Price Signals

Big economic news today (besides insane China stock market and "good" Jobs Report) is that US auto makers had a record year,propped up by sales of trucks and SUV's. High fives all around! The expert on NPR explained it as the result of "price signals". With gas prices so low consumers want bigger vehicles and those pesky CAFE miles per gallon, well, they have been dropping. The Expert kept his commentary value neutral, giving the impression the signals sent by The Invisible Hand are inviolable, and by inference, rational. But as I have written about ad nauseum, these signals are actually distorted and create perverse incentives, like spewing more poison into the atmosphere and contributing to ecocide. Oh yeah, that. They are distorted because parties affected by the exchange (money for gas) have no say, are invisible or "external", and so that information is not included as a"cost" by the consumer. But not to worry, or Our High Tech Billionaire Saviors are lining up at the trough. From an article by Michael Klare : Joining Gates and Bezos in this venture are a host of super-rich investors, including Jack Ma, founder and executive chairman of Alibaba, the Chinese internet giant; Mark Zuckerberg, the founder and chairman of Facebook; George Soros, chairman of Soros Fund Management; and Ratan Tata, chairman emeritus of India’s giant Tata Sons conglomerate. While seeking to speed the progress of green technology, these investors also see a huge potential for future profits in this field and, as the venture claims, “will certainly be motivated partly by the possibility of making big returns over the long-term, but also by the criticality of an energy transition.” Do good AND do well! I feel better already.