From day one of his presidency, Joe Biden has been implementing his climate change agenda. By hook or by crook, the Biden administration and Congress are trying to force American businesses and consumers away from plentiful and affordable oil, coal and natural gas.
Then, something happened along the way that could derail their extreme climate change plans: inflation.
The increase in prices bodes ill for the climate change agenda, since energy prices are driving so much of the price hikes felt by Americans. A majority of the public may be concerned about climate in the abstract, but not enough to pay more to address it, according to polling.
The consumer price index (CPI)—the most common measure of general inflation—in the last year has risen 5.4 percent. A disaggregated look of this number shows much higher price increases on specific consumer goods, especially energy, that hit Americans much harder. A gallon of gasoline has increased by more than 50 percent from one year ago, and natural gas has doubled in price since last spring.
It’s only getting worse. Earlier this month, the U.S. Energy Information Administration (EIA) predicted most home heating bills will increase by 54 percent by year’s end (in the dead of winter) over last year.
There are several contributing factors to growing inflation, all going back to deliberate actions of politicians, starting with President Biden and his allies running the Congress of the United States.
The climate agenda implemented so far includes: President Biden canceling pipelines and energy leases. Lower energy supplies raise prices, which increases the cost of manufacturing and transporting goods.
Next you have the $1.9 trillion American Rescue Plan passed by Congress last February on a partisan vote that increased unemployment benefits, to the point of making joblessness financially better off for millions of Americans than working. Low and behold, millions of jobs have either gone unfilled or have increased wage rates; higher prices are now required to cover the higher labor cost.
Now, the term “supply-chain” has entered the vernacular. Cargo ships are idling off the California coast with consumer goods due to lack of dock workers, and truckers to unload and transport them. The Secretary of Transportation, Pete Buttigieg, had to take time away from his paternity leave to attempt to explain: He warned that consumer shortages would likely impact the holiday shopping season and could last “years and years.”
Finally, there is the massive increase in federal spending in the last 18 months of more than $5 trillion, most of which is financed by the U.S. Federal Reserve Bank, producing money from nothing to purchase U.S. Treasury bonds. The government lending money to itself in such massive amounts and in such a short time, is cheapening the currency—a recipe for financial and economic disaster that is looming ever closer. With so much money flooding the economy and production failing to keep up, inflation is exacerbated.
Rather than slamming the brakes on this fiscal recklessness, President Biden and his congressional allies are doubling down. They want what amounts to another $5 trillion in federal budget increase over the next decade, though Biden just acknowledged this amount will likely be trimmed.
In an evenly split U.S. Senate, Democratic Senator Joe Manchin of West Virginia, (a state where coal still matters) stands as one of the few against risking further fiscal and economic damage. He has urged a much lower rate of spending overall, and last week, demanded removal from the budget plan, the Clean Electricity Performance Program (CEPP). This proposal would spend $150 billion to induce companies to transfer their energy sources to “renewable” from fossil fuels, and impose fines if they do not.
If Senator Manchin and a handful of congressional Democrats hold firm against this fiscal orgy of new spending, they will limit the economic harm to the country from restricting production and use of oil, coal, natural gas and even higher inflation—the very crisis that has affected European nations from climate policies.
Climate change policies appear benign and virtuous-sounding when times are good, and Americans are prospering. Flashback to pre-pandemic 2019, when America was at full employment with lower-wage, and middle-income workers experiencing real, non-inflationary income gains. Simultaneously, states such as California, New York, Virginia, and New York City were passing Green New Deal laws to mandate increased use of renewable energy and restrict more reliable fuels, including banning natural gas pipelines and closing nuclear power plants. The economic folly and impracticality of all of this was predicted.
Times have changed—quickly. With this burst of inflation (especially the spike seen in energy costs), further climate policies presented to Congress are in trouble, as Americans feel their bite.
Higher energy prices and inflation amount to a cruel tax, especially on low-income and middle-class households. Further climate policies sought out by President Biden and members of Congress will only compound this ominous trend—unless they come to (whatever remains of) their senses or if the likes of Joe Manchin succeed in thwarting them.