Tag: economy

Corn Belt Politicians Are Using High Gas Prices To Push Even More Carveouts for Ethanol

With the average price of gasoline in the U.S. reaching its highest level since the start of the Iran war, lawmakers are thinking about giving energy producers special treatment to supposedly cut costs at the pump.

As part of the negotiations over the Farm Bill, which is expected to be voted on by the House of Representatives this week, a bipartisan group of Corn Belt lawmakers is proposing a measure to authorize the sale of E15—gasoline with an ethanol content up to 15 percent—year-round. This fuel is typically not allowed to be sold in the summer months because it evaporates easily, which contributes to air pollution and smog. (The Trump administration waived requirements last month to allow for E15 to be sold this summer, citing high gas prices.)

The proposed amendment would also limit blending exemptions for small refineries under the Renewable Fuel Standard (RFS)—the federal law that requires refiners and fuel importers to ensure that a certain percentage of the transportation fuel sold in the U.S. comes from renewable fuels, the most common of which is ethanol. Compliance with the RFS is estimated to cost refineries about $70 million in both 2026 and 2027, according to the energy consulting firm Turner, Mason & Company.  

“At a time when consumers are acutely sensitive to energy prices, this amendment represents a pragmatic solution that balances energy affordability, rural economic strength, and regulatory certainty,” said a coalition of agricultural and energy groups in a support letter for the measure. Additionally, its reforms to RFS exemptions “will help restore transparency and predictability for all parties subject” to that law. 

It doesn’t seem like “all parties” are on board. 

Last week, the National Corn Growers Association published a press release calling out a group of “oil corporations” for attempting to “derail legislation that lowers fuel prices.” 

“There is a tiny minority of major energy corporations – like Delek U.S. Inc., Cenovus Energy, CVR Energy, HF Sinclair, Parr Pacific Holdings and Suncor Energy Inc. – that are masquerading as small refineries to get Renewable Fuel Standard exemptions they don’t need,” said the association’s president, Jed Bower. “Their greedy actions are holding up legislation that would help farmers who are struggling during tough economic times.”

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Fury as NYC on course to join Detroit, Chicago and Puerto Rico with woke mayor Mamdani’s latest reckless plan

Fury is mounting as New York City drifts closer toward the same fiscal traps that have crippled Detroit, Chicago and even Puerto Rico.

It comes after Mayor Zohran Mamdani began exploring a controversial plan to delay billions in pension payments as City Hall scrambles to plug a growing budget hole.

The proposal – now under discussion with state officials – would allow the city to push back retirement contributions into its vast municipal pension system, freeing up at least $1 billion in the next fiscal year.

But critics warn the move amounts to little more than kicking the can down the road. It would swap short-term relief for a far bigger bill later, and risk problems that have pushed big cities to crisis in the past.

The city currently faces a $7.1 billion budget gap. As Mamdani resists significant spending cuts, he is considering delaying required payments to city pension funds as a temporary fix. 

For now, the city remains on track to meet its long-term pension funding obligations by its 2032 deadline. 

Mamdani’s team said in a statement to the New York Times that it has not started ironing out the details of the proposal and that any changes would likely push the deadline beyond 2032.

Any delay to the pension plan would require the approval of New York Governor Kathy Hochul. 

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Stagflation Incoming: The Donald Ain’t Gonna Like What Happens Next!

Here is a salient place to start regarding the economic impact of the Donald’s misbegotten war on Iran: To wit, approximately 7 billion ton-miles of freight moves by truck each and every day in the USA, which heavy truck fleet consumes upwards of 2.9 million barrels per day (mb/d) of diesel fuel.

Alas, the price of diesel fuel was about $3.55/gallon both a year ago and as of early January 2026, but has since soared by more than+$2.00 per gallon to $5.60. That’s a 56% rise in the cost of pumping goods and commodities through the arteries of the US economy. On an annualized basis, the diesel fuel bill for the US truck fleet went from $155 billion per year to $250 billion per year at current oil prices.

The big question, of course, is through which channel these drastically higher fuel acquisition costs will be absorbed – in higher prices or reduced output? And that pertains not just to the microcosm of the trucking sector, but the entire GDP now being battered by the Donald’s elective war-based dislocation of the world’s 175 million BOE/day oil and natural gas markets.

We’d bet it will be a combination of both inflation and deflation, otherwise known as stagflation. The mix of these outcomes depends upon supply and demand conditions in individual sectors of the economy in part, but also, and ultimately and more importantly, on the Fed. That is, whether the nation’s central bank pumps incremental demand into the economy via credit expansion with a view to “accommodating” the soaring price of energy today, and, soon, food and other commodity inputs to GDP, too; or holds firm on the printing press dials and allows the now cresting energy and commodity shocks to work their way through the interstices of the $30 trillion US economy.

Of course, during the previous comparable petroleum supply disruption during the 1970s, the Fed made the huge mistake of printing the money to counteract what was a “supply shock” in the form of soaring petroleum prices. But that led – just as sound money advocates had always held – to double digit increases in the general price level by the end of the decade, and thereafter the trauma of the Volcker administered application of the monetary brakes.

With the Fed fixing to welcome a new Chairman, as today’s congressional hearings remind, it is therefore a question of whether or not the Kevin Warsh Fed will want to take its place in the monetary policy villains gallery along with Arthur Burns and the hapless William G. Miller.

We think not. We actually believe that for the first time since Volcker, we are about to get a Fed chairman who understands the requisites of sound money and noninflationary finance, as well as the profound error of Keynesian demand management at the central bank.

And not only that. As far as we can tell, he also has the experience from his prior service on the Fed during the so-called Great Financial Crisis and the cajones to lean heavily against the supply shock now emanating from the Persian Gulf.

Of course, in a perfect world of honest money and free markets – including in the production of money and credit – there wouldn’t be any central bank “leaning” to do. Under an honest money gold standard, for instance, the impending petroleum supply shock would cause relative price changes, thereby generating a sharp curtailment of activity in petroleum intensive sectors and the reallocation of activity, output, jobs and capital to less petroleum intensive sectors. That’s what the miracle of free markets do when they are allowed by the state to operate.

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Netanyahu and Zionism is Pushing the World Towards Economic Catastrophe

As has often been the case since the Iran War has started, the U.S. corporate media, whether “left” leaning or “right” leaning, is reporting news on this war that is far different from what is being reported outside of the U.S. media.

So here are two very recent interviews that are both only about 30 minutes long, giving the “other side” of what actually happened this past weekend with the negotiations in Islamabad, which were “led” by JD Vance, as well as views on the alleged current “blockade” of the Strait of Hormuz by the U.S. military.

The Wall Street Journal had actually published a story stating that the U.S. was going to assassinate the delegation from Iran, which forced them to return to Iran in secret after the meetings ended.

Professor Seyed Marandia, who lives and teaches in Tehran and is a U.S. citizen, was actually at the negotiations, and at the time of this writing this is his most recent interview with Glenn Diesen.

He states that the Iranians fully expect a resumption of attacks by Israel and the U.S., and that they are preparing for it.

He stated “Netanyahu and Zionism is pushing the world towards economic catastrophe,” and he also stated that if they attack Iran’s energy infrastructure again, they will start attacking the infrastructure of the rich Arab Gulf States, starting with the UAE, which he states that they can completely destroy in 1 day.

Marandia also states something that I can personally confirm is true, which is that the Arab States around the Arab Peninsula are heading into their summer season, where it gets unbearably hot, where during the day nobody does anything outside, as it is too hot, and that U.S. soldiers would never survive day operations in such heat.

Iran’s summers, by contrast, do not get that hot, and he said that in Tehran today one can look at the mountains to the north where there is still snow on them, and that one needs a jacket to go outside.

I lived in Saudi Arabia for almost 4 years back in the 1990s, and stayed in the Kingdom through one summer, as I was teaching English at their university, and I made double pay for teaching during the summer as most foreign teachers returned to their home countries in the summer.

Air conditioning during those times is a life and death situation, and when someone’s air conditioning went out in the faculty housing, it was imperative that it was fixed immediately, and they had a large staff running the energy infrastructure, mostly Filipinos at that time.

So when Marandi says that if the power goes down in any of these Gulf States during the hot season EVERYONE will need to leave, he is not lying, but speaking the truth.

In the second interview between Pepe Escobar and Judge Napolitano, Escobar states that the Iranians will NOT return to Islamabad for the second round of “negotiations,” but will only agree to a place in either Russia or China.

Russian diplomat Sergey Lavrov is in Beijing today, allegedly assuring China that Russia will continue supplying oil to China if they cannot get it through the Strait of Hormuz.

Escobar also states that there is no actual blockade of the Strait of Hormuz at the present time.

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US to Create 4000-Acre High-Tech Economic Security Zone in the Philippines

The United States and the Philippines are set to build a 4,000-acre industrial hub after Manila became the latest government to sign up to a Washington-led initiative to secure semiconductor supply chains needed for artificial intelligence, the U.S. State Department announced on April 17.

The move makes the Philippines the 13th country to join “Pax Silica,” an international program that aims to secure the full technology supply chain, including critical minerals, advanced manufacturing, computing, and data infrastructure.

The initiative is a key aspect of President Donald Trump’s economic strategy aimed at reducing the United States’ dependence on rival nations and strengthening cooperation among allied partners, with the State Department describing it as “a positive-sum partnership of nations who want to remain competitive and prosperous.”

Other signatories to Pax Silica include Australia, Finland, India, Israel, Japan, Qatar, the Republic of Korea, Singapore, Sweden, the United Arab Emirates, and the UK.

The new hub will be erected in New Clark City, the Philippines’ planned metropolis north of Manila, which is owned and developed by the government through the Bases Conversion and Development Authority (BCDA).

New Clark City sits within the Luzon Economic Corridor, a strategic hub that includes Manila and neighboring regions to the capital.

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Will Americans Keep Paying a ‘Tariff Tax’?

When Eileen Nusselt and Gio Cox got married earlier this year, they skipped the traditional registry and asked their guests to donate to a home renovation fund. Yet as tariffs have pushed up the price of materials like lumber and paint, that money isn’t going as far as they expected. 

“We’re having to cut off projects that we really want to do,” said Cox, who lives with his wife in Charleston, South Carolina.

Many of the Trump administration’s signature tariffs were struck down earlier this year, but the couple doesn’t expect prices to fall anytime soon. “What incentive do any of these big companies have to lower their prices?” Nusselt asked. Especially, she added, “if they’re getting money back” from the government in the form of tariff refunds.

After the Supreme Court ruled in February that the Trump administration lacked the authority under emergency economic powers to levy many of its tariffs, the Court of International Trade ordered the federal government to process refunds — plus interest — to the more than 330,000 companies that have paid roughly $166 billion in tariffs now considered illegal. Since then, more than 2,000 companies have filed suit against the federal government to demand their refunds.

American consumers, however, will likely not be compensated for the tariff costs they bore, passed on through higher prices. Indeed, as taxpayers, they may be responsible for the interest that accrues each day the government does not process refunds.

But the cost of tariffs largely fell on shoppers, not companies.

Transferring Tariff Costs

According to analysis from the Budget Lab at Yale, prices of consumer goods (excluding more volatile food and energy) rose more than 2% throughout 2025 and into January 2026, reversing recent declines and adding to evidence that the costs of tariffs are being passed on to consumers. 

Tariffs accounted for an estimated 86% of the rise in prices for imported household goods through January, with the passthrough even more pronounced for long-lasting durable goods like cars, appliances and furniture, the Yale researchers found.

Some company leaders have spoken publicly about incorporating tariffs into their pricing. In a call with investors last May, Walmart CEO Doug McMillion said the retail behemoth would “do our best to keep our prices as low as possible,” but also that “higher tariffs will result in higher prices.” In an August 2025 earnings call, Home Depot Executive Vice President of Merchandising Billy Bastek spoke of “some modest price movement” due to tariffs.

Amazon CEO Andy Jassy told CNBC in January that the company stocked up on items  before the tariffs were instituted to keep prices low, but that supply ran out last fall. “You start to see some of the tariffs creep into some of the prices,” he said.

An analysis by congressional Democrats on the Joint Economic Committee found that American consumers paid more than $231 billion in total tariff costs between February 2025 and January 2026, amounting to roughly $1,745 per household.

“Tariffs are regressive in nature, and they impact low- and middle-income families more than wealthy individuals,” said Ryan Mulholland, a senior fellow focused on international economic policy at the liberal think tank Center for American Progress. Lower-income people not only spend a greater share of their income, they’re also more likely to buy cheaper, imported items — the kind likely subject to tariffs. At the same time, tariffs may contribute to inflation more broadly, which also disproportionately affects households with less financial flexibility.

“As budgets get tighter, tariff pressures bite more,” said Mulholland. Indeed, researchers at the Budget Lab at Yale found that, as a share of income, tariffs may burden the poorest households more than three times as much as the wealthiest.

Currently, only “importers of record” are entitled to refunds per U.S. trade law, and companies don’t have a legal obligation to pass any of that money on to the consumers who paid higher prices.

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The Quiet Carnage of California’s Minimum Wage Hikes Obsession Continues

Once upon a time (aka a couple of years ago), many others and I predicted California’s rush to jack various minimum wages would invoke the law of unintended (dire) consequences, which would also be completely ignored as lessons go. 

The ‘Clueless, Pandering Democrats Bone Working Stiffs and Business Owners Yet Again’ Maxim

This particular 2023 post dealt with two specific laws taking effect in April 2024 that boosted the pay of company/franchise-owned fast-food workers to $20 hr ($4 above the state minimum wage of $16 for everyone else), and healthcare workers were boosted into the $18-23 hr range depending on the job description thanks to some heavy union lobbying and creative job category reclassifications. 

For businesses like Pizza Hut, that meant their delivery drivers now fell into the $20/hr employee bracket, too. For many of those drivers, this law meant they were the first to receive pink slips, and almost immediately, as businesses scrambled to find savings ahead of the law coming into effect.

…Right now it’s about 1200 jobs gone at these franchises.

…“Well, I knew that was coming. All these big corporations they have to make money,” said Scot Ward, owner of Stone Pizza in Roseville.

…”What these businesses are going to do is cut out employees to make up for the money they are losing,” said Ward.

One year later, as the California Globe reported, the National Bureau of Economic Research issued its findings on the first full year of the minimum wage law AB 1228’s impact on CA workers’ new and improved quality of life. It seems the law had had very much the opposite effect, from outright job losses to decreased hours for those lucky enough to retain their employment.

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IMF Cuts Growth Outlook, Warns Iran War Could Push Global Economy to Brink

The International Monetary Fund (IMF) on Tuesday cut its growth outlook and warned the global economy could edge toward recession if the Iran war intensifies, as energy disruptions ripple through inflation, financial markets, and trade.

In its latest World Economic Outlook and accompanying analysis, the IMF said the Middle East conflict—now disrupting a key share of global oil and gas flows—sent previously positive growth momentum to an unexpected halt and introduced unusually high uncertainty for policymakers and investors.

“Downside risks dominate,” IMF analysts wrote in the executive summary. “Geopolitical tensions could worsen even more than they already have—turning the situation into the largest energy crisis in modern times—or domestic political strains could erupt.”

The fund outlined three scenarios—reference, adverse, and severe—depending on how long the war lasts and how deeply energy markets are affected. Under the most severe case, global growth could fall to around 2 percent, a level historically associated with recession-like conditions that has occurred only four times since the 1980s.

“This shock is large. … It is global. Everybody uses energy. Everybody feels the pinch,” IMF Managing Director Kristalina Georgieva said in a recent interview with CBS, noting that up to 13 percent of global oil and 20 percent of gas flows have been disrupted.

“People are hurting.”

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DEI Practices Reduce Productivity, Cost $94 Billion Annually: White House Economic Report

Diversity, equity, and inclusion practices negatively impacted the U.S. economy, according to the 2026 White House Economic Report released April 13. 

Researchers calculated that DEI policies reduced output and lowered the country’s gross domestic product by about $94 billion each year, amounting to approximately $1,160 per year for families with two working adults. 

“These estimates imply that DEI promotion has led to inefficient management, raising the cost of doing business,” the report reads.

“These costs lead the companies practicing DEI to hire fewer people and pay their workers less.” 

President Donald Trump commissioned the report, released by the White House Council of Economic Advisers. 

DEI policies “actively encouraged” employment discrimination, according to the report, which cited fourfold growth in the percentage of minorities holding management positions between 2016 and 2023. 

During the same period, industries that adopted DEI protocols were 2.7 percent less productive than industries that avoided the cultural shift. 

The president announced soon after taking office for a second time that his administration was targeting what he said are discriminatory hiring practices. 

“We’ve ended the tyranny of so-called diversity, equity, and inclusion policies all across the entire federal government and indeed the private sector and our military, and our country will be woke no longer,” Trump said when he addressed a joint session of Congress in March 2025. 

“We believe that whether you are a doctor, an accountant, a lawyer, or an air traffic controller, you should be hired and promoted based on skill and competence, not race or gender.” 

President Lyndon B. Johnson signed the Civil Rights Act into law in 1964, thus outlawing employment discrimination based on race, color, gender, religion, or national origin. 

Human resources departments across the country generally abided by the laws to avoid legal action, but things began to change approximately 10 years ago when corporate offices began adopting new diversity-related hiring agendas. 

President Joe Biden accelerated DEI practices with executive orders implementing the programs in the military and across the federal government’s various agencies and departments. 

Biden directed government agencies to “seek opportunities to establish a position of chief diversity officer or diversity and inclusion officer, … [and] ensure that all Federal employees have their respective gender identities accurately reflected and identified in the workplace,” among other changes. 

Agencies were required to submit “Equity Action Plans” outlining steps to further diversify staff. 

Treasury Secretary Janet Yellen oversaw the establishment of an Equity Hub and Advisory Committee on Racial Equality, spending millions of dollars on DEI consulting services in the process and redirecting billions of dollars in federal funding to “benefit specific racial groups,” according to the report. 

Studies show references to DEI programs exploded during the 2020s, with many corporations mentioning the policies during earnings calls, which cited analyses showing the number of DEI-related jobs quadrupled between 2017 and 2022. 

Trump rescinded the orders with a series of executive actions in January 2025. 

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The Strait Of Hormuz Crisis Exposes A Fatal Flaw In Economic Thinking

A priest, an engineer, and an economist are stranded on a desert island. The first order of business is to get some food. The priest suggests that they all pray. The practical-minded engineer suggests that the three men make a net to catch some fish. But where will they find the necessary materials? The priest and the engineer turn to the economist and ask him if he has any ideas. The economist replies, “Assume a fish.”

This well-worn economist joke summarizes one of the chief flaws in contemporary economic theory.

That theory almost completely ignores the role of physical resources, assuming they will always be available in the quantities we need at prices we can afford at the time we need them. When those resources aren’t available, that theory begrudgingly accepts that there will be some damage to economic activity, but tends to greatly underestimate the impact.

This conceptual flaw explains why economists in most financial institutions and governments, and thus investors, are not especially alarmed at the loss of energy resources, as stock market indices remain not too far from their recent highs.

For a good summary of how contemporary economic theory goes off the rails, Australian economist Steve Keen offers a mercifully brief and comprehensible explanation. Here I will relate one critical part of that explanation. About 5.7 percent of U.S. GDP is devoted to procuring and distributing energy. Most economists will tell you that a 10 percent decline in energy availability would have a small effect on the U.S. economy. They would take the percentage of the economy devoted to energy, in this case 5.7 percent, and multiply it by 10 percent to arrive at a 0.57 percent reduction in economic activity.

This conclusion is utter nonsense and not even close to what the effects would be.

The reason is that energy is the master resource. It cannot be treated like other resources. Energy is the resource that makes all other resources available. Nothing gets done without energy. The correlation between economic activity and energy use is 0.9 (where 1.0 represents a perfect correlation). This should come as no surprise. When the economy is growing, energy use grows with it as energy fuels the economic activity that pushes growth.

What this implies is that a 10 percent reduction in energy availability is much more likely to result in a decline in economic activity closer to 10 percent than to one-half percent.  For comparison, the real GDP of the United States fell 4.3 percent during the Great Recession, which lasted from December 2007 through June 2009.

So, how much energy is currently being denied to the global economy by the closure of the Strait of Hormuz? No one knows for certain. We do know that liquefied natural gas (LNG) exports from Qatar were previously transiting through the strait. And, close to 20 percent of the world’s oil supply was also passing through the strait on a daily basis.

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