With Transportation Secretary Pete Buttigieg, it’s hard to know what’s worse: his “you must suffer for your own good” sanctimony or his abject economic illiteracy.
In a July 19 congressional hearing, Buttigieg accidentally said the Biden administration’s quiet part out loud: higher gasoline prices, rather than being an unfortunate reality, are actually part of the strategy.
“The more pain that we are all experiencing from the high price of gas, the more benefit there is for those who can access electric vehicles,” Buttigieg said, with a tone of voice and an expression indicating he is quite pleased with the situation.
Never mind, by the way, that the power for electric cars is usually produced by burning fossil fuels anyway, so slightly more than half the carbon emissions “saved” by jettisoning gasoline engines are still emitted. Moreover, according to JustFacts, when taking into account the needs for the manufacture, use, and disposal of automobiles, electric cars from “cradle to grave” actually increase human carcinogenic toxicity, emission of fine particulate matter, freshwater ecotoxicity, and human non-carcinogenic toxicity.
But that’s all OK for Buttigieg because he can feel virtuous by making it so expensive to use gasoline that we move to somewhat carbon-saving electric cars instead. Serving the ideology must come first, right?
From misplaced sanctimony, Buttigieg then moved to financial ignorance. When Rep. Carlos Gimenez (R-FL) noted the transportation secretary’s weirdly gleeful response to the prospect of “more pain that we are all experiencing from the high price of gas,” Buttigieg tried to pivot.
He said the solution lies in “making [electric vehicles] cheaper for everybody” by subsidizing them.
Gimenez quite reasonably said, “That doesn’t make them cheaper.” Buttigieg replied, “Well, actually, it does.”
Can Buttigieg be “well actually” that moronic? Or is he just a gasbag?
If policymakers use government resources to “subsidize” something, that doesn’t mean the actual cost falls; it just means somebody else is paying for it. There are only two possible sources for those subsidies-cum-payments — taxpayer dollars taken from our paychecks or more money printed (or credit “created”) from thin air by the Federal Reserve Board.
If the government’s central bank prints more money without basis in productive substance, inflation results. Prices across the whole economy rise. The left hand must pay for what the right hand “saves.” It is exactly the Biden administration’s extravagant lack of concern with government debt and the Federal Reserve’s extremely “loose” monetary policy that has caused inflation to rise by more than 9% over the past 12 months.
And that’s just in a macroeconomic sense. In not just the long run but the medium run (so to speak), a subsidy for a good or service puts upward pressure on the eventual prices charged because it raises demand for the (temporarily) “cheaper” good or service. It is an iron law of economics that when demand rises, prices feel upward pressure, too. (That’s why, by analogy, forgiveness of student “loans” never solves the college affordability problem: With students getting “free money” and thus not balking at the costs, colleges know they can get away with hiking tuition.)
In sum, Buttigieg effectively welcomes high gasoline prices while advocating free money that isn’t really free, all to promote electric cars that cause all sorts of environmental harm.
The nation was better off when Buttigieg, instead of being secretary of transportation, was an undistinguished mayor of the 310th largest city in the United States. In South Bend, Indiana, his virtue signaling didn’t cause the rest of us any pain at the pump.
