Live from Music Row, Monday morning on The Tennessee Star Report with Michael Patrick Leahy – broadcast on Nashville’s Talk Radio 98.3 and 1510 WLAC weekdays from 5:00 a.m. to 8:00 a.m. – host Leahy welcomed the original all-star panelist Crom Carmichael to the studio for another edition of Crom’s Crommentary.
Michael, there were three articles that I read that were kind of interesting. They’re related. One of them is The Wall Street Journal called “The Coming Global Crisis of Climate Policy.” Another one is “Europe is Bound to Collapse”. That was in The Epoch Times. And then another one is from the Free Beacon called “California Punishes the Poor by Banning Gas-Powered Cars.”
In every one of these, what you see is, in the case of Europe they are destroying their economy in the name of what they consider to be the need to transition away from fossil fuels at a time when renewables are just simply not cheap.
They’re very expensive and they’re not there all the time. In other words, sometimes they just don’t work when the wind doesn’t blow or the sun isn’t shining. Europe is heading toward a tremendous problem. But here’s what’s interesting to me.
The role of profits and the role of markets in an economy that is growing and prosperous, especially the role of profits, is not well understood by the folks in the media because they never talk about profits in the sense of what they do that really helps the economy grow.
Generally speaking, when the media people talk about profits, they talk about greedy people trying to make money and they’re making money on the backs of the poor and all this type of thing.
The primary role, the most important and subtle role of profits in a market economy, is it allocates capital properly, and by that I mean if there is an industry that is making exorbitant amounts of profit based on return on capital, that industry will draw more capital and therefore, as more capital goes into that market, the supply increases and prices will fall.
Now, but if the government decides that it knows better than the market how capital should be allocated, and they do that by doing one of two things – either giving direct subsidies to an industry or subsidizing the customer to buy a particular type of product – and thereby they’re redirecting capital.
And in the case of the climate change issue, the redirection of capital is in the trillions of dollars across the world. Trillions of dollars. And we’re now beginning to see what the results are in Europe in particular. Michael, you’re seeing inflation in Europe north of 20 percent.
North of 20 percent. The British economy is collapsing. The French economy is collapsing. The German economy is collapsing. These economies are collapsing before our eyes. Going into this winter there’s an open question as to whether or not they’ll have enough energy to heat their homes.
And I’m reading Kissinger’s latest book – the guy is 99 years old – on leadership. That’s the name of the book and the first chapter is about [former German chancellor] Konrad Adenauer and how the German leadership – when the war was over Germany had been so devastated by the war, as had other countries – but the leadership didn’t have enough power.
And so they literally slept under blankets and their overcoats. And so Germany, without war, looks like it’s trying to head back in that direction again. And our markets have not taken all that into account.
Now, you do see the dollar increasing in value dramatically against the Euro, but that isn’t because our economy is so good. Our economy is failing, but it’s failing at a slower rate than the German economy.
And because of the checks and balances that we have here with our own government, Biden and the Democrats cannot inflict nearly as much damage on our economy as they have said they would like to.
They don’t call it damage, but when you dramatically increase taxes and you limit the production of fossil fuels, you’re taking the most important single industry, say, food and water, and you are essentially destroying it, which is what the Europeans have done and what the Democrats and Biden seem to want to do.
So over the next few months, we will begin to see terrible stories, real stories, coming out of Europe. And thank God that we have some checks and balances here to keep the idiocy from happening here.
Listen to today’s show highlights, including this interview:
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