One of the Greatest Cons of all Time
“One for you, and one for me,” works well enough for divvying up when there are only two. When there are more than two and the divvier gets one for everyone else’s one, that’s capitalism; one of the greatest cons of all times. Somehow, 1% convinced the other 99% to believe in something that was in the interest of the 1% and contrary the interests of the 99% without necessarily invoking religion. More like, they who hold the marbles make the rules; have since forever. Capitalism wasn’t that much better/different than feudalism/serfdom, if any. All those who got one each time around got an early pass to eternity; the divviers, wealth beyond imagining. For a very few decades in the mid-20th century, the divvied ones enjoyed some parity; unions were the greatest thing that ever happened to capitalism. Since about 1980, things have been going the other way. A lot has changed over these past four decades, but not the power of wealth (capitalism is the power of wealth applied). Today, in America, one is either a capitalists or they are a socialists; with being a socialist on a par with being an atheist; both the two being heretical. Truth be, both, capitalism and socialism, are meaningless anachronisms; have been for a while. Atheism isn’t even heretical; if you think about it.
In spite of all the years of working people to an early death, of profiting from the impoverishment of others, of destroying the environment, of being a leading cause of global warming; fealty to capitalism and the god of Abraham is a requisite in American politics.
In times of sacrifice, the divvying becomes 0.8 or less for the working class, 1.2 x # of workers or more for the capitalists. On 06 April 2022, executives from BP, Shell, Chevron, ExxonMobil, … were called before the House Oversight Committee in re the current high gas prices. They all pleaded innocent to the charges that their companies were gouging consumers; placing the blame for the increases on the laws of economics, which of course aren’t really laws at all. Insisted that supply and demand, sometimes called ‘the market’, not them, dictated the price of gasoline. Which, too, of course, was a lie. Supply and demand, and ‘the market’, are but figments of economists’ imagination. In reality, it was that old ‘whatever the market will bear’ rule and greed that were at play, with, perhaps, a little price elasticity thrown in. Whatever the market will bear is the time-tested, market-approved way of determining prices wherein the price of a product or service is increased until profitability declines, then lowered to find the profitability sweet spot. At best, the supply and demand curve can be used to explain the after the fact of it all. Maybe.
Katie (w/ sincerest apologies to the real Congresswoman Katie Porter, CA) here:
—In billions —
Total Profits = Profit/Unit Sold x Units Sold
Total Profits = $2/gal x 100 = $200
Let’s say that the cost of crude oil makes up 60% of the price of a gallon of gasoline. If on January 22, the average price at the pump was $3.32 /gal and crude went up 21% we would expect the cost of producing a gallon to go from (0.60 x $3.32 = $1.99/ gal) to $1.99/gal x 1.21 = $2.40/gal; an increase of $0.41/gal. We would expect the price at the pump to go to ($3.32 +$0.41 = $3.73/gal. In actuality, the price went to $4.32/gal and stayed even after the price of crude went down 15%. That’s excess profits of at least $0.59/gal x 11 billion gals/month = $6 billion dollars/mo extra profits these companies are extracting from consumers’ pockets at a time when consumers are being asked to sacrifice for the sake of Ukraine, the Nation. They increased dividends and bought back shares with the profits while consumers sacrificed.
Don’t say there is nothing /Congress can do. Within the week after the hearings, the pump price of gasoline was down $0.20/gal.
EXXONMOBIL CEO Darren Woods @ 1:32 ‘supply and demand’
Chevron CEO Mike Worth @ 1:57 ‘we do not control prices’
“Lawmaker blasts Big Oil CEOs at hearing: ‘You are ripping off the American people,” CNN Business
Supply and demand mearse. It is whatever the market will bear. If price is too high, it will decrease demand. If demand is lowered because of high prices, suppliers will either lower prices or reduce supply.
Out here in high gasoline prices California, the general public is well aware of the up fast down slow operation of the relationship between oil and gas prices. More than once the state has “investigated” the pricing of gasoline because it seemed so out of whack with what we knew about costs. Every time there is no wrongdoing found.
Of course all the details are to technical or convoluted to be explained simply to the public on the nightly news.
What I have been saying all along, is there probably never was an increase in cost. Supply chain issues do not need an increased cost of materials to raise prices. Even if it was Labor working OT, it is a much smaller part of the cost. Increased demand does not increase cost. If you are using less efficient processes to manufacture product, the cost can go up.
This is a capital-intensive refining process that probably runs 24 hours a day and comes down for maintenance or product switch. Global oil is rent -taking or increasing prices because they can do so.
They do follow Brentt pricing per barrel.
I agree. The price of crude is a separate issue. The gouging is being done by the refineries; refineries owned by big oil that was doing the lying.
The new Frontline series addresses big oil’s role in holding off action on climate change