Category: Economics

China ready to spend $16 Billion on charging stations for electric cars

China is considering providing as much as $16 billion in government funding to build electric-vehicle charging facilities and spur demand for clean cars, according to two people familiar with the matter.

The policy will be announced soon, said the people, who asked not to be named because the discussions are private. The people declined to provide further details of the plan such as how long the program would last or whether the chargers would be compatible with cars made by Tesla Motors…

Increased state funding would be a tailwind for carmakers coping with consumer concerns over the price, reliability and convenience of electric vehicles. It would also build on the tax breaks announced by China, the world’s biggest carbon emitter, to fight pollution and cultivate its local EV industry, which includes BYD Co. and Kandi Technologies Group…

Among recent government initiatives, China will exempt new-energy vehicles — defined as electric cars, plug-in hybrids and fuel-cell vehicles — from a purchase tax starting next month, and has ordered government departments to buy such vehicles for their official fleets.

Supporting a strategic and emerging industry like new-energy vehicles is a “win-win” for industrial development and environmental protection, the central government said last month in the statement announcing the waiver of the purchase tax. Developing new-energy autos is important for spurring innovation, promoting energy savings and reductions in emissions, and will help to drive domestic demand and nurture new avenues of growth, according to the notice.

Chinese governmental departments target a minimum of plug-in vehicles to 30% over the near term.

Let’s see. I’ll go peek at what the United States target is. Golly – a million EV’s on the road in another decade. Based on federal tax breaks for consumers.

There is a grouping of eight Democrat-dominated state legislatures collectively aiming for over three million electric vehicles and plug-in hybrids on the road in the same sort of timeframe. Triple the federal goal!

Oh, that’s right. There’s a clot of bought-and-sold politicians in the way of any such national spending. It’s called Congress. Stuffed full of cowards and decrepit ideologues.

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Remember Hurricane Katrina


Click to enlarge

The ninth anniversary of Hurricane Katrina is Friday (Aug. 29), and a handful of groups in the New Orleans area are planning theatrical events, rallies, benefits, days of service, and celebrations of recovery to mark the occasion.

Lots to remember. Especially since all the repairs, alterations and changes to poor and workingclass neighborhoods still ain’t complete.

Inequality and trending Web searches

credit luke shuman

In the hardest places to live in the United States, people spend a lot of time thinking about diets and religion. In the easiest places to live, people spend a lot of time thinking about cameras.

This summer, The Upshot conducted an analysis of every county in the country to determine which were the toughest places to live, based on an index of six factors including income, education and life expectancy. Afterward, we heard from Hal Varian, the chief economist at Google, who suggested looking at how web searches differ on either end of our index.

The results, based on a decade of search data, offer a portrait of the very different subjects that occupy the thoughts of richer America and poorer America. They’re a glimpse into the id of our national inequality.

In the hardest places to live – which include large areas of Kentucky, Arkansas, Maine, New Mexico and Oregon – health problems, weight-loss diets, guns, video games and religion are all common search topics. The dark side of religion is of special interest: Antichrist has the second-highest correlation with the hardest places, and searches containing “hell” and “rapture” also make the top 10…

In the easiest places to live, the Canon Elph and other digital cameras dominate the top of the correlation list. Apparently, people in places where life seems good, including Nebraska, Iowa, Wyoming and much of the large metropolitan areas of the Northeast and West Coast, want to record their lives in images…

Beyond cameras, subjects popular in the easiest places include Baby Joggers, Baby Bjorns and baby massage; Skype and Apple devices like the iPod Nano; a piece of workout equipment known as a foam roller; and various foreign destinations (Machu Picchu, New Zealand, Switzerland and Pyeongchang, the South Korean host city for the 2018 Winter Olympics). The phrase “pull-out” is also relatively popular in the easiest places. It presumably refers to either a kind of sofa or a kind of birth control.

…You can understand why religious web searches that are relatively more popular in places where life is harder have such a dark cast. “They are not just about religion but about apocalyptic religion,” notes Dan Silver, a cultural sociologist at the University of Toronto.

In the places on the other end of the spectrum, the picture is much brighter. People have disposable income to buy new technology and take faraway vacations. Their time spent prostrate on a foam roller or out running with the baby in a jogging stroller is more than enough to make up the occasional cupcake. And of course they are intent on passing down their way of life to the next generation, via Baby Bjorns and early access to technology.

RTFA for details and some analysis – including structure of the studies.

Most of all – I didn’t find anything surprising. Another one of those occasions when I wish my cynicism turned out to be wrong.

Thanks, Helen

Paul Krugman lectures the hawks who persist in crying wolf

According to a recent report in The Times, there is dissent at the Fed: “An increasingly vocal minority of Federal Reserve officials want the central bank to retreat more quickly” from its easy-money policies, which they warn run the risk of causing inflation. And this debate, we are told, is likely to dominate the big economic symposium currently underway in Jackson Hole, Wyo.

That may well be the case. But there’s something you should know: That “vocal minority” has been warning about soaring inflation more or less nonstop for six years. And the persistence of that obsession seems, to me, to be a more interesting and important story than the fact that the usual suspects are saying the usual things…

The Times article singles out for special mention Charles Plosser of the Philadelphia Fed, who is, indeed, warning about inflation risks. But you should know that he warned about the danger of rising inflation in 2008. He warned about it in 2009. He did the same in 2010, 2011, 2012 and 2013. He was wrong each time, but, undaunted, he’s now doing it again…

The point is that when you see people clinging to a view of the world in the teeth of the evidence, failing to reconsider their beliefs despite repeated prediction failures, you have to suspect that there are ulterior motives involved. So the interesting question is: What is it about crying “Inflation!” that makes it so appealing that people keep doing it despite having been wrong again and again?

Well, when economic myths persist, the explanation usually lies in politics — and, in particular, in class interests. There is not a shred of evidence that cutting tax rates on the wealthy boosts the economy, but there’s no mystery about why leading Republicans like Representative Paul Ryan keep claiming that lower taxes on the rich are the secret to growth. Claims that we face an imminent fiscal crisis, that America will turn into Greece any day now, similarly serve a useful purpose for those seeking to dismantle social programs…

But while easy money may in principle have mixed effects on the fortunes (literally) of the wealthy, in practice demands for tighter money despite high unemployment always come from the right. Eight decades ago, Friedrich Hayek warned against any attempt to mitigate the Great Depression via “the creation of artificial demand”; three years ago, Mr. Ryan all but accused Ben Bernanke, the Fed chairman at the time, of seeking to “debase” the dollar. Inflation obsession is as closely associated with conservative politics as demands for lower taxes on capital gains.

It’s less clear why. But faith in the inability of government to do anything positive is a central tenet of the conservative creed. Carving out an exception for monetary policy — “Government is always the problem, not the solution, unless we’re talking about the Fed cutting interest rates to fight unemployment” — may just be too subtle a distinction to draw in an era when Republican politicians draw their economic ideas from Ayn Rand novels.

Which brings me back to the Fed, and the question of when to end easy-money policies…

But the last people you want to ask about appropriate policy are people who have been warning about inflation year after year. Not only have they been consistently wrong, they’ve staked out a position that, whether they know it or not, is essentially political rather than based on analysis. They should be listened to politely — good manners are always a virtue — then ignored.

Freshly-educated, modern economists completely ignore, wholly reject the crap that is economic dogma for Republicans. Whether they are social moderates or the more fascist-minded.

Another organic tie between modernists like Krugman and political progressives is dedication to the needs of the mass of American workers and their families. We are the real source of value created to make a cushy life for the one-percenters. We deserve more than a minimal safety net or education barely-sufficient to moderate an obedient class of producers.

What a free trade zone is all about – Amazon ready to expand in China!

amazonchina

Amazon.com will set up shop in China’s Shanghai free trade zone, the company said on Wednesday, aiming to take advantage of less stringent trade regulations to sell a wider range of products in the country.

The U.S. online retailer’s move shows an intent not only to remain in China but to beef up its presence in an e-commerce market dominated by Alibaba Group Holding and Beijing-based JD.com, the second-biggest player.

Amazon did not say when the company is likely to begin operations in the free trade zone, which enjoys more relaxed import and export regulations than the rest of China.

The company is also pushing its Amazon Web Services (AWS) cloud computing business in China and said in December that the country will have its own AWS region to improve speeds for its mainly corporate customers…

Amazon’s move to the free trade zone comes nearly a year after the zone was launched, attracting attention from overseas businesses and hailed as one of China’s boldest reforms in decades. However, there has been a lack of specific policy details since the initial fanfare.

Foreign banks, such as Citigroup and HSBC Holdings have set up branches in the zone, but many foreign companies have been reluctant to follow suit, citing a lack of clarity on what will and will not be allowed in the zone.

The 2nd half of that last sentence is representative of what investors call the chickenshit index. Since Reuters was purchased by Thomson you’re bound to find some editorializing by omission. It’s the imperial disease.

In truth, this first free trade zone has been so successful that another dozen or more cities around China are lobbying to follow Shanghai’s model.

1 in 7 Americans relies on food banks


Photo from 1983. Things haven’t gotten any better.

Nationwide, 25% of military families – 620,000 households – need help putting food on the table, according to a study by Feeding America, a network of 200 food banks.

“The results are alarming,” says Bob Aiken, chief executive officer of Feeding America. “It means that people in America have to make trade-offs. They have to pick between buying food for their children or paying for utilities, rent and medicine.”

One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families, the study found…

Linda Patterson, executive director of Lorton Community Action Center, says stereotypes of the people who need food assistance are misleading.

“The people who come here are hard workers. They are employed. They are the school bus drivers, the lab techs in doctors offices, receptionists, the janitors who clean the floor of your children’s school,” Patterson says. “They just can’t make ends meet because some kind of crisis has hit them.”

The Hunger in America study found that of people who use food banks:

• 26% are black, 20% are Hispanic, 43% are white and 11% are other.

• 33% of households have at least one family member with diabetes.

• 65% of households have a child under 18 or someone 60 or older…

In the past year, food banks have increased their focus on healthy foods. The study found that 79% of people who use food banks report purchasing inexpensive, unhealthy food just to have enough to feed their families…

“The people who come to us for help are coming more regularly,” says Allison Majewski of the Capital Area Food Bank. “We aren’t a one-time emergency stop anymore. We are a staple for them, so it’s very important that we make these healthy foods available.”

Last time I read about anyone in Congress trying to live on a food stamp budget it was a couple of Democrats and one Republican. They may have lasted a week.

Everyone else was away at fund-raising banquets.

Our species’ environmental footprint is not sustainable

Substantial, fundamental changes in the world economy are required to reduce humanity’s overall environmental footprint to a sustainable level. This is the conclusion of Arjen Hoekstra, professor of Water Management at the University of Twente. He publishes his findings in the article “Humanity’s unsustainable environmental footprint[.pdf] in Science magazine.

Hoekstra, mainly known for the water footprint, has published the research together with his German counterpart Thomas Wiedmann, employed by the University of New South Wales in Australia. In Science, the authors describe how intertwined the global economy, politics, consumption and trade are in their effect on global land, water and raw material consumption and on the climate.

“Our article mainly focuses on understanding the interdependence of the different types of footprints and the role that businesses, consumers and governments play in creating our overall footprint,” says Hoekstra. “We know that we are not sufficiently sustainable in our actions. But the interdependence has not previously been shown in this way. The various players have divergent interests and take too little responsibility. Consumers do not feel responsible for what producers do and politicians focus too much on growth, exports and cheap imports. For example, who feels responsible for the distress caused when we deplete the resources in China because of cheap imports? If you buy a stolen bicycle, you are liable to punishment and individually responsible. But isn’t the consumption of products that are not produced sustainably also irresponsible behaviour? Rethinking the global supply chain, that’s what it’s all about.”

Hoekstra and Wiedmann map out mankind’s total environmental footprint in a scientific, unique manner, but also realize that a solution is not immediately obvious. “This of course requires fundamental changes in the global economy and international cooperation. But understanding the role of the various parties and the enormous complexity underlying our overall footprint is a first step. Everyone should assume and be given greater supply-chain responsibility; only then can we sustain our society“, concludes Hoekstra.

I don’t think this will provoke anymore examination and thought in the bowels of our government than, say, in the boardrooms of Western Capitalism.

That is not to say it will be ignored in the ever-burgeoning hinterlands of Brazil or China or the few centers of Realpolitik that engage with science. None of which are within the borders of the United States. Unfortunately.

Thanks, Mike

He’s in the top 1% of the 1% — and he wants a $15 an hour minimum wage

nick-hanauer

The fundamental law of capitalism is that if workers have no money, businesses have no customers. That’s why the extreme, and widening, wealth gap in our economy presents not just a moral challenge, but an economic one, too. In a capitalist system, rising inequality creates a death spiral of falling demand that ultimately takes everyone down…

Policy makers debate incremental changes for arresting this vicious cycle. But perhaps the most powerful and elegant antidote is sitting right before us: a spike in the federal minimum wage to $15 an hour.

True, that sounds like a lot. When President Barack Obama called in February for an increase to $9 an hour from $7.25, he was accused of being a dangerous redistributionist. Yet consider this: If the minimum wage had simply tracked U.S. productivity gains since 1968, it would be $21.72 an hour — three times what it is now…

Raising the minimum wage to $15 an hour would inject about $450 billion into the economy each year. That would give more purchasing power to millions of poor and lower-middle-class Americans, and would stimulate buying, production and hiring.

Studies by the Economic Policy Institute show that a $15 minimum wage would directly affect 51 million workers and indirectly benefit an additional 30 million. That’s 81 million people, or about 64 percent of the workforce, and their families who would be more able to buy cars, clothing and food from our nation’s businesses.

This virtuous cycle effect is described in the research of economists David Card and Alan Krueger (the current chairman of the White House Council of Economic Advisers) showing that, contrary to conventional economic orthodoxy, increases in the minimum wage increase employment. In 60 percent of the states that raised the minimum wage during periods of high unemployment, job growth was faster than the national average.

Some business people oppose an increase in the minimum wage as needless government interference in the workings of the market. In fact, a big increase would substantially reduce government intervention and dependency on public assistance programs.

An objection to a significant wage increase is that it would force employers to shed workers. Yet the evidence points the other way: Workers earn more and spend more, increasing demand and helping businesses grow.

Critics of raising the minimum wage also say it will lead to more outsourcing and job loss. Yet virtually all of these low-wage jobs are service jobs that can neither be outsourced nor automated.

Raising the earnings of all American workers would provide all businesses with more customers with more to spend. Seeing the economy as Henry Ford did would redirect our country toward a high-growth future that works for all.

Nick Hanauer really is in the top 1% of America’s 1%. One of the original investors in Amazon.com, he and his partners in Second Avenue Investors own their own bank. He sold his ad agency to Microsoft for $6.4 billion in 2007 – in cash. He is a self-described plutocrat.

He would like to prevent a revolution. Something on the order of French peasants and workers rolling out the guillotine in 1793. He believes economic justice will rescue our economy from the crapper it was dropped into by investment bankers in 2007 – and rebuild a prosperous nation with a healthy middle class.

Or you could pay attention to the scumbag side of class warfare in the Republican Party.

Stodgiest outfit on Wall Street agrees inequality is causing slower growth

Income-inequality

Is income inequality holding back the United States economy? A new report argues that it is, that an unequal distribution in incomes is making it harder for the nation to recover from the recession and achieve the kind of growth that was commonplace in decades past.

The report is interesting not because it offers some novel analytical approach or crunches previously unknown data. Rather, it has to do with who produced it, which says a lot about how the discussion over inequality is evolving.

Economists at Standard & Poor’s Ratings Services are the authors of the straightforwardly titled “How Increasing Inequality is Dampening U.S. Economic Growth, and Possible Ways to Change the Tide.” The fact that S.&P., an apolitical organization that aims to produce reliable research for bond investors and others, is raising alarms about the risks that emerge from income inequality is a small but important sign of how a debate that has been largely confined to the academic world and left-of-center political circles is becoming more mainstream…

Because the affluent tend to save more of what they earn rather than spend it, as more and more of the nation’s income goes to people at the top income brackets, there isn’t enough demand for goods and services to maintain strong growth, and attempts to bridge that gap with debt feed a boom-bust cycle of crises, the report argues. High inequality can feed on itself, as the wealthy use their resources to influence the political system toward policies that help maintain that advantage, like low tax rates on high incomes and low estate taxes, and underinvestment in education and infrastructure…

The report itself does not break any major new analytical or empirical ground. It spends many pages summarizing the findings of various academic and government economists who have studied inequality and its discontents, and stops short of recommending any radical policy changes favored by the likes of Thomas Piketty (who is among those cited).

And the S.&P. researchers are relatively limited in their policy prescriptions, avoiding much discussion of politically explosive debates over marginal tax rates and the scale of the social welfare system. They instead emphasize the usefulness of investing more heavily in education…

Anyone who wants to explain why the United States economy is evolving the way it is needs to at least wrestle with the implications of a more unequal society for the economy as a whole.

Overdue. Response to the problem from the talking heads in the White House has been limited to slogans and talking points. Response from our Do-Nothing-Congress has been to do nothing.

Thanks, Mike

Daylight is best medicine for nurses

In a forthcoming Cornell study…Rana Zadeh, assistant professor of design and environmental analysis, discovered nurses who had access to natural light enjoyed significantly lower blood pressure, communicated more often with their colleagues, laughed more and served their patients in better moods than nurses who settled for large doses of artificial light.

Letting natural light into the nurses’ workstations offered improved alertness and mood restoration effects. “The increase in positive sociability, as measured by the occurrence of frequent laughter, was … significant,” noted Zadeh in the paper.

Nurses work long shifts, during non-standardized hours. They work on demanding and sensitive tasks and their alertness is connected to both staff and patient safety. Past evidence indicates natural light and views have restorative effects on people both physiologically and psychologically. Maximizing access to natural daylight and providing quality lighting design in nursing areas may be an opportunity to improve safety though environmental design and enable staff to manage sleepiness, work in a better mood and stay alert, according to Zadeh…

Access to natural daylight, and a nice view to outside, should be provided for clinical workspace design, said Zadeh. In situations where natural light is not possible, she suggests optimizing electric lighting in terms of spectrum, intensity and variability to support circadian rhythms and work performance.

Yes, I know most folks would consider this an automatic goal. Tell that to some of the Scrooges who manage hospitals and clinics as if they paid for each lightbulb and window from their own pocket.