During the War of 1812, an American naval commodore who was defending Lake Erie against the British reported to General William Henry Harrison: “We have met the enemy, and they are ours.” Those words were spoken by Oliver Hazard Perry, who was signaling a great American victory over the Brits.
Permit me a slight paraphrase for President Biden: “We have met the enemy, and they are us.”
Inflation is raging, real worker wages are plunging, the stock market is cracking, interest rates are rising, recession looms. In a mere 18 months, Mr. Biden’s presidency completely unraveled as a result of his big-government socialist woke policies. His own Democratic Party does not want him to run for re-election, and he has learned nothing.
His treasury secretary, Janet Yellen, testified before both the House and the Senate in defense of Mr. Biden’s FY 2023 budget. That budget includes roughly $5 trillion in new spending for the “Build Back Better” abomination, $3.5 trillion of new, higher taxes on successful earners, large and small businesses, including a punitive tax on foreign earnings that would decimate American competitiveness, and the usual array of “Green New Deal" plans in the war against fossil fuels, as well as more programs for social justice equity and other forms of race and gender discrimination.
So, they have learned nothing. Nothing. More spending, more borrowing, more money printing, more phony climate existential threats would make today’s dreadful economy even worse, believe it or not.
Today’s New York Fed survey shows another jump in near-term inflation expectations to nearly 7 percent. Friday’s CPI report came in at 8.6 percent.
Mr. Biden’s policies continue in some kind of alternative universe.
Of course, he continues to blame Vladimir Putin for our inflation, so let’s focus on that fallacy.
It is true that Mr. Putin’s Ukraine invasion led to a roughly 1 million barrel per day drop in Russian oil production with the threat of more to come, and that drove up world prices.
However, after falling from roughly 10 million bpd to roughly 9 million bpd, Russian oil production has recently rebounded by at least half a million bpd. They have regrouped with new sales to Asia, primarily China and India.
By the end of this month, Russian oil production may be back very close to their original 10 million bpd. That is why oil prices have stabilized in a range of roughly $100-$120 per barrel.
All that said, U.S. oil production, despite huge demands by business and consumers, remains more than 1 million bpd below the pre-pandemic high. If we had that production back to where it should be, we would’ve covered the Russian shortfall and then some. Prices would be far lower than they are now.
In fact, back in 2019, the U.S. Energy Information Administration predicted 15 million bpd by 2023. All this stopped because of Mr. Biden’s war on fossil fuels. Without his crazy climate policies, we would’ve blown Russia out of the water with our energy independence.
In fact, oil prices probably would’ve stayed around $50-$60 a barrel and Mr. Putin would’ve never had the money to finance his war machine. There were no Putin-led invasions during the Trump years of energy dominance.
One more point: Gasoline production has dropped to 9.5 million bpd from 10.2 million bpd recently. The inventory stock of gasoline has fallen to 229 million barrels in the latest week from 272 million barrels at the end of 2021.
All of this is a function of Mr. Biden’s war against fossil fuels. We’re not producing oil, and we’re not producing gasoline.
So today’s AAA gas price reading is $5.01, a new record.
The moral of the story is: The facts show Mr. Biden should not be blaming Vladimir Putin about energy. Lots of other things, yes. But regarding energy, and his whole economic policy, we have met the enemy, and the enemy is us.
Last quick point: I’ve got a better plan. Supply-side growth. Make the Trump tax cuts permanent. Go for a flat tax reform and simplification. Deregulate all forms of the energy industry and the rest of American business and industry. Freeze domestic spending and protect King Dollar.
Wrap that up into a balanced budget plan and you would have skyrocketing growth and plunging inflation.
We will have met the enemy, and the enemy would have been dumbness. On the other hand, we’d be smart.
The cavalry is coming. I hope they know what to do.
From Mr. Kudlow’s broadcast on Fox Business News, Provided by the NY Sun.