PLEASE SHARE THIS POST WITH A FRIEND AND ENCOURAGE THEM TO SUBSCRIBE!
In just 1,000 days, Green New Dealer in Chief Joe Biden has turned America’s strategic energy dominance into a strategic energy subservience that now gravely threatens our economic and national security. We now run the very real risks of a prolonged stagflation and being drawn into hot wars from Ukraine, Israel, and Iran to the Taiwan Strait.
When I was a doctoral student in economics at Harvard University in the 1970s focused on reducing America’s dangerous oil import dependence, I never dreamed of that day which would come during my service in the Trump White House in which the United States became the world’s largest petroleum producer and a net exporter.
Once strategic energy dominant, America became the de facto policeman of the OPEC oil cartel and world price setter. If OPEC tried to gouge us by restricting supply, America could further increase production. That leverage, coupled with President Trump’s jawboning of the Saudis, kept oil prices substantially below what they have been throughout the Biden regime.
From Day One, Joe Biden declared war on fossil fuels. He canceled pipelines, curtailed drilling, discouraged fracking, and turned this nation into the oil supplicant that it is today.
Now, 1,000 days in, it is Saudi Arabia and Russia – the world’s two largest oil producers outside the US –setting world oil prices. Saudi princes need at least $85 per barrel to fund the government programs it uses to pacify an increasingly restive population. Putin’s Russia needs at least $100 a barrel oil to fund its Ukrainian adventure.
The resultant oil price shocks are increasing our inflation rate at a time when the U.S. is already facing significant inflationary pressures. Higher oil prices also act as a tax on consumers and thereby reduce purchasing power, with collateral negative demand and growth effects. Higher oil prices likewise increase the cost of production and transportation for businesses and thereby reduce output and growth through negative supply effects. Together, these negative growth effects represent the “stag” part of the oil price shock stagflation equation.
Normally, the Federal Reserve can treat oil price shocks as transitory, which is to say cyclical, and leave them out of the core inflation metric the Fed relies upon to set short term interest rates. If, however, higher oil prices represent a secular, long-term trend because of a Bidenomics-driven tectonic shift, sustained oil price hikes have to be factored into the Fed calculus. That will surely mean higher interest rates for a far more extended period.
These economic risks pale in comparison to the national security risks from America’s increasing oil important dependence and strategic energy subservience.
Take Russia: Even as American taxpayers are funding the Ukrainian war effort to the tune of tens of billions of dollars (while draining the American arsenal), American consumers and businesses, through a pure wealth transfer, are funding the Russian war machine as more and more Russian oil creeps into world markets and trickles down to American gas pumps. The more oil revenue Russia captures, the less likely there will be peace, and the more likely the United States will be dragged into a hot war on the European continent.
A Joe Biden desperate for cheaper oil has similarly relaxed sanctions on the sale of Iranian oil. Iranian oil production has climbed from about 2.7 million barrels a day at the end of the Trump administration to almost 3.5 million today.
With the price of oil now bouncing between $80 to $90, that’s an additional $2 billion a month Iran has to both keep its regime afloat and finance attacks on Israel and Saudi Arabia through proxies like Hezbollah, Hamas, the Houthi movement, Muslim Brotherhood, and Al-Mukhtar Brigades.
There is also the new Cuba in our South American midst in Venezuela. It, too, is now being allowed by the Biden regime to increase its oil production, sell its oil in international markets to keep its toxic regime afloat, and export both its socialism to the rest of Latin America and its illegal aliens to American cities.
Finally, as a rising Communist China eyes an invasion of Taiwan after successfully taking Hong Kong without a whimper from the West, its dictator Xi Jinping has leveraged the war in Ukraine and tensions in the Middle East to establish a yuan-denominated oil-trading bloc with Russia, Iran, and Saudi Arabia. Xi now believes he has distanced China enough from the US dollar and any collateral threats of sanctions, making war over Taiwan ever more likely.
The only way out now will be a quick return to strategic energy dominance. Here, “Green New Deal” Democrats must acknowledge that forcing the American people to reduce their demand for fossil fuels is a form of economic and national security suicide.
The math is simple: Whatever CO2 reductions the American people might achieve through their sacrifices, massive subsidies, and destruction of our economy will be more than offset by the emissions from the new powerplants and automobiles and factories of Communist China, India, and a whole host of developing nations – and their leaders will laugh at us all the way to the climate change bank.
Peter Navarro served in the Trump White House as the Director of the Office of Trade and Manufacturing Policy. His White House memoirs include In Trump Time (All Seasons Press) and Taking Back Trump’s America (Post Hill Press). Follow him at
where this article originally appeared.
A 1,000-Day Bidenomics March to Strategic Energy Subservience