Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How a State Light-bulb Law Could Revive the American Factory

Economics / US Economy May 20, 2011 - 05:18 AM GMT

By: Money_Morning

Economics

Best Financial Markets Analysis ArticleMartin Hutchinson writes: South Carolina is close to pulling off a dramatic end-run around the federal government.

If that state succeeds, the end result could have a serious impact on every U.S. manufacturing industry from cars to toilets.


It could even help balance state budgets.

Dueling Light-Bulb Laws
I'm talking about South Carolina's Incandescent Light Bulb Freedom Act - a trivial-sounding piece of state legislation that could open a significant loophole for states that are desperate to create jobs and drum up revenue.

The Energy Independence and Security Act of 2007 - a predating piece of federal legislation - decreed that all incandescent bulbs be phased out by 2012, and permanently replaced by their fluorescent and halogen counterparts.

That's where the loophole comes in. You see, South Carolina's light bulb legislation would let the state continue to manufacture and sell incandescent bulbs - so long as they were made and sold exclusively in South Carolina.

While South Carolina's attempt to nullify a federal law smacks of an antebellum crisis, the move may well work. That's because, according to the Supreme Court's 1935 decision in the case of Schechter Poultry vs. United States, the federal government does not have the power to regulate commerce that is entirely conducted within a state.

So if South Carolina attempted to buy incandescent light bulbs from one of the country's leading manufacturers, it would be in trouble - since none of the major light bulb manufacturers are South Carolina companies.

But if South Carolina makes the bulbs itself, and offers them for sale only within the state, the Schechter decision would seem to apply - though subsequent Supreme Court decisions in the opposite direction make the question a close one.

Chocolate Eggs, Toilets and '59 Caddies
Still, if successful, this would be a major coup for many U.S. manufacturers, as it would set a significant precedent. Soon, any unpopular federal product regulations could potentially be nullified by a state that's seeking popular support.

One trivial example: The state of Pennsylvania, perhaps using facilities leased to it by The Hershey Co. (NYSE: HSY), could start making Kinder Eggs - the popular chocolate egg treats that have been banned in the United States. Many children like my son, who became devotees of Kinder Eggs while living in Europe, would surely boost the Pennsylvania state economy if the treats were available there.

And there are bigger examples.

Since the late 1990s, U.S. consumers have been prevented from buying toilets that flush properly. That's because the 1992 Energy Policy Act mandated a maximum flush capacity of 1.6 gallons, which is inadequate for a truly proper flush job.

Nullifying this nonsense is the job of Wisconsin, home of Kohler Co.

Surely, Wisconsin Gov. Scott Walker would enjoy setting up a manufacturer of illegal, generously flushing toilets with the old 3.5-gallon capacity. In accordance with the law, those toilets would be sold only in Wisconsin. But that wouldn't stop desperate out-of-state customers from flooding into the Cheese State to acquire adequate sanitary facilities. The sales tax revenue alone would go a long way towards alleviating that state's budget woes.

Then there's the granddaddy of nullifications - the Corporate Average Fuel Economy (CAFE) standards. This legislation crippled the U.S. automobile industry and led to the rise of the sports utility vehicle (which initially was exempted) by mandating tight-fuel-economy standards - rather than simply using the price mechanism to reduce gasoline consumption.

Those CAFE standards will be tightened in 2016, making things even more difficult for U.S. auto manufacturers. However, citing the South Carolina precedent, the state of Michigan could pose a potential solution. All the state would have to do is set up a manufacturing facility in a disused General Motors Co. (NYSE: GM) plant and reproduce the big, gas-guzzling car U.S. consumers have always dreamed about - the 1959 Cadillac Eldorado.

The point is that, while South Carolina's initiative may have all the familiar signs of a boondoggle, it differs in one vitally important respect: It is being driven by intense consumer demand to be rid of costly product regulations.

Remember, Congress banned the sale of incandescent light bulbs, saying the new wave light bulbs would be more efficient. In reality, they are more expensive, give off an unpleasant light, and contain significant quantities of toxic mercury.

So the populist South Carolina legislature is responding by trying to liberate its residents from an unpopular federal mandate.

South Carolina Rep. Bill Sandifer, a Republican and bill co-sponsor, said the "rights to have the kind of light bulbs we want and need are our rights. They are not given to the federal government."

And if manufacturing efficiencies are even close to optimal, the "Made in South Carolina" light-bulb initiative should be a glowing commercial success.

The only problem for investors is that there is no South Carolina light bulb company in which to invest.

Similarly, Kinder Eggs would be too small a business to make much difference to Hershey. Kohler has been privately held with no non-family shareholders since 1998.And General Motors is still government controlled and has too many other inefficiencies to properly benefit from a 1959 Caddy revival.

[Editor's Note: As a global merchant banker Martin Hutchinson guided clients, companies and even entire countries by capitalizing on near-term opportunities, and by riding long-term trends.

Because of its impact on commodity prices, both in the near term and over the long haul, the rising global population requires Hutchinson to search for those more-immediate profit openings, while also scouring the horizon for the long-term trends that can create the hefty profits investors seek.

Indeed, in his "Permanent Wealth Investor" advisory service, Hutchinson has identified one particular global economy that meets all his requirements, and represents such a rich profit play, that we couldn't give it - or the investments he's recommending - away for free.

To find out more about these investments, and Hutchinson's service, check out this link.]

Source :http://moneymorning.com/2011/05/19/...

Money Morning/The Money Map Report

©2011 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in