Navigating the Politics of Putin's Price Hike
Gas prices and inflation are dominating American politics. Here's how Democrats can fight back
While the political world is rightly focused on Ukraine, the contours of the 2022 midterm election are rapidly taking shape. Talk to any political operative — Republican or Democrat — steeped in internal polls and focus groups about what is driving political sentiment, and you will get the same answer: rising costs and the price of gasoline in particular.
This was true before Russia invaded Ukraine and it’s even more true now that President Biden (correctly) banned Russian oil imports. As Biden himself predicted, the ban will lead to even higher prices over time. Despite voting for the ban, Republicans are already attacking Biden for high gas prices.
Every Democrat on the ballot this fall must find a way to navigate what Biden calls the “Putin Price Hike.”
The Political Peril of Prices
Jon Favreau and I talked about the politics of high gas prices on last week’s episode of Pod Save America. But this morning I woke up to a disturbing new poll from the Wall Street Journal and NBC News. They released two findings that scared the daylights out of me and drove home the immense political peril. According to the poll, 50 percent of voters cited inflation as the top issue they wanted the federal government to address — doubling Ukraine, which was the number two issue. The second finding should send a chill down the spine of every Democrat — Republicans have a 17-point advantage over Democrats on who is better able to handle inflation. In other words, we are getting our collective clocks cleaned on the number one issue in the country.
Inflation is, of course, a problem much bigger than gas prices. It affects every segment of the economy. However, gas prices historically have the most dramatic impact on the political prospects of the party in power. This is common sense. You have to drive to work and run errands. Many Americans are forced into long commutes because of the absence of affordable housing. And perhaps most importantly, there are giant signs advertising gas prices everywhere you look.
A wide majority of Americans, 79%, said they favored a ban on Russian oil imports even if the prohibition increased energy prices in the U.S., according to data from a new Wall Street Journal poll. Just 13% said they opposed it.
The American public has shown remarkable support for the Ukrainian people and demonstrated a unity sorely lacking on other issues. It is possible the public will take record-high gas prices in stride. However, Democrats should hope for the best but prepare for the worst with a plan to aggressively fight back.
Setting the Record Straight
The Republicans are cynically trying to square their support for a ban on Russian oil with their plan to blame Biden for high gas prices by making two claims. First, they claim gas prices were up before Russia invaded Ukraine; and second, the pre-invasion price increase is due to the Biden Administration cutting back on domestic oil production. It will not shock you to find out that both of these claims are bad faith bullshit.
It is true that prices were up before the actual invasion, but that has nothing to do with President Biden. Gas prices were up for the same reason that all prices are up — supply chain shortages and other issues related to pandemic. As the New York Times explained in a very helpful “fact check”:
In the early months of 2020, when the virus took hold, demand for oil dried up and prices plummeted, with the benchmark price for crude oil in the United States falling to negative $37.63 that April. In response, producers in the United States and around the world began decreasing output. As pandemic restrictions loosened worldwide and economies recovered, demand outpaced supply.
The price of oil also started going up in February in anticipation of conflict as Russian forces massed on the Ukrainian border.
President Biden is a strong supporter of transitioning away from fossil fuels, but the idea that domestic production of oil is down on his watch is wholly incorrect. As Matt Yglesias pointed out in his Slow Boring newsletter, average annual oil production is higher during the Biden presidency than any time in history.
To be clear, more oil production is not inherently a good thing. Especially when we should be aggressively transitioning to green energy. But facts are facts. The idea that Biden’s environmental policies are leading to the price spike is pure disinformation.
Fact-checking is a necessary but insufficient response to the gas price attacks. Democrats need an aggressive plan to fight back. Whether you are running for Congress or county commissioner, I recommend the following approach:
“Putin’s Price Hike”: While this term will win no awards for nuance or subtlety, I do commend the White House for just saying the thing. There is a hike in prices and it’s Putin’s fault, so you might as well be as direct as possible. There is an obvious political upside to tying the price increase to the actions of a person hated by everyone(other than Tucker Carlson, Donald Trump, or their ilk). This is national security issue pure and simple.
Go After the Oil Companies: Big Oil is only slightly better regarded by the American electorate than Vladimir Putin. Big Oil has a habit of using moments like these to gouge consumers. According to a recent report from Accountable.US: “[The big four oil companies] raked in $24.4 billion in quarter four of 2021, bringing their total profits for last year to over $75.5 billion. Chevron, Shell, BP, and Exxon used these bloated profits to shower billions onto their shareholders – including their wealthy executives whose salaries are heavily padded with stocks.”
Keeping the pressure on the oil companies has substantive value because it might prevent them from further jacking up prices. There is a political benefit as well. Big Oil bankrolls the Republican Party. Voters trust the Democrats more than the Republicans to hold Big Oil accountable. A populist message about high gas prices is strong political ground for Democrats. Congressional Democrats should consider hearing and investigations to make sure the oil companies know that someone is watching them.
Have a Plan: One of my old colleagues in the Obama Administration always said that “Plan beats no plan.” Right now, Democrats need a plan for how to reduce pain at the pump. Some ideas for such a plan include:
Windfall Profits Tax: Senators Warren, Sanders and others on working on a bill to tax oil companies using this moment for profiteering. The money raised from this tax would be used to send rebate checks to the public quarterly.
Gas Tax Holiday: The proposal is admittedly more symbolic than substantive, but there is growing momentum to suspend state and federal gas taxes. In the past, I opposed these proposals because they are gimmicky. I still think that’s true when dealing with spikes in the normal course of business, but the Russian invasion is an extreme circumstance. At best, consumers will see minimal savings. However, with inflation where it is, every single penny matters to a lot of families. My guess is the train is going to leave the station so Democrats should be the engine, not the caboose.
More Money in Their Pockets: The Build Back Better agenda is dead. Long live the Democratic plan to combat inflation. There is an opportunity to pick a couple of agenda items that will immediately put money in people’s pockets or reduce costs in other parts of the family budget and make them the centerpiece of this plan. The focus should be simplicity and immediacy.
Ideally, any Democratic plan could pass the House and have the support of all 50 senators. In that situation, the bill will pass or Republicans will use the filibuster to defend Big Oil. The former would help. The latter would clarify for the public the stakes of the election.
Public support for transitioning to greener energy tends to wax and wane with energy prices. When costs go up, support goes down. Facing political pressure on high gas prices, there is a temptation for Democrats to talk less about Climate Change and default into a bidding war with Republicans about domestic oil production. That sort of short-term thinking is a setback to the much larger and important goal of making the case for moving away from fossil fuels. There is an opportunity — and an imperative — to use a spike in gas prices to demonstrate that true energy independence comes from moving to clean energy. In the long run, the only way to defeat Putin and other petrol-state tyrants is by transitioning away from the fossil fuels that fund their machinations. The public is paying attention. We don’t get these moments often. We must use them.