Finance – When Government Disrupts the Economy


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Money Matters

September 19, 2022 by Scott Crosby

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Finance – When Government Disrupts the Economy

History is littered with the unlearned lessons that governments should keep their fingers out of the economy.

Economic disruption and decline, including depressions and recessions, are among the worst examples of governments that do not serve their citizens, but instead act as their subjects’ masters.

California’s numerous impositions have resulted in a steady exodus of its brightest and best, along with the wealth on which is founded that culture’s future development and growth.

The end of August provided an example of the most foolish antics of an autocratic government, exposing it in a way that virtually everyone – even the media – saw as blatantly stupid.  

The political two-step began with the passage of a radically-restrictive new law enacted by the California legislature.  The most notable result was a blockbuster headline on August 25th that was guaranteed to attract country-wide attention:  “California bans the sale of new gas-powered cars by 2035”.

Talk about disruption of the economy:  with a stroke, Californians are being told what they can and cannot buy, in a massive disruption that will contort and up-end their freedom to make their own choices about something which is routinely a major purchase in most peoples’ lives.

Not entirely surprising, the media was an absent voice in any comments about issues of freedom.  

In America’s Declaration of Independence, the Founders wrote, “We hold […] that all men are […] endowed […] with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.”

“Life” means the right of each individual to maintain and live his own life, uncontrolled by the government.

“Liberty” means the right of each individual to take those actions which are in his best interest in furthering his own life, and not be impeded by anyone else – including the government.

“The Pursuit of Happiness” is the freedom to act in one’s own economic best interest – and not as demanded by any government.

Like any dictatorship, no democracy – and no legislature – can rightfully take away or even erode those fundamental freedoms.

The separation of government and the economy – like the separation of the government and religion – is essential to the recognition – and governmental protection – of the rights of that smallest minority, the individual.  

And yet, that is what the California legislature has clearly and deliberately chosen to do.

As might be expected, environmentalist groups were supportive of the law, and support even harsher measures.  It seems that their special-interest concerns should override the freedoms which the government is tasked with protecting.  Individual choice, in their opinion, must be eliminated, in favor of the dictates of the environmentalists’ choice.

“Other states should move swiftly to join California and adopt this life saving rule, which will improve air quality and help slow the climate crisis,” one said.  The environmentalists, intent on imposing their will on others, ignore that climate changes naturally, all on its own.  That people are causing climate change is far from being firmly established, despite the political interest of those desiring to control other peoples’ lives.

Divine retribution, it seems, raised the ante on that legislature’s malfeasance.  Just days after the new law’s passage, “a brutal heatwave” descended on the state.  

By the first of September, less than a week after the new legislation Californians were then being asked not to charge their electric vehicles – to conserve energy.  California, it is now clear, cannot produce enough electricity to support the required air conditioning of its homes and businesses.  Adding the charging of those existing electric vehicles currently in-state to the demands for electricity will bring down the whole system.

Being stuck between a rock and a hard place is bad enough.  Having deliberately placed yourself in that position is a fool’s errand.  Even the media took note.

Financially, of course, the new legislation will be very expensive, for manufacturers and for car owners.  It will also require expensive new charging stations and a substantial expense to provide support for the new cars.

Meanwhile, for those of us contemplating the purchase of an electrically-powered vehicle (an “EV”), a news article by Jenny Cohen on May 28th, titled “10 Hidden Costs of Owning an Electric Vehicle That No One is Talking About” (see it at “https://finance.yahoo.com/news/10-hidden-costs-owning-electric-132700541.html”) succinctly sums up the major issues – the considerable expenses – which you will face with EV ownership.

1.  Higher purchase price – an EV is more expensive to manufacture.

2.  Higher registration fees.

3.  Charging on the road – don’t expect to match the ease and speed of filling your gas tank.

4.  Higher insurance costs – as much as 25% above that of a gas-powered car, due to higher repair costs.

5.  Battery replacement – is likely to exceed the value of the EV.

6.  Makers of EV tend to add in expensive features.

7. Higher repair costs.  Also, “Electric vehicle auto mechanics may not be as easy to find as combustion engine mechanics.  Your car manufacturer may also have restrictions on who can repair your particular type of vehicle.”

8.  Expense of installing your own home’s charging station – expect to pay about $1500.

9.  Impacts of the outside temperature – the temperature affects the an EV’s battery’s ability to fully charge.  Too, running the car’s a/c or heater drains the EV’s battery much more quickly, reducing the range before needing to be recharged.

10.  Charging time – You may be used to a quick ten-minute stop to top off your gas tank.  With an EV, the minimum charge time is 30 minutes, if you can find a fast-charging station.  Warning:  they are not always present (or working) where they are advertised.  Without a fast-charger, an EV’s charge time can be 7 to 12 hours.

The article does not mention that manufacturing the Lithium batteries essential to every EV’s existence is much more climate-destructive than oil refineries and the production of oil and gas.

Additionally, Lithium is very rare.  Mining it is limited to a very limited few locations.  As the number of EVs grows and the demand for Lithium increases, expect the batteries’ costs and thus the EVs’ prices to go up.

Research to improve the power of electric batteries continues, and small, incremental improvements are developed.  But the substantial, order-of-magnitude improvements needed to compete with gasoline engines are impossible.  

Gasoline engines remain by far the most efficient use of resources, providing the most economical energy source of power for automobiles, with the most efficient conversion of natural resources into motive power – an engine to power a vehicle – in existence.  

EVs undermine the economy, raising the costs of living, which means more people will sink to a more impoverished existence, as the government imposes laws favoring EVs.  

The government’s determination to ignore that imposition exposes its intention to interfere with peoples’ lives and impose ever-greater controls; i.e., attacking their freedom by reducing and thus eroding it away.

That interference is best described as “the government against the economy”.

And what is “the economy”?  The economy is simply the composite, combined actions of each and every one of us, as individuals.  When the government is against the economy, it is against each one of us.

That government which is constitutionally required to protect the freedom and rights of each individual as its fundamental reason for its existence will be the best government at truly serving its citizens.  Anything less is, to whatever degree, simply a drag on the economy:  i.e., hurting the well-being of the people living in that country, and detrimental to their lives.

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