Highlights of My Weekly Reading, August 25, 2024

Analysis of Recent Economic Developments

by Donald J. Boudreaux, American Institute for Economic Research, August 21, 2024.

President Xi and his government officials in China have been facing challenges in their push for large-scale production of electric vehicles (EVs). Despite their efforts, it seems that the Chinese may not have a comparative advantage in this industry. Redirecting resources into EV production on such a massive scale is proving to be counterproductive. While there is a possibility that with more resources, China could eventually gain a comparative advantage in EV production, the current situation does not look promising. The Chinese government’s continued subsidies and protections for the troubled EV producers are funded by taxpayers and consumers, highlighting the potential pitfalls of central planning in the market.

The Impact of Declining Birthrates on Welfare States

by Ryan Bourne, Cato at Liberty, May 16, 2024.

The declining birthrates in many countries pose a significant challenge for pay-as-you-go welfare states and economic growth. While there have been proposals for pro-natalist policies such as baby bonuses and childcare subsidies, the effectiveness of such measures is questionable. Past experiences in countries like Australia and Nordic welfare states show that financial incentives may only lead to temporary spikes in birth rates without addressing the underlying issues. The focus on financial incentives may also result in the “re-timing” of births rather than a sustainable increase in birth rates.

The Challenges of Alcohol Labeling Mandates

by C. Jarrett Dieterle, Reason, August 24, 2025.

Mandates for nutritional and ingredient labeling in the alcohol industry pose unique challenges, especially for small businesses like craft breweries, distilleries, and wineries. The pre-approval system enforced by the Alcohol and Tobacco Tax and Trade Bureau (TTB) for alcohol labeling adds a layer of complexity and cost for producers. This system contrasts with the post-market enforcement of food labeling by the FDA, making it particularly burdensome for businesses that rely on innovation and seasonal products. The prospect of having to get labels preapproved annually could be detrimental to small breweries and hinder their ability to adapt and thrive in a competitive market.

The Shift Towards Hybrid Vehicles Amid Regulatory Challenges

by Joe Lancaster, Reason, August 23, 2024.

A major automaker’s decision to prioritize hybrid vehicles over battery-powered electric vehicles (EVs) reflects a strategic focus on transitional technologies. However, federal regulations, particularly the EPA’s new emissions standards, could complicate this transition. The EPA’s rules aimed at reducing gas-burning vehicles on the road may clash with the automaker’s shift towards hybrids, potentially leading to regulatory hurdles and market disruptions.