President Biden spoke today, selling his new idea of putting 50 million barrels of oil from the Strategic Petroleum Reserve on the market. That will cover about three days' worth of oil consumption, plus some kind of international consortium of countries making vague promises and so far producing virtually nothing.
It's a terrible idea. Releasing 50 million barrels is like spitting in the wind. Now I’d like you to hear a key sentence in the president's presser today:
"The big part of the reason Americans are facing high gas prices [is] because oil producing countries and large companies have not ramped up the supply of oil quickly enough to meet the demand. And the smaller supply means higher prices globally – globally for oil. To address these issues, I got on the phone with leaders from other countries grappling with this challenge."
Just to repeat, because "the big part of the reason Americans are facing high gas prices because oil producing countries and large companies have not ramped up the supply of oil quickly enough to meet the demand."
Now, you know what folks? President Biden is absolutely right. There's not enough oil production. Oil supplies are too low in relation to rising oil demand. But there's one thing he forgot.
America has oil. Lots of it. In fact, pre-pandemic we were producing over 13 million BPDs (barrels per day). When the economy was closed, that slumped to 11 million BPD. But since the economy has reopened with strong growth, we're still only producing 11 million BPD. Why is that, Mr. President?
As usual, Mr. Biden is playing the blame game. Blame the Saudis. Blame OPEC+. Blame Russia. Blame gas stations. And then blame America. Because in 'Biden World, America needs to stop producing fossil fuels, like oil, in order to clear the way for climate change reforms. So you can't have your cake and eat it too, sir.
If you correctly figure inadequate oil production supplies, then you've got to come home to America and let our great companies, large and small, produce. right? We need more supplies. right? How about, America first. Drill, drill, drill. Remember that? Not spro, spro, spro, but drill, drill, drill. There's a difference.
Your policies are taxing fossil fuels, over-regulating fossil fuels, bad-mouthing fossil fuels, denying credit to fossil fuels, appointing a banking commissioner who wants to bankrupt fossil fuels. You'll do anything you can to stop the production of fossil fuels and yet you say the problem is inadequate production.
Get it, folks? Make sense? Of course not. Not even remotely. No ANWR, no Willow, no XL pipeline, no Line 5, no nothing. So guess what? If you're going to penalize everything they do, then producers won't produce. Isn't that just common sense?
Don't forget Mr. Biden and his cronies want to spend $550 billion to stop fossil fuels and subsidize renewables. That crazy idea is in the crazy budget, which, of course, must be killed.
Now here's the latest one: Two Republicans on the Federal Trade Commission (FTC) asked the White House to disclose any mounting evidence of wrongdoing behind high gas prices after President Biden urged the agency to dig deeper into possible illegal conduct in the market. The GOP commissioners wanted the White House to share the evidence so that we might consider how to proceed.
Last week, Biden told his new FTC chair, Lina Khan, that there was mounting evidence of anti-consumer behavior by oil and gas companies. Ok, show me. Show me the evidence. Show me the money. Trouble is, at least so far, there is no evidence. And there's no money.
Today, Mr. Biden accused oil companies of -- hold on a moment -- dododo -- excess profits! Why did I know that was coming? Price gauging and excess profits are always the rallying cry of the progressive left who hate profits. Right?
Markets love profits. Business and the economy grow through higher profits. Profits are the mother's milk of stocks and the lifeblood of the economy.
But wait a minute. Here's our pal, Senator Elizabeth Warren, in a letter to the DOJ. A headline reads: "Sen. Elizabeth Warren calls for probe into turkey costs as prices soar."
Warren accuses poultry industry of excessive consolidation AND price-fixing. You have to love it.
This is, by the way, the same person who called all bankers "a-holes" the other day. And now she thinks that turkeys are colluding with one another to raise their prices.
Or the NBC reporter who said the way to cut costs during Thanksgiving is to not buy turkey. Very clever. As a substitute, maybe we should all go out and buy Big Macs and spoon heavy quantities of cranberry sauce on them. Just to keep the Thanksgiving flavor gobble, gobble, gobble.
So, folks, the spro idea is a non-starter. Ironically oil prices went up over $2 today on the announcement. Sorry, Uncle Joe – not supposed to happen huh?
Want to see gasoline back to $2 where it was a year ago? Or crude oil back to $45 or $50 where it was a year ago? Then drill, drill, drill. I never understood why the left does not understand supply and demand curves. It's the basis of microeconomics. It's called price theory. It's not even political or ideological. Any old textbook will tell you that.
But not in the Biden White House. Save America. Kill the bill.
This article is adapted from Larry Kudlow's opening commentary on the November 23, 2021 edition of "Kudlow."