"Energy Abundance” makes a great bumper sticker. Since the 1970s oil embargo, energy has been on the list of words that generate anxiety. Finally, there is reason to heave a sigh of relief. In addition, "abundance" has never been used in political sloganeering, so it's actually fresh.
Biden should repeat this often: “Think of it! The United States is pumping more oil than any other country on Earth—not Russia, not Saudi Arabia, the United States! And yet, we are reducing greenhouse gas emissions every year! And that's a fact.
And able to quickly ramp up gas exports to Europe when they needed it! The LNG "pause" -- besides being a cost-benefit "economic" mistake -- really queers what ought to have been a good abundance-foreign policy point.
I was in elementary school during the energy crisis of the 1970s. Stores only turned on half of their fluorescents. Thermostats were set at 68.
It was drilled into me by parents and teachers to always turn off the lights when you left the room, because oil was running out and my generation would have to get by with much less.
I told one of my friends in the energy industry that they sound like Aunt Edna from Vacation…after record number of bankruptcies in the energy industry in 2016 they had a record dollar amount of bankruptcies in 2020…and they are now nitpicking and complaining about everything Biden has done. So from a political standpoint it makes perfect sense for Biden to at least virtue signal with the potential pause on future LNG exports because people in the fossil fuel industry are never going to vote Democrat again even after their industry has hit record production under Biden. Btw, the guy started outlining his logic and he repeated neoliberal talking points after making very clear he is a neoconservative with respect to foreign policy…he’s literally both a neoliberal and a neoconservative!!
Once again, we had cheap gasoline in 2016 and it helped the Republican because now that we produce the most oil in the world higher oil prices mean more jobs. And many of the jobs are in places that manufacture equipment for the fracking industry which aren’t close to any oil fields like near Lake Erie and in Wisconsin.
The economy was strong in 2018 and Republicans lost in the midterms. The inflation has been over for a while and now sentiment about the economy is improving. The Fed’s mandate is price stability which they have achieved. Btw, that particular mandate is what led them astray in 2006-08 as the Katrina supply shock wreaked havoc on their data and led to the appearance of price stability.
Unfortunately both the left and the right are addicted to doom and gloom. Everything is going to hell, facts be damned, whether because of global warming, inequality or immigration.
Bidens's policies have devalued the dollar to 83 cents, in just three years. Homes are all but impossible to buy, thanks to the increased rates for mortgages. Energy is more expensive because of Biden's absurd energy policies. And the border, under nearly complete control under Trump, is now wide open, with eight million illegals having come in under Biden. And WE are PAYING for their upkeep, to the tune of billions of dollars.
I don't want any more of Joe's help. I can't afford it.
I'm 76 years old and have had multiple mortgages. I know how the rates work. Mortgage rates are directly tied to the economy. They are up because of Bidenflation. Bidenflation is the result of the government 'printing' huge amounts of money with no comparable increase in production. If any economic principle is inviolable, it is this: Inflation is the result of too many dollars seeking too few goods.
Many commentators don’t want to recognize that the inflation calculation was changed around 1980 to reduce the CPI so that the cost of living adjustment for social security would be reduced
So todays 9.1 percent inflation is 22 percent using the old formula
Unless you are in the top 20 percent in income you are going to be under severe financial pressure
Biden and his Uniparty have made debt slaves of their grandchildren, the born and the unborn. Thirty years from now these children will be chained to trillions in interest obligations they did not choose.
The anti-Biden people can't even get their story straight. The inflation of 2021-22 REDUCER the ratio of national debt to GDP! That is how inflation works! 😂
How inflation works is that most people are having a very hard time paying costs that have increased with inflation, when their paychecks haven't kept up. That is the way it ALWAYS works. The workers are always playing catch-up with inflation. It never works to their advantage.
Trump did that. That’s why Haley attacked Trump and Tim Scott on spending. Btw, the most deficit spending happens when a Republican is president because Republicans in Congress will never increase spending to help a Democrat president while Pelosi sent stimulus packages to a Republican president under both Trump and Bush. So if you want to control spending then vote for a Democrat president and definitely don’t vote for Trump!!
Obama’s second term actually reduced spending and obviously everyone knows about Clinton’s surplus. But if your concern is spending then the problem is very clearly Republican presidents because that is when the big and wasteful spending happened.
The increase in the death burden for our grandchildren pails in comparison, to how much more wealthy they will be as a result of the program growth policies. Federal debt is actively shrinking as a share of the economy. It really seems to me that a lot of people don’t understand the simple fact.
Says which economist? We owe near $250,000 per working taxpayer. History is replete with different versions of MMT and most end up failing. This time its different?
"CBO’s latest budget projections confirm that the country is on an unsustainable fiscal trajectory. While deficits and debt will temporarily subside as the economic recovery takes hold, debt will soon begin to grow and will reach a new record of 106.4 percent of GDP by the end of the decade. "
The CBO is also reporting that just servicing the debt will consume most of the collected tax dollars within a couple of years. No matter how large the GDP gets you cannot create money and spend your way out of the national debt.
It is the future that matters. Joe for POTUS perpetuates the crime. There are a few Republicans who are not Uniparty. Trump as POTUS will strengthen their voice.
True enough. But we don't have to look into the future. Right now, the national debt is about $90,000 per person. Just 5% interest makes that $4500/yr per person in interest payments. That's not play money, that's real money that we will pay out every year forever, until we get responsible government. But, as you point out, it's not getting better, it's getting worse.
Yes, there are a lot of moving parts, and this is just some of the basics. But these basics are the backbone of everything else.
If you think this can never just cave in on us, check out Venezuela. They used to think they could just keep printing money and get away with it. Now, they know better, but it's too late.
Was interested to see the recent Reason interview with David Stockman on Youtube who highlights RFK Jr.'s perspective on slashing the Defense budget. Stockman often pounds the drum of unsustainable debt growth. It hasn't worked out for Argentina either.
Home prices are so high because interest rates were way too low for way too long, which caused inflation of asset prices. The cure is either a huge increase in supply or even higher interest rates to suck the remaining air out of the market so sellers finally have to lower their prices to sell. But if we did this people would call it a “housing crash” and panic, so we won’t. Instead we’re stuck limping along for years hoping we can keep house prices flat while wages increase until eventually things are sane again.
Huh? Pure nonsense talk. Free market. Supply and demand. Housing prices aren't 'supposed' to be anything. They are what they are based on market conditions. If the federal government would stop trying to 'fix' everything, there wouldn't be so much that is broken.
I am enjoying your comments here, but you seem to have quite different views on what a home price should be vs. what a utility bill or groceries should be:
“You will never again see a day when the dollar is worth what it was in 2020. Not even close. We all know that from shopping and paying utility bills.”
Why is inflation (I.e. distortion in supply and demand) above reproach in home and ruinous in everything else?
I'm not sure what you thought I was saying, but that's not it.
Rich people and governments benefit from inflation. They can invest, and stay ahead of the inflation curve, making more from the inflation than the actual inflation. If their investment makes 6% in an economy with 4% inflation, they come out ahead with a 2% net gain. Poor people don't invest. 4% inflation means their money is worth 4% less each year. Yes, they get raises, but the raises always trail behind the inflation. Think about it; has anyone ever gotten an inflation-adjustment raise for MORE than inflation? Less, yes; more, never.
Governments have control of the money supply. Why? Sure, it seems obvious at first, but when you think of the power that government have as a result, we should think carefully about it. When you think about how incompetent our governments really are, we should be terrified.
The real estate market is the most regulated and state controlled market in the US. 30-year mortgages and FHA loans are federal government creations not found in other countries. Perhaps we agree the government made this mess?
The government makes most messes. San then makes them worse.
Most people learn from their mistakes. Government keeps throwing money at their mistakes. The solution to every problem is to throw more money at it, even when throwing money at it is what caused the problem in the first place. Education didn't used to be so expensive, until government threw money at it. Same for healthcare.
It's not necessarily that governments are incompetent, although that is always a distinct possible. It's that governments know that the more money they control, the more they control us.
Correct, because we had deflation in 2020. So the Fed doesn’t want deflation and so Powell was fine running the economy a little hot. What he didn’t plan for was unprecedented weather events in Texas/Louisiana and Ukraine and the Delta wave/people refusing vaccines. So those events happening exacerbated inflation.
The problem for the 18 percent Americans over the age of 65 is that our savings piles have lost about 20 percent of their purchasing power during the Biden years. You may write all you want about “Abundance” being on its way but that loss is very painful, and it’s not likely to be remedied for any of us during the balance of our lives.
Fortunately, inflation-adjusted wealth for older Americans has gone up under Biden, not down. The low interest rates that enabled inflation in 2021 also pumped up the value of bond portfolios and houses that older Americans rely on.
No, wealth increases for most are because of the substantial increase in the value of the stock market, which thankfully, Biden has a hard time screwing up regardless of Obama's warning that Joe has a reputation for and the proven ability for f***ing things up.
I’m not sure it’s quite that simple, Noah. After all, most non-treasury bonds are callable when rates go down, thereby capping their potential appreciation. And then when they’re paid off, the investor must reinvest the money at the new, lower interest rate. It would have taken some real agility to manage a bond portfolio for retirement income these past 10-15 years. With regard to house price inflation, I take it you’d have us all sign up for reverse mortgages or home equity LOC’s? Or sell out and downsize (which my wife has been after me to do for a while anyway!).
It is true that Social Security benefit payments are supposedly indexed to some cost-of-living index. But I would guess that vast portions of contemporary retirement payments are not indexed to inflation, most obviously fixed annuity payments and still-large defined benefit pensions that many, if not most, of today’s retirees earned during their first twenty or so years in the workforce.
And it has exactly zero per cent to do with Biden’s policies. If anything, Americans are much better off than the rest of the world. It really is fascinating that American voters think the US president is some sort of all powerful God.
It’s rounding up 14.4 percent increase in PCE (much of this is driven by housing and most pensioners own their homes so they experience less inflation.)
And people have their inflation adjusted social security payments and private retirements in the market.
It’s a lie to assert people have lost 20% of their “savings piles” unless they are literal piles.
Presidents (and all politicians starting with dog catcher) love to take credit for things they had nothing to do with. And, they also get blamed for things they had nothing to do with.
Larry Summers has made a career of incorrectly warning that every government decision would resurrect runaway inflation. For once he was half right but everyone had already stopped listening.
SSI COLAs are a joke. A recent evaluation compared the actual reported inflation (using mostly bogus government under reporting) showed that even with SSI COLAs, the purchasing power of SSI recipients has decreased by about 40% over the past less than two decades.
An OK amount of "relief," (Fiscal deficits do not "stimulate" an economy when you have an inflation-targeting central bank) but it should have been paid for with tax increases. It is the deficit that is costly for future growth.
If you want to criticize deficits -- and you should -- (and everybody's not just Biden) point to the Fed having to keep interest rates higher for longer. That is the way that deficits shift resources from investment curtailed by high interest rates) to consumption.
Revenue raising, deficit reducing tax reform should be one of the priorities for Democrats.
Battery technology is nearly there. It’s measured in wh/kg. And the highest commercial battery is 500 wh/kg. The best lab produced battery (from last year) is 700 wh/kg [1]
Here in Ireland the household energy use is about 4300kw per year - about 12kw a day. Simple division suggests that a house needs a 24kg battery at 500wh/kg to power that house fully from the battery. Which is well within the weight of car batteries.
That said the commercial battery at 500wh/kg is rare. But we are getting there.
But all of this is meaningless unless there is some incentive to buy the battery and use it.
We need people to power up the battery when the wind is blowing (it’s not going to be sun here) and use the power when it’s not.
Maybe as battery technology increases we get a few days from a storm. That needs financial incentives - wind driven power should be cheaper - and a grid that can transfer the extra energy to houses when the energy is cheaper.
Also the grid needs to handle quiet days.
Also we need to electrify heating and transport of course. Let’s see.
Weight doesn’t matter for grid storage batteries, cost per watt/hour is what is important. Right now iron-air batteries have the lowest cost (and greatest weight) but don’t depend on lithium, nickel or cobalt.
It might matter in a house and especially an apartment that the battery be small and energy dense, but I agree that cost also matters. Would be great if batteries didn’t need rare or difficult to mine metals, I agree.
It wouldn't matter for homes or apartments if it was 10% or even 50% heavier (or larger). But the bulk of the market is clearly (at the moment) in applications where weight clearly is critical (automotive).
"Remember what happened on day one with one-party rule? The president canceled the Keystone pipeline, and then he stopped new oil and gas leases on federal lands and waters." (Quote from a Republican, but it's true.)
"Biden came into office pledging to end federal oil and gas leasing, but he has been forced by court order to hold a few lease auctions."
"[T]here have been only six on-shore drilling lease sales since Biden took office, compared with 65 in Barack Obama’s first two years in office."
"The reason for the fast pace of approvals is that the BLM streamlined the permit application process under Trump."
It's clear to anyone paying attention that Biden isn't pushing for more oil and gas domestically. Maybe he isn't standing in the way as much as he could, but he isn't going to get much credit for that. Noah, stop gaslighting us that Biden is some big oil advocate.
While we're at it, a tight labor market with high interest rates and high inflation is exactly the wrong time to build a bunch of subsidized factories. Biden's policies are making inflation worse. You know that, of course, but it's convenient for democrats to pretend otherwise. Your relentless partisan cheerleading is tiring.
All the green meat this White House has been throwing at climate activists is not the best use of political capital.
One reason I suspect that the abundance story is not being pushed more is that people in the administration are worried about a sudden fuel price shock or recession. If you come out touting economic success a year out from the election and something changes then you might be in a worse position than if you based your messaging off of the state of the world in June or July.
Rather, the only voters who aren't already beyond the reach of persuasion are the ones that haven't been paying attention. Everyone who has paid attention has already decided which party's candidate they're going to vote for and political messaging isn't going to change that.
Noah, you're a great person and I love your Substack, but whenever I hear the "solar is so cheap!" message, I get cognitive dissonance.
My husband and I are well-off professionals living in a 1600 square foot house in Southern California, and we're getting quotes for solar panels for our roof plus a battery to tide us over after sunset. Long story short, the whole setup looks to be ~$30k (the solar panels alone, minus the battery, would be ~$15-20k).
That is NOT cheap in any way, shape or form. That is absolutely unaffordable to the vast majority of Americans. And we're talking a 1600 sqft home, so a good size but not a ginormous McMansion, in freaking So Cal, where it's sunny almost all the time year-round. How would the economics pencil out somewhere further north and/or constantly cloudy, like Seattle?
Yes, I get that solar panels are cheaper relative to what they used to be, but the salient comparison for most people is not "how much did this used to cost?" but "can I afford this now?," and the answer is a resounding no.
Furthermore, I understand that the economies of scale are a thing, and that installing a giant solar farm in the desert is (hopefully/presumably) much cheaper per kWh than installing residential rooftop solar. Maybe society should go all-in on building massive solar farms where land is abundant, and leave residential solar as a niche interest for rich people in sunny areas who care about the environment. But "solar energy is super cheap and easy, barely an inconvenience!" rubs me the wrong way in light of what my husband and I have learned.
Home solar is expensive, and now that California reduced the give-away feed-in tariffs the actual cost is being paid by new installations. Most of the cost reductions are for utility scale solar, but this often ignores the actual cost of connecting those desert farms to the grid, which requires permitting transmission lines, and producing scarce transformers, and there is a huge backlog and it’s worse (as many things are) in California.
I agree, the home solar market is screwed up. I was looking forward to having solar installed on our roof but deferred it indefinitely once I realized it would be a terrible investment. It came out to something like a 1% annual return on investment, even after the subsidy.
I'm not sure exactly what the causes are. Maybe home solar is inherently not very economical. Maybe installers are pricing for people who are emotionally invested in solar and willing to pay more than it's worth from a financial perspective.
What does the math say? Using numbers from friends in CA with solar it is clearly cost effective in CA where existing electricity is among the most expensive in the country. The latest numbers from BLS has LA at $0.288/kwh, San Diego at $0.477/kwh, Riverside at $0.279/kwh. The national average is $0.161. You should be able to produce ca. 12 MWh/yr on a house in CA, which at the LA prices is “worth” $3,456. Using that as a good back of the envelope number your break even point is 8.7yr. The inverter’s last about 20 years, but that means that you would have zero electricity cost for 11 years. I don’t know, but as a Chemical Physicist putting solar on seems like the obvious thing to do.
OK, but knowing that you'll break even in 8.7 years is no help at all to the millions of Americans who simply cannot afford $30k out of pocket. I guess you could take out a loan and pay it off with all the money you're saving on electricity, but realistically, how many people are going to do that?
"Yes, I get that solar panels are cheaper relative to what they used to be, but the salient comparison for most people is not "how much did this used to cost?" but "can I afford this now?," and the answer is a resounding no."
We were quoted 14,000 kWh/year. They told us the panels would range from generating 50 kWh under optimal conditions (sunny summer day) to 6 kWh on a crappy, cloudy day.
For comparison, Google says the average American household uses 10,500 kWh/year of electricity.
Thanks. I was quoted based on 13,500 kWh/year, but I'm at a higher latitude, so you would need less than the 10kW of panels in my quote. It wasn't economic for me because we have cheaper electricity here than you (mostly nuclear and hydro).
Do you know what the panel capacity in your quote was? Was it economic for you?
Sentiments are a big part of politics. We were pumping more oil than any other country on earth...true, but we have been doing that before Biden was in office. They key issues that Americans are reacting to are: Border Security (or the lack of), Illegal Immigration (growing), grocery store prices (increased and some cases still increasing), and yes, the lack of confidence in the Biden administration, including the President himself. Think image, think confidence, think overall sentiments. I usually don't fall for polling, but all polls are showing very low confidence, by large numbers.
While you correctly painted a picture of abundance, Biden's base doesn't want to hear it. Biden will continue to downplay energy in favor of climate catastrophe to garner votes from young activists. And it's already begun as he has touted his LNG exports limitations. The most important issue to a broad section of voters is inflation. While moderated, the comparison of prices like McDonald's hamburger from the beginning of his administration to now will be among the deciding factors. The wages of those folks have not kept pace with inflation. It's the old pocketbook issues.
True. [Although I wonder if 0.1% of the emails I get asking for money asked instead for my time ...] But its a trade off. How much swing voter turning off do you have to do to attract the optimal number of volunteers? Not much is my guess.
Inflation is much less bad in the US than in the rest of the world, and has now all but disappeared, while economic growth is stronger than almost anywhere else. But voters are like toddlers unfortunately - all emotions and no rationality. I really despair for democracy, being ruled by the ignorant emotional masses. The solution is to educate and increase the intelligence and moral character of the populace, naturally, not to wish for an enlightened despot (which doesn’t exist and would be wrong anyway)…
Peak inflation runs in cycles. The first one I remember was during the Vietnam war when Johnson did not want to raise taxes to pay for it so he printed money and stated that cycle into the 1970s. Then Carter in the eighties when interest rates hit high double digits in efforts to quell "stagflation". Then a period of relative calm until Biden dumped $trillions of fake dollars during a period of low productivity. All inflation issues are demand vs. supply, then further obfuscated by various government agencies who willingly roll the dice.
Terrible idea. When people don't feel abundant, telling them it is will create cognitive dissonance. And it makes him look out of touch. People will go with their feelings over facts in today's world. His message should be... if you think it feels bad now on whatever issue, the Republicans will make it feel worse. Abortion, average person doing better, foreign policy... etc.
"Biden should absolutely brag about the fact that he helped push U.S. oil production to an all-time high" That may be a smart move politically, but how do you reconcile that with fighting climate change? Wind and solar power should replace fossil fuels, not come on top of them.
They are absolutely compatible. We fight climate change by reducing global DEMAND for fossil fuels. But there is nothing wrong with the last CO2 molecule emitted having come from a US produced source.
But to ask all producers to include to include the cost of net additional CO2 emissions is consistent, but pretty unrealistic. Most are less serious about climate change than the US. Of course it is even better to ask everyone to just tax net emissions within their own jurisdictions and then these production-level cost benefit analyses would not be necessary.
A side point - not the main thrust of the article. Consuming more has a lot of other externalities besides greenhouse emissions (landfills, plastic pollution, .........)
Major fact check: Sunrise Movement did signficant GOTV work and campaigning for Joe Biden to help him win in 2020, and spent a lot of time and money producing pro-Biden GOTV comms (I was part of the national comms staff. The endorsement argument you pull from twitter is pretty misleading.
The U.S. is awash in conventional energy. Solar and wind energy infrastructure is just beginning. In addition to providing cheaper energy, solar panels above crops function 20% better and significantly reduce the amount of irrigation needed to grow crops via preventing transpiration of water -- ancillary to cheaper desalination of water using solar power.
The capex of a new solar farm is cheaper than the annual opex of a natural gas power plant.
Based on the gas price chart, touting Biden as making gas cheap is a non-starter. Gas was much cheaper than now throughout Trump's entire 4 years.
Running on pumping oil - by keeping Trump's policy - is also a strategic error.
Putting only $1.5B into nuclear is a failure, not something to brag about. It's peanuts.
I'm a policy wonk, I love this stuff. Working towards energy abundance has been great and successful policy. Campaigning on it is suicide. It's complicated and voters' guts have been experiencing the opposite.
Except for factory spending. People get that. And it contrasts marvelously with Trumps rhetoric vs. achievements. Taking that away from Trump is a big effing deal, as the saying goes. Second only to taking away immigration, if Biden can manage to.
"Energy Abundance” makes a great bumper sticker. Since the 1970s oil embargo, energy has been on the list of words that generate anxiety. Finally, there is reason to heave a sigh of relief. In addition, "abundance" has never been used in political sloganeering, so it's actually fresh.
Biden should repeat this often: “Think of it! The United States is pumping more oil than any other country on Earth—not Russia, not Saudi Arabia, the United States! And yet, we are reducing greenhouse gas emissions every year! And that's a fact.
And able to quickly ramp up gas exports to Europe when they needed it! The LNG "pause" -- besides being a cost-benefit "economic" mistake -- really queers what ought to have been a good abundance-foreign policy point.
I was in elementary school during the energy crisis of the 1970s. Stores only turned on half of their fluorescents. Thermostats were set at 68.
It was drilled into me by parents and teachers to always turn off the lights when you left the room, because oil was running out and my generation would have to get by with much less.
“We are such a sunny country and folks are taking advantage of that.”
It’s not because of Sleepy Joe but in spite of his woke agenda trying to go green until we all are leaving with no carbon footprint (aka dead).
Case in point - his latest “pause” on LNG terminal construction.
Biden is a puppet and until you look behind the curtain to unmask the puppet master, you’re just a blind sheep being led to the slaughter house.
Relative to wages, pump prices are down to 2019 levels! Check the red line on my chart. 😍
I told one of my friends in the energy industry that they sound like Aunt Edna from Vacation…after record number of bankruptcies in the energy industry in 2016 they had a record dollar amount of bankruptcies in 2020…and they are now nitpicking and complaining about everything Biden has done. So from a political standpoint it makes perfect sense for Biden to at least virtue signal with the potential pause on future LNG exports because people in the fossil fuel industry are never going to vote Democrat again even after their industry has hit record production under Biden. Btw, the guy started outlining his logic and he repeated neoliberal talking points after making very clear he is a neoconservative with respect to foreign policy…he’s literally both a neoliberal and a neoconservative!!
Come to the West coast where gas prices are still between $4.50 and $5.50 a gallon mostly still above $5 and even more for diesel.
That would be due to West Coast policies and is besides the point – unless you think Biden can come in and unilaterally lower WA’s gas tax.
In terms of impact on voter psychology, I don't think anyone is comparing today's prices to 2019, but today's price is versus last year's.
Once again, we had cheap gasoline in 2016 and it helped the Republican because now that we produce the most oil in the world higher oil prices mean more jobs. And many of the jobs are in places that manufacture equipment for the fracking industry which aren’t close to any oil fields like near Lake Erie and in Wisconsin.
The economy was strong in 2018 and Republicans lost in the midterms. The inflation has been over for a while and now sentiment about the economy is improving. The Fed’s mandate is price stability which they have achieved. Btw, that particular mandate is what led them astray in 2006-08 as the Katrina supply shock wreaked havoc on their data and led to the appearance of price stability.
Unfortunately both the left and the right are addicted to doom and gloom. Everything is going to hell, facts be damned, whether because of global warming, inequality or immigration.
This, this, 100x this. Just look at this thread. Just below this one is a string of "Biden has made us slaves" comments. Good lawd.
https://www.mattball.org/2024/01/up-is-down-red-is-green-love-is-hate-we.html
It's contrarian nihilism. It's easy and requires them to know nothing.
But not the middle! The middle is where it's at. Let's figure our problems out and get things done.
Bidens's policies have devalued the dollar to 83 cents, in just three years. Homes are all but impossible to buy, thanks to the increased rates for mortgages. Energy is more expensive because of Biden's absurd energy policies. And the border, under nearly complete control under Trump, is now wide open, with eight million illegals having come in under Biden. And WE are PAYING for their upkeep, to the tune of billions of dollars.
I don't want any more of Joe's help. I can't afford it.
Please remember that mortgage rates are set independently of presidential policy.
I'm 76 years old and have had multiple mortgages. I know how the rates work. Mortgage rates are directly tied to the economy. They are up because of Bidenflation. Bidenflation is the result of the government 'printing' huge amounts of money with no comparable increase in production. If any economic principle is inviolable, it is this: Inflation is the result of too many dollars seeking too few goods.
So Biden is the reason the whole world went through an inflationary period and the U.S. experienced lower inflation than the rest of the world?
Are you sure you “know” how mortgage rates work?
https://fred.stlouisfed.org/graph/?g=1f7gF
As you know, the dollar is the global currency. The inflated dollar causes inflation everywhere.
That is not how floating exchange rates work.
Other countries didn’t offer as many fiscal transfers and as much spending as the U.S.
And their episode of inflation the U.S. was modest relative to historic periods of U.S. inflation.
So, no.
Many commentators don’t want to recognize that the inflation calculation was changed around 1980 to reduce the CPI so that the cost of living adjustment for social security would be reduced
So todays 9.1 percent inflation is 22 percent using the old formula
Unless you are in the top 20 percent in income you are going to be under severe financial pressure
Interest rates aren’t high right now. But I bet you were complaining about interest rates in 2006 when these rates were considered too low!?!
Mostly the Fed’s fault but yes also some of the stimulus (and some supply shocks).
Biden and his Uniparty have made debt slaves of their grandchildren, the born and the unborn. Thirty years from now these children will be chained to trillions in interest obligations they did not choose.
The anti-Biden people can't even get their story straight. The inflation of 2021-22 REDUCER the ratio of national debt to GDP! That is how inflation works! 😂
It kind of helps to be a rhetorical nihilist because then you can always change the meaning of words post-hoc.
It doesn’t matter if they contradict themselves.
Not sure how you feel about the subscriber policy and guidelines but I don’t see how reading comments like the above adds anything to the discourse :/
How inflation works is that most people are having a very hard time paying costs that have increased with inflation, when their paychecks haven't kept up. That is the way it ALWAYS works. The workers are always playing catch-up with inflation. It never works to their advantage.
Inflation works to the advantage of a debtor, in that the amount of debt is decreasing in real terms.
How does that justify burdening future generations with trillions of dollars of interest expense?
Trump did that. That’s why Haley attacked Trump and Tim Scott on spending. Btw, the most deficit spending happens when a Republican is president because Republicans in Congress will never increase spending to help a Democrat president while Pelosi sent stimulus packages to a Republican president under both Trump and Bush. So if you want to control spending then vote for a Democrat president and definitely don’t vote for Trump!!
You make a good argument for divided government. I see no sign that fiscal responsibility is in the DNA of any Democrat or member of the Uniparty.
Obama’s second term actually reduced spending and obviously everyone knows about Clinton’s surplus. But if your concern is spending then the problem is very clearly Republican presidents because that is when the big and wasteful spending happened.
Bush=6 trillion added to deficit in 8 years
Trump=7 trillion in 4 years
Where is the fiscal in conservatism?
Why jump on Joe when Republicans have been just as irresponsible?
The increase in the death burden for our grandchildren pails in comparison, to how much more wealthy they will be as a result of the program growth policies. Federal debt is actively shrinking as a share of the economy. It really seems to me that a lot of people don’t understand the simple fact.
Says which economist? We owe near $250,000 per working taxpayer. History is replete with different versions of MMT and most end up failing. This time its different?
"CBO’s latest budget projections confirm that the country is on an unsustainable fiscal trajectory. While deficits and debt will temporarily subside as the economic recovery takes hold, debt will soon begin to grow and will reach a new record of 106.4 percent of GDP by the end of the decade. "
https://www.crfb.org/papers/analysis-cbos-july-2021-budget-and-economic-outlook
The CBO is also reporting that just servicing the debt will consume most of the collected tax dollars within a couple of years. No matter how large the GDP gets you cannot create money and spend your way out of the national debt.
There's a simple solution. Raise Trump's tax cuts.
Dollars to doughnuts that will only encourage greater spending.
It is the future that matters. Joe for POTUS perpetuates the crime. There are a few Republicans who are not Uniparty. Trump as POTUS will strengthen their voice.
Debt not death oops
click on the "..." to the bottom right of your comment. The edit fairy will allow you to fix typos.
True enough. But we don't have to look into the future. Right now, the national debt is about $90,000 per person. Just 5% interest makes that $4500/yr per person in interest payments. That's not play money, that's real money that we will pay out every year forever, until we get responsible government. But, as you point out, it's not getting better, it's getting worse.
Yes, there are a lot of moving parts, and this is just some of the basics. But these basics are the backbone of everything else.
If you think this can never just cave in on us, check out Venezuela. They used to think they could just keep printing money and get away with it. Now, they know better, but it's too late.
Was interested to see the recent Reason interview with David Stockman on Youtube who highlights RFK Jr.'s perspective on slashing the Defense budget. Stockman often pounds the drum of unsustainable debt growth. It hasn't worked out for Argentina either.
Home prices are so high because interest rates were way too low for way too long, which caused inflation of asset prices. The cure is either a huge increase in supply or even higher interest rates to suck the remaining air out of the market so sellers finally have to lower their prices to sell. But if we did this people would call it a “housing crash” and panic, so we won’t. Instead we’re stuck limping along for years hoping we can keep house prices flat while wages increase until eventually things are sane again.
Huh? Pure nonsense talk. Free market. Supply and demand. Housing prices aren't 'supposed' to be anything. They are what they are based on market conditions. If the federal government would stop trying to 'fix' everything, there wouldn't be so much that is broken.
I am enjoying your comments here, but you seem to have quite different views on what a home price should be vs. what a utility bill or groceries should be:
“You will never again see a day when the dollar is worth what it was in 2020. Not even close. We all know that from shopping and paying utility bills.”
Why is inflation (I.e. distortion in supply and demand) above reproach in home and ruinous in everything else?
I'm not sure what you thought I was saying, but that's not it.
Rich people and governments benefit from inflation. They can invest, and stay ahead of the inflation curve, making more from the inflation than the actual inflation. If their investment makes 6% in an economy with 4% inflation, they come out ahead with a 2% net gain. Poor people don't invest. 4% inflation means their money is worth 4% less each year. Yes, they get raises, but the raises always trail behind the inflation. Think about it; has anyone ever gotten an inflation-adjustment raise for MORE than inflation? Less, yes; more, never.
Governments have control of the money supply. Why? Sure, it seems obvious at first, but when you think of the power that government have as a result, we should think carefully about it. When you think about how incompetent our governments really are, we should be terrified.
The real estate market is the most regulated and state controlled market in the US. 30-year mortgages and FHA loans are federal government creations not found in other countries. Perhaps we agree the government made this mess?
The government makes most messes. San then makes them worse.
Most people learn from their mistakes. Government keeps throwing money at their mistakes. The solution to every problem is to throw more money at it, even when throwing money at it is what caused the problem in the first place. Education didn't used to be so expensive, until government threw money at it. Same for healthcare.
It's not necessarily that governments are incompetent, although that is always a distinct possible. It's that governments know that the more money they control, the more they control us.
Wasn't that inflation driven more by the Western world's attempts to boycott Russian oil and gas in response to the invasion of Ukraine?
Fed looks at core PCE…that peaked in early 2022 at over 5% and remained high for most of 2022.
Correct, because we had deflation in 2020. So the Fed doesn’t want deflation and so Powell was fine running the economy a little hot. What he didn’t plan for was unprecedented weather events in Texas/Louisiana and Ukraine and the Delta wave/people refusing vaccines. So those events happening exacerbated inflation.
The problem for the 18 percent Americans over the age of 65 is that our savings piles have lost about 20 percent of their purchasing power during the Biden years. You may write all you want about “Abundance” being on its way but that loss is very painful, and it’s not likely to be remedied for any of us during the balance of our lives.
Fortunately, inflation-adjusted wealth for older Americans has gone up under Biden, not down. The low interest rates that enabled inflation in 2021 also pumped up the value of bond portfolios and houses that older Americans rely on.
https://www.noahpinion.blog/p/great-news-about-american-wealth
No, wealth increases for most are because of the substantial increase in the value of the stock market, which thankfully, Biden has a hard time screwing up regardless of Obama's warning that Joe has a reputation for and the proven ability for f***ing things up.
I’m not sure it’s quite that simple, Noah. After all, most non-treasury bonds are callable when rates go down, thereby capping their potential appreciation. And then when they’re paid off, the investor must reinvest the money at the new, lower interest rate. It would have taken some real agility to manage a bond portfolio for retirement income these past 10-15 years. With regard to house price inflation, I take it you’d have us all sign up for reverse mortgages or home equity LOC’s? Or sell out and downsize (which my wife has been after me to do for a while anyway!).
It is true that Social Security benefit payments are supposedly indexed to some cost-of-living index. But I would guess that vast portions of contemporary retirement payments are not indexed to inflation, most obviously fixed annuity payments and still-large defined benefit pensions that many, if not most, of today’s retirees earned during their first twenty or so years in the workforce.
And it has exactly zero per cent to do with Biden’s policies. If anything, Americans are much better off than the rest of the world. It really is fascinating that American voters think the US president is some sort of all powerful God.
It’s rounding up 14.4 percent increase in PCE (much of this is driven by housing and most pensioners own their homes so they experience less inflation.)
And people have their inflation adjusted social security payments and private retirements in the market.
It’s a lie to assert people have lost 20% of their “savings piles” unless they are literal piles.
So the people whose wage growth has been beating inflation since 2018 except for a short window?
Those are the exact same people as “ Americans over the age of 65”?
Apparently the purchase of goods and services is now a stock of retirement savings?
Now you are talking about inflation for goods and services relative to a difference target group?
Ok.
Presidents (and all politicians starting with dog catcher) love to take credit for things they had nothing to do with. And, they also get blamed for things they had nothing to do with.
And voters should see through it. If I/we see through it, why can't they?
Because we are irrational, emotional creatures who wallow in cognitive dissonance. That's the best I can come up with.
Larry Summers has made a career of incorrectly warning that every government decision would resurrect runaway inflation. For once he was half right but everyone had already stopped listening.
https://fred.stlouisfed.org/graph/?g=1f6ue
Good thing Social Security checks increase with COLA and IRAs/401k grow with the market.
SSI COLAs are a joke. A recent evaluation compared the actual reported inflation (using mostly bogus government under reporting) showed that even with SSI COLAs, the purchasing power of SSI recipients has decreased by about 40% over the past less than two decades.
Ah yes, the government and Fed are lying about inflation fiction parroted again.
Depends on how the savings were invested. But in any case, the inflation is the Fed's business, not Biden's.
I think Biden's $5,000,000,000,000 deficit had something to do with inflation.
Or Trumps tax cuts in addition to 7 trillion in deficit spending? You don't goose the economy when it's already growing.
Absolutely blame Trump and Republicans for deficit spending! But there wasn't high inflation until Biden was president.
An OK amount of "relief," (Fiscal deficits do not "stimulate" an economy when you have an inflation-targeting central bank) but it should have been paid for with tax increases. It is the deficit that is costly for future growth.
Actually, no.
If you want to criticize deficits -- and you should -- (and everybody's not just Biden) point to the Fed having to keep interest rates higher for longer. That is the way that deficits shift resources from investment curtailed by high interest rates) to consumption.
Revenue raising, deficit reducing tax reform should be one of the priorities for Democrats.
Battery technology is nearly there. It’s measured in wh/kg. And the highest commercial battery is 500 wh/kg. The best lab produced battery (from last year) is 700 wh/kg [1]
Here in Ireland the household energy use is about 4300kw per year - about 12kw a day. Simple division suggests that a house needs a 24kg battery at 500wh/kg to power that house fully from the battery. Which is well within the weight of car batteries.
That said the commercial battery at 500wh/kg is rare. But we are getting there.
But all of this is meaningless unless there is some incentive to buy the battery and use it.
We need people to power up the battery when the wind is blowing (it’s not going to be sun here) and use the power when it’s not.
Maybe as battery technology increases we get a few days from a storm. That needs financial incentives - wind driven power should be cheaper - and a grid that can transfer the extra energy to houses when the energy is cheaper.
Also the grid needs to handle quiet days.
Also we need to electrify heating and transport of course. Let’s see.
[1] https://newatlas.com/energy/highest-density-lithium-battery/
Weight doesn’t matter for grid storage batteries, cost per watt/hour is what is important. Right now iron-air batteries have the lowest cost (and greatest weight) but don’t depend on lithium, nickel or cobalt.
https://www.nsenergybusiness.com/features/energy-storage-analysing-feasibility-grid-scale-options
Weight still matters. It just isn't an overriding concern. You still need to get the battery from the factory to the location of intended use.
That’s the general grid.
It might matter in a house and especially an apartment that the battery be small and energy dense, but I agree that cost also matters. Would be great if batteries didn’t need rare or difficult to mine metals, I agree.
It wouldn't matter for homes or apartments if it was 10% or even 50% heavier (or larger). But the bulk of the market is clearly (at the moment) in applications where weight clearly is critical (automotive).
From the article you cited (https://news.yahoo.com/biden-granted-more-oil-and-gas-drilling-permits-than-trump-in-his-first-2-years-in-office-190528616.html):
"Remember what happened on day one with one-party rule? The president canceled the Keystone pipeline, and then he stopped new oil and gas leases on federal lands and waters." (Quote from a Republican, but it's true.)
"Biden came into office pledging to end federal oil and gas leasing, but he has been forced by court order to hold a few lease auctions."
"[T]here have been only six on-shore drilling lease sales since Biden took office, compared with 65 in Barack Obama’s first two years in office."
"The reason for the fast pace of approvals is that the BLM streamlined the permit application process under Trump."
It's clear to anyone paying attention that Biden isn't pushing for more oil and gas domestically. Maybe he isn't standing in the way as much as he could, but he isn't going to get much credit for that. Noah, stop gaslighting us that Biden is some big oil advocate.
While we're at it, a tight labor market with high interest rates and high inflation is exactly the wrong time to build a bunch of subsidized factories. Biden's policies are making inflation worse. You know that, of course, but it's convenient for democrats to pretend otherwise. Your relentless partisan cheerleading is tiring.
Don't forget that Biden has nearly drained the strategic oil reserves (some sent to China) while begging Venezuela to come to his rescue.
All the green meat this White House has been throwing at climate activists is not the best use of political capital.
One reason I suspect that the abundance story is not being pushed more is that people in the administration are worried about a sudden fuel price shock or recession. If you come out touting economic success a year out from the election and something changes then you might be in a worse position than if you based your messaging off of the state of the world in June or July.
Also, most voters are not paying attention.
"Also, most voters are not paying attention."
Rather, the only voters who aren't already beyond the reach of persuasion are the ones that haven't been paying attention. Everyone who has paid attention has already decided which party's candidate they're going to vote for and political messaging isn't going to change that.
Noah, you're a great person and I love your Substack, but whenever I hear the "solar is so cheap!" message, I get cognitive dissonance.
My husband and I are well-off professionals living in a 1600 square foot house in Southern California, and we're getting quotes for solar panels for our roof plus a battery to tide us over after sunset. Long story short, the whole setup looks to be ~$30k (the solar panels alone, minus the battery, would be ~$15-20k).
That is NOT cheap in any way, shape or form. That is absolutely unaffordable to the vast majority of Americans. And we're talking a 1600 sqft home, so a good size but not a ginormous McMansion, in freaking So Cal, where it's sunny almost all the time year-round. How would the economics pencil out somewhere further north and/or constantly cloudy, like Seattle?
Yes, I get that solar panels are cheaper relative to what they used to be, but the salient comparison for most people is not "how much did this used to cost?" but "can I afford this now?," and the answer is a resounding no.
Furthermore, I understand that the economies of scale are a thing, and that installing a giant solar farm in the desert is (hopefully/presumably) much cheaper per kWh than installing residential rooftop solar. Maybe society should go all-in on building massive solar farms where land is abundant, and leave residential solar as a niche interest for rich people in sunny areas who care about the environment. But "solar energy is super cheap and easy, barely an inconvenience!" rubs me the wrong way in light of what my husband and I have learned.
Home solar is expensive, and now that California reduced the give-away feed-in tariffs the actual cost is being paid by new installations. Most of the cost reductions are for utility scale solar, but this often ignores the actual cost of connecting those desert farms to the grid, which requires permitting transmission lines, and producing scarce transformers, and there is a huge backlog and it’s worse (as many things are) in California.
Permitting is one of the many reasons Texas is beating California
I agree, the home solar market is screwed up. I was looking forward to having solar installed on our roof but deferred it indefinitely once I realized it would be a terrible investment. It came out to something like a 1% annual return on investment, even after the subsidy.
I'm not sure exactly what the causes are. Maybe home solar is inherently not very economical. Maybe installers are pricing for people who are emotionally invested in solar and willing to pay more than it's worth from a financial perspective.
What does the math say? Using numbers from friends in CA with solar it is clearly cost effective in CA where existing electricity is among the most expensive in the country. The latest numbers from BLS has LA at $0.288/kwh, San Diego at $0.477/kwh, Riverside at $0.279/kwh. The national average is $0.161. You should be able to produce ca. 12 MWh/yr on a house in CA, which at the LA prices is “worth” $3,456. Using that as a good back of the envelope number your break even point is 8.7yr. The inverter’s last about 20 years, but that means that you would have zero electricity cost for 11 years. I don’t know, but as a Chemical Physicist putting solar on seems like the obvious thing to do.
OK, but knowing that you'll break even in 8.7 years is no help at all to the millions of Americans who simply cannot afford $30k out of pocket. I guess you could take out a loan and pay it off with all the money you're saving on electricity, but realistically, how many people are going to do that?
Yes. People incapable of long term savings will have difficulty planning for the future.
You are missing the point. Noah argued solar has gotten cheaper and an 9yr break even proves it. It
I literally said this in my comment above:
"Yes, I get that solar panels are cheaper relative to what they used to be, but the salient comparison for most people is not "how much did this used to cost?" but "can I afford this now?," and the answer is a resounding no."
If you have any home equity, you borrow the $30k and your payments on it would be less than your power bill.
If you don’t have home equity, you can still benefit from utility scale projects, which are certainly more effective than rooftop installations.
How many kW was your quote for?
I'm looking at $35K for 10kW, no battery. Down from $75K 20 years ago, but still not economic, even with all the subsidies.
We were quoted 14,000 kWh/year. They told us the panels would range from generating 50 kWh under optimal conditions (sunny summer day) to 6 kWh on a crappy, cloudy day.
For comparison, Google says the average American household uses 10,500 kWh/year of electricity.
Thanks. I was quoted based on 13,500 kWh/year, but I'm at a higher latitude, so you would need less than the 10kW of panels in my quote. It wasn't economic for me because we have cheaper electricity here than you (mostly nuclear and hydro).
Do you know what the panel capacity in your quote was? Was it economic for you?
Sentiments are a big part of politics. We were pumping more oil than any other country on earth...true, but we have been doing that before Biden was in office. They key issues that Americans are reacting to are: Border Security (or the lack of), Illegal Immigration (growing), grocery store prices (increased and some cases still increasing), and yes, the lack of confidence in the Biden administration, including the President himself. Think image, think confidence, think overall sentiments. I usually don't fall for polling, but all polls are showing very low confidence, by large numbers.
https://fred.stlouisfed.org/graph/?g=1f6vW
Looks like a negative second derivative has resulted in grocery prices peaking, but then again “line goes up” is a pernicious bias.
While you correctly painted a picture of abundance, Biden's base doesn't want to hear it. Biden will continue to downplay energy in favor of climate catastrophe to garner votes from young activists. And it's already begun as he has touted his LNG exports limitations. The most important issue to a broad section of voters is inflation. While moderated, the comparison of prices like McDonald's hamburger from the beginning of his administration to now will be among the deciding factors. The wages of those folks have not kept pace with inflation. It's the old pocketbook issues.
But Biden does not NEED the votes of young activists. They are not the swing voters in the swing states.
Young activists form the volunteer base that powers the party. Without their support, the party machinery will struggle to get votes.
Sigh. You both a right.
True. [Although I wonder if 0.1% of the emails I get asking for money asked instead for my time ...] But its a trade off. How much swing voter turning off do you have to do to attract the optimal number of volunteers? Not much is my guess.
Inflation is much less bad in the US than in the rest of the world, and has now all but disappeared, while economic growth is stronger than almost anywhere else. But voters are like toddlers unfortunately - all emotions and no rationality. I really despair for democracy, being ruled by the ignorant emotional masses. The solution is to educate and increase the intelligence and moral character of the populace, naturally, not to wish for an enlightened despot (which doesn’t exist and would be wrong anyway)…
Inflation wasn’t fun. It also wasn’t that crazy.
You seem to assert (lie) over and over that somehow inflation today is higher that in the past.
The claim (lie) parroted is that peak inflation over 2021 that has since dropped is worse than sustained inflation of the 70s or 80s.
With “evidence” claimed but not shown.
Peak inflation runs in cycles. The first one I remember was during the Vietnam war when Johnson did not want to raise taxes to pay for it so he printed money and stated that cycle into the 1970s. Then Carter in the eighties when interest rates hit high double digits in efforts to quell "stagflation". Then a period of relative calm until Biden dumped $trillions of fake dollars during a period of low productivity. All inflation issues are demand vs. supply, then further obfuscated by various government agencies who willingly roll the dice.
Remind the Ivy league and other institutions of higher learning what should be taught since they have obviously forgotten.
Slaw’s claim is false.
Wage gains for the bottom half of earners has outpaced or met inflation for the past 10 years.
https://fred.stlouisfed.org/graph/?g=1f8LK
One thing to think about is that climate activists are plugged in to current politics and normal voters start paying attention in a few months.
Terrible idea. When people don't feel abundant, telling them it is will create cognitive dissonance. And it makes him look out of touch. People will go with their feelings over facts in today's world. His message should be... if you think it feels bad now on whatever issue, the Republicans will make it feel worse. Abortion, average person doing better, foreign policy... etc.
"Biden should absolutely brag about the fact that he helped push U.S. oil production to an all-time high" That may be a smart move politically, but how do you reconcile that with fighting climate change? Wind and solar power should replace fossil fuels, not come on top of them.
They are absolutely compatible. We fight climate change by reducing global DEMAND for fossil fuels. But there is nothing wrong with the last CO2 molecule emitted having come from a US produced source.
Yep, we didn't transition to the car from horses by first killing all the horses. We did it by making cars WAY BETTER than horses.
This must be what the other oil-producing countries think about their own output...
But to ask all producers to include to include the cost of net additional CO2 emissions is consistent, but pretty unrealistic. Most are less serious about climate change than the US. Of course it is even better to ask everyone to just tax net emissions within their own jurisdictions and then these production-level cost benefit analyses would not be necessary.
Yes, but it's not incompatible. Some will be wrong, because they are the high cost producer.
A side point - not the main thrust of the article. Consuming more has a lot of other externalities besides greenhouse emissions (landfills, plastic pollution, .........)
Major fact check: Sunrise Movement did signficant GOTV work and campaigning for Joe Biden to help him win in 2020, and spent a lot of time and money producing pro-Biden GOTV comms (I was part of the national comms staff. The endorsement argument you pull from twitter is pretty misleading.
https://www.washingtonpost.com/politics/2020/10/30/youth-led-climate-group-is-campaigning-biden-if-he-wins-honeymoon-will-be-short/
https://www.theguardian.com/us-news/2020/nov/16/joe-biden-climate-crisis-ennvironment-energy
The U.S. is awash in conventional energy. Solar and wind energy infrastructure is just beginning. In addition to providing cheaper energy, solar panels above crops function 20% better and significantly reduce the amount of irrigation needed to grow crops via preventing transpiration of water -- ancillary to cheaper desalination of water using solar power.
The capex of a new solar farm is cheaper than the annual opex of a natural gas power plant.
Based on the gas price chart, touting Biden as making gas cheap is a non-starter. Gas was much cheaper than now throughout Trump's entire 4 years.
Running on pumping oil - by keeping Trump's policy - is also a strategic error.
Putting only $1.5B into nuclear is a failure, not something to brag about. It's peanuts.
I'm a policy wonk, I love this stuff. Working towards energy abundance has been great and successful policy. Campaigning on it is suicide. It's complicated and voters' guts have been experiencing the opposite.
Except for factory spending. People get that. And it contrasts marvelously with Trumps rhetoric vs. achievements. Taking that away from Trump is a big effing deal, as the saying goes. Second only to taking away immigration, if Biden can manage to.