With apologies in advance, I have to focus one more time on President Biden vs. fossil fuels. I just can't help myself. I promise to search for other topics, assuming he doesn’t come out with any more crazy stuff.
Crazy like calling America’s oil companies “war profiteers” and threatening them with a windfall profits tax. By the way, Mr. Biden and his crew as a general matter don’t like profits. Remember?
From Day One, Biden and Company have wanted to reverse President Trump’s highly successful corporate tax cut, which boosted blue-collar and lower-income people, reduced poverty, reduced inequality, and generated record-low minority unemployment.
Big-government socialists don’t like profits. In fact, they don’t like business either — let’s be straight about this. Yet the attack on oil companies on the eve of an election where the Biden Democrats are likely to get shellacked is, well, close to a new low.
It sure is hot air. Like he’s really doing something about explosive energy prices. Which, as we’ve said a number of times, filter through the entire economy.
Refined petroleum products permeate every nook and cranny of everyday life in America. So when you put the handcuffs on petroleum production, you curtail supply and raise prices. That is, you raise prices everywhere.
I’m not going to go through the whole list once again. I’ll spare you that today, but let me just say it covers everything from phones, clothing, and fertilizer through diapers and MRIs and stethoscopes, and hearing aids, tennis rackets and golf balls, and insect repellent.
There. I really tried to save time and truncate the list this time. Seriously, though, refined petroleum and petro chemicals do indeed affect every part of everyday life, and from Day One, Mr. Biden has stopped drilling permits, nixed pipelines, opposed new refineries, and repeatedly said we are going to end fossil fuels.
So now for him to threaten oil and gas companies with a windfall profits tax, question their patriotism, and accuse them of not investing and producing enough redefines the word “hypocrisy.”
We know Mr. Biden is incapable of telling the truth about the economy. Well, let’s check this petroleum box now, too. He is incapable of telling the truth about his own policies. That’s how bad this is.
By the way, as a footnote, Presidents Nixon and Carter slapped windfall profits taxes on oil in the 1970s — and guess what happened? Production went down. Prices went up. We played right into the hands of Saudi OPEC.
It was President Reagan who ended the windfall profits tax and decontrolled oil prices, which took oil down to $10 a barrel from $40 a barrel. As producers invested more, consumers benefited from more plentiful oil and lower prices, and at least temporarily we countered OPEC’s power.
On the eve of the elections, Mr. Biden’s hot air is an attempt to distract Americans from the fact that prices for gasoline and all sources of related power have skyrocketed during his administration.
Also, because energy companies actually listened carefully to Mr. Biden’s repeated pledges to end fossil fuels, and of course watched carefully as Democrats mainlined a couple trillion dollars’ worth of renewable tax subsidies, they chose to carefully hoard their capital, went slow on production, and instead rewarded shareholders who stuck with them.
This is while Biden and Company and their ESG policies repeatedly told people not to invest in fossil fuel companies.
Think of this: On any given day more than half of the federal government spends its time attacking fossil companies. The SEC, the FTC, the justice, energy, and interior departments, the EPA, and of course the White House are putting forward overly restrictive regulations — even when, as in the case of the SEC and the FTC and the Federal Reserve, they have no energy or climate or environmental experts.
Think of the Federal Reserve, plus the comptroller of the currency, bringing in ESG people and telling markets not to invest in oil companies.
The Bidens are in favor of onshoring supply chains in every area — except oil and gas. Along the way, they insult the Saudis, play footsie with the Iranians, and smooch with the Venezuelans.
This is brilliant, yes? No. It’s incredibly incoherent. It has generated enormous damage to both our economic and national security, and it’s just plain stupid.
Finally, I'm going to bet that the EPA and other agencies are working overtime to avoid the recent Supreme Court decision in West Virginia v. EPA, which says Congress did not provide the authority for federal agencies to cap carbon emissions on power suppliers or to regulate carbon emissions in general.
The Clean Air Act didn’t go that far. Indeed, the point of that Supreme Court decision suggested that these unelected executive regulators do not have the authority to promulgate regulations with “vast economic and political significance.”
So, all these ESG regulators proliferating in federal agencies are ignoring the Supremes.
Mr. Biden, on the other hand, is ignoring economic and common sense. I’m not sure which is worse, but they’re both bad. This whole energy story is bad.
There is a solution: Just unleash oil and gas production, which will favorably permeate every nook and cranny of American everyday life — with more supplies at lower prices and generate lower inflation with stronger economic growth.
Let’s not make this any harder than it needs to be. Thank heavens, the cavalry’s coming — in seven days.
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.
Please share with anyone who would benefit from the tippinsights newsletter. Please direct them to the sign-up page at: