A version of this story appears in CNN’s What Matters newsletter. To get it in your inbox, sign up for free over here.
The good news is that the government has found a way to do something about climate change. The bad news is that lawmakers have done so in a very ineffective manner.
We’ve spent a lot of time covering the massive passage of the climate and health care bill that Democrats presented as a major step toward combating climate change. Among its many provisions, the legislation includes tax credits for electric vehicles.
So I was surprised to read in a CNN story that, according to an industry group, zero electric vehicles currently available would be eligible for the full tax credit next year.
Companies will have to adjust their production to meet US production requirements for vehicles and to source batteries. The hope is that these requirements will make the US economy more independent of China.
Moreover, income and price limits will cut a large portion of the electric vehicle market out of eligibility.
These requirements and more were added to get the primary vote for West Virginia Senator Joe Manchin, who torpedoed the inclusion of more robust climate provisions in an earlier version of the bill and insisted on substantive changes during subsequent negotiations.
Read Matt McFarland’s full report for a summary of the complex new rules regarding electric vehicle tax credits. I reached out to McFarland with some follow-up questions about how effective these credits are in changing American roads — something he said there is no perfect answer for him.
What matters is: What do we know about how long it will take for car companies to adapt to these new rules and get more fully qualified cars on the market?
McFarland: It’s hard to know how long that will take. Depends on a lot of factors. What changes are they (car companies) making? How will the federal government measure eligible vehicles? There are big gray areas right now.
It may also be costly for automakers to make certain changes. So they will have to evaluate the financial benefits (to make the cars eligible for EV credits).
What matters is: What do we know about how long it will take for these credits to dramatically reduce the number of carbon-emitting cars?
McFarland: Electric cars are growing but still make up a small part of our fleet. Radical change would be elusive.
Another thing that may hurt the uptake of electric cars is the fact that gas prices continue to fall from record highs earlier this summer.
This is good news for consumers struggling to deal with inflation – and possibly bad news for the environment.
It is still impossible to understand the fluctuations of the economy.
Gasoline and diesel prices are dropping. Natural gas is rising.
CNN’s Kristen Romance calls it the economics of Dr. Jekyll and Mr. Hyde. You write that the good guy, Jekyll, is winning this week.
“This stagnation mania has faded a bit over the past 10 days or so amid continuing indications of labor market strength, lower gas prices, and hints that runaway inflation may have peaked,” Roman writes.
Falling gas prices allow consumers to spend more. They’re showing some austerity to get more bang for their buck.
But she notes that polls still show “the public feels bad about the economy”.
Yet it may be that high-income people are driving the continuing consumer power – so it’s, as ever, unequal.
The metaphor that CNN’s John King used on “Internal Politics” has been a seesaw — mortgage rates are dropping in the short term, suggesting that inflation may go down, but home sales are down, too.
CNN’s Matt Egan told King that home sales are down 30% in the South and West. But prices continue to rise, albeit more slowly, to $404K, based on 10 consecutive years of home price increases.
One pressing question is how cautious optimism that inflation is cooling and the economy has weathered the worst of it will affect the political situation.
Before speaking to Egan, King spoke to Amy Walter, publisher of the Cook Political Report (and my longtime boss at a different news organization).
She sees more optimism for Democrats in November and points out that on ballots in Senate races in particular, Democratic candidates are outperforming President Joe Biden’s poor approval rating.
The Cook Political Report changed its race rankings to bring the main race in the Pennsylvania Senate from “retreat” to “lean Democrat.”
She argued the main political debate around abortion this summer and the new focus on former President Donald Trump could hurt Republicans in November.
“The focus was almost entirely on the Republicans, and not in a good way,” Walter said.
Republicans still have a historical advantage ahead of the midterm elections, when the president’s party always loses some seats—and Democrats only hold the fewest majorities in the House and Senate. The end result could be a net majority for Republicans after November, rather than a bombardment that some Democrats fear.
“We’re seeing a touch of optimism creep in, in terms of voters’ views of the economy,” Walter said. “It won’t turn around overnight. But at least if the trend line is going in the right direction, that’s good for Democrats. The more focused Donald Trump, it’s good for Democrats too.”
Trump will be in the spotlight somewhat as Election Day approaches. The Trump Organization is on trial in October, and Trump, working to cement his power in the party, continues to dominate the headlines in the world of legal cases swirling around him.
But the economy may be more than Mr Hyde by then, which could completely change the political equation.