“It’s the ‘Ukraine malaise’ talking point!” Ed texted me to say after watching the clip below.
I’m not sure “suck it up” is the optimal message to repair a 38 percent approval rating.
Remember the song from “Team America,” “Freedom Costs a Buck-Oh-Five”? It costs five bucks at the local gas station now. Inflation, man.
🚨: NY Times’ Jim Tankersley asks Biden, “How long is it fair to expect American drivers to pay that premium” for the war in Ukraine?
Biden: “As long as it takes.” pic.twitter.com/PnRX95xT48
— John Cooper (@thejcoop) June 30, 2022
Congrats to the DNC on their new campaign slogan — “Democrats 2022: Get used to it.”
Biden’s unfortunate pitch is part of the White House’s effort to pin rising energy costs entirely on the “Putin price hike.” It’s true that the war and resulting western sanctions account for some of the upward pressure on inflation. But literally no one believes they account for all of it, including the head of the Federal Reserve and the majority of Biden’s own party.
This may be the best card Dems have to play, though, as weak as it is. What’s the alternative to blaming Putin? Admitting that they sh*t the bed when they passed a $1.9 trillion COVID bill in the midst of a global supply-chain crisis?
WATCH: Biden again lies about gas prices, claiming “Ultimately the reason why gas prices are up is because of Russia. Russia, Russia, Russia.”
Gas prices were up substantially before Russia invaded Ukraine, averaging $3.54 a gallon. pic.twitter.com/lKgKOgzIoN
— John Cooper (@thejcoop) June 30, 2022
Biden’s top economic advisor is also singing from the “do it for Ukraine” hymnal, albeit more tactfully than his boss:
CNN asks WH’s Brian Deese what he’d tell Americans who can’t afford to pay high gas prices for months/years if military analysts project the Russia-Ukraine war to go so long
Notes progress but also: “this is about the future of the liberal world order and we have to stand firm” pic.twitter.com/vlY2I5v2Xs
— Alex Thompson (@AlexThomp) July 1, 2022
Gotta be fair here. Back in March, when support for backing Ukraine was at its zenith in the U.S., a whopping 79 percent of Americans said they’d support an embargo on Russian oil even if it increased energy prices. That number was fully bipartisan too — 88 percent of Democrats and 77 percent of Republicans were on board. Deese’s problem isn’t his logic, it’s his silly hope that American voters would continue to embrace that logic now that the foreseeable consequences of a difficult policy choice have begun to materialize. How long have you lived here, Brian?
But we’ve gotta be fair to voters too. In March, when they were gung ho for Russia sanctions, gas was $4.32 per gallon. It’s now $5.03. A 16 percent increase in just three months may be more than they signed up for, especially with prices everywhere else still rising too.
There are glimmers of hope. AAA reported yesterday that gas prices dropped slightly this week as demand slackens and inventory rises. “As these trends continue, drivers will likely continue to see relief at the pump,” the group predicts. Noah Smith has an even more encouraging piece out spotting signs of disinflation in numerous economic indicators: Freight rates, commodity prices, and rents are all falling while retail inventory is rising. It’s happening!
The question now is, is “it” a recession?
GDP numbers for the second quarter won’t be out for a while, but already we can see a few indicators showing slowing economic activity. Consumer spending is now falling in inflation-adjusted terms, while manufacturing is slowing and home sales have been trending down. That suggests that the Fed is succeeding in its mission to cool off the economy. But capital spending has remained firm, and employment numbers have held up, so we’re still getting mixed signals on the real economy. It’s not clear how severe a recession we’re going to get.
Meanwhile, there are definite signs that supply is increasing. U.S. oil production is rising, Russian production is recovering as it sells more to China (at a discounted price), and OPEC has pledged to drill more as well. Miners are mining more minerals and chipmakers are making more chips. There’s also falling demand in China due to Covid lockdowns and a real estate crash; this actually acts like a positive supply shock for America, because it means China is buying fewer commodities on the world markets, leaving more for us.
So it’s reasonable to think that both supply increases and demand destruction are at work here.
Supply, supply, supply, Smith writes. The more the feds can drive down prices by increasing supply, the less economic chemotherapy the Fed will have to deliver by raising rates again to reduce demand. Which is something Mitch McConnell and Chuck Schumer should bear in mind as they chart a way forward on the USICA bill that would boost U.S. semiconductor production.
Here’s the gang of propagandists on Russian state TV laughing at Biden last week for driving up oil prices by imposing sanctions, leading to a windfall for the world’s biggest gas station. Exit question: Will Americans be more receptive to the “do it for Ukraine” pitch on gas prices if the Ukrainians begin to advance on the battlefield and drive Russia out of occupied cities like Kherson? It’s one thing to sacrifice for the sake of the liberal world order when that order is en route to victory. It’s another to do so when it’s en route to defeat.
On Russian state TV they’ve been laughing about what Biden calls “Putin’s price hike” and proposing their own term for the impact of high oil prices – “Biden’s budget surplus”
(They’re not of course mentioning that the Finance Ministry recently forecast a deficit for 2022-25) pic.twitter.com/OdJ70r3xpH
— Francis Scarr (@francis_scarr) June 24, 2022