Those Stubborn Facts: China Celebrates Earth Day

Tags

China, climate change, coal, Earth Day, energy, fossil fuels, Those Stubborn Facts

Coal production capacity China says it will add this year:   300 million tons

Increase from China’s new coal production capacity last year: 36.36%

China share of global coal production & consumption: c. 50 percent

 

(Source: “With coal surge, China puts energy security and growth before climate,” by Christian Shepherd, The Washington Post, April 22, 2022, https://www.washingtonpost.com/world/2022/04/22/china-coal-climate-change-xi-energy/)

(What’s Left of) Our Economy: #PutinPriceHike? Not Even Close – Yet

Tags

baseline effect, Biden administration, CCP Virus, coronvirus, COVID 19, energy, fossil fuels, gasoline, inflation, lockdowns, oil, Putin, sanctions, stay-at-home, Ukraine invasion, Ukraine-Russia war, Wuhan virus, {What's Left of) Our Economy

According to the Biden administration, it’s the #PutinPriceHike. That is, don’t blame anything Washington has or hasn’t done for the the bulk of the high gasoline prices Americans have been paying lately. Instead, blame Russian dictator Vladimir Putin, his aggression against Ukraine, and the global oil market turmoil it’s triggered.

The trouble is, if you look at these prices in a comprehensive, statistically legitimate way, scapegoating Putin in this case isn’t justified yet. But the same methodology shows that Mr. Biden and his aides are off the hook, too – at least until recently.

Critics (see, e.g., here) have countered the Biden claims by noting that strong U.S. gasoline inflation predates the Ukraine war and even Russian military buildup by many months, and they’re right. As known by RealityChek readers, however, that’s far from the whole story. In particular, they’re ignoring the impact on gasoline and other prices of the ongoing aftermath of the CCP Virus pandemic, the brief but sharp recession created by the disease and related lockdowns and voluntary behavioral changes, and ongoing stop-start U.S. economy that’s still resulting.

In other words, they’re ignoring the “baseline effect” caused by the economic shocks of the 2020 pandemic year in particular. These drove economic activity down to such low levels, and kept it there so long, that any major return to normal (and therefore normal prices) is going to produce unusually lofty inflation stemming from a catch-up effect. Therefore, it won’t be possible to determine the role of other contributors to inflation in gasoline or any other goods and services until this baseline effect fades significantly and finally disappears. And therefore, scapegoating Biden for soaring gasoline prices pre-Ukraine buildup isn’t justified, either.

RealityChek reported yesterday that the latest official U.S. figures show that the baseline effect has ended for headline inflation, and looks on the way out for core inflation (which strips out food and energy price. And roughly the same is true for gasoline prices.

The table below shows their monthly year-on-year percentage changes for last year (2020-21) in the middle column and for pandemic-dominated 2019-2020 (in the righthand colum). The numbers begin in March because March, 2020 was the first month in which the virus began significantly affecting the economy.

Gasoline price annual percentage changes      2020-21             2019-20

March:                                                               22.58                 -10.05

April:                                                                 49.68                 -32.03

May:                                                                  56.51                 -33.67

June:                                                                  45.42                 -23.41

July:                                                                   41.93                -20.12

Aug.:                                                                  42.76                -16.67

Sept.:                                                                  41.93                -15.43

Oct.:                                                                   49.52                -18.15

As is evident, starting in March, 2020, gasoline prices began nosediving from their levels of 2019, and steep annual drops continued (though at a slower pace) through October. It’s easy to understand why. The combination of lockdowns and stay-at-home behavior caused automotive travel to crater, and national demand for gasoline naturally plummeted as well. Further, that’s clearly a big part of the reason why during the following March-October period, gasoline prices prices skyrocketed on the same annual basis. They were returning to normal from an artificially low base. And as a result, it’s wrong to blame the Biden administration exclusively or even mainly for this hot gasoline inflation.

From that point, however, the Blame Biden case gets stronger. The above table stops in October, 2021 because November was when the Putin military buildup began – and according to the Biden argument, gasoline prices really began taking off. What happened to annual gasoline prices increases from then until the end of  2021, and how strong was the baseline effect? Here are the numbers for November and December, with the 2020-21 annual increases in the middle column and the 2019-20 increases in the righthand column:

Gasoline price annual percentage changes      2020-21             2019-20

Nov.:                                                                  57.76                 -19.53

Dec.:                                                                  49.34                 -15.34

The strong 2020-21 yearly price increases continued for these two months. But the baseline effect (from the big 2019-20 price drops) weakened. In fact, the December, 2019-20 annual 15.34 percent annual gasoline price decline was the smallest such figure since March, 2019-20’s 10.05 percent. And the annual increase for the following March (22.58 percent) was less than half December’s 49.34 percent.

What about this January and February? For these months, of course, the comparison years are 2021-22 (whose increases are presented in the middle column) and 2020-21 (in the right hand column).

Gasoline price annual percentage changes      2020-21             2019-20

Jan.:                                                                   40.02                  -8.90

Feb.:                                                                   38.01                   5.42

So the story for the first two months of this year – between the start of Putin’s buildup and the (late February) invasion – is that annual increases slowed, but the baseline effect vanished much faster. Indeed, between February, 2020 and February, 2021, gasoline prices actually rose. So the administration’s #PutinPriceHike claims hold much less water.

Blaming Putin will become more credible going forward, as sales of Russian oil worldwide are curbed by sanctions. Since the global oil market is so thoroughly integrated, U.S. oil supplies will be crimped and upward price pressures will strengthen. But this is also the point at which other major administration policies will rightly attract attention for their role in spurring torrid gasoline inflation. They include in particular measures and rhetoric that throughout the President’s term have convinced oil and other fossil fuel providers that their industries’ growth will keep facing ever greater policy obstacles, and whose cumulative effect has undercut their ability to ramp up output quickly to fill the Russia gap.(See, e.g., here and here.)

All of which means that, as is the almost always the case with major economic trends and developments, recent gasoline price inflation has many causes, not one. And they can change profoundly in their nature and respective importance with the kinds of changing circumstances that have shaken the global oil and U.S. energy policy landscapes since the CCP Virus pandemic began. Let’s all hope, therefore, that American leaders across the political spectrum begin spending more time developing effective responses to oil price inflation, and less on bombarding each other and the rest of us with facile talking points.

Following Up: Podcast On-Line of National Radio Interview on the Economics of the Ukraine War

Tags

Following Up, fossil fuels, Iran, Iran nuclear deal, JCPOA, Market Wrap with Moe Ansari, natural gas, oil, Russia, Ukraine, Ukraine-Russia war

I’m pleased to announce that the podcast is now on-line of my interview yesterday today with Moe Ansari on his nationally syndicated “Market Wrap” radio program.

Press the “play” button under “Current Market Wrap” at this link for a timely discussion of how the Ukraine war – and especially sanctions on Russian fossil fuel exports – will likely impact the U.S. and global economies. And we shine a special spotlight on how the recent burst of energy diplomacy is influencing the talks on curbing Iran’s nuclear weapons ambitions.

And keep checking in with RealityChek for news of upcoming media appearances and other developments.

Making News: Back on National Radio to Talk War and the Economy

Tags

climate change, energy, European Union, fossil fuels, green energy, Green New Deal, Iran, Iran nuclear deal, JCPOA, Making News, Market Wrap with Moe Ansari, Moe Ansari, natural gas, oil, renewable fuels, Russia, Ukraine

I’m pleased to announce that tonight I’m scheduled to be back on the nationally syndicated “Market Wrap with Moe Ansari” radio program to discuss the economic – and especially energy – repercussions of the Ukraine-Russia war.

“Market Wrap” is broadcast nightly between 8 and 9 PM EST, the guest segments typically come in the second half-hour, and you can tune in by visiting Moe’s website and clicking on the “Listen Live” link on the right-hand side.

As usual, moreover, if you can’t tune in, the podcast will be posted as soon as it’s on-line.

And keep checking in with RealityChek for news of upcoming media appearances and other developments

(What’s Left of) Our Economy: How to Really Make Trade Fair

Tags

automotive, BBB, Biden administration, bubbles, Build Back Better, Canada, consumption, Donald Trump, electric vehicles, EVs, fossil fuels, manufacturing, Mexico, NAFTA, North America, production, tax breaks, Trade, U.S.-Mexico-Canada Agreement, USMCA, {What's Left of) Our Economy

There’s no doubt that the next few weeks will see a spate of (low-profile) news articles on how unhappy Canada and Mexico are about proposed new U.S. tax credits for purchasing electric vehicles (EVs) and how these measures could trigger a major new international trade dispute.

There’s also no doubt that any such disputes could be quickly resolved, and legitimate U.S. interests safeguarded, if only Washington would finally start basing U.S. trade policy on economic fundamentals and facts on the ground rather than on the abstract and downright childishly rigid notions of fairness that excessively influenced the approach taken by Donald Trump’s presidency.

The Canadian and Mexican complaints concern a provision in the Biden administration’s Build Back Better (BBB) bill that’s been passed by the House of Representatives but is stuck so far in the Senate. In order to encourage more EV sales, and help speed a transition away from fossil fuel use for climate change reasons, the latest version of BBB would award a refundable tax break of up to $12,500 for most purchases of these vehicles.

The idea is controversial because the administration and other BBB supporters see these rebates as a great opportunity to promote EV production and jobs in the United State by reserving his subsidy for vehicles Made in America. (As you’ll see here, the actual proposed rules get more complicated still – and could change some more.) And according to Canada and Mexico, this arrangement also violates the terms of the U.S.-Mexico-Canada-Agreement (USMCA) governing North American trade that replaced the old NAFTA during the Trump years in July, 2020.

Because USMCA largely reflects those prevailing concepts of global economic equity, Canada and Mexico probably have a strong case. But that’s only because this framework continues classifying all countries signing a trade agreement as economic equals. Even worse, there’s no better illustration of this position’s absurdity is the economy of North America.

After all, the United States has always accounted for vast majority of the continent’s total economic output and therefore market for traded goods. According for the latest (2020) World Bank figures, the the United States turned out 87.51 percent of North America’s gross product adjusted for inflation. And when it comes to new car and light truck sales, the U.S. share was 84.24 percent in 2019 (the last full pre-pandemic year, measured by units, and as calculated from here, here, and here).

But in 2019, the United States produced only 68.88 percent of all light vehicles made in North America (also measured by units and calculated from here, here, and here.) Moreover, more than 70 percent of all vehicles manufactured in Mexico were exported to the United States according to the latest U.S. government figures. And for Canada, the most recent data pegs this share at just under 54 percent (based on and calculated from here and here).

What this means is that, without the American market, there probably wouldn’t even be any Canadian and Mexican auto industries at all. They simply wouldn’t have enough customers to reach and maintain the production scale needed to make any economic sense.

So real fairness, stemming from the nature of the North American economy and the North American motor vehicle industry, leads to an obvious solution: Give vehicles from Canada and Mexico shares of the EV tax credits that match their shares of the continent’s light vehicle sales – just under 16 percent.

Therefore, using, say, 2019 as a baseline, from now on, the first just-under-16 percent of their combined light vehicle exports to the United States would be eligible for the credits for each successive year, and the rest would need to be offered at each manufacturer’s full price (a pretty plastic notion in the auto industry, I know, but a decision that would need to be left to whatever the manufacturers choose).

Nothing in this decision would force Canada or Mexico to subject themselves to these requirements; they would remain, as they always have been, completely free to try to sell as many EVs as they could to other markets (including each other’s).

What would change dramatically, though, is a situation that’s needlessly harmed the productive heart of the U.S. economy for far too long, resulting from trade agreements that lock America into an outsized consuming and importing role, but an undersized production and exporting role. In other words, what would change dramatically is a strategy bearing heavy responsibility for addicting the nation to bubble-ized growth. And forgive me for not being impressed by whatever legalistic arguments Mexico, Canada, any other country, or the global economics and trade policy establishments, are sure to raise in objection.

(What’s Left of) Our Economy: U.S. Manufacturing’s Biggest 2020 Winners & Losers

Tags

aerospace, automotive, Boeing, CCP Virus, computer and electronics products, consumer goods, coronavirus, COVID 19, energy, Federal Reserve, food products, fossil fuels, furniture, housing, industrial production, inflation-adjusted output, lockdowns, machinery, manufacturing, on-line shopping, stay-at-home, travel, wood products, Wuhan virus, {What's Left of) Our Economy

Thanks to last Friday’s release of the Federal Reserve’s report on December U.S. manufacturing production, it’s possible to identify the sector’s biggest winners and losers for inflation-adjusted growth. And their ranks include some notable surprises. (As with all U.S. government economic data, though, there’ll be plenty of revisions over the next few years.)

First, let’s keep in mind that the following categories are pretty broad, including a wide range of products whose performances have varied just as widely. For example, as noted previously (e.g., here), “machinery” contains everything from machine tools to heating and cooling equipment to semiconductor production gear to turbines to construction equipment to farm machinery.

Still, these groupings are specific enough to show how much care is needed when generalizing about the performance of a piece of the economy as big as manufacturing. Moreover, they’re the categories that come early on in the incredibly detailed presentation each month of manufacturing output results deep in the weeds of the Fed’s own website.

With these observations in mind, the five strongest growers (or most modest shrinkers) in manufacturing during 2020 were automotive (vehicles and parts combined) at plus-3.64 percent; food, beverage, and tobacco products (up 0.40 percent), wood products (0.38 percent), computer and electronics products (up 0.14 percent), and non-metallic mineral products (down just 0.52 percent).

The biggest losers? Petroleum and coal products (down 13.34 percent); printing and related activities (off by 10.41 percent); furniture and related products (down 9.86 percent); non-durable miscellaneous manufactures (down 8.57 percent); and aerospace and other non-automotive transportation equipment (an 8.27 percent contraction).

Some of these results were entirely predictable. For example, petroleum and coal products essentially entails the fossil fuels industries, which have been decimated by the overall U.S. and global economic slumps triggered by the CCP Virus, and by the particular hit taken by business and leisure travel. And don’t forget the lingering effects of Boeing’s safety troubles. Moreover, of course those Boeing woes in turn have taken their toll on the aerospace sector.

On the flip side, despite major concern about the strength of America’s food supply chain, it proved impressively resilient. And since Americans didn’t stop eating, real food production expanded – although as the table below shows, its this expansion was much slower than in 2019.

I’m not sure what’s been up with furniture, though, especially considering that the good performance of wood products surely reflects the strength of a domestic housing industry that should have spurred production of furniture. Moreover, so far, the 2020 trade statistics reveal no significant increase in imports.

Non-durable miscellaneous manufactures are something of a puzzle, too. This category includes items like jewelry, silverware, sporting goods, toys, and musical instruments. Since on-line shopping has propped up consumption during the pandemic period, purchases and domestic production of these goods should have remained strong, too – even though many of these sub-sectors have long dominated by imports.

And speaking of imports, a clear sign of their importance is the negligible growth of the domestic computer and electronics industries. It’s clear that the virus and related lockdowns and stay-at-home orders has greatly increased demand for information technology products. But it’s evident that the biggest winners weren’t U.S.-based suppliers. In fact, 2020 growth was way below 2019’s, as the table below shows.

Meanwhile, the solid growth of the automotive sector is pretty remarkable, since the sector literally shut down almost completely in March and April. That looks like awfully strong evidence that much of the economic damage of the pandemic period has stemmed from government restrictions, and not from any inherent weakness in the economy.

In any event, below are the results for all of manufacturing’s main big industry groups, along with the data for the durable goods and non-durable goods super-sectors, and industry overall. For comparison’s sake with the pre-CCP Virus period, I’ve also presented their after-inflation growth for 2019. And a year from now, the final Fed 2021 statistics will permit judging just how complete a retun to normalcy has been achieved.

                                                                              2018-19              2019-20

manufacturing                                                        -1.06                   -2.63

durable goods                                                         -1.70                   -2.97

wood products                                                       +3.58                  +0.38

non-metallic mineral products                               -1.17                   -0.52

primary metals                                                       -2.69                   -7.66

fabricated metals products                                     -1.72                   -5.38

machinery                                                              -2.39                   -3.80

computer & electronics products                          +6.19                  +0.14

electrical equipmt, appliances & components       -1.71                   -1.68

motor vehicles and parts                                        -9.05                  +3.64

aerospace and misc transporation equipment       +0.29                   -8.27

furniture and related product                                +0.34                   -9.86

miscellaneous manufactures                                +0.30                    -3.67

non-durable goods                                                -0.72                    -2.24

food, beverage and tobacco products                  +2.67                   +0.40

textiles and products                                            -2.24                    -5.04

apparel and leather goods                                    -7.50                    -3.64

paper                                                                    -2.37                    -1.91

printing and related activities                              -3.20                  -10.41

petroleum and coal products                               -1.32                  -13.34

chemicals                                                            -2.07                     -1.31

plastics and rubber products                               -3.24                     -0.78

other manufacturing                                           -8.59                      -8.51

Following Up: Still No Biden Learning Curve in Sight on the Middle East or China

Tags

America First, China, energy revolution, Following Up, fossil fuels, globalism, Iran, Iran nuclear deal, Israel, Joe Biden, Middle East, oil, Phase One, Saudi Arabia, Sunnis, tariffs, The New York Times, Thomas L. Friedman, Trade, trade war, Trump

Talk about great timing! Just two days ago, I analyzed New York Times columnist Thomas L. Friedman’s new offering warning Joe Biden not to rush back into the Iran nuclear deal because this step could undo lots of the progress made by President Trump’s America First foreign policy approach in greatly improving the prospects for advancing and protecting U.S. interests in the region.

And just this morning, Friedman has published a piece based on lengthy interview with the apparent President-elect making clear that he has no interest in learning these valuable lessons of the recent past. In addition, Biden confirmed that his China policy plans are just as dominated by cynical doubletalk these days as during the 2020 election campaign.

As Friedman argued on November 29, Mr. Trump’s message that Israel and the Arab world’s Sunni Muslim monarchies (mainly Saudi Arabia) should no longer count on the United States to fight their battles accomplished this critical objective: It

“forced Israel and the key Sunni Arab states to become less reliant on the United States and to think about how they must cooperate among themselves over new threats — like Iran — rather than fighting over old causes — like Palestine. This may enable America to secure its interests in the region with much less blood and treasure of its own. It could be Trump’s most significant foreign policy achievement.”

But as Biden made clear in his conversation with Friedman, he either can’t or refuses to understand the key development that validates the Trump approach – the U.S. fossil fuel production revolution that has eliminated America’s overriding reason for treating the Middle East as a vital national security interest, and enabled Washington to adopt a Trump-ian take-it-or-leave-it approach safely.

Not that domestic energy independence means that completely ignoring Middle East affairs is always the best response. But it certainly does mean much greater scope for Washington to advance objectives with varying degrees of importance (notably, preventing a nuclear-armed Iran from dominating the region) in ways far less risky and costly than the lengthy wars and immense military commitments that have dominated globalist strategy.

And as Friedman has indicated, the President has started lifting the United States off its dangerous hook by leaving its Middle East allies no choice but to stop quarreling over trifles (like the fate of the Palestinians) and work together to take responsibility for their own genuinely critical and shared interests.

Biden, however, still believes that America remains so dependent on “getting some stability” in this long-unstable region that deep entanglement in Middle East affairs is unavoidable. Just as worrisome: He’s laid out a genuinely Rube Goldberg-esque rationale for treating the Iran nuclear deal as his strategy’s linchpin. As Friedman describes his blueprint (based on this interview and other conversations with top Biden aides):

“[O]nce the [nuclear] deal is restored by both sides, there will have to be, in very short order, a round of negotiations to seek to lengthen the duration of the restrictions on Iran’s production of fissile material that could be used to make a bomb — originally 15 years — as well as to address Iran’s malign regional activities, through its proxies in Lebanon, Iraq, Syria and Yemen.

“Ideally, the Biden team would like to see that follow-on negotiation include not only the original signatories to the deal — Iran, the United States, Russia, China, Britain, France, Germany and the European Union — but also Iran’s Arab neighbors, particularly Saudi Arabia and the United Arab Emirates.”

To which the only reasonable response is “Good luck with that” – especially given the lack of consensus on Middle East goals among this highly diverse group of countries, and, equally important, the wildly varying stakes in success between governments inside and outside of the Middle East,

On China, the big and encouraging news is that Biden has decided not to remove the steep, sweeping Trump tariffs “immediately.” That position of course makes at best little sense given how disastrous he called these levies’ impact.

Otherwise, the former Vice President showed that his China policy statements could be even more thoroughly dominated by doubletalk and cluelessness than they were during the campaign.

Most troubling was how Biden contended (correctly) that “leverage” is the make-or-break factor in negotiating with China, and then quickly added “in my view, we don’t have it yet.” Even leaving aside Beijing’s at-least-suggestive decision to sign a Phase One trade deal whoppingly one-sided in favor of a country whose markets it needs desperately to secure adequate levels of prosperity, why did the apparent President-elect go out of his way to advertise supposed American weakness? Indeed, this perverse practice looks like an emerging habit of the Biden foreign policy camp.

As Biden told Friedman, he continues insisting that this leverage can be created in large measure by creating a “coherent strategy” behind which the United States and its European and Asian allies can unite. But as I’ve pointed out repeatedly, many of these countries (notably, Germany, Japan, and South Korea) have made too much money trading with China at the U.S.’ expense to support any position but a complete return to the pre-Trump era of actively coddling and enabling the People’s Republic.  (See, e.g., this analysis.)

At the same time, the apparent President-elect deserves credit for recognizing that gaining sufficient leverage to deal with China successfully requires (in Friedman’s words) “developing a bipartisan consensus at home for some good old American industrial policy — massive, government-led investments in American research and development, infrastructure and education to better compete with China.”

Finally, however, Biden still accepts the completely unjustified pre-Trump view that, without the kind of one-sided, pro-U.S. enforcement mechanism at the heart of the Phase One agreement, Washington can negotiate away most of China’s wide-ranging trade predation with precisely enough worded paper agreements. As I’ve explained, the only genuine hope for progress along these lines is the kind of dispute-resolution system set up in Phase One – in which Washington serves as judge, jury, and court of appeals. 

A few days before he spoke with Friedman, Biden told another journalist that he knows the nation and world are “totally different” from his Vice Presidential days and that therefore his administration would not be “a third Obama term.”  His conversation with Friedman, though, strongly indicated that he meant “except for the Middle East and China.”  

Im-Politic: Final Grades on the Final Debate

Tags

battleground states, climate change, crime, crime bills, election 2020, energy, fossil fuels, fracking, green energy, Im-Politic, Joe Biden, marijuana, narcotics, natural gas, oil, presidential debates, progressives, racism, systemic racism, Trump

I got something massively wrong about the second (and final) presidential debate of 2020. I thought that my frantic live-tweeting covered every important aspect of the Thursday night event. Upon reading the transcript, I realized there was lots more to say.

Let’s start with the 30,000-foot picture. There’s no question that President Trump performed more effectively than in the first debate. Even his most uncritical admirers, like Fox News talker Sean Hannity, have conceded as much (Check out the video of his post-debate show, in which he acknowledges that long-time Republican political operative Ari Fleischer was right in faulting Mr. Trump’s first debate performance as too overheated.)

But there are plenty of questions left unanswered about the second debate’s impact on the Presidential race. For the record, I’m sticking with the assessment I offered after the first debate: Given his lead even in most battleground state polls, because the Trump campaign and other Trumpers (including Hannity) had set the bar so low for “Sleepy Joe,” all Biden needed to do was show up and not screw up massively in order to win.

Those battleground polls have tightened somewhat, Biden’s perfectly fine first debate performance raised the bar for the second debate, and I’m far from thinking that the race is over. But I’d still rather be in Biden’s shoes than in Mr. Trump’s. And time keeps running out for the President. All the same, it’s important to remember that we haven’t seen any major post-debate nationwide or battleground polls come out yet, so there’s simply no hard evidence to go on at this point.

The time-is-not-the-President’s-friend point, though, brings up my first new debate-related point: Mr. Trump’s improved performance alone (whether he “won” or not either on points or according to the public), indicates that he erred in rejecting the Commission on Presidential Debate’s offer to hold the second debate virtually, due ostensibly to CCP Virus-related reasons.

Especially if Mr. Trump had by that time begun heeding the advice of supporters urging him to dial it down (which isn’t at all clear), he lost an opportunity to square off again against Biden in real time. And although there’s no adequate on-line substitute for the atmosphere and resulting pressures of in-person encounters, the President did lose a valuable opportunity to reassure voters unnerved – rightly or wrongly – by his first debate tactics.

Getting down to specific points, on Thursday night, two issues really do demand further discussion. First, I might have been mistaken in my tweeted view that the Biden comments on natural gas fracking and energy (and related climate change) policy wouldn’t be terribly important.

I did agree that the former Vice President did nothing to help himself in key energy states like Pennsylvania, where voters might worry that his various positions – and the prominence of staunch fossil fuels opponents in Democratic ranks now – would guarantee relatively rapid closures of the coal mines and gas and oil fields that created so much employment in their regions. But I stated that, because these subjects had been aired so thoroughly already, few energy voters’ minds would be changed.

What I clearly underestimated was the impact of an extended discussion of energy and climate subjects before a nation-wide audience. If I’d been right, why would the Trump campaign have almost immediately put out an ad spotlighting Biden’s assorted statements on these topics. And why would the Biden campaign have spent so much time trying to explain the Biden position?

Looking at the transcript helped me understand why energy- and climate-related anxieties in the energy states might have been elevated by the Biden debate remarks. For on the one hand, the Democratic challenger insisted that he was “ruling out” “banning fracking” and claimed that

“What I will do with fracking over time is make sure that we can capture the emissions from the fracking, capture the emissions from gas. We can do that and we can do that by investing money in doing it, but it’s a transition to that.”

And whereas previously, Biden had responded to a primary debate question about whether fossil fuels would have any place in his prospective administration by declaring “We would make sure it’s eliminated and no more subsidies for either one of those. Any fossil fuel,” on Thursday night, the former Vice President referred to transitioning from “the old oil industry”–presumably to some (undefined) new kind of oil industry.

Nonetheless, it would be reasonable for energy states residents to question these assurances of gradualness and transformation instead of elimination given Biden’s continued contention that “global warming is an existential threat to humanity,” that “we’re going to pass the point of no return within the next eight to ten years,” and that the energy sector in toto needs “to get to ultimately a complete zero emissions by 2025.” Last time I checked, that’s only five years from now.

Moreover, given the notable split within the Democratic party on climate change and energy issues between progressives and centrists, the Biden statements suggesting that major fossil fuel industries will survive during his administration in some form could depress turnout in their ranks for a candidate who clearly needs to stoke their enthusiasm.

The second set of issues I should have tweeted more about entails crime and race relations. I think Biden deserves a great deal of credit for calling “a mistake” his support for crime bills of the 1980s and 1990s that, in the words of moderator Kristen Welker “contributed to the incarceration of tens of thousands of young Black men who had small amounts of drugs in their possession, they are sons, they are brothers, they are fathers, they are uncles, whose families are still to this day, some of them suffering the consequences.”

He was also correct in pointing out that President Trump – who quite properly pointed to some noteworthy achievements of his administration on behalf of African Americans – took a sweepingly harsh line on crime himself in previous decades.

But two positions taken by Biden should disturb even supporters. First, his argument that “It took too long [during the Obama administration] to get it right. Took too long to get it right. I’ll be President of the United States, not Vice President of the United States,” clearly throws his former boss under the bus. In fact, he also implicitly blamed Obama for the failure to resolve the problem created by children living the United States born to illegal immigrant parents.

The second such position was Biden’s argument that “No one should be going to jail because they have a drug problem. They should be going to rehabilitation, not to jail.”

I personally can support this view when it comes to hard drugs. But marijuana? For whose use so many American blacks have been jailed – and so many more than white Americans? (I’m not a big fan of the American Civil Liberties Union these days, but the data in this study are tough to refute.) Mandatory (government-funded?) therapy for potheads? That could use some rethinking.

But like I said at the outset, I expressed views on many other debate-related subjects on my Twitter feed (@AlanTonelson). So there’s no substitute for following there, as well as checking in with RealityChek, for the most up-to-date thinking on the election — as well as everything else under the sun.

Im-Politic: How Bernie Can “Win”

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2016 elections, amnesty, Bernie Sanders, Buy American, carbon tariff, China, climate change, Democrats, Donald Trump, energy, environment, fossil fuels, fracking, greenhouse gases, gun control, Hillary Clinton, Im-Politic, Immigration, Jobs, liberals, multinational corporations, natural gas, offshoring, Open Borders, Populism, progressives, third world, Trade, unions

Like Donald Trump, Bernie Sanders is doing such a good job of influencing the agenda of other 2016 presidential candidates (namely Hillary Clinton) that there’s no useful advice I can offer on that score. Yet the Vermont Senator still has a ways to go if he wants to generate more lasting change in American politics, and the recipe, not too surprisingly, is the inverse of that for Trump.

First, some background. I’ve had the privilege of working with Sanders firsthand on trade and jobs issues, and greatly admire his dedication to getting America’s international economic policies right. He’s not only been a longtime champion of this cause – he’s been a tireless worker as well. Sanders has also kept his focus squarely on the most important victims of offshoring-friendly and otherwise flawed trade policies – the American worker and the productive segments of the U.S. economy. That’s a refreshing change from most others on the leftward end of the political spectrum, who have consistently muddied both the politics and economics of trade issues by (wrongly) emphasizing the harm allegedly inflicted on developing countries by American and American-supported policies.

Even better, it’s already clear that Sanders recognizes the importance of generating crossover appeal. In addition to noting that many of his positions – like Wall Street reform – resemble those of real conservative populists, he has walked this walk on an important social/cultural issue: gun control. But if he genuinely wants to shake up American politics and not simply worry Clinton through next November, the Democratic contender needs to understand the game-changing potential of more realistic immigration and climate change policies.

Earlier in this year’s campaign, Sanders was chided by numerous progressives for being too quiet on immigration issues. Unfortunately, he responded with a June speech to Latino-American elected officials by appearing to pander to this Open Borders crowd. His trade policy position, however, makes clear how substantively mistaken these views are. In particular, as suggested above, he has recognized that failed U.S. trade policies have betrayed America’s “working people” by sending “their jobs…to China and Mexico….” (Although he’s also made some nods to “third world victimhood-mongering.”) Unlike Trump, moreover, he correctly targets multinational companies – not foreign governments – for most of the blame.

But why, in this case, does Sanders (along with most other liberal and Democratic party trade critics) now favor immigration policies that also will take more jobs from Americans, and drive wages down? If trade deals that, among other failures, make many more very low-paid workers in the third world much more available to U.S.-based businesses have these effects, why would immigration policies that literally encourage such workers to come to America produce different results?

In fairness, Sanders and other liberal immigration supporters have an answer: Foreign workers who come to the United States will be much easier to union-ize, and thus will earn higher wages, than their counterparts who remain abroad. But given the labor movement’s major and chronic failure to stem dramatic shrinkage – especially in the private sector – that clearly belongs in the wishful thinking category. Moreover, labor’s recent organizing successes have come almost entirely in service sectors that don’t face any foreign competition. As for parts of the economy that are heavily traded, like manufacturing, continuing new legal or illegal immigration influxes, along with amnesty, will surely intensify the competition for remaining domestic jobs and drive wages even lower.  

Further, as I’ve written, liberals’ claims that mass immigration can produce a new mass middle class overlook that their conception of mass immigration has no logical stopping point – and therefore is likeliest to furnish American businesses with not only huge, wage-killing labor gluts, but with huge, never-ending labor gluts.   

More important, in an election year, populist-minded voters on the Right are bound to reject this reasoning. For any hope of recruiting them to his ranks, Sanders’ immigration approach will need a thorough overhaul. And of course, by extension, this goes for any Democratic candidate.

Sanders has been one of Washington’s leading champion of high priority efforts to fight climate change, which means that re-positioning on this issue to broaden his base will be even more difficult than on immigration. But it could also pay some political dividends, and could be engineered in a way to satisfy at least some environmentally minded Democrats. In three related ways, moreover, the kinds of trade policies Sanders favors are very helpful.

First, Sanders should start emphasizing that one of the best ways to reduce global greenhouse gas emissions is to reduce China’s emissions – and that this objective in turns requires slowing down the Chinese export machine. I’ve long emphasized that, given the huge market for Chinese goods represented by the United States, American trade curbs would be a big environmental plus – whether put in place unilaterally, through sanctions on currency manipulation, or possibly better, through the kind of multilateral carbon tariff that even prominent economists are starting to favor.

Second, Sanders could win some business support for this approach by pointing out that, the less competition American businesses face from countries where environmental (and other) regulations are non-existent or not enforced, the more environmentally friendly regulation they could bear.

Third, as a strong opponent of trade decisions that have gutted the nation’s ability to administer strong Buy American regulations governing government purchases, Sanders will have no problem insisting that federal support for green manufacturing and technology be restricted to operations and facilities in the United States that employ American workers.

At the same time, Sanders will have to take much more seriously the inevitably dominant role fossil fuels will play in the country’s energy future for the foreseeable future, and his energy approach will need to make much more room for greenhouse-friendly natural gas in particular. As a result, he’ll need to view whatever pollution issues are posed by fracking not as an excuse to reject or neglect gas, but as a problem to be solved technologically.

The good news, in contrast to Trump, is that Sanders does seem to take advice from outside his ideological comfort zone and political base – his dealings with me and colleagues, when I worked at a small manufacturers’ organization, represent just one body of evidence. And representing even a small state like Vermont inevitably has exposed Sanders to the kinds of voters and their direct feedback that a one-percenter like Trump probably rarely encounters. For these reasons alone, he seems to be a more plausible candidate to help create an enduring populist alternative to the two major parties.

Just with my treatment of Trump, this analysis of Sanders’ chances doesn’t mean that I view him as an ideal candidate or, similarly, that I’m with him on most or even many issues other than those mentioned here. What it does signal is my belief that these two figures boast the potential to rework American politics by identifying crucial areas of overlap on the core pocketbook issues that are vital both to voters and to the nation’s future. Will they? Leaving aside their personal traits, recent history doesn’t provide many reasons for hope. But of course it’s precisely because meaningful change sometimes happens that we’ve had history in the first place.

Our So-Called Foreign Policy: Amid Middle East Chaos, Climate Change Crowd Ignoring Energy Security

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climate change, energy security, fossil fuels, Iraq, ISIS, jihadis, Middle East, Obama, Our So-Called Foreign Policy, renewable fuels, terrorism

Here’s how brain-dead President Obama and much of the environmental movement can be. The Middle East, still a key to affordable energy for America and the rest of the world economy, is literally falling apart in front of our eyes. Realistic ideas for preventing the spread of chaos and/or Islamic extremism are in conspicuously short supply. And reportedly a new push by the White House and its climate change allies for stronger action is completely ignoring the issue of energy security.

I’m pretty skeptical about even mainstream climate change warnings and recognize the difficulties of rapidly transitioning to a renewable fuels-based economy even if the scariest global warming predictions are true. (So, evidently, do most avid climate change policy advocates, given the modesty of the near- and even medium-term goals, and the third world-friendly selectivity, of the UN-sponsored Kyoto Protocol.)

But the potential of renewables over time to reduce the world’s dependence on all fossil fuels – and therefore on energy from the deeply unstable and generally hostile Middle East – can’t reasonably be denied. Imagine what America’s record and position in the region would be like had the nation seriously fostered renewables research and use starting with the first OPEC oil embargo and steep price hikes – which occurred 40 years ago?

So if the President really wants to give some oomph to his climate change proposals, he’ll give a nationally televised speech pounding the table for faster renewables adoption to hasten the day when the Middle East’s endless turmoil can be safely ignored – and conversely, when Americans and others can act forcefully against its bad guys, if they wish, without fear of excessive economic costs or deliberate retaliation.

Chances are even voters in fossil fuel-rich swing states would respond to a chief executive who looked them straight in the eye, maybe jabbed his finger in the air a bit, and declared, “Nothing will help our nation – and especially future generations – stick it to the fat cat sheikhs and the jihadis and the terrorists and the women-kidnappers and torturers and all the Middle East’s America-haters like speeding up the changeover to renewables.”

Granted this approach won’t come naturally to the emotionally cool and politically correct Mr. Obama. But whether he rises to the challenge or not, something like it – along with measures to step up exploitation of America’s enormous new available fossil fuel reserves safely and responsibly – will surely be a winning message in upcoming election cycles.