Biden Hangs On After The Election. That’s Bad News For Energy Prices.

One of the points I made in my pre-election analysis is that it didn’t really matter which party won from a policy perspective. That’s because so many of Biden’s policies were already in stone and beyond the ability of Congress to change in the short run.

If there were any new legislation, it could be vetoed. If we ended up with the House controlled by Republicans and the Senate controlled by Democrats, there might not be any legislation at all because of partisanship and an inability to compromise. More to the point, Biden could rule by executive order and bureaucratic inertia and not need Congress at all.

The election results are still not conclusive. One Senate seat is going to a runoff on December 6, and control of the House is still undecided pending about ten or so House races where votes are still being counted, and the race is too close to call. Still, this article is a good demonstration that my policy expectations are correct and that the composition of Congress may not matter that much.

The article describes how Biden’s solution to high energy prices is to accuse oil and gas companies of being “war profiteers” (a reference to a war Biden could have prevented in Ukraine) and extracting “windfall profits” from everyday consumers. Both accusations are ridiculous partisan rants. Worse yet, they are guaranteed to make the energy supply situation worse.

Energy company profits may be high, but that’s because Biden has squashed output and competition by closing the Keystone XL pipeline, ending new oil and gas exploration leases on federal lands, draining the Strategic Petroleum Reserve (which is intended for national emergencies, not price fixing) and selling oil and natural gas to China and Europe instead of making it available in the U.S. The windfall profits tax was tried in the 1970s and it ended in disaster.

Oil companies sent production overseas (where it is not subject to the tax) or passed the tax along to consumers, which caused even more price increases. Biden doesn’t understand energy economics, and he has shown no ability to learn from history. He seems ready to repeat the mistakes of the 1970s.

Congress can’t stop him (or may not even try). Consumers will pay the price. And stock markets will fall in lockstep with the resulting higher energy prices.

Corporate leaders and institutional fiduciaries looking to incorporate state of the art predictive analytics to their risk mitigation and strategic analysis should click the link to learn more about Raven Predictive Analytics®.