The America Second Agenda

America Second. That’s the current administration’s goal. Almost immediately once “President” Biden was in office, crude oil and retail gasoline pricing went through the roof. In a blatant, reckless, unthinking cave to the environmental/green lobby, the new administration canceled the Keystone XL pipeline, forfeiting thousands of good-paying, permanent union jobs in favor of enhancing their woke credentials in the eyes of radical progressives and the leftist media. Then they withdrew permission to explore for oil in Alaska’s ANWR region and canceled several exploratory licenses on federal lands. Biden also rejoined the meaningless Paris Accords, further demonstrating that the new government is not interested in pursuing an energy independence policy that actually benefits America.

Along with canceling the fossil fuel industry as the very embodiment of anti-woke capitalistic conservatism, the administration wants to cancel or rescind any policy, legislation, or Executive Order put in place by President Trump, simply because it was done by President Trump. Evaluating the actual efficacy of the Trump-era measure is not the goal; doing away with anything positive -- as quickly as possible -- that could accrue to President Trump’s credit in the voting public’s mind is the real aim.

It's the whole notion of private companies run by conservative white men making billions of dollars in profits in the open marketplace that really gets the progressives’ goat. They need to knock them down. The Kerrys, Obamas, and Pelosis of the world fly on their petroleum-fueled private jets, stay in opulent, wasteful five-star locales, and spew empty, duplicitous platitudes. They don’t care about the “environment.” They only care about sabotaging conservatives. That’s what this is all about.

However, the actual result of this administration’s anti-oil actions has been a devastating rise in all things even remotely connected to the fossil fuel industry. Obviously, gasoline has risen from the low $2.00/gallon range when President Trump left office to well over $3.00/gallon today, and it’s still rising. Heating oil and natural gas have experienced similar increases. A rise in gas, heating oil, and natural gas affects the lower-income segment most because energy costs represent a higher percentage of their household expenses and such purchases are not discretionary. So much for progressive “compassion” for the underprivileged.

Of course, rising fossil fuel costs negatively affect every aspect of the economy. Transportation costs are higher for every single category of consumer goods, commercial supplies, and manufacturing raw materials. Retail and wholesale customers alike are paying more for everything, because it costs more to get the goods to their destination. Airline travel -- just starting to recover a bit from COVID-induced lockdowns -- is now hit with dramatically higher fuel costs, which then have to be passed along to the passengers.

But why have oil prices risen so dramatically? We hadn’t yet gotten Drop One from ANWR, so it’s not like an existing supply was cut off. Likewise, the Keystone XL pipeline hadn’t been built, so the Canadian crude that would flow faster and more cheaply to American Gulf refineries was a future occurrence, not a present one. Again, the existing supply wasn’t affected.

The answer is buyer psychology.

When events influence the mindset and expectation of a given market’s customers, then prices will be affected accordingly. In the case of the oil market, the Biden administration is giving off signals that the U.S. will be producing less oil in the future. So even though the existing supply is unaffected, the market presumes there will be less supply at some indeterminate point down the line. Therefore, pricing rises today in anticipation of a possible future shortfall. The opposite is also true: when a country actively explores for oil and discovers new reserves, the market reacts with lower pricing, since buyers are reassured that new supplies will be forthcoming and steady.

There is another aspect of buyer psychology at work here too: Even if that newly discovered oil reserve hasn’t yet made it to the market, just the knowledge that it’s coming will influence current suppliers to keep pricing low in an effort to retain their existing customers.

Here’s a good analogy, one that actually occurs in the real world. There is a good local building supply house with many significant construction company customers in their area. They are the ‘go-to’ building materials supplier.

A major national company, say Home Depot, announces that they will enter that market two years from now with their big wholesale materials department, ready to supply all the local construction companies.  Just that announcement alone is enough to cause the local building supplier to sharpen their prices and redouble their efforts to better service their existing customers. The local supplier will do anything and everything they can to retain their customers in the face of new (albeit future) competition.

OPEC and the other big foreign producers would do the same (they’d sharpen their prices and increase their production) if they knew that big future U.S. oil supply was definitely coming -- even if a few years off -- and that the new U.S. production might very well elbow them out of some of their biggest customers. But they would do the opposite if they know that future U.S. production will be curtailed.

Do the progressives understand how market forces and buyer psychology works on a worldwide trading level? Since no one in the administration or any top Democrat party politician in either House has any top-tier real-world business experience whatsoever, it’s actually likely that they just don’t understand how any of this works.

The far more frightening possibility is that the progressives do in fact understand how markets work but are so intent on damaging Trump-supporting billionaire conservative white men and pushing their progressive woke agenda that they just don’t care that middle-class Joe the Plumber has to shell out $180 more per month in gasoline and heating oil and now can’t afford high-speed Internet access for his stay-at-home community college daughter.

Welcome to the America Second Agenda.

Image: Flappiefh

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