Despite repeated claims amid crises that the buck stops with him, President Biden and the White House have been scurrying around trying to take heat off of Biden as his approval continues to crater while inflation rages ahead of the 2022 midterms.
Even though Biden has been in office for just more than one year, he and his administration have tried shifting blame for economic woes on several outside parties. First, inflation was nothing to worry about because it was "transitory" and just a side-effect of the economy restarting after the pandemic. When that explanation was debunked by reality, Psaki pivoted to blame "big meat" and greedy corporations.
As gas prices rose more than $1 within Biden's first year, the White House needed a new scapegoat as costs continued to swell. Russia eventually fit the bill, so Biden and his team came up with "Putin's price hike" to again blame someone else. Then, apparently needing more than one fall guy, the White House turned again to blaming oil and gas companies — the ones Biden is trying to put out of business by demonizing their vital work and blocking their activities.
And, because the White House seems to enjoy infographics more than actually working to address the inflation that has caused the average American worker to experience a net loss in earnings despite wage growth, the Biden administration shared a handy chart that seems to back up Biden's complaints.
Oil prices are decreasing, gas prices should too.— President Biden (@POTUS) March 16, 2022
Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31.
Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans. pic.twitter.com/uLNGleWBly
"Oil prices are decreasing, gas prices should too," Biden's official POTUS account tweeted. "Oil and gas companies shouldn't pad their profits at the expense of hardworking Americans." Biden's tweet is just part of the administration's messaging that seeks to blame record-high gas prices on supposedly greedy oil and gas companies — a message that hopes to capitalize on Americans not thinking critically about what the White House is asserting. As it turns out, Biden and White House are wrong on multiple levels.
First: Lies, damn lies, and statistics. The graph Biden tweeted out includes a citation to Bloomberg, L.P. The data's source was noticed by Javier Blas — Bloomberg's energy and commodities columnist — who pointed out "you can fit almost any narrative into a chart" and shared one of his own showing the same metrics as Biden's — but with a wildly different result.
I see the White House chart is sourced to Bloomberg LP data. As a public service, I'm going to suggest a different chart. Mine has some of the same elements (WTI oil and retail US gasoline price), but instead I normalized it, and use Dec 1, 2021 = 100. #OOTT #CrackMargins https://t.co/JWVbsvI1o3 pic.twitter.com/F5v9MQH5uw— Javier Blas (@JavierBlas) March 16, 2022
Not only is Biden's infographic dubious, the basis for his claim is disputed by reality.
A 2014 report from the Federal Reserve Bank of St. Louis explained that "when oil prices rise after being steady for some time—gasoline prices shoot up quickly" but "when oil prices fall after being steady for some time, gasoline prices retreat slowly." That's what is shown in Blas' graph.
This is because, as The Wall Street Journal explained recently, "Individual retailers set gas prices based on what they expect their future fuel deliveries to cost. But they have no clue right now due to all of the global uncertainty. Oil prices have plunged this past week in part because the United Arab Emirates said it would urge OPEC to pump more. But the cartel might not," The Journal added.
If the United States were still energy independent, there wouldn't be the same level of uncertainty that cause gas retailers to worry and nudge their prices higher. But in Biden's America, gas stations have to make their best guess as to what oil prices will look like based on the actions of tyrants have a world away.
Another thing that the graph tweeted by Bloomberg's Blas shows is that the national average for gas did not jump as high as the cost of oil. In fact, it shows that oil and gas companies would have been generating less profit as oil prices spiked. As Fox News explained, "most oil companies get squeezed on the revenue side on the way up." And, as Blas' chart depicts, "energy companies did not pass on the entire price increase in the cost of crude oil and may have to keep prices higher to make back revenue they lost on the way up."
Another inconvenient truth for Biden's attempt to make boogeymen out of oil and gas companies? "The vast majority of the nation’s 150,000 gas retailers are mom-and-pop operations" and "fewer than 5% are owned by refiners." For those individual retailers, "profit margins are only about 10 to 15 cents a gallon even when prices shoot up," meaning "small businesses aren’t padding their profits. They’re trying to hedge against big losses if oil prices spike."
Does Biden or his administration care that the narrative they are currently pushing is based on activists' claims rather than reality? Probably not. As he's shown repeatedly during his first 14 or so months in office, he'll divide Americans and direct their anger at straw men in order to save his own hide. Those tactics, as polling consistently shows, are not playing to Biden's advantage.
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