The US is still a land of unrivaled plenty. Sure, inflation has battered both individual pocketbooks and companies’ ability to do business. And wealth disparity—along with the social and economic issues that accompany it—continues to grow. In 2021 the top 10% of Americans held nearly 70% of US wealth and the bottom 50% just 2.5%.1 But as of this moment, the average American (however you might define that) remains more advantaged and freer than their counterparts in other places.
The country’s geographic isolation continues to serve it well, particularly when combined with the relatively recent ascent towards the top of the list of the world’s hydrocarbon producers. European energy prices are already both much higher and more volatile than those in the US and are likely to become more so as winter approaches and space-heating demand grows.
Alarms sounded last month when Equinor ASA senior vice-president Helge Haugane mentioned at the annual Gastech conference that European governments might have to backstop energy derivatives margin calls totaling more the $1.5 trillion to maintain enough liquidity to keep markets trading.
Manufacturing has also been getting pummeled. European aluminum and steel producers have announced combinations of production cuts, partial closures, and adjusted working hours to help mitigate exposure to expensive electricity. A letter to the European Commission by Eurometaux, Europe’s non-ferrous metals association, expressed its members’ deep concern “that the winter ahead could deliver a decisive blow” to many of its operations, noting that 50% of the European Union’s aluminum and zinc capacity had already been forced offline. Aluminum smelters are difficult and costly to restart once idled, raising concerns that at least some of the capacity taken down on what was intended to be a temporary basis may not restart.
The effects on the workaday European citizen are at least as stark, retail electricity prices in some cases already having more than quadrupled from year-ago levels. Wages can’t keep up with those sorts of increases in the cost of essential goods, causing citizens fortunate enough to have savings to dip into them, and forcing even harder choices on the millions living week to week.
Pub life at risk
One of the cornerstones of modern civilization, the UK pub, is also getting hit from both ends. Soaring electricity bills have multiplied operating expenses at the same time the average punter can’t even afford to get a round in. And all while both the pubs and their patrons are still recovering from the pandemic.
None of the options available as a response are good and are unfortunately familiar to many in the US service industry, which also was wracked by COVID-19: cut staff and hours, raise prices, or simply close for good. That last option was looming as all-too-real for many independent pub owners. But then new Prime Minister Liz Truss intervened.
Responding to the prime minister’s announcement of energy-cost caps for businesses, the British Beer and Pub Association remarked that “she understands just how critical the energy crisis has become for our breweries and pubs, and just how important pubs and brewers are to their communities.”
Count your blessings
So, have your political battles and culture wars. Work to prevent disasters and mitigate ongoing pollution and improve your bottom line.
But also enjoy your tailgate parties, fueled by still relatively inexpensive and freely available beer, and gasoline, and propane, and meats, and realize that you’ve got it pretty darn good. The way things are setting up, life is once again going to be a lot easier in the US this winter than most other places, for the umpteenth time in a row.
- Siripurapu, A., “The US Inequality Debate,” Council on Foreign Relations, Apr. 20, 2022.