Policy

Returning to An Alternate Universe

Dave Davis Commentary, Policy, Uncategorized

Since returning to the States from a trip abroad, I’ve had this weird feeling things aren’t right. Instead of people acting rationally, the opposite is true. Take the recent inflation victory party on the White House lawn. While the administration was lauding the passage of “The Inflation Reduction Act,” we saw split-screen evidence inflation is still going strong. The market was dropping a whopping 1,200+ points in anticipation that the Federal Reserve had no choice but to jack interest much higher or lose control. 

What were the revelers celebrating? There’s the $300+ billion in programs and subsidies for the “Green New Deal” that, as others have pointed out, don’t do anything to lower the earth’s temperature. The bill caps some medical costs, but price controls always end up costing more down the road. Neutral observers have noted the law does not reduce our present inflation problem. 

In the face of hard evidence, some believe we must spend these vast sums to save the planet. They claim to see doom if we don’t accept all their proposals. But this argument rings hollow. If you thought the earth was in immediate danger and things might not move fast enough to stave off disaster, wouldn’t you be looking for a plan B? After all, we’re facing extinction. What if temperatures start quickly rising as they predict? Shouldn’t we be looking for a backup action?

 Some people think this would be prudent. Solar geoengineering creating a planetary sunshade isn’t a new idea. A team of Harvard Researchers wanted to experiment with calcium carbonate over a Swedish Space facility. A decade earlier, British Researchers wished to do a similar experiment. Neither got off the ground due to massive opposition from the green crowd. What could [ossibly arouse such hostility? Some dust in the atmosphere can provide cooling at a very reasonable price. If we’re about to become extinct, entertaining some ideas that might save us is a good idea.

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Returning To A World Of Woe

Dave Davis Commentary, COVID-19, Policy, Uncategorized

On the third try, we finally took an Iceland cruise. The island lies closer to Europe, so we had several fellow passengers from the British Isles and the continent. Brits, especially, always are eager to talk. While we in the U.S. have increasing doubts about our institutions, Brits have similar concerns. The response to the covid pandemic is primarily to blame. The question on both sides of the pond was a complete shutdown necessary.

Readers know where I’ve stood on this issue since the series on Covid started in March of 2020. Prime Minister Boris Johnson initially favored an approach akin to Sweden’s; protect the at risk as much as possible but maintain everyday life. The dire predictions by the Imperial College echoed by the government’s medical establishment panicked Johnson into a reversal.

The same thing happened to Donald Trump. The funding of massive disruptions with vast public expenditure undertaken by both governments. Now we are evaluating the lost years due to our institutional actions. Did we follow the data? Were there better alternatives? It’s good to know we aren’t alone in our inquiry.

The astonishing reports on our loss in life expectancy and our children’s education greeted us on our return. No longer can we ignore the poor path our government elites lead us down. Indeed, a soul-searching dive into the many agreeing on courses of action with disastrous results is mandatory.

Instead, we see the same elites claiming we didn’t know what to do. Only later did we realize schools presented little Covid danger, and older vulnerable are more likely to die. Now we know we protect the at risk and go about our business. The latest CDC advisory is the opposite of the lockdown strategy. Has Covid gone away? It’s spreading, but nobody except China wants to repeat the lockdown foolishness. 

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Shouldn’t We Get Something For Our Money?

Dave Davis Commentary, Policy, Stopping Inflation

It’s hard to keep up with the Biden debacles. While we wait for the administration to explain the latest fiasco, the raid on Trump’s Florida residence, we need to continue evaluating Build Back Better, oops, the Inflation Reduction Act. While the Congressional Budget Office (C.B.O.) points out that the legislation does nothing to reduce inflation, the claim is it will save the planet. Just ask the New York Times columnist, Paul Krugman. 

Too bad the $380 billion spent on this march to the Green New Deal will make no noticeable difference in the earth’s temperature by the end of the century. Wall Street Journal contributor Bjorn Lonberg ran the numbers and found that the most optimistic case lowers the temperature by 0.028 degrees Fahrenheit. The pessimistic case is 0.0009. 

This result is understandable once you realize nothing we in the U.S. does will make any difference in the earth’s temperature as long as the third world, China, and India continue to expand the use of fossil fuels massively. Nations desiring to improve the lives of their people understand the need for cheap reliable energy. Suppose it’s locally sourced; so much the better. That isn’t the windmills and solar panels we’re pushing.  

To make the pain equal worldwide, The World Bank is lobbying for a single world carbon tax. Even though this idea has support in some quarters, the National Bureau of Economic Research (NBER) finds a slight increase in world G.D.P. at the turn of the next century from a lower temperature wouldn’t be worth the pain getting there. 

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Widget’s Revenge

Dave Davis Commentary, Policy, Stopping Inflation, Uncategorized

Senator Joe Manchin and Senate Majority leader Chuck Schumer have agreed on what they call “the Inflation Reduction Act.” This bill is a slimed down but a still expensive version of the multi-trillion dollar “Build Back Better.” At the core is a minimum of 15% tax on over-billion dollar corporations. The revenue from this tax pays for much of what’s in the legislation.

Democrats and much of the media have applauded this provision as only fair. After all, many big corporations pay no tax. How can that be fair? At least they can give a pittance. !5% isn’t too much to ask from these wealthy corporations. 

Maybe there is more to the story. Let’s look at what I’ll call The Internation Widget Corp (IWC). In my days in Business school, a widget was the stand-in for anything produced. Company A Turns out 100 widgets an hour, but company B only 75. How can B match or exceed A?  

How would this “Inflation Reduction Bill” affect this mythical company? Demand for widgets outstripped production, leading to inflationary supply-chain disruptions. Investment in increased production is necessary to fill orders and maintain the company’s competitive position. IWC will post a profit in 2022 of a billion dollars from selling this essential to many industries.

IWC is investing $4 billion in plant and equipment to meet the challenge. Three billion borrowed. Trump’s 2017 tax reform let it offset its tax liability by rapidly depreciating this investment resulting in zero tax. It’s committing all the company’s profits and the maximum money it can borrow without losing its excellent credit rating.

Expansion means more jobs and economic activity- More taxable income down the road. Trump understood it takes invested capital to create viable employment. Business investment underpinned the Trump boom before the pandemic. In any case, expanding supply to meet demand curtails inflation.

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A Little Respect for Older People

Dave Davis Commentary, COVID-19, Policy, Uncategorized

It’s nice to know President Biden had lifesaving Paxlovid as soon as he tested positive for Covid. Of course, President Trump got lifesaving infusions when he had Covid symptoms. Good for them. The reality for other people their age or older is quite different. The Trump Infusions became functionally available only after Florida Governor Ron DeSantis set up centers across his state. Observing Florida’s success in saving lives, other states followed. However, almost a year elapsed after Trump’s treatment before these centers opened.

Even though Paxlovid was approved last December, until recently has been challenging to obtain. Horror stories of people traveling great distances to fill a Paxlovid prescription abound. Things are better, but you still have to check around to find it.

For the average person, this may not seem like a significant problem. For octogenarians like my wife and I, it is a matter of life or death. Four out of five covid deaths occur over 65.

Maybe you can understand my dismay when I asked my doctor for Paxlovid to have for an overseas trip where the drug was unavailable and turned down. No prescription until you test positive. The drug may conflict with other medications.

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