In pursuit of reaching net-zero carbon emissions by 2045, the Newsom administration has given billions in subsidies to the “renewables” industry, at the same time it has relentlessly attacked producers of conventional energy.
As a result, California’s households and businesses pay for the most expensive electricity and gasoline in the lower 48 states. It’s all for nothing. California still relies on oil and gas for 80% of its energy, a reliance on fossil fuel that is the same as the national average.
But unlike other states, California imports nearly 90% of its natural gas despite sitting on tens of trillions of cubic feet of reserves. California used to produce 60% of the oil it consumed, but despite reserves estimated as high as 30 billion barrels, in-state production is down to 23% of consumption. Thanks to Mr. Newsom, California’s resource-rich geology is off limits.
This is pure hypocrisy. Instead of safely extracting oil in a state with the world’s most rigorous environmental and labor protections, California is forced to refine oil imported from such paragons of human rights and environmental stewardship as Ecuador, Brazil, Saudi Arabia and Iraq. Meantime, California’s refineries are shutting down, one by one, without the option to import gasoline thanks to the special formulation the state requires to lower the “carbon content” of transportation fuel.
Matt Zwolinski reviews John Hasnas’s Common Law Liberalism. A slice:
Once in a while, however, an argument opens a genuinely different path. John Hasnas, a legal scholar at Georgetown University, has been clearing such a path for a while now, and the chapters in his new book, Common Law Liberalism, have all been previously published elsewhere. But brought together in one volume, these essays set forth an intriguing, novel, and highly promising approach to thinking about a free society.
The book’s core idea, to put a sophisticated argument rather crudely, is that the philosophers have screwed us all up. Philosophers, Hasnas argues, tend to put far too much stock in the construction of logically consistent systems of thought, proceeding from premise to conclusion in a neat, orderly sequence. Logic sets the standard, and if the world fails to live up to that standard, well, that’s the world’s problem, not ours.
For Hasnas, by contrast, thinking about politics begins not with a moral theory but with the actual conflicts people face when they go about the difficult business of living in a community together. Justice is not something first discerned by philosophical reason and then applied (by lesser minds) to settle particular disputes. Justice develops out of those disputes as an emergent phenomenon, often in ways that are neither foreseen nor intended by the people directly involved.
The test of a theory of justice, in this approach, is not logical consistency or completeness. To ask this of justice is to ask too much—and to ask more than is required. We do not need an airtight theory; we simply need rules that bring a dispute to an end and allow people to get on living together in peace.
This requirement is largely met, in Hasnas’ view, by the Anglo-American common law. The common law serves as a mechanism for providing law without legislation—law, that is, without need for a monopolistic legislative body that attempts to anticipate and resolve all problems in advance and from afar. It embodies both a Hayekian openness to dispersed, local knowledge and a Burkean respect for the wisdom of evolved tradition.
The Wall Street Journal‘s Editorial Board shares new data from the Tax Foundation’s review of new IRS. Two slices:
Here’s a statistic to remember next year, as Congress debates extending President Trump’s 2017 tax cuts: The top 1% of income-tax filers provided 40.4% of the revenue in 2022, according to recently released IRS data. The top 10% of filers carried 72% of the tax burden. Self-styled progressives will never admit it, but U.S. income taxes are already highly progressive.
These figures are from the Tax Foundation’s analysis of the IRS data, which is worth a read. But allow us to highlight a few points, starting with why this matters for the political debate. The GOP’s 2017 law lowered tax rates on people across the income spectrum, and those changes expire at the end of 2025. Extending today’s top marginal rate on high earners, 37%, will be contentious. Democrats will want to let it revert to the old 39.6%. Mr. Trump, scrounging to pay for other priorities, might go along.
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Two other notes on the data: First, these figures overstate the actual income-tax burden shouldered by the bottom 50%, because “refundable” credits paid to those with no tax liability are treated as spending and aren’t reflected in the IRS numbers. This means tens of millions of Americans have income-tax rates that are effectively negative—that is, they get what amounts to a welfare check from the government.
Second, these numbers only cover the income tax. The IRS figures don’t include payroll taxes on workers with lower earnings, including to support Medicare and Social Security. But other analyses show that although including payroll taxes somewhat modifies the progressivity of the tax code overall, the basic picture doesn’t change.
David Henderson weighs in on the merits of economics graduate school. A slice:
As I see it, there are two main strategies for the kind of graduate school to go to. The first is to go to the highest-ranked school you can get into, realize that you won’t learn much economics and won’t find much of what you learn interesting, hold your nose for 4 years, and then get a job with the kind of school that fits you. Former co-blogger Bryan Caplan did this at Princeton and then got a great job at George Mason University. The second is to go to a school such as George Mason University, where you’ll learn a lot of economics but won’t get as many good opportunities on the job market. Even there, though, the opportunities can be good. I’m reminded of that fact every year when I go to the annual meetings of the Association for Private Enterprise Education and meet at least 10 young interesting economists whom I hadn’t heard of or knew only a little about, at least 5 of whom got their Ph.D.s at GMU.
Brian Albrecht and Josh Hendrickson give thanks for price theory. A slice:
One important feature of market-based economies is the feedback provided by the profit and loss mechanism. People often have an intuitive understanding of why profit is important for allocating resources effectively and the incentives that profit-seeking creates. However, losses are just as important when it comes to the efficient allocation of goods and services. Losses send a market signal that what is being produced is not sufficiently valued by the market. Firms experience losses and shut down, freeing up resources to be allocated to a more efficient use.
Pierre Lemieux rightly criticizes Donald Trump’s economic ignorance. A slice:
An oft-heard objection is that the tariffs are just a threat, but its validity is doubtful. Certainly, it is not part of the art of the deal to let a negotiating counterpart know that you are just bluffing. At any rate, the first Trump administration did enact tariffs, and most of those that remained were kept and, in some cases, increased by the Biden administration. Government interventionism is not a tap one can turn on and off at will.
Donald Trump: “Either China does what I want, or I will impose large, and economically pointless, taxes on my own citizens!”
