The Truth! Why High Gas Prices Are Joe Biden's Fault, Not Corporate Greed

Flaws with the corporate greed argument-
The subscribers also believe that greedy corporations want to monopolize or that they are already monopolies.
- Three factors contribute to the formation of a monopoly and they are Ownership of a Key resource, Government regulation and the granting of exclusive property rights to a particular entity, and economies of Scale. Which is a reduction in the average cost per unit of output by an increase in the magnitude of production by a firm
The Biden administration has stated that Oil companies have the permits and ability to increase production, but choose not to because they are worried that future demand will diminish.
Oil is an inelastic good. Which means demand is impacted very little or not at all by price fluctuations due to the lack of acceptable substitutes. The reason future demand for a current inelastic good such as oil would be impacted, is because of possible future substitutes, in this case substitutes that are being highly subsidized by the current government such as a large tax credit for the purchase of electric vehicles along with stronger regulation of the oil and gas industry.
The permits are stock piled by oil companies but that does not mean they can be used to produce more oil. Furthermore, the government has recently disincentivized and restricted not only an increase in domestic production, but an increase in global production through climate change agreements like the Paris climate accord. They have also disincentivized the industry through higher taxation initiatives not only on domestic revenues, but through global minimum tax agreements as well.
If Exxon could produce more oil as claimed by the Biden administration, and they would actually see an increase in profits by lowering their price, as proven by the results of the last quarter, then why wouldn’t they do so? They care about profits don’t they?
It would actually be in thier best interest and the interest of thier shareholders for them to lower their prices against the competition and draw more of a market share if they actually had the ability to meet the demand. That would be true corporate greed.
The same goes for the actual gas stations selling gas to everyday people like us. The problem is they are not able to do so because the supply isn’t accessible. And they could not meet the demand. The reason supply isn’t accessible is because of government restriction.
Further more oil prices are not set by the producer, rather they are highly influenced by market place and the futures market. Gas stations do not set current pump prices based on the cost of the most recent delivery, but set the prices based on the future expected cost of the next delivery.
Furthermore, the sanctions levied on Russia cut out a large competitor in oil industry and a substantial amount of the global supply of oil.
While the US may have only imported a small percentage of its oil and gas from Russia, Other countries were far more reliant on it. Now that global demand has to be met utilizing fewer producers, less supply, and less competition. This goes back to the actions of the government pushing entities like OPEC into a more monopolistic role.
Really think about this. In Free Market Capitalism, success results from the ability to meet consumer demand in a superior way to your competition. Contrary to Socialist and communist belief that capitalism results in keeping the majority poor while enriching the few, The reality is that capitalism wants the majority to have more ability to consume. More money in peoples pockets= more of a potential market for goods and services.
No one starts a business in an industry that has no demand. That is why you don’t see any IPOs for typewriter companies. Henry Ford displayed this concept by increasing the pay of his workers to give them the financial means to purchase cars from Ford. A car is worthless if no one can buy it, therefore making it affordable and accessible to a larger amount of customers is in the best interest of the business and why true corporate greed actually benefits consumers.
Think of it like this. A football team makes money from the fans. The fans are the consumer and the team is the product. A football team doesn’t make money by screwing the consumer with a shitty product. They make money by defeating their competition and by being consistently better than their competitors. This is done by putting together a quality team that fans want to come watch play. That is why an organization is willing to invest in the best possible coach and players. That is why quality winning teams fill stadiums and losing teams do not. Furthermore fans are willing to pay more money for quality football than they are for mediocracy. #exxonmobil #corporategreed #oil #oilandgas #joebiden #climatechange