyle Group.

We are now at that crossroads again, and once again, we have the engagement crowd telling us that it’s much better for us for to let the Party of Xi escape, with our assistance, rather than face the music of the last nine years of economic mismanagement.

Whether it’s slithering Hank Greenberg, Kissinger, or even our newest US China policy maker, Australian Ambassador to the US Kevin Rudd, the bail out China brigade is out in full force.

I disagree.

Unless the engagement fellows have figured out a way to increase the Chinese birth rate, solve the problems of communism, and found some path for the Communist Party to allow an investment that is not a gift, then we are wasting our time.

Xi put them in this mess, and it’s his mess to sort. The idea that we need some type of Marshall Plan to help the Communist Party save itself, so they don’t turn into bad guys and invade the rest of Asia is sadly lacking an understanding of exactly what totalitarians have done throughout history.

I’m not advocating to isolate, or to even cut off trade with China, but if they want to trade, then they can trade like adults, and not always based on the premise that the United States and the European Union are their supplicants.

It’s been the common thread from the China hands for the last 30 years that China is a place that only changes on its own, and we, the West, can only watch and encourage them to go in the better direction. Sounds right to me. Xi made the mud, let him, on his own, clean it up.

Biden and Obama: The two Democratic presidents of the country’s only credit downgrades

Former President Barack Obama once explained how he would have arranged for a third term as president. He jokingly explained how it essentially involved having a puppet as president in which there would be a “frontman or frontwoman” with Obama directing them what to do while in “his basement in his sweats.” Three years into the Biden administration and these comments make Obama look like a soothsayer.

“If I could make an arrangement where I had a stand-in, a frontman or frontwoman, and they had an earpiece in, and I was just in my basement in my sweats, looking through the stuff, then deliver the lines, but somebody else was doing all the talking — I’d be fine with that,” Obama said to Stephen Colbert in 2020.

After the news of the Fitch downgrade, Obama’s joke now seems like an accurate description of the Biden presidency, mainly since only two presidents have overseen the country suffer credit downgrades: Joe Biden and Barack Obama. Biden’s was this past week with Fitch; Obama’s was with Standard & Poor in April 2011. Both downgrades occurred during each president’s third year in office. And, naturally, both presidents sought to blame Republicans each time. Blaming the GOP was a hallmark of the Obama legacy.

Obama’s downgrade in 2011 was the first time the United States was given a credit rating below AAA. S&P decided to lower the country’s rating to AA+ because the federal government failed to provide a credible plan to confront the soaring national debt at the time, CNN Money reported. S&P also blamed political gridlock, squabbling, and “dysfunctional policymaking” for the decrease.

“The downgrade reflects our opinion that the … plan that Congress and the administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics,” S&P declared at the time. “The political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.”

Fast forward 12 years later, and Obama’s vice president in 2011, Joe Biden, is now in charge. Once again, a credit agency downgraded the nation’s rating to AA+ from AAA. Coincidence? I don’t think so. The Fitch decision was based on “a steady deterioration of governance over the last 20 years” — the majority of that time occurring during the Obama and Biden presidencies.

Additionally, Fitch explained other factors behind its decision, including “repeated debt limit standoffs and last minute resolutions” and a “high and growing general government debt burden.” Other reasons included the government lacking a “medium-term fiscal framework” and having a “complex budgeting process.”

One of the most essential factors in the Fitch decision was a scathing indictment of “Bidenomics.” For all the rampant celebratory propaganda Democrats have spread regarding the economy under the Biden administration, projections call for “weak 2024 GDP growth” and a mild recession at the end of this year and into the first quarter of 2024.

Fitch also predicted “GDP growth slowing to 1.2% this year” and an anticipated “growth of just 0.5% in 2024.” It’s “Bidenomics” at work. And it should be noted that Biden’s weak GDP growth prediction is similar to the underwhelming Obama economy in 2011, the time of the last credit downgrade, which resulted in a measly 1.5% GDP growth. This is why Democrats are trying to deflect from this reality and pin the blame on Donald Trump or things like January 6th. They want to hide the truth of the adverse outcomes they helped create.

It’s no coincidence that both credit downgrades happened under Democrats — especially Democrats who were part of the same presidential administration. Democratic policies have been hampering the country for quite some time. It’s as if their entire party is immune to accepting responsibility for their political actions, no matter how often they misled the public into believing the opposite. Democrats should look at themselves instead of blaming Republicans for their failures.

NY Fed Reports “Successful” Months-Long Digital Dollar Test

The Federal Reserve Bank of New York’s Innovation Center has recently concluded a 12-week experiment in cahoots with banking behemoths such as Citigroup Inc. and Wells Fargo & Co. The study focused on regulated liability networks, with an aim to test the efficiency of digital dollars in the financial sector. Though the initial results showed some advantages in transaction speeds, critical questions regarding privacy and civil liberties remain glaringly unanswered and alarmingly relevant.

The study, as reported by Bloomberg, employed a permissioned private blockchain to simulate the issuance and settlement of digital currency, representing customer deposits. The very use of a private blockchain rings alarm bells, as it could allow the central bank, and potentially other financial entities, to have an unprecedented level of control and surveillance over individual transactions. This could be a perilous road leading towards an Orwellian financial system where citizens are stripped of financial privacy.

Per von Zelowitz, the director of the New York Innovation Center, seemed to gloss over these concerns in his statement emphasizing the functional benefits of central bank and commercial bank digital money operating together on a shared ledger. However, it raises the question – at what cost to individual privacy and freedom?

The experiment found that digital dollars could streamline dollar-denominated payments and expedite settlement processes. However, what this conclusion conveniently omits is an examination of how this digitization could allow a dystopian degree of oversight and control over personal and business transactions. Tony McLaughlin from Citigroup talked about the “prospect of a global, instant US dollar payment system,” but made no mention of the invasive potential it could hold for individual privacy.

As the research revealed no immediate legal impediments to the establishment of a digital dollar under existing US laws, it’s chilling that there has been no transparent discussion about the civil liberties at stake. With the advent of central bank digital currencies (CBDCs), governments could have the power to track every transaction, big or small, of every citizen. This raises severe concerns not only about privacy but also about the potential misuse of personal data.

Moreover, the experiment’s exclusive reliance on a private blockchain – in stark contrast to the public blockchains which at least offer some level of anonymity – paints a haunting picture. Herein lies a thinly-veiled warning; financial efficiency should not and cannot be pursued at the expense of basic human rights and liberties.

The concept of CBDCs in the United States is nascent, but this should serve as an urgent call for rigorous public debate. Before we tread further down this slippery slope, it is imperative to consider the Pandora’s Box we might inadvertently open, trading our treasured privacy for marginal gains in transaction speed.

Breaking: McCarthy gets debt-ceiling deal — with work requirements.

Utterly predictable, although it still came about 24 hours later than I expected. On a holiday weekend when people are paying the least attention, Joe Biden finally cut a deal with Kevin McCarthy to raise the debt ceiling and end a game of chicken that Biden and Democrats lost months ago. House Republicans didn’t get everything they wanted, but Biden and the Democrats didn’t get anything they wanted except to limit the embarrassment:

President Biden and Speaker Kevin McCarthy on Saturday reached an agreement in principle to raise the debt limit for two years while cutting and capping some government spending over the same period, a breakthrough after a marathon set of crisis talks that has brought the nation within days of its first default in history. …

The deal would raise the borrowing limit, which is currently $31.4 trillion, for two years — enough to get past the next presidential election.

According to a person familiar with the agreement, it also would impose new work requirements for some recipients of government aid, including food stamps and the Temporary Assistance for Needy Families program.
It would place new limits on how long certain recipients of food stamps — people under the age of 54, who do not have children — could benefit from the program. But it also would expand food stamp access for veterans and the homeless, said the person, who spoke on condition of anonymity because they were not authorized to discuss details of the package.

The tentative deal also claws back some unspent money from a previous pandemic relief bill, and reduces by $10 billion — to $70 billion from $80 billion — new enforcement funding for the I.R.S. to crack down on tax cheats. It includes measures meant to speed environmental reviews of certain energy projects. And it includes an enforcement measure, meant to avert a government shutdown later this year, that would reduce funding caps for the military and veterans and Congress does not pass into law all 12 regularly scheduled appropriations bills by the end of the year.

The work requirements on safety-net programs will enrage Biden’s allies, not just on principle but also because it hands McCarthy a big win. Without it, McCarthy probably wouldn’t get more than a handful of his caucus to back him. As it is, the reductions in the cuts they already passed are not going to make the Republicans happy, even if they have to swallow it at the eleventh hour.

But come on … they won. Biden and Chuck Schumer lost this weeks ago, and now they just caved. It would not surprise me if the Democrats knew this was coming all along, and they merely waited for a holiday weekend to give them enough cover to pull the trigger.

As I said, utterly predictable. Just like the way we knew McCarthy would win, because — again — he won the moment he got the debt-ceiling hike through the House. He forced Biden and Schumer to negotiate on his terms, and he kept enough of them to matter. We’ll have more on the deal as it comes together, and as the media tries to spin it any other way.

Update: This is apparently what counts as a win for Biden:

Republicans had sought to repeal Biden’s efforts to waive $10,000 to $20,000 in debt for nearly all borrowers who took out student loans. But the provision was a nonstarter for Democrats. The budget agreement keeps Biden’s student loan relief in place, though the Supreme Court will have the ultimate say on the matter.

The Supreme Court is dominated 6-3 by conservatives, and those justices’ questions in oral arguments showed skepticism about the legality of Biden’s student loans plan. A decision is expected before the end of June.

That plan is going to die a very well-deserved death at the Supreme Court no matter what, on a number of grounds. McCarthy probably put it in the bid so that Biden could claim a concession from Republicans in the final deal.

Lysander Boomer

Given the threat to our economic and consequently political stability posed by the consequences of the curtailment of natural gas production, I would welcome a statement from the governors of producing states about what their intentions are in the future.

Assuming a second Biden term, it is probable that additional restrictions will be passed aimed at destroying domestic energy production. State governments must nullify such restrictions and ensure sufficient energy supplies.

I would encourage the formation of regional organizations between states to ensure that at a minimum, politically aligned states are not economically devastated by the policies of this administration. Joint litigation, joint resistance, joint production etc.
The lights must be kept on, the production of food must not be interfered with, the grid must be secured against sabotage, both physical and legislative in origin.

If we must have a constitutional crisis, let it be over keeping folks fed and living with proper amounts of air conditioning and electrical services. The feds will either yield or be displaced in such a circumstance.

Force the agenda out into the open. Use state power to the absolute maximum to ensure the prosperity of your state and confederate with other likeminded states to resist the inevitable federal repercussions. It may get ugly but it is a worthy fight.

Potentially consider passing legislation to allow for the recall of senators if they are judged to act against the interest of the state government. This will work to restore the intention of the senate as a battleground of the states.
State legislatures must wield their power strongly to defend against federal overreach. I can’t say it enough, the states must arm themselves (legally) against the federal government and prepare to fight with everything they’ve got.

Comment O’ The Day
As with electric cars, the environmental benefits of fake meat are more claimed than proven.

Eat Meat! (2)

In today’s developed world, average people can achieve a higher standard of living than has ever before been possible. In fact, the difference between an “elite” standard of living and that enjoyed by people of average, or a little more than average, means, has dwindled to near-insignificance. It is fair to say that today, an “elite” American has little more chance of living a satisfying and happy life than the average American.

Our “elites” consider this situation intolerable, a fact that explains much of our current political turmoil. Liberals are trying to drive down the standard of living for all Americans. True, their own standards will suffer slightly. But if you are a multi-millionaire, how much do you care if your electricity bill doubles? The salient fact is that a general decline in standards of living will increase the disparity between the “elite” and the rest of us. That, I think, is the goal of many liberal policies, and the main reason why most rich people are liberals.

Today, a person of ordinary means can toss some steaks on the grill on Memorial Day. That is a good thing, in most people’s opinion, but it galls “elite” leftists, who eat steak themselves but are annoyed that the rest of us can afford to do so, too. Hence the Left’s war on meat, the point of which is to drive up prices so that they can afford steak, pork chops, bacon, etc., but you can’t.

As always, “the environment,” in the form of CO2 emissions, is the excuse. But does that actually make any sense? One of the alternatives to cows, pigs and chickens is lab-grown meat, which has been touted as an environmentally-friendly substitute for the real thing. But a recent study casts doubt on that claim:

Lab-grown meat has been touted as a way to save the planet, but a new study suggests its green credentials are not as solid as many believe.

Researchers have revealed that lab-grown or ‘cultured’ meat, produced by cultivating animal cells, is up to 25 times worse for the climate than real beef.

Which is to say, it produces up to 25 times the CO2 emissions. What are we talking about here?

Lab-grown meat is different from plant-based ‘meat’, which is not meat at all but uses vegan ingredients such as vegetable protein to replicate the look and taste of real meat.

Lab-grown or ‘cultured’ meat is generally seen as more ethical than real meat because it requires a sample of body tissue rather than the death of the animal, although many vegans and vegetarians will not touch it because it is made of animal.

I won’t touch it either, but not for these reasons:

In the study, the scientists estimated the energy required for stages of lab-grown meat’s production, from the ingredients making up the growth medium and the energy required to power laboratories, and compared this with beef.

They largely focused on the quantity of growth medium components, including glucose, amino acids, vitamins, growth factors, salts and minerals.

They found the global warming potential of lab-grown meat ranged from 246 to 1,508 kg of CO2 equivalent per kilogram of lab-grown meat, which is four to 25 times greater than the average global warming potential of retail beef.

Whatever. If it didn’t come from a cow, a pig, a sheep, or a fowl or fish, I don’t want to eat it.

And scientists are pushing back against the Left’s attack on meat:

[T]he war on meat is only just getting going – and it has some very powerful supporters. ESG (environmental, social and governance) rankings and corporate social responsibility checklists reward companies for creating vegan products, even if nobody buys them. Meat taxes are being considered to price it out of our reach. The Dutch government is spending €25bn (£22bn) to buy out its livestock farmers and close down their farms. But it’s all based on some very dubious pseudoscience.

Now the scientific establishment has begun to fight back. Last month, over 900 scientists signed the Dublin Declaration, a milestone in the defence of livestock farming. The declaration explains how ruminants, such as cows and sheep, rescue marginal land.

“Well-managed livestock systems applying agro-ecological principles can generate many other benefits, including carbon sequestration, improved soil health, biodiversity, watershed protection and the provision of important ecosystem services.” They add that a drastic reduction in animals “could actually incur environmental problems on a large scale”. It will also hurt three billion of the world’s poorest, who could use the iron and protein that comes from real meat.

Plus, meat is nutritious, and it tastes good. The author of the Telegraph piece explains the war on meat with a classical reference:

I wonder if even the most compelling rational arguments for meat will wilt when faced with such furious medieval zealotry. The motivation is not really saving the climate, or concerns about nitrogen – it’s simply that something so nutritious and delicious should be being enjoyed at all.

As Macauley wrote of the Puritans: they “hated bear-baiting not because it gave pain to the bear, but because it gave pleasure to the spectators.”

Exactly. The spectators here being ordinary people who can afford to buy meat. In the eyes of our “elites,” that can’t be allowed to continue.

Who turned the lights out? Joe Biden

Does the radical climate change agenda know no end? Earlier this year, it was gas stoves — and then lightbulbs.

Then, a few weeks ago, President Joe Biden’s administration announced much less gas cars after 2032. Even though about half of Americans say they don’t want an electric car and only 6% of drivers are buying them.

But that was child’s play compared to the latest Biden scheme to shut down as many as half our electric power plants across the country. These are the plants that charge those Tesla batteries and cellphones. They also keep the lights on in our factories, schools, hospitals, stores, and homes and power the internet. Further, they cook our food and keep us warm at night. No, that power doesn’t just come magically from the socket in the wall.

Most of the electric power supply in America and around the world comes from fossil fuels. Coal, gas and oil power plants account for more than 60% of the electric power we use in the United States today. Only about 20% comes from wind and solar power.

Hold that thought. Because the Biden administration has announced what The Washington Post calls a plan to “drastically reduce (power plant) greenhouse gas emissions.” These cuts are so stringent that most of our gas- and coal-fired plants would be technologically incapable of complying. But here’s what’s sinister: That’s the point of these rules — to wrench fossil fuels from our energy supply altogether.

Our electric grid system is already stressed to the limits. States that have tried to switch to green energy — California comes to mind — are having to undergo dangerous blackouts and brownouts. This is what happens in Third World countries. It isn’t supposed to happen here.

Where are we going to get the electric power to charge 150 million EVs every night? From windmills? Remember, these new Environmental Protection Agency rules come just weeks after Biden announced cars would soon no longer be fueled with gas, oil or diesel. Yet now, we are going to shut down more power plants?

The Biden administration says that coal and gas plants will have to pay for carbon offsets to make up for their carbon emissions. Who’s going to pay for that? We all will with much higher utility bills.

If you want to cripple an industrial economy like that of the U.S., a good way to do so is to dismantle its energy supply. Who is the president residing in the White House these days? Joe Biden or Dr. Evil?

No country has cleaned its air more than the U.S. has over the last many decades. The Institute for Energy Research reports that our air pollution emissions — including lead, sulfur, carbon monoxide and particulates — have fallen by a combined 74% over the past 50 years. We have the cleanest air in any of our lifetimes.

Even our carbon dioxide emissions have fallen in recent years more than any other country, thanks to natural gas production. We aren’t the problem. China is, and you can be sure they’re not doing anything to slow their economy.

These new EPA regulations aren’t about breathing cleaner air or changing the temperature of the planet. They are a dangerous assault on the American free enterprise system and U.S. global leadership.

Biden thinks his legacy will be as the president who fought global warming.

Wrong. He will go down in history as the president who turned the lights out on the U.S. economy.

Stephen Moore is a senior fellow at the Heritage Foundation

REGULATORS SEIZE FIRST REPUBLIC IN SECOND LARGEST BANK FAILURE IN U.S. HISTORY:

Early on Monday, regulators seized the San Francisco-based First Republic Bank and agreed a deal to sell its deposits and most of its assets to JPMorgan Chase, preventing further spiral in the banking industry.

Three of the four largest-ever U.S. bank failures have occurred in the past two months. First Republic Bank, which as of April 13 had $229.1 billion in total assets and $103.9 billion in total deposits, is the second largest bank to go under in U.S. history, behind only Washington Mutual, which went down in 2008. First Republic has been struggling since the failures of Silicon Valley Bank (SVB) and New York-based Signature Bank in March.

Investors and depositors were growing increasingly worried the bank would not survive because of its high amount of uninsured deposits — that is, deposits over the FDIC-insured limit of $250,000. First Republic also had high exposure to low-interest loans. A focus on wealthy clients on both coasts allowed First Republic to grow into one of the biggest banks in America. Large deposits funded low-rate mortgages to wealthy home buyers.

The bank lost $100 billion in deposits in a March run following SVB’s collapse. First Republic struggled to cope with the declining situation until eleven of America’s biggest banks deposited $30 billion into its coffers. That gave the bank breathing room and it tried to turn itself around. First Republic planned to sell off unprofitable assets, including the low interest mortgages, and it also announced layoffs of a quarter of its workforce.

The quarterly report, however, sent investors into panic. With the stock price in freefall and the bank poised for further spiral, regulators considered intervention necessary.

“As part of the transaction, First Republic Bank’s 84 offices in eight states will reopen as branches of JPMorgan Chase Bank, National Association, today during normal business hours. All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits,” explained the FDIC in a statement Monday.

“The resolution of First Republic Bank involved a highly competitive bidding process and resulted in a transaction consistent with the least-cost requirements of the Federal Deposit Insurance Act,” the agency added, estimating the cost to the Deposit Insurance Fund to be about $13 billion. The agency is sharing losses on First Republic’s loans.

The FDIC seriously considered a bid from at least one smaller bank — namely, PNC Financial Services, the Wall Street Journal reported.

Both First Republic and Washington Mutual are now substantially owned by JPMorgan. Chairman and CEO Jamie Dimon was instrumental in earlier efforts to rescue First Republic. JP Morgan was one of the eleven banks to intervene in March and Dimon was pushing for additional steps to be taken.

“Our government invited us and others to step up, and we did,” explained Dimon in a statement. “Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.”

“This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise,” Dimon added.

JPMorgan expects the addition of First Republic to add $500 million to its net income per year, not including the approximately $2.6 billion one-time post-tax gain or approximately $2 billion of post-tax restructuring costs expected over the course of 2023 and 2024.

Three huge problems with Biden’s new ‘equity’-based mortgage policy.

President Biden has repeatedly rejected the traditional American principles of meritocracy and opportunity in favor of the nebulous push for “equity,” aka equality of outcome. The latest incarnation of this shift comes via the Biden administration’s new rules for mortgage fees that will punish the responsible and reward the reckless.

Here’s what’s going down.

“A new rule will raise mortgage fees for borrowers with good credit to subsidize higher-risk borrowers,” the Wall Street Journal reports. “Under the rule, which goes into effect May 1, home buyers with a good credit score over 680 will pay about $40 more each month on a $400,000 loan, and upward depending on the size of the loan. Those who make down payments of 20% on their homes will pay the highest fees. Those payments will then be used to subsidize higher-risk borrowers through lower fees.”

This is a terrible idea, and here are 3 reasons why.

The housing market is already struggling

The real-estate market is already struggling right now, with home sales down significantly thanks to rising interest rates that are making buying a home much more expensive. That means it’s the worst time to add new rules that make it more expensive to buy a home. And it’s not just right-wing activists and conservative media saying this.

“This confusing approach won’t work and more importantly couldn’t come at a worse time for an industry struggling to get back on its feet after these past 12 months,” said former Obama administration housing official David Stevens. “To do this at the onset of the spring market is almost offensive to the market, consumers, and lenders.”

This rule makes responsible people pay for irresponsible people

Biden’s new rule is fundamentally unfair. If you’ve made responsible decisions and have a good credit score, you will now be punished—to the tune of thousands and thousands of dollars over the lifetime of your mortgage—to bail other people out of the consequences of their poor decision making that’s led them to have a poor credit score. That’s an insult to hardworking Americans and a boon to those who don’t deserve it.

Further encourages people to buy houses they can’t afford

We need look no further than the 2008 financial crisis to see what happens when you make it easier for people to get a mortgage who can’t actually afford to buy a house or be trusted to pay back a mortgage. That’s exactly what this fee system does, however. As the Journal notes, “This is the socialization of risk, and it flies against every rational economic model, while encouraging housing market dysfunction and putting taxpayers at risk for higher default rates.”

All in all, it’s a terrible idea. And, unfortunately, it’s part of a broader pattern. On everything from so-called student debt “cancellation” to Affirmative Action, the Biden administration is siding against American meritocracy and endorsing radical redistributionism.

Hint: ‘Cash is still King’
(and $500 won’t go as far as you might think it does)

SO, SHOPPING AT THE FRESH MARKET TONIGHT, we were among the very few to buy groceries, because their computer network was down and they couldn’t process credit or debit cards.
They couldn’t even accept checks because those are run through an ACH payment system rather than deposited in the old way.
We, however, were able to pay and get out, something only a couple of other customers could do.
One older guy, and a couple of teenaged girls who said “we rock it old school with cash,” which I thought was hilarious.
Most people didn’t carry enough cash for groceries.

2 lessons:
(1) The “cashless society” is less robust than cash; and
(2) Always carry enough cash to buy groceries, a meal out, and a tank of gas. Just in case.
–Glenn Reynolds