By Douglas V. Gibbs
Overall prices have been slowly dropping, despite arguments to the contrary. While Democrats cry “affordability,” the Trump administration is taking steps to continue to lower prices. Yes, some prices have not come down yet, and the ones that have are coming down slower than Trump would like. It is, after all, a process, and a part of the process is reducing energy costs.
Government sources explain that many factors influence electricity prices, for example.
- Fuels: Natural gas and petroleum.
- Power plant costs: Including financing, construction, maintenance and operating costs.
- Transmission and distribution system: Which can be influenced by damage from accidents, extreme weather events, and improving cybersecurity.
- Weather Conditions: Extreme temperatures may increase demand for heating and cooling, which in turn may increase fuel and electricity prices. Weather conditions may also negatively affect solar and wind power.
- Regulations: Which varies by state as Trump works to reduce federal regulations.
Energy costs are a part of the cost of doing business. The cost of doing business is a major factor in what the prices of the products involved will be. The factors that influence the cost of doing business, and in turn may cause inflation, include:
- Energy costs.
- Taxes.
- Regulatory costs.
- Transportation costs (which is tied to energy costs, too).
- Wages.
- Benefits.
- Insurances.
- Consumer Demand.
- Cost of raw materials to produce products or wholesale prices to place products on shelves.
There are more influences, but I hope you see that the list of influences is longer than most people realize. The Trump administration has been working feverishly to influence those factors the best they can to bring down prices.
Fiat money pumped into the system also can increase prices, and the Biden administration was constantly inserting fiat dollars into the system during his four years in office. The reasoning, a Keynesian strategy, is called “priming the pump,” which calls for a rush of government money into the system to provide funds for consumers to use. The theory is that economies are consumer-driven. While consumerism is a vital part of a healthy economy, basic supply and demand principles tell us that increased supplies reduces prices. So, the way to battle against inflation, aside from not pumping fiat money into the system, is to take actions to increase production. In order to increase production, the cost of doing business must come down. In order for the cost of doing business to decline, the cost of energy must decline.
Since President Trump has taken office, understanding there was not much he could do to tackle the fiat money pumped into the system, he knew that the key was to reduce the cost of doing business and encourage production, and new domestic manufacturing. He has secured investments in manufacturing, and has been working feverishly to bring down the cost of doing business by reducing taxes, slashing regulations, and increase domestic production of energy. However, electricity prices have continued to climb during his presidency.
The Big Beautiful Bill contained in it a sweeping energy package, expanding oil and gas leasing, limiting federal clear energy subsidies, and eliminating credits for wind and solar energy. The initial result has been in increase, but as domestic energy production kicks into high gear in 2026, by the end of the year prices should begin to slowly work their way downward, again.
Other obstacles, however, do exist that Trump has no ability to battle against. Policies in California, for example, has kept gas prices high, and electricity prices higher. New Virginia Governor Abigail Spanberger has promised policies that will increase living costs for Virginians, with one of those policies expected to increase electric bills for families by $1,100 per year.
In short, what we are seeing is Donald Trump doing everything he can to reduce energy costs and the price of doing business. However, Democrats have been doing everything they can to sabotage those efforts, and then pointing fingers at Trump because electricity prices and some other prices aren’t dropping as Trump would like. That’s like a contractor putting up a building, then having someone else knock it down and then accuse the builder of failing to put up the structure.
— Political Pistachio Conservative News and Commentary
