Bury Putin and Covid! ... and get gas prices down
The Leader of the Free World must lead. Elected officials must act. Stop crimes against humanity in Ukraine, defend democracy, and end the hardship of the pandemic, especially from high gas prices.
Two years, on March 11, 2020, we shut the U.S. economy down to protect Americans from Covid. Within weeks Congress and the Fed fought back; fought for us, getting relief out, getting markets out of a tailspin.
A year later, Congress blasted out more relief with the Rescue Plan, the best economic policy in forty years. The Fed held the line in 2021 to get jobs back. Even so, it’s been a heart-wrenching two years; Covid robbed us of 1 million Americans and 6 million people around the world.
Less than two weeks ago, a despot, Vladimir Putin, attacked the free people of Ukraine. At this moment, a slaughter of family, friends, and neighbors is raging there. Can you imagine? No, likely you cannot. If you can, my heart goes out to you.
Source: Tyler Hicks, New York Times.
Enough is enough. Throw the politics out. We got a job to do. Restore peace in Europe, prepare for a Marshall Plan for the freedom-loving people of Ukraine and Russia, and help Americans struggling at home with a recovery halfway won.
Halfway is not good enough. Not with democracy, not with people’s lives.
President Biden plans to ban the importation of Russian oil into the United States, a significant escalation in economic penalties for Russia’s invasion of Ukraine, but a move that could also further rattle global energy markets and raise gas prices.
Hey traders, the mothers burying their children from rocket attacks are shattered, not rattled. Democracy dying will be bad for profits and your soul. Trust me.
Ending the tragedy in Ukraine and struggles in America have a common thread: Get oil and gas prices down! We are funding Putin’s crimes against humanity; even when we cut off Russian imports, others won’t. Here are three of my blue-sky ideas.
The actions from this corporation grow more outrageous by the day. Not all oligarchs are Russian. First, it made almost $20 billion in adjusted earnings last year off the backs of Americans who had to deal with about a 50% increase in prices at the pump.
Then Shell plowed that money into stock buybacks and dividends. (They are not the one corporation who did, profiting from the surge in demand and marking up prices.)
Finally, they got caught this week buying Russian oil on the cheap after the war in Ukraine began. They said they were “sorry” and would do better next time. That’s not good enough for the Americans or Ukrainians.
Boycott time. Shell owns over 12% of gas stations in the United States. Drive on by. Today, this station in South Arlington was $4.31 a gallon; they raised prices 22 cents since Saturday morning. Come on. A few blocks from me, a mom-and-pop station has undercut Shell and the other big names by 20 cents or more during the entire pandemic and war. Do not give Shell a penny. Do not fund crimes against humanity.
Source: My morning walk by Shell station on Columbia Pike in Arlingon, VA on Tuesday, March 8, 2022.
Start a federal gas tax holiday, with corporations agreeing to pass on the whole 18.7 cents to consumers.
Enact a one-year federal gas tax holiday. Push the largest companies, excluding Shell (see boycott above), own over one in five U.S. gas stations to publicly commit to passing all 18.7 cents of tax cut to consumers. Television those promises live from the Rose Garden. Then monitor and have White House updates on their margins, the retail minus production price.
Holding corporations to margins (and with it, profits) before Russia's invasion or, even better, pre-Covid, makes them and their shareholders share in the costs of defending democracy and ending the Covid economic crisis. It also combats the hand wringing by elite economists about ‘tax incidence.’ For once, use market concentration to our advantage. If you don’t like my ideas, propose better ones. Every penny counts.
Business lobbyists complain a gas tax holiday (keyword “lobbyists") would cut infrastructure investments. Many states, primarily led by Republicans, have not used their funds from the Rescue Plan. Do the American thing and step up to serve people.
Rich people, do your part and use less gas and energy.
Fact: Millions of Americans must fill their tank to get to work. You demanded people go back to crappy, often dangerous jobs. Make at least the trip there affordable.
Fact: Even when prices are high, gallons of gas bought are stable (except in the depth of the Covid recession). On average, gas accounts for about 3% of families’ spending.
Fact: High-income families spend three times as much on gas as low-income families.
There is a multitude of ways we can conserve energy and gas. Google it. Think of it as the 21st century Victory Garden. Notably, the cutbacks should start with those with the most financial means, from the top 1% to the top 20%.
Here are many more ideas.
The immediate goals are to cut Russia off and get prices at the pump and heating bills down for Americans and people. At the same time, we must take action to achieve our longer-run goals to reduce U.S. dependence on foreign oil and gas and reduce our dependence as a world on fossil fuels.
Again, be creative. Be bold. Pursue many solutions at once. Every penny counts. Implementation and accountability are key.
Halt all arms sales to Saudi Arabia and other Gulf countries until OPEC agrees to increase their oil production. Saudi Arabia must bring its oil production back to pre-Covid levels immediately. Profiteering off the crises is not remaining neutral.
Saudi Arabia decided to play politics during a war. It’s time for Congress to commit to a floor on the price of oil from U.S. shale companies. Domestic production will shield us from this anti-democratic country.
Tie the removal of sanctions on Iran and Venezuela, to a clear commitment to increase oil supply as soon as possible. Set a firm timetable and supply metrics.
Open strategic oil reserves in the United States further and encourage other countries to do the same. If not now in a pandemic and a war in Europe, what are our reserves for?
Democrats must clarify their plan to reduce U.S. dependence on foreign oil and gas and energy security. That was a positive outcome of the 1970s oil crisis. Do it again. Today is not as bad as the 1970s, but far from good enough.
Admit that it will take several years to reduce U.S. demand for fossil fuels, and it will never go to zero. Less uncertainty now would encourage moderate increases in domestic production, such as shale.
Encourage corporations, particularly in high-energy using sectors like delivery services to reduce their use of gas, diesel, and electricity.
Employers should be more flexible with work-from-home arrangements, which would help with energy costs at the office and keep commuting lower.
Congress must invest in research and development to support domestic energy production, including technologies for cleaner oil and gas production and for more cost-effective sustainable energy sources. It must be sustainable for people’s budgets and sustainable for the planet.
Go back to the drawing board with carbon taxes. Outrage over higher prices at the pump, even with massive economic relief in 2021, suggests that a carbon tax on consumers with redistribution is a problematic way to go green.
Make big investments in research and development and infrastructure for renewable energy sources and consumer products like electric vehicles that are affordable and comparable in quality to existing vehicles.
Support public transit in our big cities and densely populated regions. Bring transit, workforce development, and technology experts together to establish a plan to make public transit an affordable and useful option.
We must communicate every effort and set measurable goals. Be open about the tradeoffs and do not promise instant relief. If none of this works, try something else.
Listen to the people.
Special thanks to everyone who replied on Twitter to my request for ideas on bringing gas prices down. Listen to the people. They know.
Claudia Sahm @Claudia_Sahm(very briefly on here) ... asking for a friend: - ways to bring inflation down, especially gas prices? PS macro men need not reply. I know what you'll say. https://t.co/LvuIcmwYM0
The stakes are very high.
Ukrainians are enduring crimes against humanity and Russian oil exports are funding Putin’s war. Higher gas and energy prices are a hardship for Americans and many around the world. Moreover, even with all the progress on jobs and income relief during the crisis, the recovery is not complete until we have inflation back down.
We have a job to do to support families and workers. Right next to that Shell station is an empty LoanMax building. Across the street is an empty payday lender. They had so little business during the pandemic and the economic crisis that they closed these locations. Think about that! I never want to see them re-open. No one does. No one should need them.
Poverty is a policy choice. Choose to dignity and democracy for all people.
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The views here are my own and do not represent the Jain Family Institute or my colleagues.