Unleash Prosperity Hotline – Weekend Edition Issue #829
08/04/2023, 08/05/2023, 08/06/2023
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1) Saudi America
Harold Hamm of Continental Energy is the godfather of the shale revolution, that led to an astonishing tripling of American energy output from 2007 – 2019. (The boom ended — hopefully only temporarily — with the election of Biden.)
Harold has a fantastic new book out called “Game Changer” which tells the whole story of one of the great technological revolutions of all time. And it’s just getting started. As Harold likes to say: “We aren’t running OUT of energy in America. We are running into it.”
One positive result of the shale revolution — especially horizontal drilling — is that we’ve accessed huge reservoirs of clean and cheap and efficient natural gas. What has been the impact of that?
The United States has led the world in reductions in carbon dioxide emissions as we use more natural gas.
And of course, the idiots in the environmental movement are against it.
Florida Governor Ron DeSantis hasn’t exactly made a spalsh on the national scene this year, but finally, he has done something very smart. DeSantis has agreed to a 90-minute debate with Newsom on Sean Hannity’s Fox News show. It will likely be held in early November.
DeSantis told Hannity the debate will be important because the two men represent diametrically opposed visions of governance and the economy. Newsom, who is clearly auditioning to run for president if Joe Biden steps aside, has taunted DeSantis by running ads in his home state claiming “freedom is under attack” in Florida.
We can’t wait to break out the popcorn for this one. California is the prototypical high-tax, forced-union, culturally liberal blue state that is bleeding jobs, people, and businesses as homelessness, crime, and poverty rise. Florida’s economy is on fire.
“This is the debate for the future of our country,” DeSantis told Hannity. It sure is. What kind of country do Americans want?
Regular readers will recall that our new study by Casey Mulligan at the University of Chicago shows that the cost of regulations under Biden is already costing the average family thousands of dollars.
Politico reports the regulators are just getting started. The Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Commission are separately preparing a wish list of new regulations.
“It’s coming, and it’s coming in a big way,” says Ed Egee, a vice president at the National Retail Federation.
The Labor Department is preparing to make unions happy to toughen enforcement of the Davis-Bacon law that mandates union wages on federal projects. New rules are being readied to expand overtime pay requirements for millions of workers and to make it much harder for firms to classify workers as independent contractors instead of employees. That will almost certainly lead to less hiring. The administration is also trying to find a way to pass the so-called “Pro Act” that would outlaw right-to-work laws in 28 states.
The NLRB may try to make it easier to hold companies liable for labor law violations committed by their franchisees or contractors – which would act like a giant wet blanket over the growth of new franchise owners.
Here's a good way to stop the regulatory onslaught. Cut the budgets for the regulatory octopus in Washington and use the Congressional Review Act after the 2024 elections to stop the regulations from taking effect.
Our friend Grace-Marie Turner is one of America’s top healthcare analysts, but she also has the distinction of having sat in on a famous dinner in Washington that changed economics forever. She recently wrote about her recollections of that meeting.
Grace-Marie was a young reporter and attended the dinner in 1974 between then White House chief advisors to Gerald Ford – Dick Cheney and Don Rumsfeld – along with the Wall Street Journal editorial writer Jude Wanniski. Jude coined the phrase “the Laffer Curve.” It was at this meeting that Laffer wrote the curve (below) on a famous cocktail napkin (now in the Smithsonian Institute).
Here is how Wanniski described what happened:
“'There are always two tax rates that yield the same revenue,’ observes Arthur Laffer…[who] drew the curve shown above to illustrate his point.
When the tax rate is 100 percent, all production ceases in the money economy. People will not work in the money economy if all the fruits of their labor are confiscated by the government. An individual will not work for $1,000 a day if, after taxes, his paycheck comes to zero. Because production ceases, there is nothing for the government’s 100 percent rate to confiscate, and revenues to the state are also zero.
On the other hand, if the tax rate is zero, people can keep 100 percent of what they produce in the money economy. There is no government wedge, and thus no governmental barrier to production, so production is maximized … but because the tax rate is zero, government revenues also are zero.”
Political leaders’ job is to find that optimal balance where workers and investors are incentivized to work and produce but where there is sufficient revenue for the government to operate and provide its essential services.
Some 50 years later, why is this concept so hard for politicians to understand?
