Biden’s sinking poll numbers are not based on reality
WHAT I’M ON ABOUT: Biden’s approval numbers keep dropping because consumers are not happy with the rising price of just about everything, including gasoline. Nearly two-thirds of Americans described the economy as poor in a poll released this week. In Virginia, where Republicans won a crucial prize in the state’s governor’s mansion, the economy ranked in exit polls as the most critical issue, surpassing education, taxes, and Covid. The reality is that high prices come with high wages, and our supposed “ally” Saudi Arabia wants higher OPEC prices.
Voters don’t like inflation, but they do like higher wages. We are experiencing this sudden surge in inflation for three main reasons.
First, for the past year and a half, due to Covid, hardly anyone was spending money. Now that the economy is back open, people are spending and traveling, and, as such, there is a bottleneck with very high demand. Our system isn’t set up for this increased demand level, so that causes inflation in the short term.
Second, with interest rates lowered to almost zero since March of 2020, these low-interest rates have spurred demand in housing which is experiencing a significant backlog and adding to inflation worries.
Finally, higher wages add to product costs which companies are passing along to consumers. Higher product costs result from a shortage of raw materials caused by Covid ravaged nations who still haven’t resumed total production.
High energy prices are a growing political problem for President Biden. The president has few options to change the market’s trajectory when demand is rising. Oil companies are hesitant to produce more. Even if Biden hadn’t restricted pipelines and drilling, it’s unlikely that U.S. producers would be drilling anyway. The people funding oil-and-gas companies are not interested in growing production anymore. They want oil companies to drill only their best wells and return cash to shareholders.
At its regular monthly meeting OPEC+, whose membership includes OPEC nations, Russia, and Mexico, basically told President Biden to go pound sand on his demand for more oil production, made Tuesday in Glasgow at the COP26 climate summit. In issuing that demand, Biden warned that he might take action if the other major oil-producing nations rejected his appeal.
Voters, of course, don’t care about excuses; they want results. Republicans have been quick to jump on inflation worries, promising things they can’t deliver. In all likelihood, prices for most products won’t come down because CEOs need to keep profits high, and it’s better to pass the costs on to what they see as cash-rich consumers.
President Joe Biden’s executive order for government agencies to stop fossil fuel subsidies and the United States’ renewed commitment to the Paris Agreement serves as solid commitments to domestic reform. By leveraging these signals, making tangible progress, and showing that it has every intention of eliminating subsidies, the United States can then credibly push for international reform as well.
U.S. taxpayers spend tens of billions of dollars a year subsidizing new fossil fuel exploration, production, and consumption, which directly affects how much oil, natural gas, and coal gets produced-and how much clean energy doesn’t. By comparison, direct U.S. subsidies to renewables are much smaller, and renewable energy developers cannot access many of the same breaks that fossil fuel industries do.
Higher prices are here to stay along with higher wages. Voters need to stop blaming everyone and realize that corporations will pass along costs to all of us.
Originally published at https://commonsenseandpolitics.com on November 9, 2021.