Chuck Schumer’s Chip Shortage

A Micron plant in New York is years behind schedule for all the reasons you’d expect

WSJ editorial. Excerpt:

"Consider Micron’s massive fabricator project in upstate New York, which it announced in October 2022. “With the CHIPS and Science bill I wrote and championed as the fuse, Micron’s $100 billion investment in Upstate New York will fundamentally transform the region into a global hub for manufacturing,” New York Sen. Chuck Schumer boasted."

"The 2022 Chips Act provided some $53 billion, plus a 25% investment tax credit, to subsidize U.S. chip-making."

"Congress in 2024 passed a law exempting some semiconductor projects from the National Environmental Policy Act’s stringent environmental reviews. But the exemptions don’t apply to Micron’s project."

"it includes hundreds of acres of wetlands and forestland that are nesting areas for endangered bats. This makes permitting and building more complicated. Trees can only be chopped down when bats aren’t nesting—i.e., from November to March."

"Construction was supposed to start two years ago, but tree clearing didn’t begin until this past January"

"environmental impact statement numbered more than 700 pages" 

Democrats Shout Into the Wind

Now they know how it feels when they kill oil and gas projects

WSJ editorial. Excerpts:

"West Virginia’s Mountain Valley Pipeline was more than 90% complete when Fourth Circuit Court of Appeals judges canceled its permits. Congress had to pass a law to let the developer finish the pipeline so more gas could flow from Appalachia to the Southeast.

A liberal federal judge in 2020 ordered Energy Transfer to halt the oil flow and empty the Dakota Access Pipeline, which had been operating for three years. The D.C. Circuit stayed the order, but the legal battles continue. The Army Corps of Engineers on Friday issued a new 464-page environmental review for the pipeline."

"Democrats have used phony environmental concerns to block natural-gas pipelines. Former New York Gov. Andrew Cuomo nixed a permit for the Constitution pipeline, which would have delivered cheap gas from Pennsylvania to his state"

"In 2022 Massachusetts Gov. Maura Healey boasted she had “stopped two gas pipelines from coming into this state.”"

"Gas plants can produce electricity at some 80% lower cost than offshore wind"  

Can Congress Finally Reform NEPA?

A bipartisan bill would fix the main obstacle to faster U.S. projects.

WSJ editorial. Excerpts:

"Federal agencies take an average of 4.5 years to approve environmental impact statements"

"Environmental Quality, and an environmental review can add more than $4 million to project costs. Lawsuits challenging the reviews force companies to revise projects multiple times, tying up capital companies are ready to deploy."

"“The unrealized returns on projects in the permitting pipeline amount to $100 billion to $140 billion each year,” McKinsey found in a July study."

"Lawsuits filed under NEPA and a review process lifted the pipeline’s [the Atlantic Coast Pipeline] cost to $8 billion from $4.5 billion." 

A Copper Minefield of Obstruction

Will the Ninth Circuit follow the Supreme Court on NEPA and the Resolution Copper mine?

WSJ editorial. Excerpt:

"It takes on average an incredible 29 years to develop a mine in the U.S., the second longest in the world after Zambia. A major reason is lengthy environmental reviews, which inevitably draw lawsuits no matter how detailed they are. Republican Rep. Bruce Westerman of Arkansas and Maine Democrat Jared Golden are sponsoring legislation that would limit NEPA lawsuits." 

The Supreme Court Gives Permission to Build Under NEPA

The Justices issue a unanimous ruling against 3,600-page environmental reviews and endless litigation

WSJ editorial. Excerpts:

"the 1970 National Environmental Policy Act. But NEPA is supposed to let federal regulators “weigh environmental consequences as the agency reasonably sees fit,” Justice Brett Kavanaugh writes for the Court in Seven County Infrastructure Coalition v. Eagle County. “NEPA is a procedural cross-check, not a substantive roadblock. The goal of the law is to inform agency decisionmaking, not to paralyze it.”"

"The federal Surface Transportation Board approved the rail line in 2021, after a lengthy environmental review"

"“The central principle of judicial review in NEPA cases is deference,” Justice Kavanaugh says. “Under NEPA, an agency’s only obligation is to prepare an adequate report.” The regulators overseeing the proposed project, he adds, are “better equipped to assess what facts are relevant to the agency’s own decision than a court is.”"

"nothing in NEPA requires the Surface Transportation Board to study “upstream or downstream projects separate in time or place from the 88-mile railroad line’s construction and operation.”"

"agencies don’t need to “analyze the effects of projects over which they do not exercise regulatory authority.”"

"the Utah rail review was 3,600 pages"

BEAD Program and Bureaucratic Failure by Design

A $42.5 billion federal program meant to bridge the digital divide reveals how layers of bureaucracy—not lack of funding—can stall progress by design.

By Craig Eyermann of The Independent Institute. 

"How can the U.S. government spend billions to bring high speed internet service to digitally deprived Americans and have almost nothing to show for it?

On May 13, 2022, the Biden-Harris administration rolled out its plans to close what it called the “digital divide” in America. The federal government would spend billions to deliver affordable high-speed internet service to underserved communities. The administration’s “Internet for All” initiative would, in their own words, “meaningfully address fundamental economic, educational, social and health-related inequities in our country”.

The biggest part of that effort was the Broadband Equity, Access, and Deployment (BEAD) Program. Under this program, bureaucrats at the Department of Commerce would disperse $42.5 billion in grants to every corner of the United States. With so much money made available to them, surely they would realize their goal of providing high-speed internet connections to all those underserved Americans who lacked them.

Three Years Later and No High-Speed Internet Connections

Almost three years later, there’s no evidence of any American anywhere having connected to the Internet from anything the Commerce Department funded with its BEAD program grants.

Comedian Jon Stewart learned that shocking truth and the reason for it on his Weekly Show podcast. Even though they had $42.5 billion at their disposal, they appear to have had even more bureaucratic red tape at their disposal, which doomed the program. Stewart’s interview with the New York Times‘ Ezra Klein lays out the fourteen bureaucratic hoops that were thrown in the way of progress:

Here’s an excerpt of the craziness of the steps the state and local government applicants had to go through after they made it through the first seven steps, which omits some of Stewart’s more coarse reactions.

Transcript of Bureaucratic Craziness

“Having submitted their five-year plans and letters of intent, step eight is states must submit an ‘initial proposal’ to the NTIA [National Telecommunications and Information Administration],” Klein explained.

“Is that a result of their $5 million planning fund?” Stewart asked, noticeably losing hope.

“I assume, but then what was the five-year plan?” said Klein. “Like, if the five-year action plan isn’t the initial proposal, then what’s the five-year action plan?”

“Step nine, NTIA must review and approve each state’s—again—’initial proposal.’ By my read, we have had at least two initial proposals here, but that’s a different issue,” he continued.

“Step 10, states must publish their own map and allow internal challenges to their own maps. So the government has published a map. They have invited the states to challenge the map. Then states have submitted initial proposals and they then have to publish their own map and allow challenges.”

“Wait, who’s challenging it within the state?”

“Well, you know, organized interest groups, environmental groups,” Klein said. “Literally anybody. I want to say something because it’s very important. This is the Biden administration’s process for its own bill. They wanted this to happen. This is how liberal government works now.”

“This is something they instituted for their bill?”

“For their bill. This is a bill passed by Democrats with a regulatory structure written by a Democratic administration,” he said. “Step 11, the NTIA must review and improve the challenge results and the final map.”

“So, the NTIA has put forward a map. The states have challenged that map. Then the states have put forward their maps, had other challenges, and now the NTIA must review and approve the challenges to the state maps… We’ve lost nine of the applicants at that point.”

“Step 12, states must run a competitive sub-granting process—yeah, none of that could have happened along the way here. We have now lost 17 more applicants. So now 30 of 56 have completed step 12.”

“Step 13, states must submit a final proposal. All the proposals weren’t enough for NTIA. Now that goes to three of 56. So, we’ve gone in the last couple of steps from 56 had gone to this point to three or 56,” he continued.

“Step 14, the NTIA must review and approve the state’s final proposal. And that is three of the 56 jurisdictions and states are there.”

Say what you will about the politicians and bureaucrats behind the Biden-Harris administration’s costly “Internet for All” debacle. They built the exact program they wanted. Its failure was not left to chance. It was built in by design."

‘Why Nothing Works’ Review: Distrusting the Process

Beginning in the 1960s, progressives became ever more suspicious of big projects and their threats to individuals and local communities

By Judge Glock. He is director of research at the Manhattan Institute.

He reviewed the book Why Nothing Works: Who Killed Progress—and How to Bring It Back by Marc J. Dunkelman.

Excerpt: 

"These progressives typically preferred to block projects not by criticizing their aims but by objecting to their procedures. There was always need for more public hearings, public notice, commission oversight, court appeals and, most importantly, detailed study. According to Mr. Dunkelman, by the mid-1970s the federal government and half the states required developers and bureaucrats to study how proposed building projects might affect their surroundings—water tables, wildlife, traffic, air quality, historic properties.

If a procedure had been skipped or a study deemed inadequate, lawsuits could send multibillion-dollar plans back to the drawing board. One of the activist left’s crowning achievements was the 1971 Supreme Court case Citizens to Preserve Overton Park v. Volpe, which stopped the construction of a highway that would have run through Memphis, Tenn. Justice Thurgood Marshall ruled that the U.S. Transportation Department hadn’t followed an obscure legal provision requiring it to study whether there was a “feasible and prudent alternative” to taking a public park. Activists touted the case as a pre-eminent example of the people versus big power, yet the Memphis City Council had voted 4-1 for the road. A similar stalled road in San Antonio, Texas, had won 2 to 1 in a public-bond referendum. Whatever the wisdom of these urban highways, progressive activists themselves were blocking the will of the people. 

The end result of progressives’ efforts was that Hamiltonian projects became bogged down by pettifogging procedures. Mr. Dunkelman labels this tendency toward bureaucratic enervation “Jeffersonian”: Negotiations over regulations, environmental lawsuits, automated welfare payments—all are Jeffersonian since they hamstring bureaucratic discretion. According to this argument, the proposal to create what became the Public Authorities Control Board to oversee independent bureaucracies in New York is also an example of “Jeffersonian caution.” One would be hard-pressed to find examples further afield from Jefferson’s small-state vision. 

Mr. Dunkelman’s book provides a strong case for the pitfalls of excessive procedure. But like many so-called supply-side progressives—leftists who want to unburden government to accomplish their aims—he imagines that the root of our modern ills is “a failure of process.” If prospective Hamiltons could rip up the flowcharts, in this view, government could fulfill its destiny.

A more convincing case can be made that modern government’s problems come from the concrete demands progressives place on it. After all, they haven’t merely required studies; they’ve demanded union wages, affirmative-action rules, laws requiring domestic production in manufacturing, endangered-species protections, wetlands preservation, emissions regulations, and on and on. 

Mr. Dunkelman is happy to attack abstract procedures, but not the unions and other interest groups that have been the drivers of progressivism. Several times Mr. Dunkelman refers to two big projects he wants a re-empowered government to complete: high-speed rail and transmission lines for renewable power. But both are demands from narrow progressive interest groups, rather than popular projects stymied by procedural hurdles.

As for the cultural battle between Jefferson and Hamilton, there is little doubt who won. In recent years state Democratic parties have renamed their venerated Jefferson-Jackson fundraising dinners. The party’s two most important founders are now painted as corrupt slaveholders. A Broadway musical has made Hamilton an unlikely hero. Big government has swept all before it, but still nothing works. Our troubles arise from more than a distrust of power."

On This One, Tesla Is a DOGE Loser

Trump’s rollback of EV charging subsidies hurts Musk’s car company

WSJ editorial. Excerpts:

"The 2021 infrastructure bill allocates $5 billion for states to install EV chargers with the goal of building a nationwide network of 500,000 stations by 2030. The Biden Administration was slow to disburse the money because it layered on mandates. Only $511 million has been awarded, and a mere 58 stations are in operation."

"the Transportation Department paused the program to ensure state charging plans “align with current U.S. DOT policy and priorities.” As well it should. Some federally funded stations have reportedly broken down. 

States warned in their grant applications that Biden mandates, including one that stations be located every 50 miles along interstate highways, could lead to “stranded assets.” A dearth of customers in rural areas could make stations unprofitable and require states to spend taxpayer dollars maintaining them."

"the Biden auto emissions standards and waiver for California’s EV mandate. Most auto makers can’t meet either and would likely have to buy regulatory credits from Tesla to comply."

Don’t Put Coal on Ice

By William F. Shughart II. He is a professor at Utah State University.

"Let’s say it plainly: The United States needs its fleet of coal-fired power plants.

Consider, for starters, the rising demands for electricity driven by the expansion of data centers, electrification, and industrial growth. A year ago, public utilities and grid operators nearly doubled their forecasts of the additional electricity needed to power the U.S. economy over the next five years. That unanticipated increase threatens to overwhelm the nation’s already strained power supplies.

The elephant in the room is the remarkable growth of artificial intelligence and the data centers needed to support it. The newest and largest data centers, such as the Quantum Loophole project in Frederick County, Maryland; the Citadel in Reno, Nevada; the Bumblehive project south of Salt Lake City; and the Microsoft Data Center in West Des Moines, Iowa, are so massive that their power demands are equivalent to those of a city the size of Seattle. Dozens of such facilities are under construction or on the drawing board.

Despite the rapidly increasing demand for power, many regions of the country are losing existing power-generating capacity faster than it can be replaced. The troubling situation can be attributed to state-level energy mandates and a barrage of Environmental Protection Agency regulations issued during the Biden administration to force the decommissioning of coal-fired power plants and make it nearly impossible to construct new natural gas plants to take their place.

The Biden administration miscalculated colossally, believing it could offset its regulatory blitzkrieg with a massive, subsidy-driven expansion of wind and solar power, along with the transmission infrastructure needed to move such “renewable” energy around the country. What we got instead were renewable energy mandates and only a fraction of the promised new transmission capacity. In short, an electricity crisis.

Just how poorly has President Joe Biden’s green dream played out?

Consider high-voltage transmission, which renewable energy proponents claim is the key to unlocking a wind- and solar-powered future. Nationally, we’re supposed to build thousands of miles of high-voltage transmission lines yearly to move solar and wind power from where it’s produced, mostly offshore and on wind and solar “farms” in the middle of nowhere, to urban and industrial centers where it’s needed. In 2023, just 55 miles of new high-voltage lines were completed, and that number improved only slightly last year.

Building and connecting new renewable projects to regional grids is not progressing any faster. The situation facing the Midcontinent System Operator, which runs the grid for much of the Midwest, illustrates that point. Dealing with numerous financial, supply chain, and permitting challenges, renewable projects that were expected to come online simply are not doing so. In February 2024, the MISO warned that if its member utilities do not postpone plans to retire coal power plants or expedite the addition of more generation resources, a possible 2.7-gigawatt shortfall in the 2025 power supply could balloon to 14 gigawatts by 2029, enough to power 10 million homes.

The MISO isn’t the only grid operator that sees a troubling imbalance between the power we need and what will be available. The North American Electricity Regulatory Corporation, which oversees the nation’s power supply, already is warning of possible blackouts affecting most of the country within the next decade. Many regions could face them even sooner.

Objectively, avoiding an energy Armageddon shouldn’t be hard. But meeting the growing electricity demand requires using every tool at our disposal.

On Day One in office, the Trump administration should put the wheels in motion to reverse Biden’s renewable energy mandates and return sanity to the nation’s energy policy. We need to build more coal, gas, and nuclear baseload power plants to meet soaring demand, and we should also work to ensure that today’s existing plants stay online as long as needed.

The nation’s fleet of coal-fueled power plants is a vital asset that can help maintain grid reliability, address rising power demands, and guide us toward our energy future. Protecting it should be a top priority for the new administration."

How Madrid built its metro cheaply

Madrid tripled the length of its metro system in just 12 years — faster and cheaper than almost any other city in the world. What can its expansion teach other cities?

By Ben Hopkinson. He is head of research at Britain Remade, where he works on policy development and analysis. Excerpts:

"In 1995, the Madrid Metro was 71 miles (114 kilometers) long. That would make it the 51st longest metro in the world today, reasonable considering Madrid is the 57th largest city in the world by population. Yet 1995 was the beginning of a revolutionary building spree. Over the course of the next 12 years, the metro grew by 126 miles (203 kilometers), nearly tripling in length. This expansion made it one of the world’s fastest-growing metros, on par with Beijing and Shanghai. Today, Madrid has the sixth longest metro outside of China, and the third longest in Europe after London and Moscow.

The new lines went all over the Community of Madrid, the region the City of Madrid is in. They included links to Madrid’s airport, a new circular line around the city center, extensions into the suburbs packaged with new homes, and new cross-city lines. There was even a circular line connecting five different towns to the southwest of the city of Madrid called MetroSur (South Metro)."

"Madrid was able to build so much because of one thing: low costs. The 35-mile (56 kilometer) program of expansion between 1995 and 1999 cost around $2.8 billion (in 2024 prices). New York’s 1.5-mile extension of the 7 subway to Hudson Yard cost about the same (adjusted for inflation). London’s Jubilee Line Extension, built at the same time as Madrid’s expansion, cost nearly ten times more per mile than Madrid’s program. The World Bank described Madrid’s costs as ‘substantially below the levels that were internationally considered possible’. Since the 1990s, Madrid, and Spain as a whole, has continued to build infrastructure at some of the lowest costs in Europe."

"Madrid’s success provides four key lessons for policymakers and engineers in places that struggle to cheaply build new transit.

• City-level powers rewarded fast, inexpensive delivery. The structure of the Community of Madrid concentrated the planning, funding, and construction powers at the right level to deliver the project. This enabled political entrepreneurs to make electoral promises about delivering new infrastructure and have their political fortunes dependent on success.
• Time is money. The regional government streamlined environmental and planning processes and the company that oversaw construction expedited the building by tunneling 24/7.
• Trade-offs matter and need to be explicitly considered. The metro planners recognized the trade-offs that exist between station design and cost, signaling complexity and how much testing is required, and tried-and-tested technology versus innovation.
• A pipeline of projects enables investment in state capacity. Madrid built the necessary state capacity to deliver the project, with experienced engineers and managers working in-house to deliver the technical design and oversee construction. The public company tasked with construction could pay extra to hire experts and procured based on cost and quality instead of just the lowest-cost bid."

"Former Madrid Metro boss Manuel Melis Maynar’s advice that ‘design should be focused on the needs of the users, rather than on architectural beauty or exotic materials’, wasn’t followed by London’s Jubilee Line Extension, built at the same time as the Madrid Metro extensions. Each of its stations had a different architect, creating large, complex designs with vast chasms between the surface and the tracks. While these were popular with architecture critics – several stations were shortlisted for Britain’s most prestigious architecture award, the RIBA Stirling Prize – they were also expensive to construct. London Bridge’s Jubilee line station cost £217 million in 2024 terms.

Madrid took a different approach. As far as possible, stations were standardized, using copy-and-paste designs. This simplified the engineering and design work required, while construction crews would gain experience and efficiency in building stations. The new stations are simple and replicable and are also easy to navigate. Busier stations have sculptures and murals to add character, a far cheaper way to spruce up a station than building an architectural behemoth. While per-station costs aren’t available, even if the entire budget of the 1995–1999 program was only spent on stations, they would still be just £60 million each in 2024 terms, less than a third as much as London Bridge’s Jubilee line station."

China Is Building 30,000 Miles of High-Speed Rail—That It Might Not Need

The train system is one of the biggest public works in history, and it’s becoming a giant money pit

By Brian Spegele of The WSJ. Excerpts:

"one of the biggest public works in history, soon to exceed 30,000 miles of high-speed rail"

"It’s becoming a giant money pit. China has spent more than $500 billion on new tracks, trains and stations in the past five years, while the country’s national railway operator, China State Railway Group, is nearing $1 trillion of debt and other liabilities. Just keeping up with its debt requires $25 billion annually."

"China’s population is projected to shrink by around 200 million people in the next three decades. Some of the newest lines are in effect duplicating older ones."

"On a recent afternoon, Fushun Station itself was practically deserted, with around 20 travelers milling about in a cavernous waiting room with seats for 1,000. Another even newer station a few miles up the road was similarly empty."

"China State Railway envisions adding nearly 15,000 miles more by 2035, costing hundreds of billions of dollars."

"high-speed trains are far more costly than alternatives, such as traditional trains or buses, which many economists believe are sufficient for much of the country."

"China State Railway’s liabilities grew to a record of about $860 billion as of September. The total debt tied to China’s rail expansion is even higher, since cash-strapped local governments are being required to bear many of the costs for new projects."

"The rail investments also divert resources away from initiatives such as building a stronger social safety net that economists say China needs to help its aging population and increase domestic consumption over time."

"one of China’s priciest rail projects is taking shape, linking Tibet’s capital of Lhasa with the central city of Chengdu in Sichuan, at a cost of more than $50 billion."

"While not technically high-speed rail, the trains would run at around 100 miles an hour over the 13-hour journey. That’s still far longer than the 2½ hours it takes to fly from Chengdu to Lhasa, with plentiful daily options. Flights can go for as little as $50 one way, making it tough for the trains to compete."

"Efforts to boost profitability are constrained by a desire to keep ticket prices low, which builds goodwill for Xi and the government. A study by Chinese academics last year found that prices for high-speed rail tickets in China were less than a quarter of the average cost of such tickets globally."

"China is now practically duplicating some routes. High-speed trains have operated for years between the inland cities of Chongqing and Kunming, a journey that takes about five hours. China State Railway says a new $20 billion line being built between the cities, following a different path, will cut travel time to about two hours, while supporting the regional economy and promoting national unity." 

Regulations Are Making It Harder To Meet the Nation's Power Demands

Federal regulators have rejected a proposal to increase electricity generation from a nuclear power plant to a large data center in Pennsylvania.

By Jeff Luse of Reason. 

"The Federal Energy Regulatory Commission (FERC) recently rejected a request to increase power generation for a data center located next to a nuclear power plant in Pennsylvania. The U.S. will need to rapidly scale up power generation to meet future demand from AI and large data centers. This decision shows how challenging this task will be.  

In March 2024, Talen Energy sold its 960-megawatt (MW) data center to Amazon Web Services (AWS) for $650 million. The data center is a co-located facility, meaning it will draw electricity directly from Susquehanna Steam Electric Station—a nuclear power plant that generates 2.5 gigawatts of power annually—rather than from the grid. 

Under the agreement between Talen and Amazon, AWS must adhere to contractual power commitments that were slated to increase in 120 MW increments over the next few years, eventually reaching 960 MW. In June, PJM Interconnection, the organization that oversees wholesale electricity markets in Pennsylvania and 12 other states, filed a request with FERC to allow the nuclear power plant and local utility to increase the amount of electricity going to the data center from 300 MW to 480 MW. 

The proposal was denied for being too vague and failing to demonstrate why 300 MW is inadequate to meet AWS' needs. FERC's decision does not void the agreement between AWS and Talen. Instead, it limits the amount of electricity that Susquehanna Steam Electric Station can provide to AWS' data center to 300 MW until federal regulators decide otherwise. 

Travis Fisher, director of energy and environmental policy studies at the Cato Institute, tells Reason that FERC made the right decision. As Fisher and other opponents of the measure see it, approving the request would have allowed AWS to draw more electricity from the grid without paying for it. This could incentivize more co-located facilities to do the same. 

Co-located facilities have received support from some utilities and industry experts who contend that they can bring generation to large-load customers, such as data centers, more quickly than through the standard regulatory process. And, because additional transmission doesn't need to be built—the cost of which gets passed on to consumers through higher rates—co-location facilities can lead to cost savings for ratepayers. 

FERC's decision will not likely impact big tech's interest in nuclear power to meet the energy needs of data centers. "The power-hungry demand from big tech is still there and likely growing. FERC's decision narrows the contractual options slightly, but even co-location is still on the table if co-located loads are willing to pay for network transmission service," Fisher says. 

While co-locating facilities can be an innovative solution to expedite new generation, the real issue that needs to be addressed is reforming the country's burdensome permitting process, Kent Chandler, a resident senior fellow in energy and environmental policy at the R Street Institute, tells Reason. 

The interconnection queue, which is the backlog of energy projects that are seeking approval to connect to the grid, has increased "eight-fold over the last decade, and is now more than twice the total installed capacity of the existing U.S. power plant fleet," according to the Lawrence Berkeley National Laboratory. 

Developers also face a rigmarole of state and federal environmental reviews, restrictive regulations, and NIMBYism that make it nearly impossible to build projects on time and within budget. For instance, the 550-mile SunZia transmission project, first proposed in 2006, only broke ground last year and is expected to start commercial operation in 2025.  

A second Trump administration, which will likely strike down the Environmental Protection Agency's greenhouse gas rule for power plants and roll back parts of the Inflation Reduction Act "will improve grid reliability, make wholesale markets more efficient, and keep costs in check for consumers, all of which will make FERC's job easier," says Fisher. 

Still, absent a comprehensive permitting reform bill that shrinks the role of the federal government, developers in the U.S. will be unable to rapidly build out power generation to meet future demand."

The EPA process to finalize the grant agreements is complicated and depends upon a federal bureaucracy that isn’t renowned for speed

See Ports Race Against the Political Calendar to Secure $3 Billion in Clean-Energy Grants: The federal support could be rescinded by a new administration if projects aren’t finalized soon by Paul Berger of The WSJ. Excerpts:

"Ports around the U.S. are rushing to nail down green-energy projects to ensure they receive their portions of $3 billion in new federal grants, funding that faces tight government deadlines and potential disruption from the presidential election.

The Environmental Protection Agency awarded the money this week to dozens of ports for investments such as new solar arrays, upgrades to electric shore power and purchases of thousands of new electric- and hydrogen-powered heavy-duty lifting equipment and trucks.  

The agency aims to finalize most of the 55 awards by the end of December so that the federal government is legally bound to make the payouts, said Ian Gansler, director of government relations at the American Association of Port Authorities. 

The process is playing out against the backdrop of an election next week that will usher in a new administration and amid Democratic concerns that a Republican White House might roll back green spending.

The EPA process to finalize the grant agreements is complicated and depends upon a federal bureaucracy that isn’t renowned for speed. “Our ports have had complicated and difficult experiences with grant obligations on just about every grant program at federal level,” the AAPA’s Gansler said. “It’s not a given.”"

"The awards aren’t guaranteed until the EPA formally obligates the money for each project, a senior EPA official said. 

To reach that stage, the ports and the EPA must sign off on a work plan, a budget and compliance with federal rules and regulations."

"California is moving to mandate the purchase of heavy-duty trucks powered by batteries or hydrogen. But adoption of the new technologies has been slow. Clean technology trucks can cost three times more than conventional diesel vehicles and access to charging and refueling infrastructure is scarce."

The Schumer Permitting Exception for Semiconductors

Computer chips get a NEPA reprieve, but the rest of the economy needs one too

WSJ editorial. 

"Wonder of wonders, miracle of miracles. Democrats in Congress have finally conceded that the U.S. economy needs permitting reform—at least if you make computer chips. Herewith a tale of political favoritism and industrial policy.

The House on Monday passed the Building Chips in America Act, which is a cleanup job for the 2022 Chips and Science Act. While the previous law doled out $39 billion to build semiconductors, the new bill will help projects shorten the path to approval under the National Environmental Policy Act (NEPA). The bill passed the Senate in December and President Biden is eager to sign it.

Chip makers will get several ways to skip environmental reviews. They can earn an exemption by starting construction before the end of this year, which several have already done. NEPA rules will also be waived for companies that receive loans rather than grants through the Chips Act, or use federal grants for less than 10% of their total project cost.

More House Republicans than Democrats voted for the bill, and the GOP support is easier to explain. Most Republicans have sought for years to streamline permitting across all industries. Even Republicans against chip subsidies would prefer projects to move quickly once the funds are appropriated.

But Democrats are breaking their usual NEPA habit. Senate Majority Leader Chuck Schumer has blocked multiple attempts at permitting reform, including a House proposal in May to speed up energy production and transmission. The green lobby sues and sues some more under NEPA to slow projects for years. The average wait is 4½ years, according to a 2020 review by the White House Council on Environmental Quality.

Without the exemptions, chip makers would likely face similar delays. A large fabrication plant can consume as much water each day as 300,000 people, and only 15% to 20% of it is recyclable, according to a study by the research firm Interface. That’s catnip for endless bureaucratic review and lawsuits. The climate lobby opposed the Building Chips act, and 112 Democrats voted no in the House.

So why did the chip exception pass? Local and election politics. Democrats have made manufacturing a main theme of this year’s campaigns and want to promote more projects before Election Day. Mr. Schumer is also crucial to this NEPA override. The new bill will likely speed construction for Micron Technology’s plant near Syracuse, N.Y., which was set to break ground this year but has been tied up by the environmental review process. It’s good to be the Majority Leader.

The chip exception shows how much NEPA permitting reform is needed for the entire economy. Companies shouldn’t need a Majority Leader in their pocket to get permission to build the plants and products that drive American prosperity."

The Government's Permitting Regime Is Choking the Economy

Housing costs, job availability, energy prices, and technological advancement all hinge on a web of red tape that is leaving Americans poorer and less free.

By Veronique de Rugy. 

"Vice President Kamala Harris thinks U.S. Steel should not have the right to sell its business to Japan's Nippon Steel. Previously, some Republican senators thought they too should have the ability to kill the deal between private companies. And it doesn't stop there. During the pandemic, airlines had to get the government's permission to hand out hand sanitizer to passengers. Energy projects are subjected to years of permitting processes. And, of course, in most places, Americans aren't allowed to build what they want on their own property without subjecting themselves to government authorization.

Welcome to the permission-slip economy. It shouldn't be this way.

Permitting reform isn't just bureaucratic minutiae; it's a critical, deeply moral issue for anyone who believes in free markets, individual liberty, and economic progress. Our permitting regime is a web of red tape that stifles innovation, slows growth, and leaves Americans poorer, less free, and increasingly frustrated with a government more interested in regulating than enabling prosperity.

This isn't some esoteric topic for policy wonks; it's about the real, tangible effects of overregulation on Americans' daily lives. Housing costs, job availability, energy prices, and technological advancement all hinge on how our government handles permits. And right now, it's failing miserably.

Take housing. Some areas like California and New York City face a crisis largely due to onerous permitting processes. Builders must navigate a Kafkaesque labyrinth of regulations just to break ground, assuming they are even allowed to build. These delays add years to construction and inflate costs by tens of thousands per unit.

This isn't mere inconvenience; it's a genuine disaster for middle- and low-income families priced out of the market. The American dream of homeownership is being strangled by red tape. Worse yet, Americans are priced out of lucrative labor markets because rents are so artificially inflated in job-rich cities.

But that's just the beginning. Permitting processes are choking the energy sector. Important infrastructure—pipelines, wind farms, grid modernization—is being held up for years by endless environmental reviews, public comments, and lawsuits. Now, two judges have signaled to developers that permits which took years to obtain could be canceled on a whim if subjected to pressure from the climate activists.

This isn't just bad policy; it's economic sabotage resulting in higher prices, less reliable supply, and missed opportunities for cleaner, more efficient energy.

What about other infrastructure? Roads, bridges, and transit systems fail to get fixed when approval for repairs takes years or sometimes decades. An outdated, bloated process prioritizes procedure over results, making some projects obsolete before they begin. Meanwhile, the government wastes massive amounts of money on infrastructure subsidies when all we need is to allow people to build.

The free market thrives on innovation and speed, allowing swift responses to societal needs. The current system is its antithesis—slow, cumbersome, and designed to prevent change rather than facilitate it.

It's not just harming businesses; it's harming everyone. Imagine what we could achieve with reform: affordable housing, more jobs, lower energy prices, modernized infrastructure. We could unleash a new wave of American innovation and growth. Yet these reforms are repeatedly blocked by bureaucrats protecting their turf, politicians appeasing special interests, or activists who believe halting progress is virtuous.

The time for permitting reform is now. Every delay means lost opportunity for Americans who deserve better: a government facilitating progress, not impeding it; a truly free market, not one shackled by bureaucracy; a future where prosperity trumps paperwork.

The good news is that there are many permitting reform ideas out there. Of course, in an ideal world, building and innovating should generally be permitted by default. Short of this, creating a "one-stop-shop" federal permitting agency to reduce redundancies—a single point of contact for applicants to coordinate between different agencies—should be a priority. This would be coupled with strict timelines for permit reviews, including a "shot clock" mechanism where permits are automatically approved if no decision is made by the deadline.

Environmental reviews should be streamlined by radically reforming the National Environmental Policy Act process, setting page limits on environmental impact statements, and allowing for more categorical exclusions for routine or low-impact projects. State-level reforms should be encouraged through federal incentives, and a "presumptive approval" system should be implemented for routine projects.

This isn't just good policy; it's a moral imperative. Permitting reform is about restoring a healthy power balance between government and individual and ensuring that America remains a place where innovation thrives, entrepreneurs succeed, and opportunity is universal. It's about reclaiming the principles that made this country great."

Lights Out in La La Land

Blackouts hit Los Angeles as climate policies wilt in the heat

WSJ editorial. 

"Meet modern life in Los Angeles. On Sunday night the Hollywood Bowl had to cancel a concert because of a city power outage. On Saturday a brief blackout disrupted a University of Southern California football game. Why aren’t La La Land’s progressive leaders upset? Maybe because they’re partly responsible.

Heat waves with triple-digit temperatures are unpleasant, though not unusual during the summer in the South and West. Yet Los Angeles’s electric power system suffered widespread failures this weekend as temperatures surged, causing more than 70,000 utility customers in the city and surrounding neighborhoods to lose power, including the Los Angeles Coliseum and Hollywood Bowl.

Tens of thousands of Californians in other parts of the state also lost power, but L.A.’s grid meltdown was the worst. Its municipal utility, the Los Angeles Department of Water and Power (LADWP), faulted overloaded cables and overheated equipment. Customers were told they might not get power back for more than 24 hours. Better crash at a friend’s place—and hope it doesn’t lose power.

L.A. Mayor Karen Bass blamed the outages on “extreme heat.” But the electric systems in Arizona, Texas and Nevada withstand sizzling temperatures without buckling. Why can’t L.A.? Perhaps because the municipal utility has prioritized the city’s climate goals over hardening its system and replacing aging equipment.

Former Los Angeles Mayor Eric Garcetti in 2021 announced plans to put the city “on the fast track to a 100% renewable energy future.” He was joined by LADWP leaders and Energy Secretary Jennifer Granholm, who declared the city’s “study” would be “proof that the clean energy transformation is not only possible, but preferable.” Sure, if you don’t mind blackouts.

LADWP has been spending heavily on building out green energy and subsidizing electric vehicle chargers. But something has to give, and that has been electric reliability. The utility has skimped on grid repairs to prevent rates from surging even more than they have. Since January 2021, electric prices in the Los Angeles metro area have climbed 36%.

Los Angeles is a portent of the not-so-bright green future that awaits America if today’s climate policies continue."

Judges Say You Can’t Build That

Two case studie—on LNG and oil drilling—in why the U.S. desperately needs permitting reform

WSJ editorial.

"Kamala Harris has walked back her support in 2019 for a nationwide fracking ban. It’s an impressive rhetorical backflip, but will she push back against her friends in the climate lobby who are using the courts to restrict oil and gas production?

Consider an August court ruling that could stop almost all offshore oil production in the Gulf of Mexico. Federal Judge Deborah Boardman struck down a 2020 environmental assessment by the National Marine Fisheries Service that had analyzed risks to endangered species in the Gulf from oil drilling.

Green lobbies claimed the agency’s “biological opinion” underestimated risks from potential spills to threatened species and lacked sufficient protections for the rice whale. The judge largely agreed, and courts typically remand environmental assessments to agencies for revisions when they find shortcomings.

Not Judge Boardman, who vacated the assessment, meaning new drilling permits and leases can’t be issued until a new biological opinion is completed and existing ones may also be legally void. The upshot? Oil production in the Gulf could grind to a halt in December when the vacatur takes effect. Will a Harris Administration appeal such verdicts by willful liberal judges?

As another example, the D.C. Circuit Court of Appeals recently vacated a Federal Energy Regulatory Commission permit for NextDecade’s Rio Grande liquefied natural gas (LNG) export project. The D.C. Circuit agreed with green lobbies that claimed FERC failed to sufficiently analyze how the project would affect “environmental justice.”

This is the first time a court has vacated a permit for an LNG export project. It creates enormous uncertainty since the project is already under construction. Work may have to stop unless the developer wins a stay. The decision also adds uncertainty for investors in other fossil-fuel projects and U.S. allies who are counting on LNG exports.

Obtaining permits for energy projects typically takes several years, but courts are putting developers on notice that they can cancel them at any time. Why would the Japanese and Europeans sign long-term supply contracts with U.S. LNG projects? Such contracts are usually needed to raise capital from investors.

Companies could now have a harder time financing fossil-fuel projects needed to keep the lights on in Europe and the U.S. The D.C. Circuit late last month also vacated a FERC permit for a gas pipeline expansion in the Northeast that is needed to ensure electric reliability in the region after nitpicking the agency’s analysis of its climate impact.

These court decisions are a cri de cœur for Congress to enact permitting reforms that limit abuses of the legal system. Yet the Biden Administration has abetted the climate lobby by stringing out environmental reviews of fossil-fuel projects and requiring CO2 emissions analyses that give opponents more ammunition for legal challenges.

This is one reason business investment has lagged under President Biden despite his $1.2 trillion Green New Deal. Ms. Harris wouldn’t need to ban fracking to limit oil and gas production. She could do what Democrats in California have done to destructive effect: Use regulation and litigation to scare away investment."

Barriers to Energy Supply Are Everywhere—Let’s Get Serious about Permitting Reform

By Travis Fisher and Josh Loucks.

"Just north of Boston in Everett, Massachusetts sits the poster child for irrational energy permitting in the United States. The Everett Marine Terminal is a facility that connects imported liquefied natural gas (LNG)—often from Trinidad, more than 2,200 miles away—to natural gas delivery networks in New England. This is an absurd outcome for at least three reasons:

1. New England demands natural gas, which generated 55 percent of the electricity on the New England power grid in 2023 and heats about half of the homes in Massachusetts,
2. Abundant natural gas resources are being developed nearby. However, states like New York can abuse environmental statutes like the Clean Water Act to block any new pipeline that would move shale gas to New England. The Marcellus shale gas play (the most productive formation in the country) extends through Pennsylvania into New York, which shares a long border with Massachusetts, and
3. Even if no new pipelines were built through New York state from Pennsylvania to Massachusetts, several American LNG export terminals (in Maryland, Georgia, Louisiana, and Texas) could supply New England if not for arcane laws like the Jones Act. As my Cato colleague Colin Grabow explains, the Jones Act “restricts domestic shipping to vessels that are US-flagged, built, owned, and crewed,” which effectively bans LNG shipments between US ports.

It would be a dark comedy of errors if the people of New England suffered because of inept energy policies and unnecessary barriers to energy resources even beyond predictably higher prices. As one example, fuel security has been a concern for the New England grid for several years, and many believe it is a matter of time until the region faces blackouts during a prolonged winter storm. James Danly, former commissioner and chairman of the Federal Energy Regulatory Commission (FERC), stated:

Some areas of the country, particularly New England, are suffering the effects of severe natural gas transmission capacity constraints. … Without action being taken to relieve these constraints, an eventual failure of the electric system in some regions appears very likely.

Although New England epitomizes the hobbled state of energy production and delivery in America, it is by no means the only region facing steep barriers to new energy supplies. American energy production from all resources (and in all regions) is impaired by permitting issues.

The recent growth in wind and solar energy has placed those industries among the energy suppliers in the United States that face steep regulatory barriers to new projects, a position the oil and natural gas industries have occupied for years. In other words, now that wind and solar have joined the party, longstanding permitting problems are receiving renewed attention from lawmakers.

The Senate’s Draft Permitting Bill

Released in late July, the Energy Permitting Reform Act of 2024 (S. 4753) appears on the surface to be a step toward more production of both hydrocarbon and renewable energy resources. However, the draft legislation fails to address fundamental challenges to all energy resources and unreasonably favors specific resources like onshore renewables and offshore wind. The strongest provisions of the legislation—including an apparent rebuke of the Department of Energy’s pause on LNG exports—are watered down by several weak provisions.

Onshore Renewables: Section 207 (Improving Renewable Energy Coordination on Federal Land) requires relevant federal agencies to “establish a target date for the authorization of not less than 50 gigawatts of renewable energy production on federal land by not later than 2030.” This provision builds on language in the Energy Act of 2020, which established a goal of 25 gigawatts by 2025. Section 207 also provides for the 50-gigawatt goal to be revised periodically.

Offshore Wind: Section 302 (Offshore Wind Energy) requires the Secretary of the Interior to “establish an initial target date for an offshore wind energy production goal of 30 gigawatts,” which dovetails with President Biden’s offshore wind goal of 30 gigawatts by 2030. Total installed offshore wind capacity in 2023 was 42 megawatts, just 0.14 percent of the 30 gigawatt (30,000 megawatt) target. In earlier articles, we have detailed the high cost of offshore wind.

Transmission: Sections 401 (Transmission Permitting) and 402 (Transmission Planning) would accelerate the buildout of electric transmission by codifying and expanding several policies included in FERC’s Order No. 1920. We critiqued that order earlier this year because it would “socialize the cost of the most aggressive climate and renewable energy goals of some states and corporate customers at the expense of consumers and taxpayers everywhere.”

For opponents of FERC’s Order No. 1920, the language in sections 401 and 402 should be troubling because one of the key arguments against the order is that it lacks a statutory basis and could be overturned by the courts in a post-Chevron world. The Senate bill also weakens the cost allocation language in Order No. 1920 by further reducing the benefits threshold from “roughly commensurate” with costs (a standard established in case law) to not “trivial in relation to the costs sought to be allocated.” (Page 49)

Taken together, the transmission provisions are a step in the wrong direction that would be codified in statute, preempting any potential court victory over FERC Order No. 1920.

Subsidies on Steroids

As the saying goes, “There is no transition without transmission.” Under current law, taxpayers will foot the bill for the energy expansion enabled by more transmission. Specifically, subsidies in the Inflation Reduction Act (IRA) are available to various resources that require an expanded transmission grid to interconnect and deliver energy. The potential $3 trillion cost to taxpayers will only be intensified and accelerated by the expansion of transmission for renewables.

Today, the lack of available transmission is a barrier to new-generation technologies eligible for the tax credits in the IRA. For example, generators can only claim the Production Tax Credit (PTC) if they can produce energy and deliver it to the grid (and avoid being curtailed for lack of transmission capacity). Further, PTC eligibility will expand to include even more resources in 2025, so the pressure to expand transmission will only grow in the coming years as these resources rush to harvest subsidies. Expanding the transmission system for the benefit of subsidized resources would hurt taxpayers because it would put the PTC on steroids.

A Free-Market Path Forward

It is an unforced error that we face energy scarcity in a nation that leads the world in natural gas production by a wide margin and has a wealth of renewable energy potential and hydrocarbon reserves. By favoring a resource-neutral set of reforms, policymakers can enact lasting, non-distortionary permitting reforms and unleash American energy. But real reform, as the Competitive Enterprise Institute points out, requires amending underlying environmental statutes, eliminating resource favoritism, and repealing distortionary energy subsidies (don’t forget to throw in Jones Act reform for good measure!). The Senate’s recent attempt doesn’t cut it."

$1.2 Trillion Bipartisan Infrastructure Bill Off to a Very Slow Start

By Marc Joffe of Cato.

"Enacting legislation and realizing its purported benefits are two very different things: a lesson now being learned by supporters of the 2021 Infrastructure Investment and Jobs Act (IIJA), known colloquially as the bipartisan infrastructure bill. The law, which dedicated $1.2 trillion to a variety of infrastructure initiatives, has yet to yield many of its expected deliverables.

Recent headlines have exposed two glaring implementation shortfalls. Although the IIJA included $42.5 billion for rural broadband, these funds have yet to add any high‐​speed internet service to the nation’s countryside. And $7.5 billion allocated to electrical vehicle charging infrastructure has produced only eight federally funded charging stations to date.

Among the reasons given for the slow progress on these initiatives include complex requirements for grantees, Buy America requirements, and preferences for unionized employees and those who have been involved with the justice system.

These factors, along with general inflation, are also impacting transit and rail projects championed by IIJA supporters. Some of these projects may never materialize, while others will take a decade or more to complete while serving only a limited number of passengers.

Amidst escalating costs, Houston Metro decided to pause construction of a 25‐​mile bus rapid transit line that would have received $939 million of IIJA funds. Metro staff estimated that the University Corridor BRT’s construction cost would have been $2.28 billion versus a previous estimate of $1.57 billion, and that annual operating and state of good repair costs for the line would have totaled $323 million. This is a lot of money to transport an estimated 19,400 daily passengers.

Another IIJA‐​funded transit project facing cancellation is New York’s Second Avenue Subway extension. After Governor Kathy Hochul pulled the plug on the Manhattan congestion pricing initiative, the Metropolitan Transportation Authority no longer has enough money to cover its $4.3 billion local share of the project, which would have attracted $3.4 billion in federal funds. It remains to be seen whether Hochul will reverse course on congestion pricing after the November election.

If she does not, the Federal Transit Administration will have to allocate IIJA funds to even less worthy projects. And, California, home of the never‐​ending $128‐​billion high‐​speed rail boondoggle, has several to offer.

For example, the FTA is considering a 1.3‑mile rail extension in San Francisco that has a total cost of $8.25 billion. The new segment will extend the lightly patronized Caltrain system further into San Francisco’s empty downtown. Next up would be a second rail tunnel under the San Francisco Bay even though utilization of the current tunnel is well below its 2015 peak. That project alone is likely to cost more than $45 billion and could single‐​handedly absorb all remaining IIJA transit capital funds.

With respect to intercity rail, the largest share of IIJA funds are being devoted to Amtrak’s Northeast Corridor, which is a reasonable choice given the preponderance of passengers located between Boston and Washington. But the high cost of executing projects on this corridor limits the opportunities for service improvements. Instead, Amtrak will be largely treading water.

The biggest IIJA‐​funded Amtrak project involves replacing infrastructure connecting New York and northern New Jersey, including a tunnel under the Hudson River and a bridge over the Hackensack River, which both date from 1910. A second project will replace a Civil War era tunnel west of the Baltimore station.

These two projects will last well into the 2030s (if not longer) and will cost $23 billion (before overruns). Once done, they will provide important reliability benefits but only minimal travel time improvements for those using Acela to get from New York to Washington.

And while passengers wait for the new projects, Amtrak service may well deteriorate. In June 2024, New York area passengers got a taste of what may be ahead as Amtrak service was repeatedly disrupted due to power issues.

So despite Congress appropriating tens of billions of dollars, the nation’s rail and bus passengers are likely to see little in the way of new travel options or speed improvements, especially over the next five years. Once all the money has been spent (by around 2040), it is safe to predict that only a small number of new passengers will be lured away from cars and planes."

The Nobel Laureates Strike Out

Prize-winning economists speak up for President Biden’s economic policies—the same policies they predicted would ease inflation and spur growth

By James Piereson of The Manhattan Institute. 

"Sixteen Nobel Prize-winning economists have signed a public letter in advance of Thursday’s presidential debate endorsing President Biden’s economic policies and criticizing Donald Trump’s. They write:

While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s. In his first four years as President, Joe Biden signed into law major investments in the U.S. economy, including in infrastructure, domestic manufacturing, and climate. Together, these investments are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition. 

The economists support Biden’s reelection campaign and warn that Trump’s tax-cutting proposals will reignite inflation and destabilize the nation’s economic standing in the world. The message was drafted and circulated by Joseph Stiglitz and signed by other luminaries, including Edmund Phelps (Columbia University), Robert Shiller (Yale), Paul Romer (Boston College), Angus Deaton (Princeton), Oliver Hart (Harvard), and others. All are known as liberal or left-leaning economists with attachments to the Democratic Party.

In 2021, 15 of these same economists, including Stiglitz, Phelps, Shiller, Hart, Romer, and Deaton, signed a similar public letter endorsing Biden’s Build Back Better agenda, which contained spending proposals for climate initiatives, health-care subsidies, schools, housing, and other causes. That bill eventually passed Congress with a $1.9 trillion price tag. Several pieces of a pared-back plan were eventually incorporated into the so-called Inflation Reduction Act of 2022, with an estimated cost of around $800 billion. The prize-winning economists had this to say about Biden’s economic proposals: “Because this agenda invests in long-term economic capacity and will enhance the ability of more Americans to participate productively in the economy, it will ease longer-term inflationary pressures.”

The economists also claimed that Biden’s agenda includes “a broader conception of infrastructure” that went beyond spending on roads, bridges, and the like to include investments in human capital, research, public education, and health care. This is a familiar Democratic Party talking point: expenditures on various social causes are really “investments.”

How did it all work out? The expert economists were badly mistaken on inflation. They said that Biden’s spending packages would “ease inflationary pressures,” but everyone understands today that those same policies stoked inflation. When they signed their 2021 letter, the consumer price index stood at 273; since then, it has surged by at least 15 percent, to its recent level of 313. This is called “being wrong.”

Interest rates have also surged since then, much to the detriment of prospective homebuyers and those planning large expenditures for autos, home appliances, and school and college tuitions. The interest rate on 30-year mortgages has more than doubled since the 2021 letter, from 2.8 percent to above 7 percent today. The prime lending rate, used by banks for most loans, swelled from 3.2 percent in 2021 to 8.5 percent today. The economists would do well to ponder their performance as forecasters.

We have no evidence to suggest that Biden’s spending packages promoted economic growth. Real GDP surged in 2021 to 5.8 percent, mostly a bounce-back from pandemic era lockdowns, but it has declined and levelled off since then, to 1.9 percent in 2022 and 2.5 percent in 2023. In a recent forecast, the Conference Board projects that growth in 2024 is likely to slow to less than 1 percent (year over year). Contrary to what our Nobel laurates would have us believe, it is more likely that Biden’s policies have caused inflation and rising interest rates that have retarded economic growth.

Then there is the federal debt, made worse by the Build Back Better and Inflation Reduction Acts. When the economists signed their letter in 2021, and before the new surge in spending, total federal debt was $28.5 trillion—an enormous sum, more or less equal to the nation’s annual GDP. Since then, it has surged to $34.5 trillion. As a consequence, interest payments on the federal debt have gone from around $500 billion in total to about $1 trillion today—a $500 billion increase in expenditures per year, expected to grow still larger year by year as more deficits pile up.

One more thing about the misnomer called the Inflation Reduction Act, pieces of which were endorsed by the Nobel laureates. When it was passed in 2022, the Congressional Budget Office estimated that its energy and climate provisions would cost $393 billion in subsidies and tax credits. Biden and other Democrats also claimed (perhaps tongue in cheek) that the provisions would reduce annual budget deficits in the near term. But last year, a Goldman Sachs report estimated that the costs of those provisions has exploded threefold, to $1.3 trillion. According to the report, this occurred because companies rushed in to claim tax credits that were never capped.

In sum, the Nobel laureates praising Biden’s policies today (and criticizing Trump) are the same ones who recommended policies that ignited inflation, drove up interest rates, wrecked the housing market, ballooned the deficit and expenditures on interest, stifled economic growth, and underestimated the true costs of these policies.

Judging by their track record, when it comes to economic policymaking, these prize-winning economists have no idea what they are talking about."