Keep on Trucking
You Can’t Buy That Diesel Truck
Regulation exists in a context of human behavior. In this case, the state is imposing a tax on truck dealers in the form of interest penalties related to financing inventory of trucks building up on their lots due to rules on the proportion of zero-emission trucks they must sell. The demand for these is low, so the electric trucks pile up. And the dealers are permitted to sell fewer diesel vehicles, given the poor sales of zero-emission vehicles. All of these trucks sit on the lot with the dealers having purchased them from the OEMs, financed with debt.
The state of California is trying to direct consumption. Dealers will start going out of business before this works, if it ever does.
‘This news came in a public comment filed by the National Automobile Dealers Association with the Environmental Protection Agency regarding California’s Advanced Clean Fleets rule. The regulation says “zero-emission” trucks must be a growing share of semi-truck fleet sales. California imposes a similar mandate for passenger cars. Trouble is, truckers aren’t buying electric big rigs because they can’t afford them even with $40,000 in federal tax credits. Electric trucks cost twice as much as diesel-powered rigs and have a limited driving range—150 miles on average, compared to between 1,000 and 1,500 for diesel trucks. There are also few truck charging stations.
‘Yet under California’s rules, “dealers are restricted from selling a diesel truck unless they sell a ZEV truck,” the dealer group reports. The result: “New class 8 truck sales (ZEV and Diesel) were down 50 percent year-over-year in June 2024.” Truckers are driving older engines longer because they can’t buy newer diesel models, which results in more pollution.
‘Dealers say trucks are piling up on their lots—electric models because truckers won’t buy them, and diesel rigs that dealers consequently aren’t allowed to sell. Dealers say they incur monthly interest penalties on unsold truck inventory that can amount to more than $99,000.’
Can AI regulation survive the First Amendment?
I missed this. The big headlines were around the veto of SB1047, the principal AI regulation that was on Newsom’s desk. Meanwhile, he signed eighteen other pieces.
The problem that these regulations may encounter is that they work to restrict freedom of expression. See for example, the law that punish people for publishing deepfakes within sixty days of an election that were intended to deceive voters. This includes satire. A judge already ordered a preliminary injunction for that one.
‘I say that because, despite vetoing SB 1047, Newsom signed 18 other AI regulations into law. Taken together, it may be the most sweeping package of legislation we have seen so far intended to regulate the misuses of generative AI. ‘
New California law bars cities from implementing voter ID requirements
We’ve written about subsidiarity and jurisdictional overlap before, both of which come into play in this instance. The state doesn’t think cities are the correct level of government for this question, even when it comes to make the rules for local elections.
If someone cannot get an ID, should they be allowed to vote? Is this a minimum acceptable threshold of intelligence and social engagement? How difficult is it to get one in California? Do they make you pass a math test?
The tradeoff here is the number of people who would disenfranchise themselves by not having ID in time to vote vs. the decline in trust in the fidelity of the result. Is the former number really so high? How do they even know?
‘Gov. Gavin Newsom has taken aim at Huntington Beach with a new law that prevents the governing body overseeing elections in California from requiring voter identification at the polls.
‘In March, voters in the beachside city approved a measure requiring residents to show valid identification when casting a ballot. The measure, which impacts city elections, is expected to go into effect in 2026.
‘In April, California Attorney General Rob Bonta and California Secretary of State Shirley N. Weber filed a lawsuit against Huntington Beach, claiming the voter-approved measure “unlawfully conflicts with and is preempted by state law.”’
The flooding in North Carolina has led to a grassroots, ad hoc response, in part because people have little faith in the ability or willingness of the federal government to respond effectively, days after the event.
This comes amidst reports that FEMA is running out of money.
It is times like this when public expectations of administrative competence are bolstered or broken.
‘Desperate residents of Hurricane Helene-ravaged western North Carolina are relying on homegrown rescue efforts instead of waiting for the Biden-Harris administration’s financially depleted FEMA to get its act together.
‘Not content to hold out hope for help that some fear might not arrive in time, a handful of grassroots rescue operations have sprung up to render assistance by air, land and even on four legs.’
Spirit Airlines Explores Bankruptcy Filing
This was predictable. The Department of Justice sued successfully to block the merger of an embattled Spirit Airlines with JetBlue, in a consolidation of the hurting low-cost carrier space. Justice argued it would have harmed consumers by lessening competition.
This deal was a bailout of Spirit and its predictable financial distress. Now that it’s on the verge of restructuring, guess what? It’s cutting capacity massively. Fewer flights from a financially weaker carrier means less competition.
We had to destroy the village to save it, sir.
‘Spirit’s deal to merge with JetBlue was struck down in January by a federal district judge who sided with the Justice Department’s argument that the combination would have reduced competition and harmed travelers who rely on Spirit’s low fares. The two airlines subsequently called off the merger deal saying that they probably couldn’t overcome the legal and regulatory hurdles.’
The reason why antitrust authorities don’t go after unions for acting in a way that abuses their market power is because the Clayton Act explicitly says that the labor of a human being is “not a commodity or article of commerce.”
It’s too bad that Congress isn’t willing to reconsider this because large scale actions like the ILA’s shutdown of ports affects the American consumer writ large, poor or rich. For a small group to demand a persistent rent that inflates the cost of goods for everyone else based upon the union members’ position at the bottleneck of commerce isn’t right.
‘The only way to get stably higher union pay is through monopolization. Unions need to get most or all producers of labor in a market to act together and fix their prices at a high level. That way, the consumers of labor have no other option but to accept lower output and pay higher prices.
‘This is a monopoly or trust in exactly the same way as when US Steel, Carnegie Steel, and Federal Steel all agree to set their prices high, forcing customers to pay more. If you think that goods sellers colluding to set prices is bad, then you should think that service sellers colluding to set prices is also bad.’