ANDERS CORR is a principal at Corr Analytics Inc., publisher of the Journal of Political Risk. He is an expert in political science and government.
Anders Corr
Team Biden’s Gas Inflation Disaster Gas inflation will make Democrats unelectable in 2022 and 2024
T
he democrats are in trouble—big, big trouble. Gas prices are up—way, way up. See the parallel? It’s been said that “it’s the economy, stupid.” Now the most obvious economic problem Americans have is filling their tanks. So we can change the saying: It’s the gas, stupid. And gas prices won’t come down for a couple of years, according to experts. That means in the midterm elections in November and the presidential election in 2024, Democrats will be hurt at the polls. Pundits already predict a wipeout for Democrats at the midterms. For 2024, even many Democrats are whispering that President Joe Biden shouldn’t run. His popularity rating is at a record low of just 39 percent. Biden’s administration got inflation, China, and Russia wrong. He says he wants to “compete” with China, but he’s making unilateral concessions—for example, on climate change—that destroy U.S. competitiveness. That will hurt U.S. jobs and the economy, even as China hoards oil in possible preparation for a war against Taiwan. Oil and gas prices are popping, which hurts Americans at the pump, but entirely prices out many people in poorer countries, just as they’re having trouble paying for food because of Russia’s invasion of Ukraine. That causes political instability. Democratic weakness ironically translates into global pain for some of the world’s worst off. Peace through strength has always been a better policy for the United States, other democracies, and our allies. But instead, the Biden administration has gone begging Saudi Arabia, Venezuela,
and other illiberal oil producers to pump more hydrocarbons and bring back refinery capacity. Democratic pleading with U.S. oil is shading into veiled threats against its profit margins, including by the president. That will disincentivize the very investments—for example, in refinery expansion—that the United States needs to bring down gas prices over the next two years.
Oil and gas companies have been busy dismantling refineries and not drilling due to COVID-19, but also because of anti-oil measures largely pushed by Democrats. But since 2020, U.S. refinery capacity has decreased by a million barrels per day, according to the U.S. Energy Information Administration. Oil and gas companies have been busy dismantling refineries and not drilling due to COVID-19, but also because of anti-oil measures largely pushed by Democrats. As a result, now we all see the prices at the pump and America’s increasing dependence on foreign oil. Democrats can’t have their cake and eat it, too, regardless of their doublespeak. Tradeoffs between the economic strength of the United States, climate change, and national security mean that if we sacrifice our economy in the process of transitioning to net-zero emissions, we also accept inflation at the pump and sacrifice our military and diplomatic strength.
Our national power is relative, and countries such as China and Russia aren’t playing ball by decreasing emissions. Former President Barack Obama didn’t negotiate equal emissions decreases by all countries at the Paris climate talks in 2016, so China thinks it can increase emissions as we decrease ours, leading to its relative increase in power. We’re losing the competition with China because some politicians deny that China is a real threat. They wrongly see the regime in Beijing as one with which we can cooperate and befriend through making unilateral concessions. What Democrats should instead do to preserve their chances in November is to get smart quickly on gas prices, which are the biggest component of inflation. To do this, they need to see climate change policy within the context of an adversarial relationship with China and Russia. We can no longer make unilateral concessions without equal and immediate concessions by our adversaries. This means approving new U.S. oil drilling, removing biofuel requirements for U.S. refiners, and rescinding all U.S. taxes on oil and gas. It means pledging to U.S. energy producers that we’ll never again put them at a disadvantage in their competition on global markets. Only once China and Russia become responsible members of the international community and decrease their emissions and territorial aggression should Americans again consider sacrificing at the pump. Such sacrifice doesn’t work when we do it alone. It will only destroy America’s economy and power to do good in the process. I N S I G H T June 24–30, 2022 45
