John Tamny:
Last week President Biden asserted in rather eye-opening fashion that he "grew up in a family where the price at the pump was felt in the kitchen.” Except that President Biden didn’t grow up in a family burdened by gasoline price spikes, and not just because he’s long overstated the humble circumstances he emerged from.
Biden didn’t endure food shortages related to pricey gasoline simply because he was born in 1942. When Biden was growing up, the price of gasoline was flat. And it was cheap. Please see the charts at the bottom of this piece if you doubt me.
While gasoline is abnormally expensive now, these spikes never happened during Biden’s childhood, and as the charts make clear, they weren’t a factor for the President until he was in his early thirties, at which point he was on the verge of winning a seat in the U.S. Senate. What Biden claims about his childhood is false. Simple as that.
Too bad no one’s called him on it. And not just because politicians should have their fibs exposed. Pundits should hold Biden accountable for uttering a blatant falsehood simply because doing so would be a “teachable moment” extraordinaire.
That’s the case because there’s a very clear reason why there were never gasoline spikes during Biden’s childhood, and also why they’ve become the norm since the President entered his thirties. And no, OPEC is not the reason.
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Let’s talk about what really happened. The simple truth is that before the 1970s, commodity markets were quite dormant, or non-existent. With commodity prices so flat, what was there to trade? Why the lack of volatility? The answer is simple. The dollar up until August 15, 1971 was clearly defined as 1/35th of a gold ounce, and with the dollar stable, so were the commodities priced in dollars. Biden never felt “the price at the pump in the kitchen” growing up simply because a soaring price at the pump never factored in his childhood.
Which is why his flamboyant mis-statement is such a worthy teachable moment. Gasoline used to be nominally cheap precisely because the dollar had a stable definition. Since then, gasoline has bounced around wildly much as oil has. With the dollar’s price no longer stable, and with the dollar having suffered bouts of weakness at times, it’s at times been the case that our dollars haven’t stretched as far as they once did. In other words, the severing of the dollar’s link to gold in 1971 was the inflationary outbreak that Americans endured in the “Me Decade,” and the dollar’s instability since then has explained gasoline’s volatility over the last 51 years. It’s really very basic.
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While this is generally true the current price spike is caused by Biden deliberately limiting the domestic supply of oil and gas in order to drive up the price because of his fantasy about "climate change" despite there being little evidence to back up that theory. The predictions of the climate change crowd have been mostly wrong for 50 years.
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