On Tuesday morning, President Joe Biden announced that he would be making available 50 million barrels of oil from the national Strategic Petroleum Reserve. The release is designed to ease a perceived tightness in supply and lower gas prices that have been rising in advance of the holiday travel season. Of those 50 million, 18 million had already been authorized by Congress.
Republicans have seized on claims of rapidly rising gas prices, along with fear-mongering over “empty store shelves” to create a narrative that not only is inflation soaring, but both Thanksgiving tables and Christmas living rooms are going to be bare. And somehow, all of this can be blamed on Biden.
The truth is that gas prices were already in decline even before the strategic reserves were tapped. The Houston Chronicle reports that while prices remain higher than they were a year ago—when travel restrictions and a greater fear of the pandemic strongly impacted consumption—they’ve fallen over the past week. When it comes to product availability, The Wall Street Journal reports that the “shelves overfloweth” at the nation’s largest retailers.
But Republicans are riding a disaster narrative. Don’t expect that train to stop soon.
Prices at the gas pump weren’t stable even before the pandemic set in. Oil that was $107 a barrel in 2014 dropped to $29 by 2016 as overproduction plagued the market. When Trump took office, oil companies were struggling to deal with what’s been called a “perfect storm” of factors that reversed long-term trends. Fracking had seen U.S. production rise to such levels that pipelines and processing plants became the bottleneck; squabbles within OPEC meant that efforts by Saudi Arabi and others to regulate supply were ineffective; and all over the planet, storage facilities were simply full.
Adjusting supply and demand in this changing market has made for a series of rises and plunges, as well as the failure of many smaller oil firms. Then mergers and buyouts allowed larger firms to reassert much of their earlier control overproduction. Prices were following a general trend back up over the last three years … until the absolute mishandling of the pandemic generated an abrupt price crash in the spring of 2020 that actually turned the price of oil negative for a period. Local imbalances were further aggravated in the spring of 2021, when a cyberattack took out a major pipeline supplying the East Coast.
When comparing the current price to the price a year ago, gas looks more costly because those 2020 prices were the lowest since the economy crashed in 2008. Otherwise, it takes going back to 2004 to find any extended period in which gas prices were comparable to 2020. So when that Houston Chronicle article notes that gas prices are “still $1.26 a gallon higher than a year ago,” they’re comparing against prices that were hovering at historic lows.
The price of oil, and gas at the pump, rose over the last year in part because of growing assurance that the pandemic was not going to spell long term economic doom, and partly because large producers finally got the kind of control they needed to adjust their output to reduced demand. That second factor is why Biden asked the FTC last week to investigate oil and gas companies are engaging in illegal conduct to drive up prices.
It’s unclear how much effect the release of the oil from the strategic reserves will have on the market, but the U.S. isn’t alone in making this announcement. China, India, Japan, South Korea and the U.K. are all taking actions to release oil from stockpiles or reduce targets for storage. India has announced that it will be releasing 5 million barrels.
What is clear is that Republicans have been pushing out emails and fundraising efforts which blame increase in gas prices on Biden “canceling the Keystone XL pipeline”—a pipeline that was designed to carry the dirtiest oil on the planet, and which was never completed because the developer canceled it. Since it never delivered a gallon of tar to the U.S., and wouldn’t have been completed for years, it’s ludicrous to draw any connection between the Keystone XL pipeline and the cost of gas at the pump today. But Republicans aren’t letting ludicrous stop them.
For months, Republicans have been pushing—and the media has been eagerly forwarding—a narrative that says U.S. consumers face a crisis of bare shelves and prices that make buying 12 gallons of milk a week intolerable. That narrative means the family facing what they claim is almost $10 a week in increased milk expenses is in trouble because it fails to mention that they’re getting at least $250 a month, per child, in new child tax credit payments authorized by President Biden. That article could also have mentioned that, thanks to those payments, child poverty has dropped by a third. It didn’t mention that, of course.
Across the country, news media has been pushing the idea that America is going to go without turkey this year because of shortages that don’t exist. It’s been pushing the idea that parents will be without options for Christmas, when retailers say that’s not true. It’s been fixated on the idea that goods are stacked up at docks, while giving little attention to how rapidly that situation is improving—or the action that President Biden took to break the stalemate.
There’s no doubt that inflation has increased in the last months. it’s gone from just over 1% in January, to 5% through much of the summer, to 6% in October. That’s the biggest increase since 2009, and that top number is the highest monthly value since 1990.
By no coincidence. In 2009, the nation was recovering from the economic crash under Bush. July 1990 marked the end of the longest peacetime recession in the nation’s history under the other Bush. Recession was up in the fall of 1990, and in the fall of 2009 specifically, because the nation was recovering from the economic battering it had taken under Republican presidents. And that’s what’s happening now.
The same thing is happening in 2021. Inflation is increasing because the nation is once again being pulled out of the ditch by Democrats. And if some of those numbers are currently unusually high, that’s because Trump was such an incredible low.
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