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“My message to the companies running gas stations and setting prices at the pump is simple,” began President Joe Biden, in a message on Twitter, “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.”
I’m used to a fair amount of ridiculous nonsense coming out of this White House, but this might be the most absurd thing I’ve ever seen out of Biden. And that’s saying something.
As we all know, the economy is in real trouble right now. The annual inflation rate is at a record 8.6 percent as of May, the average price of a gallon of gas is $4.80 nationwide and $4.93 in Maine, and the latest data from the Federal Reserve Bank of Atlanta shows that as of July 1, real gross domestic product shrank by 2.1 percent on a seasonally adjusted annual rate in the second quarter, suggesting that the country may already be in a recession.
This is bad news for any president, particularly one who has appeared to dither endlessly as Rome has been burning around him. Thus far, Biden’s main response has been to blame some combination of Vladamir Putin and “corporate greed” for high prices, and continue to push for his politically toxic “Build Back Better” agenda to be passed in Congress, something no one seems to want to do.
Blaming created boogeymen for the economic disaster on his watch may be the only card Biden has to play, but it isn’t working. Despite his attempts to create a hokey, lame-sounding catchphrase — Putin’s Price Hike — no one is buying it, because we are aware enough to realize that significant inflation was taking place well before the Russian invasion of Ukraine. Even the chairman of the Federal Reserve swatted away the implication that Putin was chiefly responsible for high prices, telling a congressional committee in late June, “No, inflation was high before — certainly before the war in Ukraine broke out.”
Nor are they buying the corporate greed angle, either. Recently Biden remarked that “Exxon made more money than God this year,” while accusing the company of not paying sufficient taxes, despite the fact that Exxon lost $20 billion in 2020, paid $40.6 billion in taxes in 2021, and oil company profits are not excessively abnormal right now. Besides, “record profits,” when they exist, don’t really come as a result of higher prices anyway, given the incredibly complex nature of oil company operations.
Besides, ask yourself who is really making “record profits” off each gallon you pay when you fill up. On every single gallon of gas sold in Maine, for instance, 18 cents goes to the federal government, and 30 cents goes to the state government. And governments earn that revenue at all times, no matter what the state of the economy is. Unlike the oil companies, they never go through periods where they lose billions.
The president’s hollow finger-pointing is entirely devoid of substance, which is why the country has given it a collective shrug. And so the president begins to look for a new boogeyman to blame.
This time the bad guy is apparently the owners of your local neighborhood gas station. Mom and pop, it seems, have been gouging you at the pump to make their luxury car payments and buy some oceanfront property.
Not quite. Gas stations typically operate on a margin of around 15 cents per gallon. This represents gross profit before expenses, which include things like shipping costs, rent, utilities, credit card fees, and labor, which can bring down a retailer’s profit to about 2 cents per gallon.
Time to give that 2 cents up, because Biden says that now is a time of national sacrifice. We are in a “time of war,” afterall, though this may have escaped your local Big Apple or Cumberland Farms attention, given that American forces are not currently engaged in major military operations, and Congress hasn’t declared a war since June 5, 1942, nor even given authorization to a military effort of any kind since March 3, 2003. Please forgive them.
But no matter. Gas station owners are to bring down the price they are charging at the pump, and they are to “do it now.”
Or else what, Mr. President? You’ll keep sending passive-aggressive tweets in their general direction? Or will you just find a newly concocted bad guy to blame next week?