Democrats are engaged in a new public relations campaign trying to blame inflation and the high price of gas on everything but their own policies.
“Make no mistake, inflation is largely the fault of Putin,” President Joe Biden said on Friday. Speaker of the House Nancy Pelosi echoed the claim, telling reporters, “Putin’s gas hike. That’s his gas hike.”
Senate Majority Leader Chuck Schumer went so far as to blame record high cost for gas on price gouging by companies and monopolies. “The bottom line is this: The real problem with increased gas prices is gouging and monopolies,” Schumer said. “You’re going to hear a lot more from us on those issues in the near, near future.”
Is it true that many of your local business owners and gas stations have increased prices for their goods and services because of Putin and price gouging?
President Joe Biden
False. Completely make believe.
As Americans know, the pain from inflation began long before Putin invaded Ukraine.
In August 2020, Independent Women’s Forum began tracking inflation using data from the Bureau of Labor Statistics. Since then, as depicted in the image below, prices have steadily risen for basic household goods, including milk, bacon, meat, cereal, clothes, and yes—gas. From August 2020 to August 2021, the cost of gas was already up 42.7 percent. Today, it’s up 81 percent since inauguration day, according to AAA.
The increases in gas prices have been driven primarily by increases in the price of crude oil, which is sold on a world market, with help from the anti-oil agenda of the Biden administration. When Putin invaded Ukraine, it accelerated prices that were already spiked.
As Tristian Justice wrote in The Federalist:
[G]as prices began to soar upon Biden’s first days in office after the president’s inaugural orders shut down the Keystone XL pipeline and unilaterally suspended new oil and gas leases on public land.
According to the Energy Information Administration (EIA), American gas prices eclipsed an average of $3 per gallon by May as President Biden unleashed a cascade of taxes and regulation on the industry while moving to lock down lucrative reserves. In other words, gas prices have been rising since Biden took office, not since Russia launched its invasion of neighboring Ukraine.
And as Gerard Baker explained in The Wall Street Journal:
Let’s be generous and date the start of the “Putin price hike” to mid-December, when anticipation of trouble in Ukraine began to weigh on energy markets. Since then the price of crude oil has risen by roughly 50%. Prices had already risen in the prior year, also by about 50%. Again, this isn’t all Mr. Biden’s fault. Oil prices hit a low in the early stage of the pandemic on fears of a global depression and have been rising since.
But the Biden administration can’t have it both ways. It can’t pursue rhetorical and regulatory policies that are explicitly designed to make fossil-fuel production scarcer and then say they have nothing to do with any price increase. The U.S. is the largest oil producer in the world, accounting for about a sixth of total production. Markets notice these things.
When President Biden took office, he traded U.S. energy independence achieved under the Trump administration for a climate agenda that crippled domestic production while increasing our reliance on oil from hostile nations. As a result, Americans were once again hostage to the economic and political forces happening in the world oil market, and the mismatch in supply and demand.
Further, there is no proof that price gouging is to blame for the current prices at the pump, as Sen. Schumer contended. “We have not heard of any inquiries or complaints from any of our members regarding gas price gouging,” AAA Public and Government Affairs Manager Ragina Ali told The Washington Times. Accusing local business owners of taking advantage of spikes in demand by charging exorbitant prices without evidence is desperate, cruel and dishonest.
Inflation took root as demand for goods skyrocketed early in the pandemic. Consumers had more cash to spend due to billions in government economic stimuli that became a disincentive to work. Millions of workers left the labor force despite record-high openings, causing production on goods to slow down in the face of increased demand. As a result, prices rose. Instead of containing the inflation, President Biden doubled down on big government spending by signing a $1 trillion infrastructure bill last year, on top of the $1.9 trillion American Rescue Plan that prominent economics warned against.
Economists who sounded the alarm about massive federal spending fueling inflation include left-leaning Obama-era officials such as former Treasury Secretary Larry Summers and counselor to the Treasury Secretary Steven Rattner, who called Biden’s $1.9 trillion American Rescue Plan the “original sin” that caused inflation.
From the notion that inflation is “temporary” and a “high class problem,” to blaming it on people going back to work and the supply chain crisis, to now pinning it on Putin and price gouging, Democrats have looked everywhere but to their own policies to explain inflation. All the while, Americans continue to suffer.