Gas prices become a growing liability for the Biden administration amid the Russian-Ukrainian war

Yahoo Finance’s Rick Newman discusses Tesla CEO Elon Musk calling on the UAW to hold a union vote and what rising oil and gas prices portend for the Biden administration.

Video transcript

KARINA MITCHELL: Happy to see you again. Well, the war of words, or perhaps lack thereof, between Elon Musk and President Biden has just escalated after the President seemingly snubbed Tesla during the State of the Union while mentioning rivals GM and Ford regarding electric vehicles. Both have strong union ties. Let’s call on Rick Newman of Yahoo Finance to find out more.

So Rick, Musk tweeted – this quote, I’d like to say – “I hereby invite the UAW to hold a union vote at their convenience. Tesla will do nothing to stop them.” So, Rick, what’s the underlying point he’s trying to make here?

RICK NEWMAN: This is a beef between President Biden and Elon Musk that essentially dates back a year to when Biden first took office. Biden is a big proponent of electric vehicles, of course. And pretty much every time he talks about electric vehicles and what the government could do to help that – fund new charging stations and things like that – he mentions General Motors and Ford. But only once, to my knowledge, did he mention Tesla.

And Elon Musk has a legitimate grievance here, as Tesla is by far the largest producer of electric vehicles in the United States, with more than 75% market share. And GM and Ford basically follow Tesla. Now why does Biden snub Tesla every time?

It’s because GM and Ford are unionized. And Biden calls himself a unionist and is clearly trying to appeal to union workers and get that vote. And Tesla is not unionized. So that’s basically why Biden doesn’t mention Tesla.

I think what Elon Musk is doing here, he’s saying, sure, United Auto Workers want to unionize our factory, let them. He doesn’t think his workers will want to join the union. So let’s say he’s serious about letting the UAW come in and try to unionize, he thinks his workers will overwhelmingly reject that, in part because they’re happy with the deal they’re getting.

Some of them get stock options, which is usually not the case in a collective agreement. So he thinks his workers don’t want the UAW, which is why he’s willing to say come in and try.

ALEXIS CHRISTOFOROUS: So, Rick, set the record straight: is it true that we produce more oil than we consume, so we don’t really have to worry about imported oil?

RICK NEWMAN: No that’s not true. There are a lot of myths floating around about oil and so-called energy independence in the United States right now because of rising gas prices. It’s a complicated story, but when people heard that the United States is supposedly energy independent, that means when you put all the fossil fuels together, we produce more fossil fuels than we know. we consume it.

In fact, we produce far more natural gas than we consume. And we produce more coal than we consume. But we produce less oil than we consume, which is why we are part of world markets, like almost all other countries. And we have to bear higher prices when the world price goes up.

I will have more to come on this subject and some of the myths and facts about energy. That’s a lot of detail, so more to come on Yahoo Finance.

KARINA MITCHELL: Rick, I just want to go back to Elon Musk for a little second because you’d think Biden would show him some love because he got all these Starlink satellites up over Ukraine to help with efforts to communication, right? So you’d think we’d show her some love. But very quickly, I want to ask you, are you surprised that Nancy Pelosi has now come out and said that the United States should ban oil imports from Russia?

RICK NEWMAN: Yeah. I think it’s surprising. And that’s important. We don’t get a lot of oil from Russia. We get more finished oil products than oil from Russia, so it’s not like we’re terribly dependent on Russian imports.

But anything that reduces the supply of oil in the United States or anywhere else by any amount is actually going to drive up gasoline prices. And that has really become a huge burden for President Biden. And I don’t think he made the case that Americans should be willing to put up with higher gas prices to support what’s happening in Ukraine.

He keeps telling people that he understands their pain and that he will try to find ways to lower gas prices. Well, keeping Russian oil out is no way to do it. It might be a smart thing to do, but President Biden and his fellow Democrats need to make the case for it first. And they haven’t done it yet.

KARINA MITCHELL: OK, maybe it’s time to suspend the gas tax too. All right, Rick Newman from Yahoo Finance, we’ll be looking for your article. Thanks very much.