(AIER)—The Biden administration last week rolled out new emissions regulations that the New York Times said will “transform the American automobile market.”
In what the paper called “one of the most significant climate regulations in the nation’s history,” the Environmental Protection Agency (EPA) is mandating that a majority of new passenger vehicles sold in America be hybrids or EVs by 2032.
The Biden administration and defenders of the policy argue that the EPA’s regulation is “not a ban” on gas-powered cars, since carmakers are not prohibited from producing gas-powered vehicles. Instead, automakers are required to meet a government-mandated “average emissions limit” across their entire vehicle line, to force them to produce more EVs and fewer gas-powered cars.
It’s a clever ruse in that it allows the Biden administration to use regulatory power to force automobile manufactures off of gas-powered vehicles while denying that they are banning them.
Whatever one chooses to call the regulation, its purpose is clear.
“Make no mistake,” the Wall Street Journal noted. “This is a coerced phase-out of gas-powered cars.”
This might be music to the ears of those who see fossil fuels as evil, but economics and history suggest the White House’s plan to force Americans off of gas-powered cars could be a disaster.
What’s Holding Up EV Adoption?
A major reason why the White House is forcing this “transformation of the American automobile market” is that Americans aren’t voluntarily adopting EVs quickly enough to satisfy the White House.
Though Americans purchased more than a million EVs last year, that still represents less than 8 percent of total vehicle sales in the US. The government’s current target is 56 percent. (If the White House was serious about speeding up this transition, it might consider eliminating the 25 percent tariff on cars built in China — which accounts for some 60 percent of global EV sales — but that would be too easy.)
Despite massive subsidies encouraging consumers to purchase EVs, Americans didn’t buy them as rapidly as predicted, causing auto companies to pump the brakes. Ford recently announced it was halving production of its most popular EV, the F-150 Lightning. General Motors, the largest US automaker, and Toyota, the second-largest US automaker, followed suit, announcing significant reductions in EV production.
The weak demand for electric vehicles no doubt has several sources, but the BBC identified a few primary reasons, two of which appear over and over in consumer surveys: price and charging reliability.
Ford’s F-150 Lightning starts at $50,000. Its popular Mach-e starts at $40,000, and that’s after a recent $8,100 mark-down. GM’s top-selling EV, the LYRIQ, starts at $59,000. On average, EVs sell for about $5,000 more than similar gas-powered cars. And EV prices are going up, not down, researchers point out.
“In 2011, the inflation-adjusted price of a new EV was near $44,000. By 2022, that price had risen to over $66,000,” said Ashley Nunes, a senior research associate at Harvard Law School, in her testimony to Congress in 2023.
The second problem is that Americans have serious concerns about how they’ll charge their EVs. A 2023 survey conducted by the Associated Press-NORC Center for Public Affairs Research and the Energy Policy Institute at the University of Chicago found that 77 percent of respondents cited concerns about charging stations as a reason for not purchasing an EV.
This is not an irrational concern.
When Americans drive their gas-powered cars, they are not worried about where they’ll fill up when their fuel runs low. Gas stations are plentiful in the US and easy to find. Charging stations are another matter.
Bloomberg reported last year that, despite steady growth in recent years of EV charging stations, there is just one quick-turn electrical vehicle charge station in the US for every 16 gasoline stations.
Federal efforts to expand charging infrastructure, including $7.5 billion in new spending to build half a million stations, have been embarrassingly slow.
‘Subsidizing EVs With Profits From Gas-Powered Cars’
Since Americans are not voluntarily adopting EVs as quickly as the government would like, the EPA is trying to hasten the transition. This could be a disastrous move.
As the Journal noted, Ford last year lost nearly $5 billion on its EV business. Yet the company still managed to generate a $4.3 billion profit in 2023. It doesn’t take a math genius to deduce how this happened.
“[Automobile] companies are heavily subsidizing EVs with profits from gas-powered cars,” the Journal notes.
Forcing automobile companies to expand production of their least-profitable product lines at the expense of their best-performing ones is economic madness. It calls to mind collectivized agricultural policies in the Soviet Union, where central planners embraced the worst farming methods.
While Stalin’s collectivization of farms in 1929 was a massive failure that led to the deaths of millions, agriculture in the USSR of course continued during and after his lifetime. But two distinct sectors emerged: a tiny private sector that produced a bumper crop of food, and a massive collectivized sector that produced very little.
The late economist James D. Gwartney (1940–2024) explained that families living on collectives in the USSR were allowed to farm on small private plots (no more than one acre) and sell their produce in a mostly free market.
Historians point out that in the 1960s these tiny private farms, which accounted for just 3 percent of the sown land in the USSR, produced 66 percent of its eggs, 64 percent of the potatoes, 43 percent of its vegetables, 40 percent of meat, and 39 percent of its milk.
Gwartney and economist Richard Lyndell Stroup note that by 1980, private farms accounted for just one percent of sown land in the USSR, but a quarter of its agricultural output.
“The productivity per acre on the private plots was approximately 33 times higher than that on the collectively farmed land!” they wrote.
In a free-market economy, farmers within the Soviet Union would have been allowed to shift toward private production — just like US automakers today would be allowed to shift away from EVs until the industry becomes more profitable.
But… the Environment?
Supporters of the Biden policy are likely to respond that we have no choice but to transition to EVs because of climate change. There are several problems with this argument.
For starters, EVs are not the green panacea they seem to be. Electrical vehicles actually require a massive amount of energy and strip mining. Half a million pounds of rock and minerals have to be mined to build just one battery, on average. EVs require far more energy and cause far more pollution when they are manufactured than gas-powered automobiles.
“[I]t’s true that the production of a BEV (battery electric vehicle) causes more pollution than a gasoline-powered counterpart,” the New York Times admitted in a 2022 article headlined “EVs Start With a Bigger Carbon Footprint. But That Doesn’t Last.”
If you weren’t aware that EVs cause more pollution on the production side than gas-powered cars, don’t be embarrassed; few do. It’s one of the dirty secrets of EVs: they start with an enormous carbon footprint. At a climate summit a few years ago, Volvo noted its C40 Recharge had to be driven about 70,000 miles before its total carbon footprint was smaller than the gas-powered version.
As the Times says, the footprint of EVs shrinks over time. But not as fast as many think. One big reason for this is that the bulk of the electricity produced in the US is produced by… you guessed it… fossil fuels. As the Energy Information Administration points out, fossil fuels generate about 60 percent of the electricity in the US, which means that most people charging their EVs are using electricity generated from fossil fuels.
Reducing that carbon footprint is also exacerbated by the fact that people tend to rack up fewer miles with EVs than gas-powered vehicles, which makes it more difficult to offset the large carbon footprint on the production side.
“[Our] data show that electric vehicles are driven considerably less on average than gasoline- and diesel-powered vehicles,” researchers at the Haas School of Business at the University of California, Berkeley noted in a 2019 study. “In the complete sample, electric vehicles are driven an average of 7,000 miles per year, compared to 10,200 for gasoline and diesel-powered vehicles.”
All of this helps explain why a 2023 Wall Street Journal analysis found that shifting all personal US vehicles to electric power would barely make a dent in global CO2 emissions, reducing them by less than 0.2 percent.
Who Chooses?
Forcing US automakers to expand their least-profitable autolines is backward economics. It puts automakers at risk, not to mention their workers and shareholders.
The higher profits automakers are reaping from gas-powered vehicles isn’t an accident. It’s a signal that consumers prefer them at the prices being offered, and heeding consumers is what separates capitalism from the failed collectivist systems of the past.
The Austrian economist Ludwig von Mises explained that in a free-market economy, it’s the consumers who ultimately call the shots, not the state or even the corporations. This idea is known as consumer sovereignty.
“The real bosses [under capitalism] are the consumers,” Mises wrote in Bureaucracy. “They, by their buying and by their abstention from buying, decide who should own the capital and run the plants. They determine what should be produced and in what quantity and quality.”
The real question here isn’t about which is better, gas-powered cars or EVs. It’s about who gets to choose.
By allowing unelected regulators to decide what kind of cars are built instead of consumers, the US is crossing an ominous line.
This kind of central planning failed miserably in the 20th century. Don’t expect it to be any different this time around.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
