Earlier this week, the Biden administration released an op-ed written by the president on his wartime inflation-fighting strategy. Specific concerns Biden responded to included disrupted supply chains and rising prices for goods, from food to gas. The President began with his own summary of the issues: “The global economy faces serious challenges. Inflation is high, exacerbated by Vladimir Putin’s war in Ukraine. Energy markets are in turmoil. Supply chains that are not fully healed cause shortages and price spikes.
Global turmoil is indeed a driver of inflation, price instability and supply chain failures, but it also offers a convenient canvas for administrations grappling with the same policy outcomes. unruly foreign and domestic mismanagement. Voters’ attention can be effectively diverted from flawed domestic politics by dramatic scenes of global unrest like those unfolding in Ukraine. And as Brian Deese argues in an interview with the PBS Newshour, war is an economic proposition with economic consequences. Biden’s article asserts the same, locating the consequences primarily in the area of energy supply.
Currently, the US government is committed to intervening in Putin’s war machine, imposing energy sanctions that prevent Russia from fueling its efforts through the sale of oil and gas. The United States has rallied allies to its cause, begging European nations to follow suit. Brian Deese notes to the PBS Newshour that the US here is looking to “increase supply outside of Russia to try to have a moderating impact on [fuel] prices…[and therefore] Biden is focused on diplomacy, working with oil-producing countries around the world to get other supplies to market. Such efforts are as political as they are economic: Biden is scrambling to stabilize prices at home while seeking other energy sources as he continues to sanction Russia, the world’s biggest oil exporter.
What Biden does not address in his article for the the wall street journal is the fact that economic manipulation has always been an instrument of diplomacy. Biden argues that “the single most important thing we can do now to move from a rapid recovery to stable, steady growth is to bring inflation down.” Inflation is the by-product of specific government interventions in the world market and a domestic consequence of the distribution of economic reprimands abroad. As Niall Ferguson reminds us in “The Ascent of Money,” inflation is an economic problem; hyperinflation is a political problem. The Biden administration is doing everything it can to reassure Americans that it has made feasible plans to reduce inflation, which will mitigate the rising cost of goods in the country. During this time, the FinancialTimes reports Biden sThe price of fuel “should not depend on whether or not a dictator declares war”, deflecting the blame for rising prices from domestic politics to Russian aggression.
By campaigning for his plan, Biden is obscuring the political source of the same inflation he pledges to fight with his audience. Sanctioning Russian oil is a political as well as an economic necessity, according to the logic of Biden’s foreign policy agenda. “The price at the pump is high largely because Russian oil, gas and refining capacity are off the market,” Biden writes for the WSJ. Reaffirming the punishment narrative that NATO and the West have established to refer to Russia, “We cannot relent in our global effort to punish Mr. Putin for what he has done,” Biden continues. “We need to mitigate these effects for American consumers [which] that is why I led the largest release of world oil reserves in history,” he concludes.
It has become normal for American political discourse, as real politics, to assume that American citizens will accept the pressure of price hikes in the abstract interest of “punishing” competitors, aggressors, and threats to democracy at home. ‘foreign. Biden’s call appears designed to equate the interests of his audience with his administration’s foreign policy agenda – “My plan would reduce the annual utility bills of an average family,” he writes, “and would accelerate our transition from the energy produced by the autocrats”. Convincing the American public that their interests — and their morals — are aligned with a US foreign policy agenda is key to advancing Biden’s plan.
The release of strategic oil reserves will facilitate this effort. Biden told the FinancialTimes that this historic decision “was designed to drive down ‘painful’ gasoline prices that were hurting the finances of many households”. FinancialTimes The analysis continued to note that “this move comes as political pressure mounts on Biden, who has faced waning criticism and approval ratings in the face of soaring fuel prices.” The difficulty of balancing stable domestic politics with aggressive responsiveness to crises abroad has been a major feature of Biden’s presidency. The release of oil reserves is no exception, and “the administration has also called on U.S. oil producers to increase production,” reports the FinancialTimes. Foreign sanctions come with incentives for domestic wells to increase production. However, “history shows that [Strategic Petroleum Reserve] suckers are not particularly effective in controlling [oil] price,” Dan Pickering, founder of Pickering Energy Partners, told the FinancialTimes. “You are not solving a structural problem of supply and demand.” Stabilization of global energy markets is the end game; releasing reserves is a stopgap measure for the Biden administration, buying time for ongoing energy negotiations and also an extension of the patience of Biden’s base at home. Perhaps the moment also offers a chance to break away from “autocratic” energy producers and lay the foundations for true and lasting American energy independence.