Table of Contents
I would not want to be working in a port right now. Or working as a truck driver. I’m not alone there, either. All that and more in The Morning Shift for December 20, 2021.
1st Gear: If You’re Wondering What’s Driving Inflation…
…It wouldn’t be hard to say that poor working conditions in the shipping industry are to blame. The pandemic is ongoing, the work is risky, and the pay is not cutting it. No surprise we’re seeing record year-over-year rises in costs for shipping, as Bloomberg reports:
The government’s latest data on producer prices showed the costs of transportation and warehousing goods for final demand soared more than 18% in November from a year earlier. That’s the largest annual advance in data back to 2009.
Higher freight costs are feeding an inflation beast that’s eating away a bigger share of consumers’ incomes and raising costs for companies. A flurry of demand earlier in the year set in motion instability in supply networks as producers and merchants scrambled for product.
Dive into the Labor Department’s detailed report on producer prices last week and you’ll see that the cost of moving freight across oceans in November was up almost 26% from a year ago, the biggest annual gain in data back to 1988. Freight costs via trucks are up more than 16%, the second-most on record, while shipments by air and rail have also posted big advances.
It’s funny seeing this framed as something that’s driving inflation, as if that’s the major complaint (and not the job itself being particularly exploitative and bad these days) but this is Bloomberg we’re talking about here.
2nd Gear: I Told You Mining Issues Were Coming Home
I’ve always maintained that questions about lithium ere going to get interesting when mining projects moved not just from somewhat far-flung corners of the globe like Chile to on the doorsteps of major developed economies. Well, please enjoy this headline from Bloomberg reporting on a giant new lithium project in Serbia “hitting roadblocks.” It’s “The World Wants More Lithium But Doesn’t Want More Mines” and it’s a fun read:
Prices for lithium, the building block of electric-vehicle batteries, shot to a record this year, amplifying concerns there won’t be enough of the metal to fuel the switch away from combustion engines. In that climate, now should be a prime time to build a mine.
Rio Tinto Group is finding out otherwise. Within months of unveiling plans for a $2.4 billion mine in western Serbia, local opponents organized a movement that’s rocked the government and brought cities to a standstill as thousands of protesters march in the streets. Authorities subsequently suspended a land-use plan for the proposed mine, though they didn’t reject the project completely.
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The article includes this wonderful summation of people having the audacity to not want to shit where they eat:
Historically, mining offered jobs and economic development to typically poor areas, with taxation and royalties to fill government coffers. But all too often, people living nearby paid a price for environmental degradation and occasional catastrophe.
That’s changing. Locals are pushing back, deciding that the economic benefits don’t outweigh the costs to their quality of life. Governments also are increasingly unwilling or unable to override those concerns.
3rd Gear: New Leftwing President In Chile Takes Radical ‘We Shouldn’t Destroy The Environment’ Stance On Mining
The other side of this issue is that even those far-flung corners are reckoning with their mining projects. We may be seeing some big news about Chile in the near future, as it just elected a new leftwing president not too keen on selling out Chile’s environment. From the Financial Times:
Gabriel Boric, a former student protest leader, has won the final round of Chile’s presidential election as the Latin American country took a decisive shift to the left after several years of civil unrest.
During his victory speech, Boric, who is part of a broad leftwing coalition that includes the Chilean Communist party, said he would oppose mining initiatives that “destroy” the environment. That included the contentious $2.5bn Dominga mining project that was approved this year.
You can read more on the Dominga project here. It’s not a lithium mine, but it is a big operation.
4th Gear: So Much For Arguing About That EV Tax Credit
There’s been a lot of complaining about Biden’s proposed tax credit for union-made American EVs. Lol! That was fun while it lasted. Here’s Bloomberg reporting on Manchin and the Democrats as a party completely failing to get shit done:
Other items that have little to no chance of passing without Manchin climbing back on board include Medicare negotiating some drug prices, a paid family leave benefit, tax credits for electric vehicles and a transition to cleaner energy.
If the White House can’t regroup and cobble together a radically reworked and smaller bill to win Manchin’s support — and keep other Democratic constituencies from scuttling the bill in kind — none of that will happen.
5th Gear: What’s $11 Billion To You?
Sounds like a lot to me, but I’m not the richest person on Earth complaining about paying taxes. From The Wall Street Journal:
Billionaire Elon Musk, the world’s richest person, said he will pay more than $11 billion in taxes this year.
The Tesla Inc. chief executive made the disclosure in a tweet on Sunday without offering additional details.
“For those wondering, I will pay over $11 billion in taxes this year,” Mr. Musk said on Twitter.
He faces an August 2022 deadline to convert roughly 22.9 million vested stock options into shares or let them expire worthless, according to a regulatory filing. He would need about $143 million to exercise those options, and could owe more than $9 billion in federal income and Medicare taxes upon exercising them.
Under California law, Mr. Musk also likely would face a sizable state tax burden because exercised options are treated as compensation partly earned in the state while he lived there.
That California tax likely would be due even though Mr. Musk said in late 2020 that he had moved to Texas.
Reverse: A Movie With More Chicken Content Than You’d Expect Going Into It
Neutral: Let’s Talk Strikes
Somehow I’ve never got caught up in a strike, even though we’re a union shop here at Jalopnik. I’m sure a lot of you out there have been involved in one, maybe even over the past year. How did it spring up and how did it shake out?