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Policy Mistakes Fund Putin's War

Photo by Li Jianguo/Xinhua via Getty Images

Let’s expand on an energy story that we talked about last night. Namely, how in round numbers, Europe is sending about as much financial assistance to Russia via its LNG imports as it is to Ukraine to defend its freedom.

Makes no sense at all. Unbelievable hypocrisy.

Believe it or not, Europe’s paying Russia just short of 30 billion euros for the imports, and the EU collectively is sending about 29 billion euros in military and financial assistance to Ukraine. Go figure.

Why? Because of radical green decisions — especially by Germany, which instead of building out its own liquid natural gas terminals blindly relied on Russian energy.

Along with Germany’s short-sightedness, the Biden administration’s radical climate change policies have of course compounded this tragic mistake. President Biden put the clamps on new permits, pipelines, refineries, and LNG terminals. So everyone played into Vladimir Putin's hands.

Whether it’s a shortage of LNG production here at home or short-sightedness in Europe, stupid policies are financing President Putin’s war effort. Now, let me expand on this thought.

Mr. Putin doesn’t invade when his principal cash crop, that is fossil fuels, is cheap. He does get on his high horse and resumes his megalomania when fossil prices soar. Think about this.

The Russian strongman invaded Georgia in August 2008, when the price of oil was about $125 a barrel. Hang on a minute: Mr. Putin invaded Crimea in February 2014 when oil was $103 a barrel. Coincidence? I don't think so.

Then, last February, when oil was $92 a barrel, just short of the century mark, guess what? The Russian dictator invaded Ukraine. Coincidence? I don't think so.

Remember the late John McCain’s great economic analysis that Russia is a “gas station masquerading as a country”? His finest moment ... but not ours. Mr. Putin grasped that McCain analysis with great clarity.

Now, during the Trump administration the average price range pre-Covid was $40-60 a barrel. In other words: cheap oil. In other words: Mr. Putin’s gas station wasn't turning a big enough financing profit to launch into new invasions.

Did President Trump have to go to war with Mr. Putin to stop the Russians? No. Did he have to threaten Mr. Putin? No. All he did was totally open the spigots for U.S. oil and gas production. All he did was grant permits for fracking, pipelining, refining, and all the rest of it.

All Mr. Trump did was make efficient use of America’s great natural resource — perhaps its greatest natural resource — which powers 80 percent of the best economy in the world and recorded the world’s largest decline in carbon emissions. All that kept Vladimir Putin at home, riding his brown horse with no shirt on.

Is that a coincidence? I don't think so. This whole mess need not have happened.

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.