Biggest grab-bag EVAH; Defense, economics, nuclear energy, more – The Optimistic Conservative

As the Democratic National Convention & Mass Protest-fest bursts upon us, it’s time to get some updates out of the way so we can concentrate on whatever moments of eventhood may eventuate this week.

There are quite a few notables to tag, so these will not be in-depth treatments. There are several national security issues, but we’ll start with an economic policy topic that demands urgent treatment, because most commentators are focusing on the wrong thing in discussing it.

They’re focusing on what they understand (very well, to be sure), and not on what we’ll really – really – regret in the long run.

“Price-gouging”: Just say no to the witch-hunt

The topic is being discussed among pundits as “price controls.”  Candidate Kamala Harris spoke relatedly on the matter late last week, and pundits, knowing well the counterproductive damage always done by price controls, were off to the races laying out for us the excellent case that it’s lunacy to impose price controls.

But in Ready Room at TOC, we’re all about getting inside the OODA loop.  And in this case, that means listening with our ears to what Harris actually said.  What she said was much more dangerous than “price controls.”  That’s why, no matter what you hear in mitigation of her bad proposal, it is imperative to understand that this is, in fact, the road to socialist managerialism, and its premise is Marxism.

If Harris had merely proposed price controls, in the manner of Richard Nixon in the 1970s or the FDR government in World War II, that would be bad enough.

But what she actually wants to do is order the Federal Trade Commission to enforce a “ban on price-gouging.”

This is something we don’t think about systematically very often, but it’s the heart of the matter, and it’s the dangerous premise the Democrats are trying to slip into the policy, while we all talk about “price controls.”

The “price-gouging” theme is open-ended, because it assumes bad faith and then goes looking for it.  It’s the definition of a witch-hunt.  “Banning price-gouging” is about permanently chartering a witch-hunt in the U.S. economy.  It’s about holding our industries, and thus our jobs and livelihoods, at perpetual risk of arbitrary political attack.

A “ban on price-gouging” has as its core premise that price-gouging is going on at any given time, and that whenever prices go up, price-gouging must be seen as a catalyst.  Price-gouging by its nature – its definition – is a pernicious activity undertaken by persons.  It’s not a market phenomenon.  It’s not the result of natural market forces.  It’s done deliberately by humans with motives.

That is the Marxist aspect of the whole subject: the assumption that “capitalists” are guilty until proven innocent of price-gouging their customers, because the capitalists’ interests are destructively and inherently opposed to the interests of customers.  (I.e., a thematic extrapolation from the socially-divisive “world-crisis” dynamic of capital vs. labor.)

Marxist-style theory, as formulated in the academic and political bargain basement, would tell us that capitalists are always trying to squeeze some tortured, ill-defined, but plausible-sounding form of “excess value” out of every economic transaction.  In political terms, the premise has powerless customers over a barrel, enslaved to paying whatever unjust prices a viciously-ordered capitalist-run system is demanding.

The Harris policy assumption about price-gouging goes beyond the traditional U.S. political understanding that it may be happening if there’s actual evidence over time of collusion within an industry.  Policy on that is variously careful or incendiary and demagogic, depending on whether there’s ranting and raving about “price-gouging” and politicians like Elizabeth Warren are involved.

Sometimes there isn’t ranting and raving, and interest groups (often from industry competitors or others affected by the alleged collusion) want an investigation in order to get relief from what they perceive as “trust” group conspiracies.  This is provided for in federal law.

In such cases, the terminology is usually “price-fixing,” which sounds a bit less malevolent than “price-gouging,” and differs because identifying it more temperately reflects that it’s supposed to be subject to rigorous criteria defined in law.  You don’t just shriek “gouging!” and then run off with an open-ended charter to wreak havoc in the economy.

But the demagogic ranting and raving are obvious in the situation of spiraling prices in 2024.  Recall, for example, the general bad faith of the Democrats’ posture on spiraling prices and the economy.  It doesn’t make sense as economic analysis or even a discussion of reality.

The Administration Formerly Known As Biden (TAFKAB) has been assuring us for more than two years now that we mustn’t trust our lying eyes:  inflation is greatly exaggerated, and we really aren’t paying enormously higher prices for food since Biden took office. Yet in the summer of 2024, Harris comes along to suddenly join the Warren bandwagon and inform us that, yes, we are paying much higher prices for food (and rent, and fuel, and everything else), and what we’re seeing is not inflation, per se, but price-gouging.

This is sleight-of-hand.

Inflation is a monetary phenomenon.  It refers to devaluation of the currency, and it happens inevitably when debt-financed government spending gets way out of whack.  We have inflation going on with the U.S. dollar, and it’s a major contributor to spiraling prices.  That’s what conservative critics and traditional economists have been speaking about.

Inflation’s not the only contributor.  The regulation-forced increase in energy prices, mostly the fault of TAFKAB, is another major contributor – to everything else in the economy, across the board.  To some extent, monetary inflation itself is affecting the price of fuel, but U.S. regulatory restrictions that inhibit fuel production are making it scarcer globally, meaning American consumers have to outbid the rest of the consuming world to keep having available what our economy demands.  Even without monetary inflation, the price of fuel would be going up in the U.S.  With inflation, it’s just going up faster.

Likewise with power-grid energy, for which prices have soared for many.  Food retailers and farmers are paying a lot more now in many cases for their grid-sourced energy than they were four years ago, just as the transportation industry is paying significantly more for fuel.

The industries that bring you food are not colluding to jack up prices.  They have to cover their operating costs, and their operating costs have soared, just as your basic operating costs – fuel, energy (utilities), rent – have soared.

In some states, employment regulations are also making it more expensive than it was only two-three years ago just to have employees (yet often without any additional pay going to employees, depending on the nature of the regulations).  This factor reduces the number of viable businesses (some simply can’t stay in business) and thus squeezes out the price benefits of competition.

Other factors among the many that affect consumer prices are unusual concentrations of adverse events like “friction” in the supply chain from Houthis firing missiles in the Red Sea, and bird flu being found in chickens and cows, resulting in federal regulators ordering mass slaughters of livestock.

Similarly, absurd changes in law and law-enforcement policy saddle retailers with rapidly increasing costs from theft and vandalism.

There’s a lot more to cite among the myriad influences affecting consumer prices.  Regulation and monetary inflation are manifestly at work, as they have to be because they have decisive impact on the costs being absorbed by businesses.

Conversely, “price-gouging” basically cannot be at work, because profit margins in all the industries that contribute to food retailing remain low.  Retailing itself is pretty much the lowest, in terms of profit margin, at 1.4%.  Walmart is not colluding with anyone to price-gouge your wallet.  Neither are local grocery chains, mom-and-pop stores, farmers’ markets, or restaurants.  They’re trying to cover their increasing costs.

Please don’t be fooled that the discussion can safely end with a rhetorical filleting of price controls.  The Trojan horse here is price-gouging.  That’s how the Marxism creeps in.  While we’re all pointing out how much better we know than to agree to temporary, general price controls, we’re failing to see the real poison pill:  the evil premise of Marxist-defined economic relations, and the political adoption of an arbitrary, never-ending witch-hunt for an ill-defined offense called price-gouging.

This drama, incidentally, is a superb case-study of how creeping Marxism in the progressive administration of your government is slipped right past you.  Everyone feels well-informed about the temporary matter of price controls; the earnest, undoubtedly intelligent discussion of it sucks up all the oxygen.  Meanwhile, the premise is quietly laid for expanding government to yet another emotional, demagogic experiment, with great promise for abusing the people.

Don’t let the witch-hunt for gouging get started.

There are a couple more economic topics on which good discussion points emerged last week, and we’ll have a few words on them below.  In the meantime, there are a couple of defense and security developments to present – mostly without additional commentary, because if I wrote in-depth on everything I’d never get anything published.

Defense and security escapades

One is the astonishing (or perhaps not) news that the U.S. is recruiting Afghan refugees to learn the skills to build nuclear-powered submarines for us.  And not just nuclear-powered submarines, but apparently our new class of strategic nuclear-powered ballistic missile submarines (SSBNs).

That last point is double- and triple-verified.  The Navy admiral in question made a commitment of Navy involvement in the project in 2021, as the Program Executive Officer on the Navy staff for strategic submarines, specifically with construction of the Columbia-class SSBN in mind.

The entities involved are an institute based in Danville, Virginia called the Institute for Advanced Learning and Research (IALR), in cooperation with the Spectrum Group, a Beltway consultancy for the defense and government infrastructure and services industries.  The trainees are recruited to the IALR, where they are to learn the skills to become workers in industries like nuclear-powered submarine building.

My opinion can be expressed pretty briefly.  I have no prior animus against the Afghan refugees, but I do note that many of them are likely to have family still in Afghanistan, and thus are subject to ready levers against their loyalties in sensitive industries in America.  I also see no reason why they need to be recruited for this industry niche in preference to the many American citizens who, among other things, already speak and read English to a level that would make technical training go faster.

It’s a serious question why “we” would prioritize hiring recent foreign refugees for such work.  There are many other useful lines of work for the refugees to earn a living in.

I note that the Spectrum Group is listed as a subsidiary of DC Capital Partners, LLC, an investment group with Richard Armitage on its board of advisors, and two top leaders (both named Campbell, though there’s no obvious family connection) with offices in each corporate entity.  The Campbell who is a managing partner with DC Capital Partners has been on the board of the Center for a New American Security, a progressive defense/security think tank chaired by Richard Armitage, with such luminaries as Michele Flournoy and Jeh Johnson on its board.

I have nothing against any of the personalities involved, but I’m not convinced any of this is a good idea.

Belt, Road, and Container

The other national security development has to do with China, and the discovery of drones being smuggled to Libya among parts for wind turbines.  The Italians made the discovery in June; the report is from July 2024, some six weeks ago.

Interestingly, the port of Gioia Tauro in Calabria, where the discovery was made, is experiencing a significant increase in traffic due to overflow from major Mediterranean ports nearer the sea’s western perimeter, brought on by the traffic diversion from the Houthi-menaced Red Sea.  (The situation is a reversal of the trend in 2019, when the infrastructure-rich port was being sold off due to loss of traffic to competitors in Mediterranean port ops.  It’s the kind of situation ripe for Chinese investment.  The port sees a lot of Mafia drug trafficking according to local reporting.)

China is taking advantage of this to fund the installation of new Chinese cargo cranes in Gioia Tauro.  The ZPMC cranes are the ones I’ve called out before at TOC as state-of-the-art, and, according to testimony from U.S. officials, likely to be recording and sending masses of data on U.S. shipping and port operations (e.g., in the Port of Los Angeles) to a CCP-linked mothership.

The likelihood that China is covertly shipping drones, and even container-launched missiles, to foreign ports – including ours – has also been noted with in-depth treatment at TOC.  In the case of the shipment to Libya, the cargo was reportedly bound for Benghazi, under the control of warlord General Khalifa Haftar, who controls about three-quarters of Libya and is backed by Russia against the government recognized by the U.S., EU, and UN, nominally seated in Tripoli.

All of these are destabilizing conditions that only continue to burrow in and expand their significance.  It does not seem particularly wise for Italy to accept Chinese cranes, running about 170-175-feet in height and probably embedded with spy sensors and devices, at a port near the toe of the “boot” overlooking the Strait of Messina, and in easy distance from the major U.S. and NATO air base at Sigonella, Sicily.  (A sector of the Italian coast guard also operates from the Gioia Tauro port.)

Also worth noting:  in May 2022, after the invasion of Ukraine, a ship originating from Canada was caught in Gioia Tauro trying to smuggle U.S. drones to Russia.  It’s always something.

“Economy, stupid” update

The first item here has to do with Kamala Harris’s promise last week to “build 3 million new affordable homes for the middle class.”

Just a couple of comments on this.  One is that housing costs have soared in many U.S. markets in the last three years, due largely to rapidly climbing interest rates (as the Federal Reserve ups the prime rate in a purported attempt to rein in monetary inflation) and increasingly scarce inventory.  Solvent homeowners are keeping their properties, even if they could use the capital from selling and move on for other things, because the cost of buying another home is now so high.  Unaffordable home prices are also driving entry-level buyers into increasingly tough rental markets.

A number of analysts attribute the market problem at least partly to a huge increase in speculation investment by foreign-backed (mainly Chinese) real estate groups.

The rapid change in conditions is clearly not due to mere underlying market forces.  That seems to be the bottom line.

Harris’s vow to build 3 million new homes sounds to the inattentive ear like some sort of plan to plunk down a new round of small suburban tract homes, like the ones that proliferated after World War II.  We can assume with high confidence, however, that it’s not.

Rather, an excellent write-up from February 2024 at the California political blog CalMatters offers a better view of what Harris would be talking about.  The summary by Ben Christopher describes how developers have been jumping into a red-tape-avoiding program launched by Los Angeles Mayor Karen Bass when she took office in December 2022. 

The attraction of the program isn’t that it’s subsidized.  It’s not.  It’s that it avoids a lot of the usual red tape, and it requires very high-density, small-apartment development, basically as if the developers are building tiny high-rise dwellings for Chinese workers in industrial cities.

It sounds awful.  But it’s an obvious way to get 3 million “new affordable homes” built with an agenda to cram entry-level American buyers into them.  Developers can earn more on less land, and progressive regional planners can high-five each other over the density “wins.”

Some of the red tape the Bass plan avoids (or skirts lightly) includes environmental impact assessments and land-use consideration of projects by the local communities.  In other words, communities without a lot of juice, such as moderately-priced neighborhoods where young parents have small children and elderly owners have kept the small properties they paid off years ago, are likely to have no recourse as they see jam-packed high-rises going up within blocks of their pocket parks, homey strip malls, and streets walkable to schools and grocery stores.

Beware leftists bearing “housing” plans.

Uranium Jerky does Michigan

The second economic development is a curious drama unfolding in Michigan.  I’m still working the backstory on this, and so don’t have a lot to report on it yet.  But it’s very noteworthy.  It involves the rare restart of a previously decommissioned nuclear power plant called the Palisades Nuclear Plant, in Covert, Michigan.

It’s the first such restart ever (i.e., from full decommissioning) in the United States.  As the Canary media article (above paragraph) indicates, there’s little precedent anywhere else in the world either.

Given these realities, ponder for a moment that radical-left Michigan Governor Gretchen Whitmer endorsed this resurrection.  Not only that, but TAFKAB has already committed to a $1.5 billion subsidy, and the project is being fast-tracked, with the prospective owner of the plant, Ohio-based Holtec International, promising to have it online by the end of 2025.

Industry experts, and even those who just follow the industry as a public interest, recognize that as an epically heroic timeline.  In mid-2024, Holtec’s project has started the process of public hearings on the recommissioning plan, and according to the full proposal, from 2022, Holtec would already have a substantial portion of the work done.  Full approval by the Nuclear Regulatory Commission, however, awaits completion of the hearings and multi-agency sign-offs.

Holtec is a well-established nuclear-industry company (with a history of operating in other forms of energy), and I have nothing against it that I know of.  I’m a proponent of nuclear power as “clean,” efficient energy.  That’s the perspective from which the following quick-look comments come.

One is that Holtec is a private company (i.e., not traded on the market).  Private companies are rare among nuclear plant operators.  Holtec had purchased the plant from its previous owner-operator, Entergy, with the intent to complete decommission and dismantling.  But the company made the decision to attempt to recommission the Palisades plant in a short span of time in 2022, within days after its decommissioning in May 2022.  (Again, see the full proposal PDF for much of the detail on this.)

Holtec stepping in as a private company to recommission a power plant commands interest, given the reality that, while private-company status affords more latitude in operational decision-making and risk-taking, it also affords less access to traditionally-acquired capital for the extremely expensive front-loaded costs.

The private-company aspect is also reminiscent of a most unusual episode: that of the Bellefonte nuclear power plant in northeastern Alabama, which culminated in late 2018 with a decision by the Trump administration to deny a private buyer, Franklin L. Haney, his bid to purchase it as a sole private owner.

If Haney had succeeded, he would have been the world’s only sole-proprietor owner of a nuclear plant.  Haney was a federal contractor whose close connections went back for years with the Clintons and Gores; he had no experience at all running a nuclear plant, and the Bellefonte plant had never been brought online after its initial construction.  It still remained to be furbished up and fueled, at great expense, before it could start operations.

The whole incident was very odd.  Besides involving Michael Cohen (yes, that Michael Cohen), the Bellefonte drama featured a financing hunt with wealthy Qataris, and apparent fast-tracking followed by the abrupt shutdown by the Trump administration.

Holtec, at least, is a company with an established reputation in the nuclear industry.  So let us move on.

A second comment is that Holtec’s signature segment of the industry has been the handling of nuclear waste.  In the last decade, in addition to its U.S. operations, Holtec contracted to provide nuclear waste storage containers to China, among quite a few other foreign customers.  (A 2018 contract was to deliver containers to China in 2020; China is now building its own storage containers for nuclear waste.)

At any rate, Holtec doesn’t start with corporate experience in operating the traditional pressurized water reactor (PWR) light water reactor that would be restarted at Covert, Michigan.  The plan is to bring in an experienced operator.

Alongside its long-term waste-handling and storage specialty, Holtec is on a path of developing small modular reactors (SMRs) – an interest many readers will be aware makes Holtec a competitor to Bill Gates’s TerraPower enterprise in diverse-concept, new-generation reactors (scroll to “Uranium jerk” here) – and has inked SMR contracts with South Korea and Ukraine.  Holtec’s South Korean partners signed on for a big investment in SMR development in May 2023, some two weeks after the SMR contract with Ukraine discussed below. And Holtec is in the running for SMR contracts in the UK.

Holtec already has a major SMR-160 contract with Ukraine, which both Ukraine and Holtec are busy fulfilling even as war with Russia rages in Ukraine’s eastern provinces.  This, we can assume, has the attention and assistance of TAFKAB, which has provided billions to Ukraine for national infrastructure redevelopment.  The contract, in progress before February 2022, was finalized in April 2023, a year into the Russia-Ukraine war.

Holtec’s connection to Ukraine also involves an earlier partnership in processing waste from Ukrainian reactors.  The partnership continues, resulting in 2023 in Ukraine inaugurating the world’s first dry-storage facility for spent nuclear fuel (located in the Chernobyl Exclusion Zone, about 14 km from the border with Belarus).  At the outset of the current Russian-invasion conflict, TOC investigated the long-running U.S. connection with the nuclear industry in Ukraine; it was pretty rooty-tooty, more so than most readers may be aware, and Holtec has had a part in it.

It’s worth noting as well, in this semi-spicy menudo, that Holtec has a subsidiary that decommissions and dismantles the U.S. Naval reactors from aircraft carriers.

A final comment is that Holtec’s baseline interest in handling nuclear waste is a company business alongside the SMR project, which is in great part about building numerous reactors where spent fuel waste will proliferate, and according to concerned analysts is not being adequately prepared for (see here and here, for example.  A search will turn up numerous examples; it’s a hot topic). 

My point is not that there’s a conflict there, but rather a potential synergistic confluence of interests – if one wants to have a lot of nuclear waste under unified processing, handling, and/or storage.

In that context, Holtec would be restarting a traditional-style PWR reactor in Michigan that would create waste needing handling and storage elsewhere.  (Holtec in 2023 obtained a federal license to operate a new site in New Mexico for interim underground storage of used nuclear fuel.)

Operating SMRs, in the meantime, is about having a lot of waste under storage in small batches, spread across a lot of geography.  At a certain point, the waste will need disposal, but observers aren’t seeing proactive planning for that.  That seems odd.  (Holtec, incidentally, plans to build two new SMR-300s at the Palisades plant site by 2030, to operate alongside the PWR light water reactor.)

Worth thinking about.  You don’t just assume the best about something so important.  At a minimum, the U.S. Congress needs to work now to ensure we’re ahead of the issue of nuclear-waste supervision with SMRs.

More in the grab-bag

We’ll top off the Ready Room with a few other random topics.

I note that the carrier USS Abraham Lincoln (CVN-72) was welcomed to CENTCOM on 21 August after a transit from Guam that began on 9 August.

The welcome message is sent when the carrier enters CENTCOM’s theater (i.e., at a dividing line in the Indian Ocean), so Abe had not reached the Arabian Gulf (or potentially the Gulf of Aden) at that point.  As of 22 August, the carrier would be about another day’s transit to an operating location for CENTCOM tasking.

One of the additional random topics is that X (formerly Twitter) has decided to end its operations in Brazil (although the social media platform will remain available to users in Brazil.  Elon Musk is withdrawing any corporate footprint from the country).

The reason is the pressure an official in Brazil has been putting on X to terminate the accounts of over 300 Brazilian users, clearly because of their political posture.  Topping the list of the threatened accounts is that of former Brazilian president Jair Bolsonaro.  Bolsonaro remains a vocal opponent of the government of Luiz Inacio Lula da Silva, the socialist former president (2003-2011) who was returned to office in an irregularity-filled election in October 2022 (assuming office on 1 January 2023).

Justice Alexandre de Moraes, president of Brazil’s Superior Electoral Court and a justice of the Brazilian supreme court, is clearly trying to silence Lula da Silva’s political opposition.  Congressional Republicans in Washington put out a report on this in April 2024; Musk has finally had to decide to pull corporate operations out of the country.

Meanwhile, the scourge of Monkeypox (the politically correct term is now “mpox” – which is not a joke; the name really was changed to mpox in order to remove the possibly-offensive word “monkey” from the nomenclature) is being touted by the World Health Organization as a threat.  By no measure is “mpox” verging on an epidemic, much less a pandemic.  But WHO is warning of the need for lockdowns.

For background and a sanity check, I append here a brief post-thread from X on this matter.

For those with quick perception, yes:  I agree this is probably related to pushing the cause of irregular, poorly-supervised voting in the U.S. election in November.  Scary disease?  Bring on the mass-mailed ballots, pop-up “early-voting” kiosks, and drop-boxes.

Another subject worth a short tag is a question advanced on X last week about what the U.S. Department of Education actually does.  The shortest of answers is that it administers federal regulations and grants relating to education.  It’s about regulation and money.  But as always, government regulation and money are connected with leverage, influence, and even extortion of constituencies and targets.  The ultimate point is to push a political agenda, typically one that Congress wouldn’t vote to implement.

Here’s an X post expressing that in a succinct, easy-to-remember, and accurate way.

I note in conclusion that a number of interests the federal government has taken, with progressive bureaucratic government over the last 100-odd years, are well described in the same fashion.  Examples include housing, urban development, regional planning, and large-scale land management.  Using federal money to bypass state legislatures and override the interests of local communities in those matters is now a standard, pervasive, and tyrannical practice.

Feature image: U.S. Navy photo by Photographer’s Mate 2nd Class Felix Garza Jr. (Via Wikimedia Commons)