A boss with low ratings makes weird leaps. On Wednesday, President Biden sent a letter to the US competition authority FTC, ACM’s Dutch counterpart. He asked the independent watchdog to investigate potential price agreements between oil and gas producing companies. Biden said there is “increasing evidence of their anti-consumer behavior” driving up energy prices. Analysts and experts did nothing wrong with this in the US media: Biden was here looking for an old opponent (Big Oil) to blame for the price hike.
Coincidentally, Data for Progress released an analysis of Biden’s assessment numbers versus the evolution of gasoline prices on the same day. The relationship between the increasing presidential disapproval and rising pump prices was astounding. Adjusted for negative outliers surrounding the withdrawal of US forces from Afghanistan The two graphs roughly overlap. Biden’s weighted average Rejection rating It hit 51.7 percent on Thursday, its highest level since taking office on Jan. 20. The average price of gasoline was 3.41 on Thursday dollars per gallonAbout 80 euro cents per liter. A year ago it was still $2.12.
Nobel laureate Paul Krugman noted this in his column this week New York times That the President of the United States very little effect Oil prices are subject to fluctuations in the global market. The price of a gallon of gasoline has risen $1.50 since its lowest level in the Corona crisis. The price of a barrel of Brent crude rose by 60 dollars. According to Krugman, there are 42 gallons in the barrel: That’s the explanation for the entire price increase.
Biden unsuccessfully asked OPEC to increase oil production
You read the column as an apology to Biden, but the president, for consistency with his ratings, needs no explanation as to why he can’t do anything about the price hike. By his message he wants at least He suggested Make sure he can. He pointed out that the price of unrefined gasoline fell by 5 percent last month, while the price of the pump increased by another 3 percent. “An inexplicable difference,” Biden wrote to the Federal Trade Commission. „a bit thinLucio Miranda believed that argument. The Chairman of the Board of Directors of Export USA for oil export consultancy Washington Post Note that that month, the White House took very little time to make its point.
In many ways, the US economy is doing well again. Unemployment is falling, salaries, especially at the lower end of the labor market, are rising, production starts in fits and starts and stock prices are rising steadily.
Ignore and underestimate inflation
Where things go wrong is on the supply side. The supply of goods has slowed around the world. US employers are struggling to find workers, a problem that could be exacerbated by the coronavirus tests that unemployed people in many states can still apply for. As a result, many entrepreneurs cannot raise their production to the level that keeps up with the demand. This is where high inflation in the US comes from: 6.2 percent between October 2020 and this year, the highest price increase in three decades.
For months, the White House ignored or downplayed inflation. It was always called a “temporary phenomenon”. Biden has been dealing with this issue for a few weeks now, but mainly to drum up support for the “Building Back Better” bill. This $1,850 billion investment bill — which includes money primarily for social services and climate action — passed the House on Friday. It would be even tougher to pass the bill in the Senate, where it has been blocked by two conservative Democrats. They find the law prohibitively expensive and argue that it will only increase inflation.
Biden would like to take advantage of strategic stocks
Biden often brandishes in his speeches the “Fifteen Nobel Laureates” who say his law will “reduce inflation.” Indeed, in September, fifteen winners of the Nobel Prize in Economics (later signed two more) open letter To show their support for the Biden Act as a necessary investment in public works. The last sentence of the letter: “Because this agenda invests in long-term economic capacity and ensures that more Americans will be able to participate productively in the economy, it will mitigate inflation in the long run.”
This accurate prediction of glass The Future, in his speeches, Biden has been particularly clear to indicate that his law addresses a severe problem. Friday came New York times With uncomfortable news: Congressional Independent Budget Office She calculated that the plan would increase the government’s deficit by at least $160 billion over the next 10 years.
Gasoline prices, posted on roadside signs for all to see, are a daily indication of inflation. No wonder Biden frantically wants to turn this knob. The letter to the Federal Trade Commission was another desperate attempt, and it shows above all just how stuck the president is. He has a green image to stick to, especially after the Glasgow Climate Summit this month. There Biden said, among other things The high prices only show how unwise it is to rely on a single source of energy (read: oil) and that they illustrate the need for “promising new technologies for sustainable energy.”
It was ironic that Biden, less than a week later, knocked on the door of the Organization of Petroleum Producing Countries, OPEC, demanding to increase its production and thus reduce prices. The short-term interest of a president who sees his popularity declining in his country has taken precedence for some time. Even OPEC has not budged any further.
in a The Wall Street Journal He was Kevin BookRecently, the director of a research firm focused on the energy sector, ClearView Energy, made an ominous statement to Biden: “High prices tend to drive the incumbent leader out of the house rather than drive new technology into him.”
American media reported that the White House is now seriously considering the possibility of exploiting strategic oil supplies to quickly influence the price – an emergency dressing. Meanwhile, the green Biden cannot do what his anti-greener predecessor Trump did: unleash the US oil industry. Under Trump, the United States has produced so much oil (including through drilling for shale gas) that the country has exported more than it first imported in living memory.
Biden stopped Trump from removing restrictions on drilling for natural resources and building a controversial pipeline.
For the president’s political opponents, it’s a no-brainer: Biden imposes environmental restrictions on American entrepreneurs and then buys oil in countries where no such restrictions exist. In Russia! US oil producers have joined the chorus: Why is the US president calling? long distance It’s best to ask for a local call, Occidental Petroleum CEO Vicki Hollub told several media outlets this week. According to her, the US energy sector can meet the sharp demand for oil. “First you ask your friends and neighbors, and if they can’t, you go to other countries.”
A version of this article also appeared in NRC Handelsblad on November 20, 2021
A version of this article also appeared on NRC on the morning of November 20, 2021
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