The European energy economy has been suffering hardship for over a year now, battling price inflation from central banks ballooning asset prices and winter resource shortage from its once largest supplier of fossil fuel, Russia.
If there is societal crisis, governments need to prioritize damage control back through sound understanding of economics until the crisis has passed, rather than socialist or environmentalist dogma.
Germany has last week powered down its last nuclear power plants, a premature move towards reliance on renewable energies that will keep energy prices higher for a longer and further increase the usage of the fossil fuels they consider so “dirty”.
Meanwhile, EU officials suggest caps on revenues for oil & gas companies. If they had paid attention to basic economics, they would know that price caps only increase shortages and thus reinforce higher prices down the line.
The most questionable idea was of course the old redistribution of profits, a “solidarity contribution” tax. “In our social market economy, [oil & gas] profits must be shared and channeled to those who need it the most“, Ursula von der Leyen stated. The idea “to each according to his needs” is a central tenet of Karl Marx’s communist legacy, and I was surprised to hear it from an EU official.
The globalist & environmentalist battle cry is to get rid of nuclear power and fossil fuels at all cost. There is nothing wrong with working for a sustainable energy future – but it can’t be in a rushed, haphazard activist manner that is devoid of an anchor in reality when it comes to technology transition. And worse, if someone is actually there to provide the energy resources to pull Europe out of an abysmal shortage during the winter, their answer is to redistribute their profits. A very hostile business culture that is breeding in the morphing “People’s Republic of Europe”.
Although temporarily exacerbated by war shortages, the primary appearance and bulk of inflation around the globe was largely produced by our governing bodies. If fingers need to be pointed, the EU should really point them at the mirror and their enabling of near zero interest rates, -reserve requirements and money printer bonanza.
Moreover, if oil & gas companies’ profits are redistributed after energy cost inflation, a factor they have not caused themselves, then logically the same need for redistribution of increased profits would arise in other sectors where external factors (i.e. central banking policies) have caused asset inflation and increased profits – the Food & Agriculture industry, banking, real estate, other hard and soft commodity investment categories, equity speculation, etc. Why the cherry-picking? Of course, such intervention could only lead to a great depression.
I have a better idea – as much I’m opposed to such dangerous ideas like redistribution of profits, if we need to indulge in them at all, why don’t we start instead redistributing the capital that brings the lowest return on investment for European society? Let’s give a portion of the exorbitant Brussels officials’ wages to “those who need it the most” … von der Leyen’s annual wage is around 330.000 EUR per year, while total EU admin costs were 12.2 billion Euro in 2022 – the bulk of which are from salaries ranging up to 21k per month.
