Prestidigitation! President Biden’s Energy Boom, the Sop to Cerberus, and Stein's Law

By Jeff Garzik and Ralph Benko

We, the founders of Washington Power and Light, an energy policy institute founded last year, are committed to one guiding principle. Energy (the fulcrum of equitable prosperity) policy should be fact-, not faith-based.

America is best served by affordable, reliable, abundant energy. And despite the fog of political rhetoric, we’re getting there. True, billions of dollars of subsidies are being guzzled by various pseudotopian advocates. The Climate Crisis Narrative™ drives tsunamis of greenbacks into policy wastelands.

Thus, you might think we are facing Energy Crisis 2.0. Many Republicans sure complain loudly about this.

They are wrong.

Even the most passionate and cynical of political actors and policy posturers cannot repeal the laws of nature. Even the most enthusiastic True Believers (of both tribes), try as they might, cannot repeal the law of gravity.

Or the law of karma.

Nor can they repeal one of the most powerful, if obscure, laws of politics. That would be Stein’s Law.

Herb Stein, chairman of President Nixon’s Council of Economic Advisors, once observed: “If something cannot go on forever, it will stop.”

The “green” energy fad has peaked.

Its specter is still haunting the Democratic Party platform. Yet it, to coin a phrase, is losing power.

As his party’s as well as our nation’s leader, what’s Joe Biden to do? Here’s what.

President Biden is a masterful practitioner of legerdemain in that hall of mirrors called politics. Perhaps Biden is the most masterful living master of this black art.

That’s a compliment and not a back-handed one. Biden has managed to keep his fanatical progressive base pacified while still governing pretty darn pragmatically.

Remarkable. It just might prove to be the ticket to his re-election.

Let’s use energy policy as a lens to help understand what America’s energy policy really, rather than purportedly, is. Then let’s tease out its political and economic implications.

Ben Lefebvre at Politico recently presented an elegant Big Reveal.

“President Joe Biden is presiding over a historic boom in U.S. energy production, with oil, natural gas and renewable power all setting records that would have seemed unfathomable two decades ago.

“And almost no one is happy about it.

“All the same, the once-unimaginable milestones keep coming: The U.S. set an all-time record for crude oil production in 2023, outstripping what any country — even Saudi Arabia — has ever produced in one year. Its natural gas exports also lead the world, providing a growing fuel lifeline to Europe and Asia. Wind and solar have emerged as the nation’s fastest-growing power source, and now contribute nearly 15% of the country’s electricity, up from nearly zero 20 years ago.”

Confused? Let’s whip out our Secret Decoder Ring and let you in on what’s really going on.

Joe Biden is a party animal. He reads the room beautifully and always goes with his Democratic Party’s consensus.

For example, Joe (“Dark Brandon”) Biden sponsored the 1994 crime bill (now reviled by progressives).

During the Reagan era, following the lead of Democratic thought leaders Dan Rostenkowski, Bill Bradley and Dick Gephardt young Senator Biden voted to cut the top marginal income tax rate from 70% to 28%.

During the Clinton era, Senator Biden voted to cut the top capital gains tax rate from 28% to 20%.

That was then.

Now President Biden is shrewdly pandering to his party’s left-wing base, rhetorically and by throwing sops to the progressive Cerberus.

Yes, we cast the progressives as romantic utopian three-headed dogs guarding the gate to Hell who have taken Biden’s party hostage. They’re really good at that!

As we said above, however, Joe Biden is a party animal. He knows how to tame his own paper tigers, even his party’s three-headed paper guard dogs.

Biden enjoys being president. (Lousy pay but lovely perks.)

And he reads the American room as shrewdly as he reads his party’s.

Credible national polls persistently show that Americans rank climate change as a low concern. Pew Research ranking that as 18th of the voters’ top 20 polled concerns.

The voters’ number one issue? The economy.

Which energy supply effects, dramatically and visibly.

Meanwhile, Reuters reports that fewer than a third of Americans are willing to pay $100 a year to end climate change. Most of us would have to pay more to reach this average, considering that 22% of Americans are under 18 and mostly not yet in the labor force and 17% are over 65 and presumably mostly retired). Thus, even fewer, perhaps dramatically fewer, would support a $140 annual fee.

Raising the cost of living for us voters (through taxes, debt, or regulation) is a surefire political loser.

Progressives don’t care about losing a battle. They’ve drunk their own Kool-Aid and are dug in to win the war. Politicians, however, care about winning… or losing. Their jobs depend on it.

Furthermore, if all Americans from cradle to grave were to pay even $100 a year, on average, it would amount to around $33 billion a year. That’s a drop in the bucket against the projected tab.

Per the International Renewable Energy Agency, it’s $131 trillion. Per Bloomberg’s green energy team, as much as $200 trillion to get to net zero. Trillion. With a T.

Hence… a politically suicidal tax or deficit increase would raise way, way less than 1% (.00025) of the cost of getting to net zero. Nonstarter.

Meanwhile, credible analysts like Bjorn Lomborg are publicly and eloquently dubious that climate change is apocalyptic.

High cost, dubious benefit. Not catnip to voters.

What’s a president to do?

Political prestidigitation, that’s what!

The astute Joe Biden knows how to capitalize on the fallacies (prominently identified by the recently departed Daniel Kahneman and his late college Amos Tversky) that drive our actual voting.

What drives our votes?

Not logic. Cognitive bias.

Hopium!

Things like the planning fallacy, optimism bias, or illusory superiority. Among many other cognitive biases.

Secret decoder ring, please! The Biden administration brags that the Inflation Reduction Act will spend $391 billion on green energy. Some analysts estimate the federal obligation to be over $1 trillion.

Even $1T is a drop in the gas tank for the trip to net zero. Not incidentally, that spending would be a substantial contributor to the deficit.

Deficit reduction is a far higher priority for voters than climate change.

Moreover, Stein’s Law is once again throwing a spanner into the fantasy of the romantic pseudotopian left.

Hertz is selling off 20,000 EVs, having discovered, the hard way, that they are more expensive to maintain and less desired by customers than originally imagined. Misreading the product-market fit cost the last Hertz CEO his job.

Meanwhile, a commentator at the New York Times reports that “China’s electric vehicles are going to hit Detroit like a wrecking ball.” American auto workers (who vote) are disgruntled.

Moving on, the owners of a grandiose multi-billion-dollar offshore wind farm planned to be situated off the coast of New Jersey, encountered economic, well, headwinds with the death of ZIRP. They are shutting it down, leaving the Danish investors with a $5+ billion writedown.

The time is out of joint.

Yet Stein’s Law remains in effect.

Shrewd Joe Biden was able to claim, to his progressive environmentalist-LARPing Democratic base, that he led heroically and therefore is not to blame for the failure of these hopium-based policies to stick.

Biden’s renomination? A layup.

Then he gets to pivot and show the American people that America is generating more energy than ever before in history and more than any other nation. Win-win!

As the great American philosopher Ralph Waldo Emerson observed, “A foolish consistency is the hobgoblin of little minds, adored by little statesmen and philosophers and divines.” We Americans, however, rarely care about consistency, foolish or otherwise, especially from our politicians.

Meanwhile, the GOP, with its paper-thin House majority, has seen its base splinter repeatedly. This internecine warfare has crippled its ability to advance the GOP agenda. (If it even can formulate one: “Reply hazy, try again.”)

One can but pray that the talented Speaker Johnson proves as shrewd at pacifying his base as Joe Biden is. That said, with friends like MTG, who needs enemies?

Do not despair. It was ever thus.

As Winston Churchill observed in 1947:

“Many forms of Government have been tried, and will be tried in this world of sin and woe. No one pretends that democracy is perfect or all-wise. Indeed it has been said that democracy is the worst form of Government except for all those other forms that have been tried from time to time.…”

Welcome to representative democracy.

Joe Biden’s superpower is his profound mastery of cognitive bias. He is deftly using that to pacify, through prestidigitation, his party’s fanatics while preserving a clear path to re-election.

Will Biden’s superpower trump Donald Trump’s superpower, mass hypnosis?

We’ll find out next November.

Neither, however, represents our savior. Whoever wins we are most likely to be saved by Stein’s Law.

Our Secret Decoder Ring reveals…

Some bad news: that American cognitive bias is enabling our romantic pseudotopians to squander billions. This money could be put to good use, such as building safe, zero carbon emission, nuclear power plants (as championed by COP28). Pity.

Some good news: Stein’s Law remains fully in effect, thwarting the fabulists.

If something cannot go on forever, it will stop.

Don’t (as we just did) spoil the magic show by pointing this out.

However, do take note that despite the political rhetoric and some madcap spending… welcome to a golden age of affordable, reliable, abundant American energy production.

By Jeff Garzik and Ralph Benko

Jeff Garzik serves as the founder and chairman of the policy institute Washington Power and Light. Before co-founding Bloq, he spent five years as a Bitcoin core developer and ten years at Red Hat. His work with the Linux kernel is now found in every Android phone and data center running Linux today.

Ralph Benko serves as co-founder and general counsel to Washington Power and Light. He is the co-founder and general counsel for F1R3FLY.io and has worked in or with 3 White Houses, 2 executive branch agencies, and the Congress as well as many political and policy institutes. He is an award-winning columnist.