Month: October 2021

“Democrats, facing a Republican barrage, scale back plans for a crackdown on tax cheating.”

This is the answer to the question: why are we encountering rising inflation if industry is not operating at full capacity and full employment? If and only if investors are not enjoying a false ceiling on taxation will they reinvest in jobs and production. Clearly, however, if they can win higher returns by not investing, they would be foolish to throw good money into jobs and goods. In effect, they are creating shortages where there need be none.

And let there be no doubt. These same Republican legislators — we used to call them criminal tax evaders — will hoot and howl when inflation continues to increase so that the corporations in which they invest can keep up with inflated prices across the market.

If, by contrast, legislators were to demand that corporations and individuals who enjoy wealth paid their fair share, this would greatly reduce the moral hazard generated by the false tax ceiling. And it would immediately be felt in stabilizing prices and wages. But that’s the last thing we want. Right?

Since I like to listen to Marketplace on APR, I am always disappointed when Kai Ryssdal misses the mark, which he did in his discussion of Nord Stream 2, the Russian built oil pipeline marketed to deliver relief to energy starved markets in Western Europe. Rhetorically (?) the lead into the story asks: does NS2 provide relief or does it build dependence? Yes and Yes. Right?

Russia wants someone — anyone — to pay top ruble for their oil. Since demand for oil in the EU is inelastic (its not as though they could say “no”), Russia was more than ready to pony up 5 of the estimated 10B € it cost to build a pipeline that bypassed the annoying former Soviet states that refuse to bow down to the Kremlin (with Uniper, Wintershall Dea, OMV, Engie, and Royal Dutch Shell covering the other 5). And so like heroin to an addict, once the oil begins to flow, the EU will experience the rush of energy. Yes, Nord Stream 2 will provide relief.

Nevertheless, since it recommits the EU to a carbon future, it also ties them into the economic — and let us admit, the political — fortunes of mother Russia in ways that will, without question, further undermine the social and political integrity of the EU. Russia has made no secret of its own agenda in this regard, playing the anti-US-UK-EU hand it has been dealt brilliantly. Thus, it sells NS2 as a means to secure energy independence from the US-UK-EU; which is part of its larger aim: to weaken the political, social, and economic fabric of the US-UK-EU. Those who doubt this are either not familiar with Russian agit-prop or are willfully ignoring it.

So should the EU cut energy ties to Russia? Not so fast. How will it supply its insatiable energy needs in that case? From the US? From Norway? From the near east? Markets behave everywhere, well . . . like markets. They create dependencies. Dependencies in doing good are fine things. Dependencies in doing evil, not so much. And dependencies over fossil fuels are dependencies that do evil. Thus the critical importance not simply of energy self-sufficiency in the EU; fine words those. But the importance of sustainable energy. There is only one reason why NS2 will be embraced by the EU. And let there be no question, NS2 will be embraced. And that is because the EU’s energy policy is unsustainable. If for no other reason, the EU is compelled to dose itself good and well with the narcotic Russia is promising, which will momentarily ease the pain and reinforce the dependency.