California’s Never-Ending Race Preferences

Again activists attempt to gut the Golden State’s ban on affirmative action

By William McGurn. Excerpts:

"California’s constitutional battle is rooted in an amendment, Proposition 209, which the state’s voters approved in 1996. Proposition 209 forbids discrimination against or preferential treatment for anyone “on the basis of race, sex, color, ethnicity, or national origin” in “public employment, public education, or public contracting.” That’s clear enough, which is why activists are always trying to gut it."

"The 2023 version of ACA 7 would have allowed the state to fund programs for specific groups “if those programs are established or otherwise implemented by the State for purposes of increasing the life expectancy of, improving educational outcomes for, or lifting out of poverty specific groups based on race, color, ethnicity, national origin, or marginalized genders, sexes, or sexual orientations.” But Fair Admissions made clear that such measures would be unconstitutional."

"So the new ACA 7 involves a change in scope. It would modify Proposition 209 by narrowing the ban on discrimination in “public education” to cover only “higher education admissions and enrollment.” That would open the door to racial considerations in K-12 education and in college and university financial aid."

"“an African American student would be given grants, while a student of any other race would be saddled with student loans, despite having equal (or even greater) financial need.”"

"result of a more generous financial-aid package going to a wealthy black student than to a poor Asian student." 

Gavin Newsom Is Driving Up Gasoline Prices

Californians pay $5.48 a gallon on average—and military jet fuel is getting dangerously expensive

By Allysia Finley. Excerpts:

"While gasoline prices have increased by an average of 74 cents a gallon nationwide over the past month, they’ve shot up 91 cents in the Golden State. “California has experienced much higher price increases than other states because the majority of the state’s gasoline is refined from foreign crude oil sources,” noted Kandace Redd a spokeswoman for the Automobile Club of Southern California."

"About 60% of the crude that feeds California refineries is imported, a third of it from the Middle East. Fifteen percent of its gasoline also comes from overseas"

"Californians paid 90 cents a gallon more than average at the start of his governorship in January 2019, $1.05 more before Russia invaded Ukraine in February 2022, and $1.50 more before the war in Iran started. Now the gap is $1.80."

"Since he became governor, the state’s oil production has plunged 40%, and a quarter of its refining capacity has shut down."

"the culprits: anti-fossil-fuel policies, including the state’s cap-and-tax program, limitations on drilling, low-carbon fuel standard, burdensome permitting and high gasoline taxes."

"California’s gasoline tax—which includes a 61-cent-a-gallon excise tax plus state and local sales taxes—is the highest in the country, and increases every year with inflation."

"its citizens pay less than those in other states into the federal Highway Trust Fund"

"a larger share of Californians drive electric vehicles or rely on public transportation"

"California’s regulatory environment has driven out actors necessary for an affordable energy consumer market,” more than a dozen Democratic state lawmakers wrote to state regulators last week." 

Why Trump’s Move to Lower Oil Prices Fell Flat

It will take time for the largest-ever release from global stockpiles to work its way into the oil market

By Carol Ryan of The WSJ. Excerpts:

"strategic reserves take longer to unlock than commercial stocks, especially if they are in specialized storage facilities. 

The U.S. SPR holds 415 million barrels of crude in 61 underground salt caverns in Louisiana and Texas. But it will be hard to get it out quickly. The Biden administration made a similar-size draw at the start of Russia’s full-scale invasion of Ukraine in 2022, which left the store at just 60% capacity. As more oil is extracted, pressure levels in the caverns fall, which slows subsequent withdrawals.

The SPR also uses the same pipelines and ports as shale producers, so infrastructure to carry the extra oil is constrained. It will take four months to get the full amount to market."

"The SPR was set up after the 1973 oil crisis to prevent the U.S. from running out of physical barrels, rather than to intervene in global oil prices. Such a shortage is unlikely now that the U.S. is the world’s biggest oil producer. From a physical supply perspective, North America is the best-supplied region in the world right now, but is still exposed to the economic fallout of rising global energy prices."

"Releasing barrels from finite stocks has less effect on the oil price than an output increase by the Organization of the Petroleum Exporting Countries normally would" 

Problems with EVs

See Things I Wish I’d Known Before Buying an EV by Christopher Mims. Excerpts:

"Mechanics must be certified to work safely around that high-voltage battery, and must have the know-how to deal with the complexity of these new computers on wheels"

"A typical car takes about five years to fall to 50% of its original value, but recently the value of some EVs had fallen 50% within two years."

"One reason for the rapid depreciation of my 2024 Ioniq 5 is that in October, Hyundai slashed the price of the 2025 and 2026 models by around $9,000"

"there’s a glut of affordable used EVs"

"if you use a home charger along with a standard extension cord that isn’t designed to carry all those amps, you can overheat your outlet"

"If you visit friends who aren’t EV owners, you’re rolling the dice on whether their home’s electrical system can charge your vehicle, even if you bring your own charger"

"some exotic fluids like battery coolant need to be monitored on an EV, and if you have a lead foot, you might burn through tires faster" 

Advice to Trump: Leave the Oil Market Alone

Government controls were responsible for the crises in the 1970s

Letter to The WSJ.

"Allysia Finley (“How America’s Oil and Gas Dominance Has Weakened Iran,” Life Science, March 9) is right to celebrate U.S. energy development but misses an important reason we no longer have 1970s-type energy crises.

The main reasons for the shortages in 1973 and 1979 were U.S. government price and quantity controls on the oil market. Natural-gas prices were also government controlled. While it is true that the Arab embargo of 1973-74 and the Iranian revolution in 1979 did reduce market supply, neither caused the shortages nor the palpable sense of crisis. Had there been no U.S. government controls, the prices of oil and oil products would have risen more and more quickly, but there wouldn’t have been shortages. When controls were lifted in the early 1980s, the age of gas and oil shortages ended.

Ms. Finley includes the first Gulf War alongside the Arab embargo and Iranian revolution. But what happened then proves my point. While prices spiked amid the conflict and Americans feared a return of gas lines, the lines didn’t materialize because prices were no longer controlled. We also didn’t experience supply crises in the 2000s or during the Arab Spring.

Of course, Americans are upset by higher prices, but we’ve lived with high gas and oil prices before and we will again. More worrisome is the report that President Trump wants to do something to lower gas prices. The last time the government “did something” we had oil and gas crises lasting a decade.

My advice: leave the oil market alone.

Prof. Em. Peter Z. Grossman

Butler University" 

ESG May Be Eating Away at Your Investments

Trump and the SEC affirm fiduciary duty, benefiting even shareholders with nonfinancial objectives

By Phil Gramm and Jeb Hensarling. Excerpts:

"Pursuing ESG objectives without the investor’s expressed consent has been part of a thinly veiled attempt by progressives to coerce investment managers and private corporations to advance their political goals and not the investors’ interest. This process began in 2006 when United Nations Secretary-General Kofi Annan announced the Principles for Responsible Investment initiative. Loud activists with anticarbon and pro-DEI agendas have colluded with asset managers to push through hundreds of corporate stockholder resolutions contrary to the financial interests of general investors."

"ESG constraints produce lower returns while delivering few environmental or social benefits"

"ESG investment funds have often fostered the illusion that investors are supporting more “sustainable” environmental outcomes while earning similar risk-adjusted returns. Rarely is that the case over extended periods. ESG investment funds routinely rely on unproven and inconsistent analytics. Weighting investments in companies based on carbon or DEI metrics means, logically, that more important factors of financial performance are underweighted. The predictable financial underperformance of ESG funds is made worse by higher management fees."

"In most ESG investing, no systematic effort is made to verify the claimed nonpecuniary impact of the investment, and government regulators have, as far as we can tell, assumed impact investors have opted out of fiduciary protections. Conflicts of interest among advisers are rampant. Proxy adviser Institutional Shareholder Services, for example, advises companies on shareholder ESG proposals and then turns around and sells the same companies ESG ratings."

"ESG investments are “not making much difference to companies’ actual ESG performance” and that they “perform poorly in financial terms.”" 

Will There Be Enough Workers to Power AI?

The workforce required to sustain AI-driven growth could become difficult to find

Letter to The WSJ.

"Concern that artificial intelligence will wipe out white-collar jobs is understandable (“Tech Firm’s Move Fans New Dread of AI Jobs Wipeout,” Business & Finance, March 2). However, insights from across the labor market suggest a different pattern: AI is reshaping work rather than erasing it, changing the tasks people perform and the skills employers require.

That shift is visible in the demand for the workers needed to build and run the infrastructure behind the AI boom. Scaling AI requires vast physical systems, data centers, energy networks and automated production facilities, and demand for the people who support them is rising rapidly. Randstad analysis of more than 50 million job postings shows demand for robotics technicians has increased 107% since 2022, while demand for heating, ventilation and air-conditioning engineers, essential for installing and maintaining data center cooling systems, has risen 67%.

The effect extends beyond emerging technical roles. As the digital economy expands into the physical world, demand for traditional skilled trades is also climbing, with postings for electricians, welders and construction workers rising as companies invest in the infrastructure required to support AI-driven growth.

At the same time, the talent pipeline for these roles is tightening. Today it takes longer to hire a skilled trades worker than a desk-based professional, reflecting a widening gap between AI ambition and workforce supply. Demographic pressures are compounding the challenge, with fewer young workers entering sectors such as manufacturing, while large portions of the workforce approach retirement.

The real risk isn’t that the economy runs out of jobs, but that it runs short of the people needed to power the AI era.

Sander van ’t Noordende

Chief executive, Randstad"