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By Jim Powell

Jim Powell

Many Europeans complain about their high energy costs, largely due to their increasing dependence on renewables — the most costly energy sources. But European political parties as well as a majority of people still want government to promote costly options, especially wind and solar power.

This is killing European economies. Electricity costs in Europe are more than double the cost of electricity in the U.S. High electricity costs make it difficult for businesses to operate if they need a lot of electricity. Their cost of electricity is high, and they might not be able to pass it on to consumers when consumers are free to patronize businesses operating where electricity costs are much lower. Many businesses under pressure are likely move to a lower-cost location, and jobs will go with them. Antonio Tajani, European Commissioner for Industry and Entrepreneurship, warned: “We face a systemic industrial massacre.”

The Germans probably have done more than anyone else to promote high-cost wind and solar power. Other types of renewable energy, like hydro power and geothermal power, usually are limited to a small number of suitable sites. The Germans want to have renewables account for 80 percent of their electricity. Their experience illustrates consequences of such a policy.

“The high cost of electricity makes it harder for the economies to function and for European governments to make payments on debt.”

The most obvious consequence is lots of subsidies and taxes. The German government has arranged for renewable energy producers to sell the power grid their electricity at more than 6 times the wholesale electricity market rate. Nature reported that in 2012 renewable energy producers “cashed in an estimated €20 billion for electricity worth a mere €3 billion.” Counting the costs of electricity from all sources, the Institute for Energy Research reported that “Germans pay 34 cents a kilowatt hour compared to an average of 12 cents in the United States).”

Big gap between low U.S. energy costs and high European energy costs

Americans, of course, benefit from the fracking revolution, despite President Obama’s efforts to discourage it. Fracking is responsible for natural gas prices that are one-third to one-quarter of what Europeans pay for Russian gas. As we know, fracking has boosted oil production in America, too. Since 2005, U.S. electricity rates have remained substantially the same, while European electricity rates have jumped about 40 percent. The expansion of pipelines from Canada, along existing permitted routes, will make …read more

Source: OP-EDS

By Steve H. Hanke

Steve H. Hanke

Since 2004, the World Bank has produced the annual ‘Doing Business’ report, which ranks countries on 10 factors reflecting the ease with which entrepreneurs and businesses may conduct economic activity in a given country.

At first glance, such a survey would hardly seem controversial. After all, with so much unreliable data coming out of official government statistics offices these days, one would think that an unbiased system for ranking the ease of doing business would be a useful tool — not only for businesses, but for governments as well. Indeed, since 2005, a total of 1,940 reforms have been implemented by countries to improve their rankings. And, several prominent heads of state, such as Russia’s Vladimir Putin, have made public pledges to improve their countries’ Doing Business rankings.

“When governments embrace market-augmenting, business-friendly policies, the cost of doing business goes down, and economic prosperity tends to increase.”

As it turns out, however, a few countries (specifically those with low rankings) are none too happy about the report. While some world leaders have adopted the Putin model of viewing their country’s relatively low rankings as a challenge to institute economic reform, other countries, most notably China (which ranks 91 out of 183), have been pressuring the World Bank to scrap the Doing Business rankings and weaken the report’s analysis to the point of irrelevance. It hasn’t helped that certain less-market-friendly NGOs, such as Oxfam, have also joined the Chinese government’s crusade.

Indeed, under pressure from China, World Bank President Jim Yong Kim commissioned a panel to “study” the rankings and present recommendations for “improvement.” Not surprisingly, the commission recommended doing away with the actual ordinal rankings, and switching to a less embarrassing evaluation of each country.

Yes, the panel’s recommendations are nothing more than a thinly-veiled attempt to gut the Doing Business report. Stripping the ordinal rankings and “reforming” the report’s methodology would have the effect of completely destroying the report’s credibility and usefulness as a policy tool.

Fortunately, the report has one very important ally — Jim Yong Kim himself. A campaign to save the report has also been mounted by Doing Business report co-founder, the former World Bank Group Vice-President Michael Klein.

These World Bank insiders recognise a simple fact — one which many businessmen, politicians, civil servants, and economists like myself, have long understood. The report represents one of the few uniform, objective metrics available for measuring …read more

Source: OP-EDS

By Mises Updates

Now the Mises Institute’s Distinguished Scholar in Law and Jurisprudence, Judge Andrew P. Napolitano answered a few questions for the Mises Institute about the American Constitutional Law and the political system:

As for reading the Constitution in order to understand it, that is no doubt what its authors intended. However, as is well known, the big government impulses of those in government have rendered most of the plain language in the Constitution meaningless. Thus, it is nearly impossible to comprehend the meaning of the Constitution without understanding about 200 Supreme Court cases interpreting it.

…read more

Source: MISES INSTITUTE