Biden needs crash course in how markets work

Vladimir Putin can breathe a sigh of relief — the Russian leader got a temporary timeout from Joe Biden’s high gas price blame game.

Instead, the president passed the buck to those who sell the gas.

Biden tweeted Saturday: “My message to the companies running gas stations and setting prices at the pump is simple: this is a time of war and global peril. Bring down the price you are charging at the pump to reflect the cost you’re paying for the product. And do it now.”

A bold, decisive statement — and one revealing a stunning lack of understanding of how markets work.

The US Oil and Gas Associated responded: “Working on it Mr. President. In the meantime — have a Happy 4th and please make sure the WH intern who posted this tweet registers for Econ 101 for the fall semester.”


Blaming high gas prices on everything except his own domestic drilling and production policies is getting old. Biden couchs his outrage in righteous tones, as when he conflated the desire for affordable gas with supporting tyranny.

“Are you saying that we would rather have lower gas prices in America and Putin’s iron fist in Europe?” Biden said last June. “I don’t believe that.”

No, we’d like an end to Putin’s war with Ukraine, and for the country to return to the energy independence it experienced under President Trump.

Amazon founder Jeff Bezos also stepped up to slam Biden’s tweet: “Inflation is far too important a problem for the White House to keep making statements like this. It’s either straight ahead misdirection or a deep misunderstanding of basic market dynamics.”

Neither one is acceptable coming from a president.

On June 15, Biden wrote in an open letter to the industry “high refinery profit margins being passed directly onto American families are not acceptable … companies must take immediate actions to increase the supply of gasoline, diesel, and other refined product.”

But US refineries are operating at 92% of capacity, according to data from the Energy Information Administration. Most of their refining units are full.

And the notion that gas station owners are playing a gouging game is also wrong. According to Peter McNally, an energy analyst with the research firm Third Bridge. “Retail gas typically has the lowest margins.” Since gas stations have to refill their underground storage tanks often, they have to charge a price for gas that will cover the cost of their next order.

The Biden administration doubled down.

As The Hill reported, White House press secretary Karine Jean-Pierre responded to criticism from Bezos, tweeting it’s not surprising the billionaire thinks “oil and gas companies using market power to reap record profits at the expense of the American people is the way our economy is supposed to work.”

Republicans have pressed Biden to increase drilling at home to reduce reliance on gas imports and theoretically bring stability to the US market.

The administration punted on the issue of whether it would open up additional oil drilling, but said it is crafting a plan that could include up to as many as 11 new offshore drilling leases or none at all.

Biden’s moves — or lack thereof — to curtail soaring gas prices has sparked some numbers to drop — his polls. Now we need to see the numbers at the pump follow.

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