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Trump repeats call to acquire Panama Canal... President-elect Donald Trump repeated his call to acquire the Panama Canal, along with Canada and Greenland, citing national security and economic benefits. Through a series of posts on his social media platform, Truth Social, on Wednesday, Trump reiterated his long-standing views on the importance of these entities for the United States.
“Merry Christmas to all, including to the wonderful soldiers of China, who are lovingly, but illegally, operating the Panama Canal (where we lost 38,000 people in its building 110 years ago), always making certain that the United States puts in Billions of Dollars in ‘repair’ money, but will have absolutely nothing to say about ‘anything,’ Trump wrote.
Trump added, “Also (Merry Christmas), to Governor Justin Trudeau of Canada, whose Citizens’ Taxes are far too high, but if Canada was to become our 51st State, their Taxes would be cut by more than 60%, their businesses would immediately double in size, and they would be militarily protected like no other Country anywhere in the World. Likewise, to the people of Greenland, which is needed by the United States for National Security purposes and, who want the U.S. to be there, and we will!”
Panama President José Raúl Mulino Quintero said there are no Chinese soldiers at the Panama Canal.
Investors nervous Trump could cut short the Biden clean-energy boom... President-elect Donald Trump’s administration may significantly alter the trajectory of clean energy investments, raising concerns among investors, the New York Times (NYT) reports. Since the 2022 Inflation Reduction Act under President Biden, renewable energy and electric vehicle industries have thrived, attracting record private-sector investments. However, Trump’s promises to cut clean energy subsidies, lower corporate taxes, and prioritize fossil fuel projects could shift market dynamics. While renewable energy maintains bipartisan appeal and economic resilience, policy uncertainty has prompted some banks and firms to pause new deals. The Federal Reserve’s stance on interest rates and potential tariffs further complicate the outlook, signaling a challenging road ahead for clean energy advocates.
Of note: Near the top of Trump’s agenda next year is extending his 2017 tax cuts. Says NYT: “He will most likely need to reduce spending elsewhere to do that. Clean energy tax credits — worth about $350 billion over just the next three years, according to the Congressional Joint Committee on Taxation — would be a tempting target. The more those subsidies are pared, the more projects would no longer make financial sense.”
Quote of note: “The fundamental thing that changes is just the economics,” said Ben King, an associate director of the climate and energy practice at the Rhodium Group, who has counted $435 billion in renewable energy projects that have been announced but not yet started. “Even today, wind, solar and batteries are competing with natural gas, on the margins. A slowdown in deployment of those technologies just leaves more room for gas on the grid.”
Hora: SAF could boost Iowa farmers, soil health... Donnelle Eller in the Des Moines Register writes about Mitchell Hora, founder and CEO of Continuum Ag in Washington, Iowa. He believes the development of sustainable aviation fuel (SAF) could transform the fortunes of Iowa farmers while improving soil health. As Hora puts it, “The impact that it can make on soil health and family farms is just tremendous,” potentially providing farmers with up to $100 per acre for adopting environmentally friendly practices. Corn ethanol, along with other feedstocks, could play a pivotal role in supplying SAF for the aviation industry, which accounts for about 2.5% of global greenhouse gas emissions.
Hora has shifted his company’s focus to helping farmers calculate their crops’ environmental footprint, enabling them to capitalize on these incentives. While some advocate for carbon capture pipelines to ensure renewable fuels’ future, Hora emphasizes regenerative practices like no-till farming and cover crops. “It’s not just about carbon capture,” he notes. “It’s about water quality, biodiversity, and flood mitigation.”
However, challenges remain. Federal regulations for SAF tax credits, expected to go into effect in 2025, still lack clarity. Hora admits, “There’s a lot of unknowns right now. Just tell us the rules, and we’re going to figure out what the opportunity is and how to make it work for us.”
Despite the uncertainty, Hora remains optimistic. Farmers adopting conservation practices could cut ethanol’s carbon intensity and make it viable for SAF, a market that doesn’t yet fully exist but holds immense promise. As Hora concludes, “If we want to make real, meaningful change... we’ve got to have volume.”
RFK Jr. eyes early influence on U.S. dietary guidelines... If confirmed as the Secretary of Health and Human Services, Robert F. Kennedy Jr. could shape the upcoming revision of the Dietary Guidelines for Americans, a powerful tool for influencing public nutrition. While his role won’t encompass all aspects of food policy — largely governed by USDA — Kennedy would appoint key individuals to the advisory panel and federal team responsible for the guidelines.
Kennedy has criticized corporate influence on nutrition policy and may advocate for tougher stances on ultra-processed foods, food additives and sugar consumption. His team is reportedly exploring bold reforms, such as reshaping agriculture subsidies and promoting regenerative farming. However, achieving lasting change will require navigating significant opposition from mainstream industry interests and regulatory hurdles.
USDA relocations show challenges in Trump’s federal job moves... The Trump administration’s previous attempts to relocate federal jobs from Washington D.C. to less expensive areas caused significant disruption, according to a Washington Post article. The relocation of USDA’s Economic Research Service (ERS) and National Institute of Food and Agriculture to Kansas City in 2019, aimed at cutting costs, resulted in a 50% loss of staff and reduced agency output. Employees and analysts described the move as a “kneecapping” of the agencies, citing a “brain drain” and lack of cost savings. A Government Accountability Office (GAO) report highlighted inefficiencies and attrition from the move.
From the WaPo article: “According to a cost-benefit analysis by the Department of Agriculture, released in June 2019, moving the workers to the Midwest would save taxpayers nearly $300 million over 15 years, mostly through lower payroll and office costs. But a separate review that month by the Agriculture and Applied Economics Association, a professional trade group, argued that the USDA analysis overstated the price of D.C.-area office space and failed to account for the lost value of the research that would have been conducted by employees who would leave the agency. As a result, the association said, the move would not save money but would instead cost taxpayers at least $83 million.”
GAO released a report in 2022 that called into doubt many of the touted benefits of the move, writing that top Agriculture officials overlooked key evidence. For example, “it didn’t factor in potential costs related to the attrition of staff or the disruption of agencies’ activities due to the relocation.” Of about 550 workers expected to make the journey to Kansas City, only 85 did, according to union officials.
The Bureau of Land Management’s partial relocation to Colorado faced similar issues, with most employees choosing to resign rather than relocate. Critics argue these moves created operational delays and diminished agency expertise. Proponents, however, say such moves decentralize power and save taxpayer money.
With plans to move 100,000 federal jobs in a second Trump term, these past experiences highlight significant logistical and operational challenges for the government and its workforce. The America First Policy Institute, a Trump-aligned presidential transition group, said moving 100,000 jobs and relocating entire agencies from D.C. would pierce the “Beltway bubble” and save $1.4 billion a year in payroll costs.
Furman advocates for a rules-based Federal Reserve... Jason Furman’s commentary in the Wall Street Journal argues for the Federal Reserve to adopt clearer, rules-based approaches to monetary policy. Furman, a professor of the practice of economic policy at Harvard, was chairman of the White House Council of Economic Advisers from 2013 to 2017.
Furman suggests that while the Fed has demonstrated strong judgment in some critical moments, its recent actions — such as cutting interest rates in December despite robust economic growth and persistent inflation — highlight the risks of relying too heavily on discretionary decisions. He proposes the Fed embrace a more systematic, rules-based framework for monetary policy, paired with transparent reasoning when it deviates from these rules.
The Fed’s decision to cut rates contrasts with the economic environment of higher-than-expected growth (2.5%) and persistent core inflation (2.8%). Furman views this as a missed opportunity for the Fed to align its actions more closely with its stated goals, such as inflation control.
Critics of rules argue they oversimplify monetary policy, ignoring complex and dynamic economic variables. However, Furman counters that historical examples (e.g., the delayed rate hikes before inflation spiked to 5%) demonstrate that rules like the Taylor rule could have led to better outcomes.
Furman outlines a three-part strategy for the Fed:
1. Clarify intermediate targets: Use a consistent metric for inflation, such as the market-based core PCE index, to guide short-term decision-making.
2. Adopt and publish rules: Pick a rule (e.g., a Taylor rule variant) and publicly share what it dictates at each Federal Open Market Committee (FOMC) meeting, with explanations for deviations.
3. Neutral deviations: Ensure that deviations from the rule are unbiased, avoiding a tendency to prioritize lower rates, which can contribute to inflationary bias.
Benefits of rules-based policy: Improved predictability and transparency in monetary policy could stabilize markets and foster better investment decisions. A rules-based system would counteract decision-making biases, ensuring more balanced adjustments in monetary policy over time. Clearer guidelines would preserve the Fed’s ability to exercise judgment while promoting accountability and reducing public skepticism.
Holiday retail sales surpass forecasts... Mastercard SpendingPulse reported that U.S. retail sales for the holiday season (Nov. 1–Dec. 24) grew 3.8%, exceeding the September forecast of 3.2% and last year’s 3.1% increase. The report, which tracks both in-store and online spending across all payment methods, highlighted that the final five days of the season accounted for 10% of all holiday spending.