For those not familiar, I own an HVAC distributor, and HVAC distribution is a subset of industrial distribution. Every few months or so during covid I have been putting up a post describing what is going on in my little slice of the world. Time for a new one.
The War Against the Middle Class
It’s one of those things of which I was mildly aware for decades, mostly through the medium of novels with an English setting … but now it has become painfully and bitterly obvious that there is an American class system, and in it’s present incarnation, malignant. We had always prided ourselves on being relatively class/caste fluid, a place where one might go from rags to riches through striking it rich, developing a better mousetrap, investing cannily, and still be on the same social level as ‘old money’. This new divide is bitter, hostile, and possibly lethal. It’s the social and political authoritarians, who crave power over the rest of us, pitted against the working and middle classes those who have a degree of control over our own lives, enough income to be at least tenuously comfortable, the leisure and energy to take part in public matters, even if only in a small way. The middle class have the effrontery to believe that yes, we ought to be able to control our own lives, rather than have every aspect controlled by the authoritarians.
The Political Economy of Environmentalism
“People, like any creature with no natural predator, will continue to spread beyond the capacity of their environment.”
Should I live to 80, the global population will have increased fourfold in my lifetime, more than double the population when the Club of Rome called for zero growth in 1972. For the average non environmental scientist, it is easier to divide the environment into the original Greek elements: fire, water, earth and air. Fires are currently raging, considered (unscientifically) as evidence of “global warming,” modified to “climate change” when the planet started cooling. Land use is also a serious global problem as the run-off into rivers and oceans is unbounded.
People respond to visual cues: when the Cuyahoga River burned in downtown Cleveland for weeks, America cleaned up its rivers. When scientists vividly described a hole in the ozone layer, consumers replaced chlorofluorocarbons in cars and refrigerators in 1987 as part of the Montreal Protocol.
Unlike the Cuyahoga River fire, environmentalism today is rather like the US debt, another intergenerational transfer that also reflects human nature. Current sacrifices can potentially reduce the projected magnitude of sacrifices forced upon future generations, but some economists argue based on UN income forecasts that future generations will be so wealthy that the high costs we would bear today will be relatively painless in the future, the environmental equivalent of “growing out of the debt problem.”
Paying for Biden’s Dreams
President Biden says, in connection with his ‘infrastructure’ plan, that “We’re going to pay for everything we spend.”
Actually, it’s you that would pay for this proposed spending. Exactly how much you would pay, and what forms your cash outflows would take, are dependent on your individual situation, but make no mistake: you would pay.
You would likely pay through higher direct taxes–yes, it is claimed that there would be no tax increases for those earning less than $400K/year (family income), but there are spending increases built into or implied in the ‘infrastructure’ bill that imply much higher spending…and taxing..over time. You would pay, in higher prices, lower wages, and reduced investment returns for those corporate tax hikes, which Biden seems to view as a source of free money. You would likely pay in terms of reduced job opportunities…possibly even outright job loss…as a consequence of a damaged US business climate.
Above and beyond the specific details, the ‘infrastructure’ plan and its supporting tax represent an attempt to redirect a greatly-increased part of the national income generated by Americans into the hands of government and of those whose relationship with that government is key to their finances. Such increases in government scope are of direct financial value to a lot of people, including high-income as well as lower-income people…see my post here for discussion of this point. Increasing the scope of government also represents a tremendous ego and status benefit for many people, most definitely including Biden himself…who actually met with history professors to get ideas on how he could build up his ‘legacy’ and who, I think, is more interested in a legacy of doing Big Things than in what the benefits of those Big Things might be.
Nancy Pelosi, in reference to the ‘infrastructure’ bill, stated that: “The dollar amount, as the president has said, is zero.” This is nonsense. The fact that money for a program will come from somewhere doesn’t mean that the cost of that program is zero. If a division of a company embarks on an expensive project and gets the money from their parent corporation, that doesn’t mean that the cost of that program is zero. Same if the division get the money by raising prices and/or selling more to their existing customers–the program still costs what it costs.
The Biden/Pelosi view seems to be that the United States exists to support the Federal government and that category of people who are most closely linked to that government. Increasingly, government and the ‘extended government’ are acting like medieval robber barons, plundering the surrounding countryside to keep themselves and their retainers wealthy and powerful.
See also this post at Ricochet: Economic Illiteracy on Parade and my post The Logic of Insatiable Centralization.