Industrial carbon tax and carbon capture requirements increase the cost to produce energy, making Alberta uncompetitive with U.S. counterparts

By Jack Mintz. He works at The School of Public Policy, University of Calgary.

Impact of Carbon Policies on Competitiveness in Oil, Natural Gas, and Electric Power: An Alberta–US Comparison

• This study, based on a newly developed methodology to assess the impact of corporate, royalty, and energy taxes on production, estimates the impact of taxes and carbon policies on marginal cost of production in Alberta, Texas, and New Mexico for oil, gas, and power industries.
• In the absence of carbon policies, the existing tax and royalty system in Alberta is tax competitive except for conventional oil, despite the differences in tax systems among the three jurisdictions.
• US and Canadian capital subsidies encourage carbon, capture, utilization, and storage investments but do not improve cost competitiveness since the subsidies are offset by CCUS costs for marginal investments.
• With the existing Alberta carbon tax at $95, not only is Alberta’s conventional oil tax disadvantaged but the oil sands lose most of its tax advantage compared to projects in New Mexico or Texas (with enhanced oil recovery). Natural gas production remains tax competitive. With a carbon tax at $170, oil sand investments are somewhat tax disadvantaged.
• As Alberta’s effective carbon tax rate is increased by raising the rate and/or limiting allowances, both oil and natural gas production will be heavily disadvantaged compared to Texas.
• While much focus has been paid to the impact of the carbon tax on the oil sands, the biggest impact will be on the electric power industry. The carbon tax will noticeably increase power prices in Alberta which will impact competitiveness of many industries. This illustrates well the competitiveness issue for Alberta when carbon taxes apply in Canada but not the United States.

 

Red States Are Winning the Prosperity Race

By Richard K. Vedder & Nicholas Jadwisienczak.

"Republicans disheartened by growing fears of electoral losses at the federal level this fall can take some solace in evidence from a new, soon-to-be-released study that we coauthored for Unleash Prosperity, a group focused on promoting pro-growth policies. The graph below shows the results from that study, revealing that in this century economic growth has been substantially greater in the Republican Red states.

The new study focuses on the more recent years 2020-2024, using modern statistical techniques to show that even after other factors impacting economic change—like climate, the proportion of the population working in manufacturing or producing oil, or the degree of urbanization—are taken into account, Republican-dominated states grew sharply faster than Democratic oriented ones. Controlling for several potential competing explanatory factors, solidly Red states typically had over 25 percent more growth in personal income in the first part of this decade than their Blue counterparts.

Why? Republicans tend to have greater faith in markets to allocate resources and distribute income and wealth and are less inclined to tax the public heavily to fund massive social services, which research shows weaken work effort and business investment—key components in economic growth. For example, the highest income earners in heavily Blue New York City pay over 14 percent in state and local income taxes on some of their income, compared with zero in a more Red city like Miami or Dallas. All eight states with zero state income tax are Red or, in one case, New Hampshire, a swing state that has a history of electing both Democratic and Republican political leaders.

 

Our statistical analysis confirms that one of the biggest sources of income growth in the Red states has come from the in-migration of generally highly productive people fleeing high-tax Blue States. The world’s richest man, Elon Musk, fled deeply Blue California for Red Texas (after earlier moving to the U.S. from South Africa), while leading financial guru Ken Griffen fled Blue Illinois for much Redder Florida. Census Bureau data show that from 2020-2025, Florida received net over two million migrants, divided nearly equally between immigrants moving to the Sunshine State from other countries, and native- born Americans fleeing states like California (which had a massive outmigration of nearly 1.7 million Americans to more congenial locales).

Our study directly refutes a quality-of-life ranking by CNBC that faced conservative backlash after stating that the 10 worst states in the U.S. to live in were Republican states. Florida Governor Ron DeSantis lashed out at the network over that study, calling it “nonsense.”

Our study shows that it was not just productive workers and their families that moved to these Red states, but capital resources as well. For example, Texas recently surpassed California for having the most corporate headquarters among Fortune 500 companies. Companies and people alike vote with their feet, seeking relief from overly expensive and inefficient government programs.

But isn’t a major reason people and companies are moving South the warmer temperatures? Not really.

One of the leading states in out-migration has been strongly Blue but climatically heavenly Hawaii, while such Red states with bitter winters like Montana and South Dakota had significant in-migration from other, often Blue, states.

To be sure, state-based public policy was not the sole factor in explaining differential rates of economic growth. Manufacturing-heavy states like Pennsylvania, Ohio, and Michigan were hurt by the rise of modern manufacturing in emerging nations like China and India, which had lower-cost labor.

A high level of unionization (typically far more prevalent in Blue states) was associated with lower growth, while growth was enhanced by having a large proportion of immigrants in the population, consistent with other research showing immigrants typically have high rates of labor force involvement and are increasingly relatively highly skilled, including such economic superstars as Musk (Tesla, Space X), Nelson Huang (Nvidia) and Microsoft CEO Satya Nadella.

More urbanized areas, controlling for other factors, typically had lower rates of growth as well, probably at least partially because they were also more likely to be associated with far-left governments like Mayor Zohran Mandami’s New York City.

Our little study comes at a most appropriate time, our nation’s 250th birthday, as it clearly demonstrates some of the genius of our nation’s Founders. They put together a federal system of government that largely eliminated legal hassles like passports and work permits for those seeking to move to a more promising environment. As Justice Louis Brandeis memorably said, America’s federal system was one where “a single courageous State may, if its citizens choose, serve as a laboratory and try novel social and economic experiments without risk to the rest of the country.”

Our national government would do well to learn from the actions of the states, benefiting from the presence of 50 laboratories engaging in sometimes novel and innovative experiments that other states could learn from, not to mention the federal government in Washington, D.C."

What Mamdani Can Learn From Hugo Chávez's Government-Run Grocery Store Debacle

Venezuela’s government-run grocery stores led to endless lines, empty shelves, quotas, and corruption.

By César Báez in Reason. 

"New York City Mayor Zohran Mamdani held up a bunch of plantains at a press conference on Monday and promised that New York City shoppers would pay 30 percent less than "typical retail prices" when the city opens five government-run grocery stores at a cost to taxpayers of $70 million.

"How are you going to keep people from taking advantage of that deal?" one reporter asked the mayor. "Is there going to be a limit on the number of items that someone can take?"

"Our RFP [Request for Proposals] makes very clear that this is a program for New Yorkers to be able to put food on the table, not a program for people to be able to make a quick buck through reselling," the mayor responded, before turning it over to Jeanny Pak, the interim president of the New York City Economic Development Corporation. She said the city was looking into a "library card-esque" system that would allow the city to "manage who's buying," with a focus on "everyday New Yorkers."

The city's plan rests on the assumption that it can control who buys subsidized goods. Yet Venezuela's experience with government-run grocery stores suggests that assumption deserves scrutiny.

When Venezuela's socialist president, Hugo Chávez, created a nationwide network of government-run grocery stores called "Mercal" in 2003, he faced the same conundrum of how to control excess demand when prices are set artificially low.

At first, Mercal seemed to work. It quickly became one of Chávez's most popular social programs. In a 2007 episode of his talk show, Aló Presidente, Chávez compared Mercal's prices with those at a nearby grocery store. A kilo of sugar at Mercal cost 740 bolívares, compared with a price of 1,300 bolívares elsewhere. Chicken sold for 1,900 bolívares instead of 4,550. The discounts were roughly 43 percent to 62 percent below prices already regulated by the government. Chávez called Mercal an instrument for building "socialist commerce."

More than 70 percent of households reported buying at least one item at Mercal during the program's peak in popularity in 2005. But eventually artificially low prices led shoppers to clear out the shelves, and the stores became famous for lines that would wind around the block. The share of households shopping at Mercal plummeted below 40 percent by 2014.

The gap between Mercal's subsidized prices and prices at other grocery stores created an obvious resale opportunity. There were complaints of diverted goods, fictitious purchases, store clerks allowing their friends and relatives to jump the line, and corruption in procurement and distribution. Hauling food across the border to resell at market prices in Colombia became a booming industry. Black-market reselling even spawned a new profession: bachaqueo.

The government responded to the shortages with tighter controls. It capped purchases, assigned shoppers a weekday based on the final digit of their national ID number, and registered sales by ID and fingerprint. Some stores required shoppers to bring a baby or present a birth certificate before they could buy diapers.

Centralized procurement created another set of problems. In 2010, Venezuela's Comptroller General audited the state food distributor and found unjustified direct awards, food containers stored outdoors, damaged products, and major discrepancies between inventory and port warehouse records.

Mercal alone did not cause Venezuela's food shortages. It operated inside a larger system of national price and exchange controls, subsidized imports, expropriations, precarious property rights, monetary financing of government deficits, and declining oil production.

Thankfully, Mamdani's program is limited to New York City.

New York's experiment is local, far more limited, and therefore, lower-stakes. Private contractors will operate the stores, while auditors, courts, reporters, and the public can scrutinize the results. Chávez, by contrast, clamped down on the free press and suppressed reporting on his failed policies.

New Yorkers will also have plenty of alternatives. The city's five municipal stores will become part of a food retail market that includes more than 1,100 grocery stores and 10,000 bodegas. 

But the comparison is still useful because, like Chávez, Mamdani will find that he can't escape the laws of supply and demand. His evasive response to the reporter's question suggests that he hasn't given much thought to how the city would manage high demand for cheap groceries. One way or another, the program will require quotas. The alternative is to tolerate price-sensitive shoppers lining up outside stores to buy discount plantains.

The spectacle of food lines would be a public relations disaster for the media-savvy mayor, who has pointed to his policies as evidence that "socialists not only understand economics, just as well as the capitalists who came before." Mamdani's rhetoric evokes Chávez's, who called Mercal "an instrument" for proving that socialism works and that Adam Smith's theory of the invisible hand was a capitalist lie.

Like Chávez, Mamdani is a socialist, an economic populist, and a gifted politician. He understands the rhetorical power of holding up a bushel of plantains. A government can dictate the price, but it cannot guarantee that the plantains will still be there."

Why Capitalism Is the Most Moral Economic System

"Success comes from meeting the needs and wants of others," says businessman and publisher Steve Forbes.

From John Stossel. 

"I've failed!

I make the case for free markets. Young people elect socialists!

What are they thinking? Do they even think? Do they pay any attention to history? Or economics? Socialism always fails. Only markets create environments that let people prosper.

"Getting the right environment—this country's done it better than anyone else," says Steve Forbes in our full interview. "Give people a chance to be creative, experience liberty, and humanity moves forward."

His magazine has made that point for years.

"You and I are failures," I tell him. "We've tried to convince people about the benefits of free enterprise….[Yet] they embrace socialism," believing "posts from people like actor Mark Ruffalo: 'Capitalism today is failing us, killing us, and robbing from our children's future.'"

"Capitalism has done just the opposite!" replies Forbes. "Deaths from famines are down 99 percent in the last 60 years. Standard of living, 10 times better than it was 50 years ago around the world."

Can Socialists Support Commerce But Not Capitalism?

By Chris Freiman.

"Socialists often criticize US trade restrictions on Cuba. A recent example is the flotilla organized by activists attempting to deliver aid to the island that aimed to draw attention to the embargo. Participants and commentators often frame Cuba’s poverty as a direct result of US policy: lift the embargo, the argument goes, and Cuba will prosper.

What should we make of this argument? For one, the primary driver of Cuba’s persistent poverty is the Cuban government’s own economic policies, including state control, chronic misallocation, and long-standing restrictions on private enterprise. These institutional mistakes would keep Cuba poor even without the embargo.

That said, there’s little doubt that trade barriers cause economic harm, and socialists are right to recognize this. But here one might wonder: can socialists coherently object to trade restrictions while also opposing free market capitalism more broadly?

Many think the answer is yes. The socialist target isn’t free exchange as such, but private ownership of productive property. Socialists object to an economy where capitalists own the means of production and workers sell their labor for wages or a salary. Socialism, by contrast, would create a kind of “workplace democracy,” where firms are owned and operated by workers themselves. They’d collectively make decisions about production, investment, and distribution rather than take orders from a single boss. This could mean workers directly voting on major business decisions or periodically electing managers to act on their behalf. Suppose, for example, that a worker-owned pizzeria is deciding whether to shift from traditional pizza to a more upscale artisanal menu. In a traditional capitalist firm, the owner would have the final say. In workplace democracy, the cooks, servers, and other employees would collectively decide how to proceed. While there might be some conflicts between growth and equality, writes Mike Beggs at Jacobin, such a model would aim to “harmonize firm-level democracy with macroeconomic expansion and a solidaristic wage.”

Under this style of socialism, markets would still play an important role. Central planners wouldn’t decide how to allocate resources to the pizzeria or determine how many pizzas it has to bake. Instead, the pizzeria would compete with rival restaurants for customers just as it would under capitalism. The goal is to retain the information markets provide in the form of prices, profits, and losses while “socializing” ownership of firms.

At first glance, it seems as though this version of socialism is perfectly compatible with free trade. You could have an economy in which firms are democratically owned and still allow free trade both within and across borders.

That’s fine as far as it goes. But there’s a tension lurking in the background. Consider that a central justification for free trade is that it enables all parties to voluntarily enter into an economic agreement in the expectation of mutual benefit. As Adam Smith puts the point:

Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.

If I want the apples you have, and you want the oranges I have, we’re both better off as a result of a trade. Trade barriers — tariffs, quotas, embargoes, and the like — block these sorts of exchanges. That’s why critics of the Cuba embargo argue that it makes people worse off: it prevents them from engaging in mutually beneficial exchange, which an abundance of research shows is a source of human prosperity.

Once you see trade in this light, it becomes harder to draw a bright line between the kinds of exchanges socialists want to allow and the kinds they want to prohibit. As I mentioned earlier, to qualify as socialist, an economy must not permit capitalists to own the means of production and hire wage laborers. This means that a socialist economy must prohibit freely agreed-upon, mutually beneficial capitalist labor agreements. For instance, suppose Barry doesn’t want to take on the risks and responsibilities that come with being a co-owner of a coffee shop; he’d rather work for a steady wage as a barista for a corporate giant. Nevertheless, a socialist economy wouldn’t allow him to do so. (Otherwise, it would start drifting toward capitalism.)

It’s not clear why trading barista labor for money is all that different from trading apples for oranges. In both cases, people are making voluntary agreements in the expectation that they’ll be better off as a result. Here, then, is the tension. On the one hand, socialists criticize trade restrictions on the grounds that they block mutually beneficial exchange and thereby make people worse off. On the other hand, they want to restrict or eliminate capitalist employment of wage laborers — even when workers voluntarily choose those arrangements.

So something has to give. You can’t easily say, “Let people trade as they see fit because they expect it to benefit them,” while also saying, “But don’t let them sell their labor as they see fit, even when they expect it to benefit them.”

If mutual benefit justifies freely trading apples for oranges, it’s hard to see why it doesn’t also justify freely trading labor for wages. And if workers may trade their labor freely, they may trade it to capitalists — a conclusion that socialist defenders of free trade are sure to find unwelcome."

Drug Prohibition and the Waterbed Effect

Jeffrey Miron.

"A key rationale for drug prohibition is the belief that outlawing drugs makes them less available and more expensive, thereby shrinking consumption.

Decades of evidence, however, suggest this impact is modest, partly due to the “waterbed effect:” enforcement efforts aimed at shrinking the market mainly causes it to shift, in various ways, without much impact on its overall size. Just as pushing down on one part of a waterbed merely forces the water somewhere else, rather than reducing the overall quantity.

Two recent news stories provide textbook illustrations. From the Washington Post,

The Trump administration’s deadly military strikes on alleged drug trafficking boats have not reduced the amount of cocaine entering the United States, but they’re prompting criminal organizations to develop new strategies and tactics and undermining traditional investigative methods, according to a previously unreported assessment by the Drug Enforcement Administration, a closed-door congressional briefing and interviews with current and former U.S. and foreign officials.

In a recent assessment reviewed by The Washington Post, DEA analysts found the strikes had failed to affect the supply or price of cocaine in the United States and had led traffickers to diversify beyond go-fast boats and to avoid international waters, opting instead for larger boats and hemming close to coastlines, where U.S. forces are less likely to open fire. In a closed-door briefing last month, Pentagon officials told lawmakers the strikes in international waters off South and Central America had not reduced its purity.

And from the Financial Times,

In the battle for the seas, drug traffickers are often coming out on top — making Europe, in the words of the UN, the new “primary destination” for cocaine. The drug, once the preserve of rich European partygoers, has gone mainstream, with street prices falling by an average of 18 per cent between 2014 and 2024 while the products sold became 44 per cent purer, according to the EU’s drugs agency.

…

As authorities have stepped up interceptions at major ports, traffickers have kept ahead through sophisticated drop-offs at sea, enabled by encrypted communications, powerful speedboats, unmanned submersibles and GPS spoofing, which involves vessels faking their locations.

“You always have to stay up-to-date, because there’s always a new modus operandi,” says Jürgen Ebner, acting chief of Europol, the EU’s law enforcement agency. He warns of a “waterbed effect” — when authorities come down hard in one area it can just push problems somewhere else.

Exactly."

The Endangered Species Act Reduces Housing

From Alex Tabarrok.

"Max Tabarrok’s paper on the Endangered Species Act and housing (WP) has just been published in the Journal of Public Economics! It’s a clever paper: Max observed that the moment an animal is put on the endangered species list, developers face enhanced compliance costs and liability risk. But what’s important for an empirical economist is that this increased regulation isn’t national–it binds just where the species lives. Thus, the ESA creates many natural experiments, places where it binds and nearby places where it doesn’t and the list changes over time–there were 82 listings in 1970 and nearly 1500 today–and there are even some de-listings which reduce regulation.

Here, for example, is a picture of the habitat (red) and control areas (blue) for when the Northern Long Eared Bat was put on the endangered species list.

 

The bottom left panel measures annual housing permits per 1000 1980 pop in treatment (red) versus control (blue) areas. The bottom right is the event study coefficients. After the bat was put on the endangered species list, the number of new housing permits declined in areas where bats might live relative to control areas.

Here is what happened when the Peregrine falcon was delisted. Before the delisting, housing permits were lower in regions (red) where the falcon had habitat compared to controls areas but after the delisting the treatment areas caught up to the control areas.

 

Overall:

…this paper provides evidence that an additional endangered species listing reduces annual housing permit flows by 0.5 permits per thousand 1980 residents, about 10% of the average place’s permit flow. Accounting for spillovers and diminishing costs, my estimates suggest the aggregate effect of the ESA has been to reduce the national housing stock by…roughly 6.3 million missing units over 1980–2024, about 4% of the 2025 housing stock.

Now, you might say, ok this shows the ESA has costs. What about the benefits of the ESA? It’s hard to measure the benefits, of course, or even know if the ESA is effective. But Max shows using satellite data that there are quite a few places where the ESA binds on infill development.

…at the intensive margin of housing production, new developments are often replacing existing buildings or are filling in space in a highly developed area that could not host endangered species even if no new construction took place. On the intensive margin, the tradeoff with species protection does not bind, and may even be positive sum as it substitutes for less dense greenfield development. Therefore, whether and how much the ESA constrains development on the extensive vs intensive margin is relevant to the tradeoffs we face between housing production and species protection, and thus is relevant to the aggregate welfare effects of the law.

In this section I extend the main empirical specification of the paper to satellite data on land use from the National Land Cover Database (NLCD) (Multi-Resolution Land Characteristics Consortium, 2025) and to heterogeneity within the Building Permits Survey to assess where the effects of the Endangered Species Act are accruing.

The NLCD is a set of satellite images of the United States compiled and pre-classified by the U.S. Geological Survey. They classify 30-square-meter pixels into one of fifteen land use groups, including four levels of development, three types of forest, and two types of wetland. The NLCD has annual files going back to 1985. I overlap these pixels with the map of permit-issuing places in the BPS using constant 2024 borders, and track the changes to pixels within each place over time. The hazard rate of extensive margin or greenfield development is measured by the flow of non-developed pixels (e.g., forests or wetlands) into any of the four levels of developed land use, divided by the total area of greenfield land use.

He concludes:

The most urbanized 15% of places are responsible for 90% of total permit flows, while the highest-value endangered species habitat is well outside these developed areas. The Endangered Species Act seems to restrict infill development in these dense areas as much as it restricts greenfield development in exurban sprawl (Table 9, Table 10, Table 11). Relaxing the legal mechanism of the Endangered Species Act in already developed areas may increase permit flows in dense, energy- and land-efficient cities in California and on the East Coast at the expense of sprawling suburbs in the Sun Belt, increasing both housing supply and endangered species habitat.

The Trump administration is trying to limit the ESA, multiple lawsuits have already been filed. Max’s paper is thus timely and it points to a fix that might satisfy housing proponents and environmentalists: relax the ESA’s bite on infill and redevelopment in already-built-up areas, where the housing-versus-habitat tradeoff barely binds, rather than across the board.

Addendum: Obviously, I am pleased as punch to see this paper in print. Max began writing the paper before graduate school–he has only just finished his first year. He was fortunate to have had lots of great advice along the way, most notably from a superb pre-doc he did at Dartmouth under the auspices of Heidi Williams."

The Enclosures and the Industrial Revolution

By Don Boudreaux.

"Here’s a letter to someone who (I boast) reports that he’s greatly enjoying reading Phil Gramm’s and my book, The Triumph of Economic Freedom.

Mr. M__:

Thanks for your email and for your kind words about Phil Gramm’s and my book. They’re much-appreciated.

Our book’s chapter on the industrial revolution prompts you, understandably, to write:

A critique may say that one reason why people left rural areas to go to the cities was due to Britain’s enclosure laws that forced rural workers off their traditional land (which they presumably wished to stay on), causing them to have nowhere else to go except the cities and factories. This undermines the argument that rural people voluntarily left rural areas for the cities and factories due to the latter being more appealing than rural life.

Sen. Gramm and I did not explicitly address this particular point, although we should have done so. Had we done so, we’d have simply summarized the work of the eminent economic historian Deirdre McCloskey. In her remarkable 2010 volume, Bourgeois Dignity, McCloskey writes on page 154 that, in attempting to explain the industrial revolution, Karl Marx

instanced enclosure in England during the sixteenth century (which has been overturned by historical findings that such enclosure was economically minor) and in the eighteenth century (which has been overturned by findings that the labor driven off the land by enclosure was a tiny source of the industrial proletariat, and enclosure happened then mainly in the south and east where in fact little of the new sort of industrialization was going on, and where agricultural employment in newly enclosed villages in fact increased).

A few pages later (pages 172-173), McCloskey adds:

By now, though, several generations of agricultural historians have argued (contrary to the Fabian theme first articulated in 1911, which followed Marx) that eighteenth-century enclosures were in many ways equitable and did not drive people out of the villages…. Contrary to the pastoralism of [Oliver Goldsmith’s 1770] poem – which as usual reflects aristocratic traditions in poetry back to Horace and Theocritus more than evidence from the English countryside – the commons was usually purchased rather than stolen from the goose. One can point with sympathy to the damaging of numerous poor holders of traditional rights without also believing what appears to be false – that industrialization depended in any important way on the taking of rights from cottagers to gather firewood on the commons. Industrialization, after all, occurred first in regions to the north and west, mainly enclosed long before, such as Lancashire or Warwickshire, and especially (as Eric Jones pointed out) in areas bad for agriculture, not in the fertile East Midlands or East Anglia or the South – the places where the parliamentary acts of the eighteenth century did transform many villages, though non “deserted.” In such freshly enclosed areas, I repeat, the local populations increased after enclosure."

Who's Paying for the Discounts in Mamdani's City-Run Grocery Stores?

This week, Mamdani announced his city-run grocery stores will sell core goods at a 30 percent discount.

Meagan O'Rourke of Reason. 

"This week, New York City Mayor Zohran Mamdani gave more details about his administration's plan to open five city-owned, city-run grocery stores across all five boroughs. Although Monday's press conference provided some more clarity about the stores' discount rates and inventory, the plan is still no better than before (despite New York magazine's declaration that the stores "Sound Pretty Good").

The Mamdani administration has announced the locations of two stores: The first will open in Hunts Point in the Bronx by the end of next year, and another will open in East Harlem by 2029. In total, the city plans to spend $70 million in capital costs, with $30 million funding the ground-up construction of the East Harlem location. The city will cover the rent and property taxes for the five grocery stores located in each borough, and private operators will run the day-to-day operations of each store. Those operators will be "contractually required" to pass on savings to customers by offering discounts on a core basket of staples.

Until Monday's press conference, it was unclear which goods would be discounted and by how much. The core set of goods, Mamdani revealed, will include produce, meat, and seafood, along with 20 other items such as milk and bread. These items will be discounted by 30 percent compared to "typical retail prices" with "no exceptions, no gimmicks." Mamdani told reporters he arrived at the 30 percent figure because food prices have risen roughly 30 percent since 2019.

When asked whether the city-run grocery stores would threaten surrounding businesses, Mamdani told reporters that the city's stores would not pose a threat to bodegas and other grocery stores because they would not sell hot food or cigarettes, items he says drive revenue for existing bodegas and stores.

Even if the public stores do not threaten privately run businesses, there are few clear upsides to the plan. As philosophy and economics professor Daniel Muñoz noted on his Substack, if the goal of Mamdani's stores is progressive redistribution, a government-owned grocery store is an inefficient and "negative sum" solution.

"Notice that anyone can shop there—there is no means testing," Muñoz wrote. "By contrast, food stamps are designed to help the poor, and they don't cause long lines or put more efficient grocers out of business."

Mamdani has said that government intervention for food distribution is nothing new. On Monday, he explained that former New York City Mayor Fiorello La Guardia was inspired to create municipally owned markets after witnessing food riots several years earlier.

"He did so because he believed in a simple definition of the task of government to make people's lives better," Mamdani said.

La Guardia may have been partially motivated to create municipally owned markets to make goods affordable, but Mamdani conveniently left out another part of the story. La Guardia wanted to create municipal markets (like Essex Market in the Lower East Side) to get pushcarts off the streets.

According to a New York Times article from 1938, La Guardia wrote in a letter to commercial associations: "It is my policy, where a market is necessary, to build a proper covered market so that these same peddlers may be permanently placed in such market under proper and wholesome sanitary conditions." While municipal markets, like Essex Market, are still in use today, they are not proof of concept for city-run grocery stores. The vendors at Essex Market pay below-market rent, but the vendors are still private businesses subject to market fluctuations.

Even if the city-run stores push other grocers out of business, create resale markets, or produce other unintended consequences, the city will have little incentive to shut them down because taxpayers will always be there to foot the bill. Plus, the city can take credit for making life more "affordable" for New Yorkers."

2026 is the quietest year for wild fires in Europe by some distance

From Matt Ridley.

 

 

 

 

The Apples and Oranges Tribunal

By Alex Tabarrok.

"Suppose that apples sell for more than oranges and Parliament in it’s wisdom decides that, at last, apples and oranges must be compared. Not by shoppers — shoppers are biased, they merely reveal what they are willing to pay — but by a tribunal, which will determine whether apples and oranges are of truly equal value and thus must sell at the same price.

What would the tribunal need to know?

Start with land. Orange groves sit on Florida real estate with one set of alternative uses; apple orchards occupy Washington hillsides with another. The opportunity cost of an orange includes the housing development, the solar farm, the tourist attraction not built on that grove. How is the tribunal to value what was never built? Perhaps you answer: look at land prices. Brilliant suggestion, I reply. Keep going.

Next, capital. Orchards take years to mature, so today’s fruit embodies investments made under yesterday’s expectations about today, financed at interest rates the tribunal must somehow incorporate. Then storage: apples keep, oranges rot, so an apple and an orange in April are different goods than the “same” fruits in October. Add transportation, refrigeration, frost, pests, crop insurance, the option to divert fruit into juice, cider, marmalade, or pie, substitution with every other item in the produce aisle, and the shifting preferences of millions of consumers, each of whom knows things about his own breakfast that he could not articulate to a tribunal. It all matters.

To determine the “just” price of apples and oranges, the tribunal would need the entire general-equilibrium system.

Market prices are necessary to compare alternative uses of resources, as Mises taught us in 1920. In 1945, Hayek added the knowledge problem: the relevant knowledge is dispersed, local, tacit, and fleeting. Free markets are the only institution that aggregates that knowledge, articulates it in prices and gives people a reason to listen and respond. A price is a signal wrapped up in an incentive. Apples and oranges can be compared but only by the incomparably complex operations of the price system. There is a reason we call it the super-market.

Britain is now running this experiment in the labor market–A retail worker equal to a warehouse worker? A canteen worker equal to a coal miner? A dinner lady equal to a gravedigger?

Under the Equality Act’s “equal value” provisions, tribunals compare jobs by scoring their intrinsic properties — effort, skill, responsibility, working conditions — the labor theory of value applied to labor. How is it going? The Tesco litigation began in 2018; the tribunal’s fact-finding hearing ran 36 days, its judgments run to more than 900 pages resting on some 19,000 pages of training manuals, and the independent experts have yet to begin the report that will actually say whether a shelf-stacker’s job equals a warehouse worker’s. Eight years, and the calculation has not started. Apples and oranges, adjudicated but not, as Orwell or Marx or Stafford Beer might have imagined, by a industrial bureaucracy or by an all-knowing artificial intelligence but by lawyers and commissions and tribunals. The worst of all worlds.

And having discovered that the tribunal cannot price two jobs in a decade, the government now proposes to add race and disability comparisons and an enforcement unit to publish official guidance on which reasons for a wage difference are permissible. A bureau of allowable scarcities.

Moreover, let us say that one day the tribunal reaches its conclusion and finds the truly just apple to orange price. At last, nirvana. The next day the public learns that vitamin C really does combat cancer–the demand for orange juice skyrockets. To encourage more orange juice production we need a higher price but wait…nothing about oranges or apples or the labor required to produce them has changed. We need to attract more labor to the orange juice industry but the effort, skill, responsibility and working conditions of orange juice workers has not changed. How can we justly pay them more than their apple juice brethren? Blank out.

The market compares apples and oranges every day. It is the only institution that can. But there is a deeper error here than computation. Suppose the tribunal succeeded. Suppose that after another decade it delivered the true and final score, shelf-stacker versus warehouseman. What would it have found? Not justice. A wage is not a grade on your character or a measure of your worth as a human being. A wage is a price — a report on how scarce your skills are relative to the desires of people you will never meet. Nurses are not morally less worthy than plumbers should they earn less than plumbers or vice-versa, and no one thinks otherwise except the tribunals.

Hayek nailed it in The Mirage of Social Justice: justice is about conduct — how one person treats another. An employer who defrauds his workers, an employee who steals from the till, a product sold under false pretenses — condemn them, take them to court. But the pattern of prices that emerges from millions of voluntary trades is nobody’s conduct. No one chose it, no one designed it, no one can be guilty of it. The constellation of prices is, in Ferguson’s phrase, the result of human action but not of human design. Demanding that prices be just is a category error, like suing the weather. Prices don’t grade our merit; they guide our actions. Ask them to do the first and they can no longer do the second.

Judge Anthony Kennedy said it well in the Ninth Circuit ruling that (mostly) killed comparable worth in the US: “neither law nor logic deems the free market system a suspect enterprise.”"

Rent control reduces housing supply

From Cafe Hayek.

"The Editorial Board of the Washington Post makes the case that Comrade Mamdani’s rent-control policy violates the takings clause of the Fifth Amendment.

A group of landlords has filed suit, arguing that the mayor’s office improperly interfered in what should be an independent regulatory decision. The board is also required to conduct an independent economic analysis before a vote, but the plaintiffs say the board had already made up its mind.

After her resignation in protest ahead of the vote, the board’s former landlord representative, Christina Smyth, said the members crossed a “legal line” because their vote wasn’t based on evidence.

A court overturning the rent freeze would be an economic gift for the democratic socialist, even if he doesn’t realize it.

New York’s rent-stabilized housing market is near its breaking point. Before the new policy, landlords were only allowed to raise rents 3 percent per year, which often did not cover maintenance costs. Nearly 60,000 rent-stabilized apartments in the city were vacant last year. That’s an increase of 8,000 from the year before.

Expect more vacancies when the freeze goes into effect in October. When San Francisco implemented rent controls in the 1990s, housing supply dropped by 15 percent."

Trump’s New Tariffs Aren’t About Forced Labor—They’re About Restoring the Tariff Wall

By Scott Lincicome and Chad Smitson of Cato.

"The “Section 122” tariffs, imposed after February’s Supreme Court ruling against President Trump’s “emergency” tariffs, expired last night and were immediately replaced by “Section 301” tariffs of roughly the same amount. The new duties range from 10 to 12.5 percent, cover goods from 60 economies, and are justified as a crackdown on “forced labor.” 

In my new column at The Dispatch, I show why these tariffs have almost nothing to do with forced labor and instead are just “a ham-fisted way to reinstall Trump’s tariff wall and protect it from another IEEPA-like defeat in federal court.” Five issues stand out:

1. The administration said the tariffs were coming before the investigation ended. President Trump, Treasury Secretary Bessent, and US Trade Representative Greer all publicly and explicitly promised that the tariffs and their revenue would replace the struck-down IEEPA regime before the investigations even started.
2. The requisite report on “forced labor” is remarkably thin. USTR’s investigation only took 82 days and generated a 98-page report to cover 60 economies, devoting little more than half a page to each, much of it the exact same empty passages copied and pasted 60 times—far short of the rigor demanded of such a consequential and far-reaching trade action. The report also contained no evidence or analysis – none – of targeted economies’ forced labor policies causing actual harm to US companies or commerce. It’s all just assumed. Nor did the USTR explain why it applied the same punitive 12.5 percent tariff rate to Angola, Libya, Russia, Venezuela, and Kazakhstan—developing countries that rank low on the Walk Free forced labor index (and have other issues!)—as it did to developed, “good actor” countries like Norway, Japan, Switzerland, and Australia.
3. The United States is hardly a forced labor angel. Section 307 of the Tariff Act of 1930 has prohibited imports made with forced labor, but was lightly enforced for over 80 years due to wide exceptions, and the Trump administration’s enforcement of the law has been much more lenient than the Biden administration’s efforts. Furthermore, the US ranks 19th among the 60 economies for the prevalence of forced labor. 
4. The tariff cure dramatically overshoots the forced labor disease. Some back-of-envelope math puts a proportionate tariff at 0.5 to 0.84 percent; Peterson Institute economist William Cline, using a different model, gets 0.23 to 0.25 percent. USTR is proposing 10 to 12.5 percent, a rate and resulting revenue (see figure below) that far exceed what could be considered a proportional response to the problem.
5. There’s no off-ramp. Section 301’s statutory goal is the removal of the offending foreign policy, yet USTR offers no benchmarks for compliance that would remove the tariffs. Indeed, a country with the United States’ exact forced-labor framework could still get slapped with duties.

As I explain, the Section 301 tariffs on Chinese imports that Trump imposed during his first term provide a telling contrast: 

Trump’s case against Chinese intellectual-property and industrial policy wasn’t without fault, but it still required an eight-month investigation and produced a nearly 200-page report on a single country. And the recommended tariffs—initially set at $50 billion to match/​offset the alleged harm from the targeted Chinese policies—came only after U.S.-China negotiations collapsed.

Forced labor is a real and complicated problem, but disingenuously dressing tariff revenue recovery in human rights language discredits the tools that might actually address it, setting a precedent for Section 301 to be an all-purpose tariff generator that any future president can invoke for any reason. Congress should fix the law before President Trump—or his successor—does even more damage.

Read the full column here.

Note: On July 24, the Liberty Justice Center filed a lawsuit in the US Court of International Trade challenging the administration’s replacement tariffs imposed under Section 301 of the Trade Act of 1974."

 

The Myth of the Free-Riding Billionaire: Ray Madoff’s ‘The Second Estate’

In her new book, Ray Madoff argues that America’s wealthiest exploit the tax code at the public’s expense. But her critique understates both what the rich pay and what they produce.

By Paul Mueller of AIER. 

"Wealthy professionals can be strident egalitarians or naive optimists about the benefits of government spending — or so it would seem after reading law professor Ray Madoff’s book The Second Estate: How the Tax Code Made an American Aristocracy. 

Madoff clearly has an axe to grind against America’s wealthiest citizens, and she is deeply critical of the legal mechanisms they use to protect and transfer their assets. Her argument often seems to boil down to this: Why should wealthy Americans keep so much of their wealth for personal use rather than allow the public — or, more specifically, Congress — to decide how those resources should be spent?

Yet The Second Estate is no low-brow polemic. Professor Madoff knows federal tax policy well, and her explanations of the tax code and the ways wealthy individuals use it are often insightful. My disagreement is not with her description of the mechanics of taxation, but with her underlying assumption — at times explicit, at times implied — that concentrated wealth is inherently harmful because it deprives the federal government of resources.

The wealthiest Americans pay hundreds, thousands, or even millions of times more in taxes than the average taxpayer. More importantly, the companies they create and build make the country more prosperous and generate enormous tax revenues in the process.

This should be obvious upon reflection. The businesses created, owned, or led by members of the Forbes 400 employ millions of people and generate tens of billions of dollars in federal tax revenue each year.

Yet The Second Estate presents a very different picture: a special class of Americans who exist above the reach of the tax code and avoid contributing their fair share to government revenue. We can set aside the questionable assumption that more federal revenue is automatically beneficial for most Americans. The deeper flaws in Madoff’s argument stem less from what she says than from what she leaves out about the super-wealthy.

Myths About the Rich and Taxes

Professor Madoff is correct to distinguish between different types of federal taxes. Income from dividends, interest, and the sale of assets (capital gains) is generally taxed differently — and often at a lower rate — than income earned through wages.

Long-term capital gains and qualified dividends are typically taxed at rates of 0, 15, or 20 percent, depending on income level, while wages are subject to both income taxes and payroll taxes. Employees pay 7.65 percent in Social Security and Medicare taxes through FICA, and employers pay another 7.65 percent. Capital gains, by contrast, are not subject to payroll taxes.

As a result, a billionaire’s effective federal income tax rate can be lower than that of an employee earning a middle-class salary. Madoff correctly explains how these differences affect taxpayers who receive income through wages versus those who receive income through investments.

Suppose Adam is self-employed while Betty receives all of her income from dividends and long-term capital gains. The following table illustrates how their federal tax burdens would differ at income levels of $80,000, $160,000, and $320,000.

 

Madoff explains how wealthy individuals often borrow against their assets rather than sell them. They don’t pay taxes on those loans (though they do pay interest). This is true. Sometimes individuals with a net worth of tens or hundreds of billions of dollars will report little or no income in a year because their “salaries” or wages are very small and they didn’t realize any capital gains.

But the fact that the ultra-wealthy can avoid paying federal income taxes some years does not mean they avoid them altogether. They have to pay down their loans and lines of credit periodically. And if they want to make exceptionally large purchases or investments, loans from banks are not enough. Then they must sell shares, realize gains, and pay taxes. The super-wealthy undoubtedly pay far more dollars in taxes than any middle-class or upper-middle-class individual.

Elon Musk, for example, famously paid about $11 billion in income taxes in 2021. This particular tax bill was anomalous both for its size and because the IRS taxed much of it as ordinary income at a high tax rate. Musk had a huge block of his stock options that he had to exercise or lose. Yet even if those were the only income taxes he ever paid over the course of 50 years, that would still come out to ~$200 million in taxes annually — far more than any but the very wealthiest Americans earn over their lifetimes, let alone what they pay in income taxes. 

Most of the super-wealthy find ways to pay lower rates on their income. Still, many wealthy individuals pay vast sums, in the tens or hundreds of millions of dollars, annually on dividend income (Steve Ballmer pays approximately $250 million every year). There are also large one-time tax payments from capital gains. Ken Griffin paid roughly $4 billion in 2021, Jeff Bezos paid about $2 billion in 2020 and 2021, Jensen Huang paid more than $100 million in 2024 and 2025, and Tim Cook paid roughly $300 million in 2021. 

Even accounting for the payroll taxes paid by ordinary wage earners, these tax payments represent the equivalent of thousands upon thousands of “Adams” paying federal income taxes. And this is where the shortcomings of Professor Madoff’s argument become clear.

Her account gives the impression that the ultra-wealthy largely avoid taxes because their effective tax rates are often lower relative to their income or wealth. While wealthy individuals certainly have ways to reduce their tax liabilities and structure their assets efficiently, it is inaccurate to suggest that they simply avoid paying federal taxes. 

It is also misleading to ignore the many other taxes the super-wealthy pay. 

They pay property taxes on their land and houses every year. In places like Los Angeles and New York City, those tax bills can reach hundreds of thousands or even millions of dollars. They pay taxes when they shop, dine, or travel. They pay transfer taxes, building fees, development fees, and a host of other taxes and charges. 

That is hardly “free-riding” on the tax system — especially when they pay many times (10, 100, or even 1,000 times more) than the average taxpayer while consuming nowhere near that proportion of government services. 

The Wealth Creation the Tax Debate Ignores

Even this oversight, however, misses the most important contribution of the super-wealthy to society: wealth. Focusing on how much Elon Musk or Jeff Bezos or the Mars family pays in personal income or other federal taxes in a specific year is a red herring. It is a rounding error compared to how much wealth their companies have generated for shareholders and how much tax revenue they have generated. Focusing on the corporate income taxes paid (or not) by individual companies makes similar mistakes. 

Consider Tesla. Over the past five years, the company has reported relatively little federal income tax liability (about $48 million in 2023) despite nearly $20 billion in net income. This is largely because Tesla has carried forward previous losses, invested heavily in new capital, and benefited from certain green energy and research-and-development tax credits. Yet Tesla employs roughly 134,000 people. If the average wage for those employees is $100,000, the company would pay more than $1 billion annually in employer-side FICA taxes alone. Employees would pay another $1 billion-plus through their share of payroll taxes — not including the income taxes they pay.

Those figures are small compared to what Amazon (1,100,000 employees), Apple (90,000 employees), Meta (45,000 employees), and Alphabet (115,000 employees) pay in FICA taxes — over $10 billion annually for the employer share alone.

Madoff’s quixotic crusade against dynastic or family wealth is just that — tilting at windmills. Only a quarter or so of people on the Forbes 400 list inherited the majority of their wealth. And that number gets smaller as you move to the top 100 and then the top 50. Inherited wealth can only last if it remains invested in companies rather than cashed out or spent. For every example of inherited wealth growing, there are more examples of inherited wealth becoming depleted.

Who Owns Wealth?

All of this raises a basic question: Why should we care that families such as the Mars, Walton, or Koch families possess wealth they can pass on to future generations?

Madoff argues that the wealthy “free-ride” on the tax system. But this assumes their money somehow already belongs to the government or the public.

It does not. 

Madoff also suggests that the super-wealthy exercise undue political influence from the shadows. In this, she leaves the solid ground of analyzing existing tax rules and mechanisms to the ideological concerns and disapproval she has for large concentrations of wealth in general.

Could the tax code be fairer and better than it is? Certainly. Will her specific recommendations make it so? I’m not sure. But will politicians implement her “ideal” policies? Assuredly not. 

Besides raising revenue, the tax code should distort and discourage economic activity as little as possible. While everyone benefits from clear rules of the game that promote competition and responsibility, it’s far from clear that they would all benefit from more “tweaks” to the tax code to close loopholes. Revenue with minimal distortion, not leveling the fortunes of the super-wealthy or making sure they pay their “fair share,” should guide tax policy.

Lobbyists, insiders, and wealthy individuals have certainly influenced the tax code for their own benefit. But so have middle-class homeowners through mortgage deductions, residents of high-tax states through state and local tax (SALT) deductions, and lower-income Americans through welfare programs and tax credits. This is how the political game is played. 

Rather than criticizing the super-wealthy for minimizing their tax liabilities as best they can, policymakers should focus on reducing government spending so that everyone else’s taxes can be reduced too. Reducing political power, limiting the coercive reach of the state, and allowing individuals to keep more of what they earn would do far more to improve Americans’ lives than taking more money from the wealthy and giving it to politicians.

Such broad-based reforms would also be more just."

Yes, Americans Probably Are About 46 (or Maybe 65) Times Richer Than in 1776

By Jeremy Horpedahl.

"My post and chart from last week showed the phenomenal growth of average income in the US since the Founding. Using GDP per capita historical estimates and adjusting for inflation, this figure is about 46 times greater today than right around the time we declared independence.

It will probably not surprise you that some folks were skeptical. Could this really be true? Two major objections were raised to using GDP per capita. First, wouldn’t it be better to use a median income value rather than a mean (simple average)? Second, wouldn’t a measure of wages be better than GDP per capita?

I really would like to show you an annual series of median income data back to 1776, but unfortunately it just doesn’t exist. Good median income data are hard to find much before the 1950s, much less the 1770s. However, while median values are often better for showing levels, the growth rates of median wages and mean wages aren’t that different for periods when we have comparable data. Consider the following chart, which compares median wages (as calculated by EPI using CPS data) and mean wages (from BLS’s series for non-supervisory workers) since 1973. I have stated these in nominal terms, so don’t take this as real growth rates, but rather it is a raw comparison of two series (we could apply the same inflation adjustment to both, but that won’t change the picture, only the numbers).

 

Median wages increased by 667% and mean wages increased by 657%, almost identical. Again, these aren’t inflation adjusted, but that’s not the point of this exercise. The point is that whether you use mean or median wages, at least since 1973, the growth rates are the same. Was this true if we went back another 200 years? We can’t say for sure. But many people have this same skepticism about mean wages in recent decades. I think it is better to use median values when you have them, but we shouldn’t throw up our hands and claim we know nothing if all we have is mean wages.

Next, consider the following chart. It begins in 1790, but instead of using GDP per capita, as I did last week, it uses a measure of average wages from economic historian Lawrence Officer. This measure is for “production workers in manufacturing,” and it is a total compensation measure, meaning that it will include the value of fringe benefits as well — though these aren’t noticeable in the data until the 1930s. This is still an average value, but because it is for manufacturing laborers, it won’t be distorted by the wages of managers and owners in that industry, and it won’t be affected by the growth of new industries that might require more years of education (indeed, manufacturing wages are lowering than overall average wages today, so this is taking the hard case). I have also included a second line, which only includes manufacturing wages (not benefits) that I have blended with Officer’s compensation series starting in the 1930s, in case you think including benefits is somehow “cheating.” (Note the log scale again, as in last week’s chart.)

 

The trends here are very much in the ballpark from the GDP per capita chart I created last week. Using total compensation, wages are 65 times higher than in 1790. Using only wages, they are 49 times higher. Notice that these are both better than the 46 times multiplier using GDP per capita. How is that possible, since I am using the same price deflator in both cases? First, average hours of work have fallen significantly since the 18th century, so incomes haven’t risen quite as much as wages. Second, there was a bit of a decline in GDP per capita during the Revolutionary War, and if we use 1790 as the baseline for GDP per capita, the multiplier is 63. But again, these numbers are all in the ballpark: whether the true figure for a typical American is 46x, 49x, 63x, or 65x, this is a tremendous amount of economic growth.

If you want to look at that chart pessimistically, you will see that there is some reduction in growth rates in the past few decades. That’s true whether we use wages or compensation. This is a well known issue, and has been discussed endlessly in academic papers and on social media. I don’t want to glaze over it here, but I mostly will: the long-run trend of growth in the US is amazing. That’s true whether you use GDP per capita, or wages or compensation for production workers.

So once again, Happy 250th Birthday to the USA and all of you living in the wake of that amazing 250 years of economic growth!"

Decriminalization versus Legalization

By Jeffrey Miron.

"A new study argues that recent drug de-criminalizations in Oregon and Washington caused substantial increases in drug overdoses.

Is this plausible? And does it imply that prohibition is better than legalization?

Yes, and no.

Decriminalization means elimination of criminal penalties for drug possession. Legalization means elimination of criminal penalties for production and sale.

Standard economics suggests that decriminalization, by reducing the full price of purchasing drugs, shifts demand outward, implying greater use.

This causes, since production and sale are still illegal, a larger underground market and therefore more of the associated negatives. These include increased violence, because black market participants cannot resolve disputes with courts and lawyers; and additional overdoses, because quality control is difficult in black markets.

Thus the study’s result makes sense. But rather than supporting prohibition, it shows that full legalization – rather than decrim – is the right path. Indeed, if policy legalizes only one side of the market, it should be supply rather than demand. A related point is that legalization must not include too much regulation and taxation; that just re-creates the black market.

A possible qualification is that some decrims seem to have avoided increased violence or overdoses. The likely explanation is that in these instances, policy de-escalated supply side enforcement along with decriminalizing."

The China dish industry claimed it was a militarily strategic good in 1951

Tweet from Daniel J. Smith.

"A representative from the fine China dish industry lobbying for protectionism as a militarily strategic good during congressional testimony in 1951"

  

After decades of warnings, new data suggest the Atlantic’s vital circulation may withstand climate warming better than feared

See Shifting currents by Paul Voosen in Science. Excerpts:

"Climate models have long warned that global warming could weaken “deep-water formation”—the density-driven sinking that is the engine of the AMOC. The logic is straightforward: As Greenland’s ice sheets melt and sea ice formation declines, North Atlantic waters will freshen. Combined with warmer sea temperatures, the freshening makes surface waters more buoyant. The AMOC was thought to have shut down abruptly during past climate warmings, and a handful of researchers now argue such a tipping point could occur this century. A sputtering AMOC could trigger a sharp cooldown in northwestern Europe, rising seas along the U.S. east coast, and shifts in tropical rainfall."

"most climate researchers think the AMOC is more resilient than these worst case scenarios make it seem. Emerging evidence suggests the AMOC may not have actually collapsed in the warm climates following ice ages. More detailed climate models suggest it could weaken but not collapse in the current surge of warming. And studies of the AMOC’s present behavior do not yet show any clear signs of trouble. They’re also exposing new facets of the circulation that could buffer any eventual weakening."

"That stately flow actually swings wildly year to year, masking any long-term trend, the first RAPID measurements showed. Swings between apparent decline and recovery have since become a hallmark of AMOC monitoring, and a recurring source of alarm and reassessment."

"Gerard McCarthy remembers well the first time he saw an AMOC decline. It was 2011, and McCarthy, now a climate scientist at Maynooth University, had just joined the RAPID team. His first task was calculating AMOC’s strength. Beginning in 2009, it plunged. “Everyone was like, ‘The new guy made a mistake,’” he recalls. Others checked the numbers. The drop held. “We all realized that something dramatic had happened.”

What happened was not caused by climate change, but rather the weather. That winter, unusual swings in air pressure weakened the jet stream and shifted wind patterns, disrupting the AMOC’s flow. The decline likely contributed to a frigid European winter in 2009 and, by leaving more heat in tropical basins, also led to an active Atlantic hurricane season the following summer."

 "It seems the AMOC is not a single conveyor belt, but a belt of belts, each part operating semiautonomously."

"OSNAP has changed the picture in other ways, including by showing that overturning occurs not so much in the Labrador Sea, as models suggested, as it does farther north, in the Irminger and Iceland basins. Additional data suggest deep-water formation is migrating even farther north, into the Arctic Ocean, following the retreat of sea ice, Årthun says. “You’re expanding the reach of this cooling machine.” The northward migration could make the AMOC more resilient to warming"

"New climate model runs that capture more realistic melt from the Greenland Ice Sheet are less dire. In two preprints posted online in the past year—one led by Chuncheng Guo, a climate scientist at the Danish Meteorological Institute (DMI), the other led by Oliver Mehling, an ocean modeler at UU—researchers created multiple simulations where carbon emissions continued until 2250 and temperatures rose by up to 7°C. In both studies the AMOC weakened, losing about 40% of its strength. But it never collapsed. Both studies also suggest the weakening is reversible"

"that resilience persisted even in the face of catastrophic warming."

 "even if atmospheric carbon dioxide levels quadrupled, driving extreme warming, the AMOC would decline by 40% after 20 or so years—but once again, it would rebound."

"Evidence from past ice ages seemed to suggest the AMOC switched off entirely when massive pulses of freshwater from the melting of the North American ice sheet poured into the Atlantic. But new work, also presented at Ocean Sciences, suggests the AMOC may not have collapsed at all during these periods." 

New York’s Data Center Self-Sabotage Gov. Kathy Hochul finds another way to hurt economic development in the state.

WSJ editorial.

The article discusses how it is regulation and not data centers that are driving up costs. 

Medicaid Spending Keeps Soaring So much for Democratic claims of onerous cuts. It’s up 10% so far this fiscal year.

WSJ editorial.

China’s Economy Is in Worse Shape Than You Think

The estimate of 4.3% GDP growth is below Beijing’s lowest projection—and it’s probably far too high

By Joseph C. Sternberg. Excerpts:

"Beijing’s statisticians on Wednesday said the gross domestic product grew 4.3% year-on-year in inflation-adjusted terms in the April through June quarter. China’s economic data are notoriously prone to fiddling for political purposes. And only this March, the Communist Party set a GDP growth target range of 4.5% to 5% for the year, its most pessimistic since the 1990s."

"Meanwhile there’s accumulating evidence that the country’s true GDP growth rate may be zero, or that the economy is in outright recession. Retail sales were a bright spot in the latest data, increasing 1% year-on-year in June, but looking across recent months this measure of domestic household consumption may be stuck in neutral. Measures of investment are in free fall: Fixed-asset investment has declined 5.7% year-to-date and real-estate investment is down 18%."

"Crude imports in July hit their lowest level in roughly a decade."

"refinery output also is declining"

"demand for energy within China . . . is dropping rapidly."

"it’s hard to find anyone who thinks any of this (more economic “stimulus”) would launch a durable economic recovery. One reason domestic consumption is dipping is that previous iterations of the consumption subsidy (a trade-in scheme, akin to the Obama-era “cash for clunkers” in the U.S., that rewards replacement of old items) pulled forward in time purchases that households would have made anyway, without setting in motion a Keynesian virtuous circle of new corporate investment to meet higher demand. As for public works, China has enough and Beijing’s more important fiscal priority remains bailing out heavily indebted local governments." 

"Domestic consumption is unlikely to revive until the real-estate market has found its bottom."