During the course of my daily media interviews, one of the most frequent questions I hear is, “when will things get better?” Being the bearer of bad news is frustrating, but unfortunately that’s all I see for the next few years. Following the basic laws of economics, energy prices can only come down based on two factors: increase the supply or decrease the demand.
They may not like to admit it, but President Joe Biden and his team understand the need for a supply increase. It explains the president’s trip to Saudi Arabia to ask their king to increase oil production. He has dispatched envoys to Venezuela and Iran for the same purpose. Unfathomably, his administration continues its relentless attacks on domestic oil production. More than one million acres of land in Alaska and the Gulf of Mexico have been removed from oil and gas production. Access in the Atlantic and Pacific have been reduced to nothing. Of the federal land available for exploration, only 20 percent has been made available. Meanwhile, Biden’s agencies from the Securities and Exchange Commission to the Federal Energy Regulatory Commission have issued new guidelines based on his unwavering commitment to the climate change agenda.
The multiple, clear signals coming from Washington, DC have succeeded: American oil and gas production is down and not rebounding anytime soon. Consequently, prices remain high. The administration has taken to bragging about prices coming down, but a gallon of gas still costs over $2 more than it did the day this administration took power.
But these policies are not enacted in a vacuum. Not a geopolitical one. Not a national security one. And certainly not an economic one. As the supply side crisis fuels inflation, the demand will begin to falter. Citibank predicts oil at $65 a barrel by December. If correct, we will see $2 a gallon gas again, but there won’t be a cheaper commute to celebrate since many jobs will be lost amid the recession.
Contrast the current economy with the banner year of 2019. Back then, our robust domestic energy production sparked the lowest unemployment rate in fifty years. Middle-class wages increased for the first time in nearly a decade. Flush with cash and optimism, Americans lived vigorously. We had record travel numbers, record shopping numbers, record restaurants numbers. Today, our crippling inflation will result in economic contraction or outright collapse.
2019 was not so long ago that Americans cannot recall the good ole days of cheap gas and readily available baby formula. The growing unrest of expensive living and fears about food shortages will lead to a simple question: how do we go back? Energy independence and the robust energy economy were no anomaly, but the current administration is incapable of returning to what works.
The reason is a core philosophical belief that determines their policies. The Biden administration believes deeply in government. Whereas the Trump administration’s energy policies were rooted in a belief in free markets. Vive la différence.
The miracle of the energy revolution during the Trump years was not a miracle at all. It was the natural byproduct of a free market. President Trump didn’t usher in some visionary energy policy. No new oil or gas field was discovered. No new technology invented. President Trump just got out of the way, and that “just” should not be seen as reductionist. Getting out of the way is nearly impossible for anyone in government.
Government tinkers. Elected leaders believe tinkering is their duty. Despite the best intentions of our Founders, government runs nearly every aspect of our lives because those in government are incapable of trusting us to live our lives. Senator Chuck Schumer, Democratic Senate majority leader, famously said, “I was born to legislate.” Anyone who thinks thusly is unworthy of elected office.
The energy revolution of not very long ago emerged from the freedom of government not tinkering, of elected officials not thinking they know how to produce energy when, in fact, they do not. And the result of that freedom was remarkable: with breathing space to do what we do, the energy industry produced the greatest amount of a product for the greatest number of people at the lowest possible price point in the most efficient way. President Trump didn’t pretend he knew how to do it better than we do. He knew enough to get the burden of government tinkering out of our way.
Contrast that with the top-down, heavy-handed, centrally planned policies of this administration. Biden believes he knows better. Biden believes government will do a better job because he believes in government. And as someone who has been in government for more than half a century, that is no surprise. Biden and many elected Democrats have a deep distrust of free markets. Accusations of “price gouging” and “profiteering” run rampant. Senator Elizabeth Warren has chastised grocery stores and the meat industry for high food prices. Senator Bernie Sanders has demanded a “windfall profits tax on those crooks.” Biden has frequently said he believes the energy industry colludes on prices.
Senators Warren and Sanders are perfect government tinkerers, convinced the big, bad private sector is a Scooby-Doo villain who would get away with it if it weren’t for those meddling senators in their hippie VW van.
Amazing how none of these accusations were flying during the heady days of 2019. Amazing that, when given the freedom to operate, the private sector wasn’t the bad guy kept in check by watchful, caring Democrats.
“When will things get better?” They won’t while Joe Biden is president, unless he changes his core beliefs. Energy independence and a robust energy economy result from freedom and free markets. The current administration is incapable of realizing that they are, in fact, the problem. Fortunately, Biden won’t be president forever. Let’s hope whoever succeeds him is able and willing to change course.