President Biden, heading toward his highly likely midterm election shellacking, has decided to make oil and gas companies the next new villain — like a Halloween character, but of course Halloween is only one day a year. Just for today, though, those evil energy companies are replacing Donald Trump and “MAGA, Mega MAGA, Mega MAGA trickle down” (whatever that means).
That effort didn’t work, and neither will this one.
In Mr. Biden's America, prices of gasoline, natural gas, electricity, home heating fuel, diesel fuel, and other fossil derivatives have all skyrocketed. That is, if you can actually get through the energy shortages. Before we get to global warming, we have to get through a cold winter. Especially in the Northeast, where there are supply shortages and price spikes for home heating fuel and natural gas.
Reportedly, diesel fuel inventories for trucks and yellow school buses are down to two weeks. That’s a potential supply chain catastrophe.
I want to take a moment, though, to talk about Mr. Biden’s grade-school arithmetic failures in figuring out energy prices. One of his key blame-the-oil-companies talking points is that gas prices haven’t come down as much as world energy prices. Well, that’s not true.
West Texas crude oil peaked at $115 a barrel in June, and is presently hovering around $86. Do the arithmetic: That’s a 25 percent reduction. Now, gasoline prices also peaked in June at around $5 a gallon, and are now around $3.76. That’s also a 25 percent reduction.
So, even though you have to figure in things like taxes and transportation costs along with refining costs, the fact remains that the decline in world oil prices has in fact translated to virtually the same drop in gasoline prices at the pump. So stop bellyaching, Mr. President.
I know you’ve had to deplete half of the Strategic Petroleum Reserve, thus compromising our national security and handing the keys to the kingdom of oil dominance to Saudi OPEC — but, again, oil in the world market and gasoline at the pump have come down about the same.
You know what? Here’s a little more petroleum arithmetic: Around inauguration time gasoline was about $2.42; today it’s $3.76. That’s a price hike of 55 percent. About that same time Mr. Biden was sworn in, world oil was about $52 a barrel; today let’s call it $86 for West Texas crude — that’s a hike of 65 percent.
So, even though you've blown up our energy and national security, energy prices have spiked enormously under your failed policies. What are your failed policies? All-out, unrelenting war against fossil fuels.
What’s the impact been? Well, prices spiked for a 40-year inflation high, and, after 18 months of declining real wages for working people, a virtual collapse of the U.S. housing industry and a growing slump in manufacturing.
You’ve basically taken the Trump boom you inherited and turned it into the Biden bust. I don’t think your lefty woke climate-change war against fossils has worked out too well.
Inflation and cost of living issues are probably the no. 1 midterm election problem. Threatening a tax on Big Oil is not going to solve that problem.
By the way, windfall profits taxes have been tried before, and they don’t work. The U.S. experimented with them during the Nixon and Carter years and, ultimately, we found that excess profits taxes actually contributed to additional energy shortages and higher prices.
As Art Laffer would put it, if you tax something more you get less of it. If you tax oil profits and production, you’re going to get less oil, higher prices, more economic misery.
Incidentally, as we have discussed in the past, fossil resources permeate the entire economy. I’ll go through the partial list again: phones, clothes, toothpaste, asphalt, trash bags, laptops, fertilizer, diapers, pacifiers and toys used by parents and babies, pacemakers, MRIs, IV bags and tubes, surgical instruments, stethoscopes, prosthetics, hearing aids, glasses, contact lenses, soaps, antiseptics, aspirin, tennis rackets, tents, tires, toothbrushes, backpacks, ballpoint pens, beach umbrellas, dog collars, golf bags, golf balls, guitar strings, hair curlers — and, let’s not forget, insect repellant.
Whatever would we do without insect repellant?
In other words, fossil fuel resources dominate everyday life. You think people sitting around their kitchen tables don’t know this? You think they don’t know that, since Mr. Biden’s inauguration, grocery prices have gone up 17.4 percent, consumer prices are up 12.8 percent, and overall energy is up 40 percent?
You think this isn’t an absolutely basic, mainstream, common-sense issue in the midterm election eight days from now?
And you think you, John Kerry, Janet Yellen, and every representative of your administration going out pounding fossil fuels every day for two years and telling people that all investment should be done in so-called climate change renewables and working with the Democratic Congress to pass trillions of dollars of subsidies and tax credits for renewables — you think that hasn’t sent a message to America’s great, efficient oil companies that they have to change their strategy and slow down their production and hand their temporary bulge in profits over to their shareholders?
They’re not stupid, Mr. President. They’re actually listening to you and your extremist policies. Then again, extremist policies never work in America.
That’s why the cavalry is coming — to overturn your extremist policies. Mr. President, get ready for a big change.
From Mr. Kudlow’s broadcast on Fox Business News.
Larry Kudlow was the Director of the National Economic Council under President Trump from 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. and his radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.
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