So let me get this right: President Biden is ordering gas stations to cut their prices. Here’s the tweet: “My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.”
Now, first up, if President Trump ever did that, the House would impeach him as an authoritarian dictator for ending democracy and taking over the economy. Actually, given how Mr. Biden has destroyed a perfectly good economy in just 18 months, it wouldn’t really be bad if Donald Trump took over the economy. He would right the ship.
Anyway, the industry people from the U.S. Oil & Gas Association blasted the Biden order in a very pleasant way over the holiday, with this tweet: “Working on it Mr. President. In the meantime — have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester.”
In a harsher tweet, the multibillionaire Jeff Bezos said: “Ouch. Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”
Let’s dig a little deeper into this presidential miscue. First, Mr. Biden’s pledge to end fossil fuels makes me think he’s really not unhappy with high gas prices. The far-left climate change people still think higher fossil prices will move everybody to renewable fuels and power. That’s a myth; ain’t gonna happen. All that’s really happening is middle-income working people are getting killed by high energy prices, which are spilling over into high food prices. And they’re extremely unhappy with the reign of President Biden.
In fact, in a recent Monmouth poll, the biggest concern for voters: 33 percent inflation, 15 percent gas prices, 9 percent economy, 6 percent everyday bills, and only 5 percent abortion.
But remember, or perhaps Mr. Biden should remember — or perhaps his intern should remember — to get lower gas prices, you need more gasoline. That means more and larger refineries. That means, permits. That means, leases. It also means, pipelines. But his administration’s policy opposes leases and permits for anything to do with fossil fuels. They oppose it.
His interior department just came out and basically said “no new leases.” Interior, energy, and EPA have stopped new permits.
Now, the recent Supreme Court decision knocking back EPA’s authority may change that, and there will be court battles, but in the meantime, the Biden administration is doing everything it can to stop the production of oil, natural gas, LNG, coal, and gasoline. So, without more oil production, and pipelines, and refineries, you’re not going to increase supply or reduce prices.
These gasoline stations, by the way, are 95 percent independent; most of them are kind of supermarkets: Their margins are very thin, and they’re not going to be intimidated.
Then, just to top it off, after several strategic petroleum reserve sales, the SPRO caverns will have been reduced by nearly 50 percent, to about 350 million barrels from roughly 650 million barrels. It also turns out, the Bidens are actually exporting SPRO oil abroad, which is incredibly dumb. SPRO is there for energy security, and national security. Not political price-fixing. The U.S. should be scaling up its LNG exports. This would create more production all around, from the oil and gas companies. Here too, though, Biden policies are standing in the way.
Just to toss in one more point: It is rumored that the EPA will publish ozone rules that would slash or end oil production in the Permian Basin in Texas, which has 43 percent of oil production. With the new Supreme Court decision against the EPA, anything like these ozone rules would be taken to court. My point is, though, it’s yet another action by the Bidens to end fossil fuels.
The reason Mr. Biden’s intern should learn some econ 101 is simply this: If you increase the supply of something faster than its demand, the price will fall. If you curtail supply, then the price will rise. Mr. Biden’s extreme progressive, left-wing climate policies are doing everything they can to cut supply.
Even Russia is now producing oil at pre-war levels. It’s purchased by India and China. Germany and other parts of Europe have gone back to coal. The G-7 idea of world oil price controls is dead on arrival.
When Mr. Biden loses the support of Silicon Valley billionaires like Jeff Bezos and Elon Musk, you know he's in political trouble.
Guess what? He’s in political trouble. That’s why the cavalry’s coming.
Larry Kudlow was the Director of the National Economic Council under President Trump 2018-2021. His Fox Business show "Kudlow" airs at 4 p.m &. radio show airs on 770 ABC from 10:00 a.m. to 1:00 p.m.