So a few things: 1) gas tax holidays are bread and circuses for the proletariat, but it's the proletariat who are most impacted by staple prices. I drive a 911. The manual calls for an octane of gasoline not readily available in my state. I fill it up and go "well that sucks." My receptionist drives an '09 Honda Fit that she has to drive 16 miles a day. She fills it up and every 50 cent per gallon increase is $2.50 out of her pocket that week. Suppose she was commuting 90 minutes? Suppose she lived in the flyover states and it took her a 45 minute round trip to get groceries? It's the poor who eat it at the pump, not the rich, and "do something about gas prices" is more than philosophical to them. 2) And the whole point is geopolitical mayhem. NYMag may think that 11 billion barrels are off the table, but the fact of the matter is Russia's oil is only about 25% cheaper. They're still selling it just fine to China, India and a whole slough of other countries. Hell, they're still selling it to Germany and France! Russia is, however, a petro-state and causing instability within Russia is the entire point of the exercise. This is why stockpiles are down - they're always down whenever we're attempting geopolitical mayhem. Last time they were down? It's because Russia and Saudi Arabia were in a pissing match where both countries were trying to break the other. It goes the other way, too - OPEC increased the fuck out of production in 2012-2013 in an attempt to destroy the US shale industry (which only profits when oil is above $60/bbl). "Price at the pump" is a local geopolitical consideration, "price at the refinery" is a global geopolitical consideration, and depending on the policy focus one will always be sacrificed for the other. 3) This is just stupid: You can't say "ZOMG gas is $8 a gallon in LA" and then argue that knocking 48 cents off the pump is going to encourage driving. What it does is keep the people who commute from desiring your ouster. This is supply/demand Econ 101 shit: IF prices are up a buck or more AND you reduce prices 48 cents THEN you have made a half-step. We're not talking about elective driving here, we're talking about compulsory driving - and with 60% of NY office space still empty as everyone works from home, we're not talking about the managerial class. 4) Let's talk about that gas station by the way. There are certain gas stations that get featured by LA news on the reg. One of 'em is down by LAX - it's the one that you will pay through the nose for because you forgot to top up your rental car and you have a rental agreement that says Avis gets to charge you $15 a gallon to top it up. That one gets used a lot because any time you have to do anything about travel or the government or whatever you have to roll a truck to LAX to do a pointless standup by the In'n'Out that everyone always uses to shoot airport landings "to establish" for your shitty romcom. So you've decisively not filled up at that station a whole bunch because why would you. The other is in the heart of "what the fuck did I do wrong" while Google gets you lost. This is where the 101, the 110, the 10 and the 5 all come together to fuck you over. where citizens take the law in their own hands to keep you from being lost, where within a half mile you have five exits that take you to Staples Center, LA Live, the district court, the art museum, Chinatown, Union Station, the LAPD headquarters and the Disney Concert Hall and where you might need to be in the far right, the second right, the far left or the second left depending on where you're going. If you're news, you're also there all the time, and you're also not about to fill up your gas tank. That gas station subsists entirely on your friends who come to visit you from out of state, who are trying to get to your apartment but have been led by Google into the freeway equivalent of a malignant tumor and are now calling you, utterly and completely lost, and without any real sense of how to escape, but in desperate need of peeing in a place where most people do it on the street, of topping up because they thought they'd make it but instead they've been orbiting what they're certain is Nakatomi Plaza for twenty unnecessary minutes. Gas is expensive. Highlighting either of these two stations, however, makes as much sense as holding Princeville and Topeka equivalent.Hochul’s plan is probably worse than just cosmetic, since it can only feed demand for more and more driving, giving people an excuse to get on the road when they might not have because they’re now saving a few cents per gallon.
One can only fantasize of a world in which driving cars is both economically disincentivized AND oil & gas companies aren't seeing historic profits by using the excuse of a petrol-state dictator threatening the global order as cover to hike prices. You'd have to be insane to dare imagine the possibility. Straight to jail.
His holy tubes, our physical conduit. So too He, Musk the redeemer will deliver us!!
I see you are correct. I did use a bit of hyperbole. But still, the most quarterly profit since 2014, and the fastest growth rate in 12 years. Despite a couple periods of declining profits, Exxon always managed to be in the black by several tens of billions of dollars every year. I know oil and gas is far from the only profitable sector subsidized by the government, but it's probably the sector most hell-bent on lobbying Congress while knowingly destroying the environment. As is too common the case, there is no sense in debating this if you still don't believe in global warming. Do you now subscribe to the "Not only is it real, it's so cataclysmic that it'd cost too much to address, better do nothing" argument? Please don't make me re-post the fusion funding plot again, btw. We could have easily funded fusion, perhaps two or three times over, with Exxon's last 12 years of profits alone. Maybe they didn't like the pitch?
If I recall correctly, didn't we find in 2008 approximately where the price of gas becomes elastic? I think it was around $4.25/gal at the time (but this info has been sitting in my brain for 14 years, so I'm not confident). I can't imagine much has changed since then, even if my numbers are slightly off. We will find a point at which people start to migrate to cars that are cheaper to operate (outside of the luxury vehicle market). In 08 I bought a manual Corolla that got about 40 mpg if driven non-aggressively. I was in grad school and commuting daily from my apartment to my teaching gig to the lab, a ~40 mi round trip. I'm sure they still get the same approximate gas mileage. I know we all hate to see oil tycoons getting tycoonier, but the fact is that high fuel prices are what drive market change. So if global warming is a bigger concern than profit taking, then you should root for high gas prices to stay. I own two cars, a V60 Polestar that demands 93 octane, and a Sierra that runs on diesel. Both are at about $6/gal around here. I'm upper middle class and I swallow hard every time I have to fill up. It hurts, but it's actually probably much closer to what they should cost.
Completely agreed, it just sucks that, like everything else in the world, this is only gonna hurt poorer people who can't afford to live closer to work, won't be getting work-from-home, can't buy a newer more efficient car, and who definitely won't be getting any sort of raise to match the increased costs
I legitimately had a cry for society in April 2020. Every bad trend in The Before Times got a ten-year boost. - Can't afford rent? Well now neither can your friends so you all have roommates. - Hate your job? Well now it's even worse so there's no reason to even try. - Police sucking? Well now they've got a fascist cheering them on so they're gonna become monsters. - Monopolistic billionaires running the economy? Well now they own most of it. - Unequal access to healthcare? Well guess who's gonna do the dying? Some of that isn't going to change. We're having a hell of a time hiring because jobs suck and nobody wants them. I guess mall retail is at $23/hr where I'm at. That's going to do a few things: (1) it's going to kill every store that can't profit at $23/hr wages (2) it's going to turn off every consumer that can't pay those prices (3) it's going to drive out every renter who can't afford a rate based on $23/hr mall workers. There's an aspect of the supply/demand curve that economists never focus on: it's always about how high wages drive up the price of whatever but never about how low wages kill labor demand. No one is going to dispute that being an "essential worker" sucks balls. No one is going to dispute that people have more stuff churning behind their eyeballs, or that they take it out on perceived social inferiors (like "essential workers"). What's different this time is that we've structured an economy and a society such that the workers are saying "naah" before corporations were ready to replace them with robots. I think we're going to see a lot more multigenerational housing, and a lot more gig work and side hustles. I think we're going to see a lot more petty entrepreneurialism. I think high gas prices are just the cherry on top- it was wild seeing the freeways in LA clear out in 2008 because it's not fucking worth driving an hour across town for $8/hr when gas is $5. I don't see any tools our current economy can use to incentivize the workers who bore the brunt of it. We're going to have to try something else. We've got Democrats in power right now, which means the solution will be well-meaning, committee'd to death and ultimately 1/10th as effective as it could be. That will likely lead to Republicans in power whose solution will be "let them eat cake." "Let them eat cake" is, historically speaking, poor policy. Funny thing happened Thursday. Both Jamie Dimon of JP Morgan Chase and Michael Burry of "The Big Short" fame observed that the economy has 3-6 months of excess savings left over from the pandemic and that once that's gone shit's gonna get spicy. Then Friday The Daily Shot came out with a graph breaking down excess savings by quintile that revealed everyone but the top 20% in the country is already broke - but that's okay because they're 60% of purchases so from an economics standpoint both Burry and Dimon are right! From a sociopolitical standpoint, they're wrong. There's going to be an unwinding. I'm hopeful it won't be too terrible, but past experience has been that "terrible" is in the cards with dreary regularity.
From a sociopolitical standpoint, they're wrong. There's going to be an unwinding. I'm hopeful it won't be too terrible, but past experience has been that "terrible" is in the cards with dreary regularity. Would love to see that quantile graph. Yeah I mean, what else but terrible is even possible at this point. You start looking at evictions; a looooot of others, mostly minorities, are behind on rent with no real change since the pandemic started, teachers are saying fuck this probably to shitty parents and to the thought of them and their students getting fucking murdered in the classroom; I really hate myself for sharing McKinsey analysis but holy shit they are showing some bleak shit for nursing jobs in the USA. And gas prices, and housing, and the job market, and the stock market...the list goes on. It's just, like, we've fucking broke everything. "We" being not ... we ... and people like most of the people on Hubski, we'll largely, tangibly, be fine, but so, so many people are fucked, and I don't see anything short of disaster happening. Gimme some optimism.Funny thing happened Thursday. Both Jamie Dimon of JP Morgan Chase and Michael Burry of "The Big Short" fame observed that the economy has 3-6 months of excess savings left over from the pandemic and that once that's gone shit's gonna get spicy. Then Friday The Daily Shot came out with a graph breaking down excess savings by quintile that revealed everyone but the top 20% in the country is already broke - but that's okay because they're 60% of purchases so from an economics standpoint both Burry and Dimon are right!
I have friends who are property developers that are absolutely salivating over the coming evictions. Talkin' onesie-twosie guys, not REITs; the same ones who were stretched over the rack buying lumber at Home Depot over the past couple years. I have a friend who's an ER nurse and yes indeedy "deaths from despair" are up, are ugly, and are not coming back down any time soon. I just finished this chewy little morsel. It's written by this guy, who I found through this incredible thread on Twitter. Wallerstein has like a five volume set on World Systems Theory which I have promised that I shall attempt to read. I suspect it will be harder than this thing because Wallerstein does not write for thee or me. He writes in an academic register deliberately chosen, I suspect, to give undue jargonal heft to arguments that, on the face of it, are pretty hand-wavey. He acknowledges the hand-wavey nature of his arguments by pointing out that the tragedy of the Enlightenment was that everything became "Science!" and that "Science!" needs a falsifiable hypothesis in order to be true. Which works well for physics but poorly for any study of human nature or civilization because the aspects that are falsifiable tend to be those that are isolated and unrepresentative of generalities. Thus, by insisting that anthropology must be studied the same as chemistry, we have blunted our insight into all things human, and particularly geopolitics. Wallerstein is the un-Rand. His basic argument is that everything is connected, has always been connected, will always be connected, and that there are no externalities. It should come as no surprise that I find this exciting, as my principle beef with economics is the tendency to externalize everything that disproves your hypothesis. And he sees the world this way: 1) There are five kinds of income: Subsistence, piecework, work-in-kind, wages and influence - Subsistence includes gardening at home or assembling Ikea furniture - it's stuff that you would have to pay for but you aren't. - Piecework is selling shit on Etsy, breaking up cartons of cigarettes to sell on street corners, babysitting for your neighbors, anything you make money at but not regularly. - Work-in-kind is anything that you would normally be doing except you can't because you're earning wages so someone else is doing it for you. - Wages are paid employment from a regular employer, either by hour or by item. - Influence is anything you do that makes you more valuable to your community, family or larger social unit, or that makes your community, family or larger social unit more valuable compared to others. 2) Social identity gyrates between the opposing forces of inclusion and exclusion, where increasing the size of the body politic by incorporating minorities or women increases job availability to employers but reduces the other four kinds of income while decreasing the size of the body politic protects wages for the traditional earners ("white men" then "men" then "men and white women" then "born citizens" etc) 3) Since the enlightenment, liberals have driven the world system through the power of capitalism, which runs most effectively on wages to the detriment of the other four types of income. As wage work increases, taxes must increase to pay for all the stuff that would be taken care of otherwise - you need a streets department if you've got people going to the shops and working in a shoe factory but if it's just your extended family in mud huts you pave your own. The social benefits available to a society become increasingly more expensive as that society becomes more developed. 4) Since the enlightenment, this tension is reflected in espousal of liberal values (see? you can't even read Wallerstein without getting all vocab on it) while seeking a return to prejudice and racism. The self-image of liberalism is, in fact, the thing that props up the racism because if all people are equal, yet blacks aren't paid fairly, it's an obvious conclusion that it's because they're inferior. This results in in-group out-group tension, where centrist liberals are pulled towards greater inclusivity and social structures by radicals and greater in-group exclusion and a lack of social safety net by conservatives. 5) The tension does not pull consistently, but by increments where steady-state persists and is disturbed, persists and is disturbed. Wallerstein, who wrote the book in 2004, put the most recent turning points as 1945, when the periphery was fully included in the global system; the "world revolution of 1968", in which the radicals yanked the world away from conservative capitalism and towards inclusive radicalism, and 2001, which the conservatives used as a reason to end globalism, acceptance of Islam and a return to "family values." Wallerstein argued that these cycles take a minimum of twenty and often more than fifty years to resolve and repeat. He off-handedly referred to them as "thirty years wars." Which, in its own way, is Strauss-Howe Generational Theory without the generations. What did Wallerstein think of 2016? Strap in: Wallerstein died in 2019 so we can't ask him what he thought of 2020, 2020.1 or 2020.2. He did make the argument that Russia would invade Poland or Ukraine eventually (and he made it back in the '90s!) because, as he said in Russia, invading other countries is the only thing Russian society is good for. So from my perspective? The one guy who actually looked at the whole system and came up with an explanation that doesn't dismiss everything inconvenient said "it's not going to work much longer." Which is basically where Aaron Bastani starts his book. You want optimism? It's that book. You could watch 35 minutes of an 85 year old man saying the world is doomed, or you can watch 2 minutes of The Expanse. I entered the biomedical industry two years after Johnson & Johnson. I entered the music industry two years before MP3 and three years after the ADAT. I entered the movie industry a year after Netflix and publishing a year after the Kindle. On the one hand? I've got abominably shitty timing. On the other hand? I know me some churn. “Democracy is the worst form of government – except for all the others that have been tried.” - Winston Churchill You know what I found out yesterday? There is no "banality of evil." Eichmann was into it, knew exactly what he was doing, and did it with relish. We know good guys, we know bad guys, and in general, civilizations prefer the good. That whole in-group out-group pissing match is always about who we assume is good by default, and what "good" means, and the arc of history is long but it bends toward justice. Shit's gonna get dicey. It can't help but do so. But for pure fucking self-interest, most people will take the path of least resistance that is most likely to keep a roof over their heads and food in their kids' bellies. And all the stuff that got us to this moment is under re-evaluation. I'm optimistic. I'm fucking scared and nervous every goddamn day but as an armchair expert, things generally get better. Eventually.The bottom quantile of US households now has less excess savings than in 2019. Note that the top two quantiles represent over 61% of US consumption.
Gimme some optimism.
If I have suggested somewhere that climate change is not real, could you please provide a link so I can clarify? Greater consequences would justify greater spending. I think the IPCC estimated that mitigation would cost a few percent of world GDP. So by 2100 people would be only several times richer than today, rather than several times richer and a bit more. I think it’s worth doing a cost-benefit analysis, as we should do for any big decision. As long as we are not allowed to count benefits of climate change, it won’t be an accurate accounting. I think the more interesting question (and one less likely to spin out of control) is how (and whether on net) Exxon benefits from war. Exxon had interests in Russia which it is abandoning. Exxon faces some higher costs which it must pass on, reducing demand. Can Exxon just raise prices whenever it wants more money? What stops it from doing so all the time?if you still don't believe in global warming
it’s so cataclysmic that it’d cost too much to address
If I have suggested somewhere that climate change is not real, could you please provide a link so I can clarify?
I'm going to be totally honest, this time the "you" in "if you still don't believe in global warming" was not 100% apostrophe, like I'd used with you recently. It also wasn't 0% apostrophe. I dunno, it's weird. It was like "even YOU, probably", like 40-60, apostrophe-not, respectively. So I feel kinda bad, 'cuz I was wrong yet again, but if the other mark's policy position (above) is still "might best do nothing" or effectively "exclusively free market solutions"? Guess I'll see you two marks-ists tomorrow. This is Mark_251 over and out
Here is another head scratcher… https://www.usnews.com/news/us/articles/2022-06-03/epa-raises-amount-of-ethanol-that-must-be-blended-with-gas Why would you want more ethanol in fuel when there are global food shortages and gas is already too expensive… also retroactive lowering for prior years to improve oil company profit… makes zero sense
We export very little corn relative to our total production, so maybe the domestic/presidential politics of pleasing the farm states are just more important than the macroeconomics? It’s sort of horrifying to say that, but I wouldn’t put it past an administration to go that cynical.
Stolen Ukrainian grain being sold by Russians and you want to raise prices on American exports. You can control the grain that goes into ethanol feedstock, you can't control the grain stolen from Ukraine and disbursed throughout Africa and you want to maintain the narrative.
I don’t understand the macro strategy here. I was curious if you did. Seems like a whole slew of secondary world power shifts are happening and a lot of them do not seem positive for Europe though maybe good for the USA in the medium term. I really don’t see what starving a bunch of countries out and creating global unrest really gains the US either. Maybe it hurts Chinese manufacturers to have high fuel costs and high raw material costs but this isn’t even doubling down on an ineffective strategy it’s intentional. What do we gain from high food prices except more wars and refugees? There seems to be a much larger global conflict that’s occurring that is occurring at a much grander scale than any one entity can control the strategy for. I’m really lost for big picture and to understand if there is a strategy or if it’s simply a collection of individual actors optimizing for short term gains.
So it's worth remembering that 99% of the corn in the US isn't food. it's food-for-food or industrial feedstock. it's also worth remembering that North America is a quarter of the world's refinery capacity and the largest producer of petroleum in the world. Which is good because we're the largest consumer of petroleum by far and our biggest usage is in gasoline for automobiles. We can't dictate how much ethanol goes into anyone else's fuel. But by cutting our own mix we free up production to counterbalance the Russians. It was never going into corn flakes, corn meal or corn chowder, it was always destined for corn syrup, livestock feed or plastics. And considering Chinese meat consumption is double American meat consumption and most of it is grown in the US, diverting feedstock to ethanol production (1) affects the Chinese more than we do, and they're the ones buying Russian oil (2) prevents agribusiness from experiencing any blowback from geopolitics (3) makes it look like we're doing something about gas prices. It's the death of neoliberalism. The argument was that the US had won capitalism and everyone else was going to fall in line. We now see that US-style capitalism is not a settled thing and that other ideas are competing. In my life we've gone from a bipolar world to a unipolar world to a multipolar world to now maybe a bipolar world again, and capitalism always looks better when you have something to compare it to. Depends. Can you pin it on the Russians? Can you pin it on the Chinese? Because if you can convince everyone else that Putin and Xi are bad but Biden is good, you get more favorable trade terms. The more favorable your trade terms, the less you have to fight for global hegemony. Wallerstein made the point that empires fall the minute you have to back up your global trade with force rather than economic enticement, which isn't new it's just another way to highlight soft power. Haha those refugees spill all over Turkey, Poland, Greece and other brown states. Americans lose their shit about the southern border but it's got nuthin on the Syrian crisis. Meanwhile we get to invite qualified applicants to apply for asylum, same as it ever was. From a geopolitical standpoint you absolutely want to create a refugee crisis wherever you have economic competitors. You want chocolate or vanilla? Jason Hickel's The Divide is about the global economic system and how it is used to repress the downtrodden and make life worse for everyone. It is a liberal perspective on all the harm capitalist hegemony causes for the world at large. Peter Zeihan's The Accidental Superpower is about the global economic system and how it is used to reinforce the righteous and justified rule of the One True People and how everyone else can suck it. Also holy shit the man loves navies. They both go through the same facts and figures, Hickel pretty much focused on how the rich use economic leverage to make life miserable for everyone else, Zeihan entirely focused on how USA! USA! USA! Hickel's book is a hard read. He makes the argument that every altruistic thing the United States has ever done was actually a craven powergrab that screwed everyone else nearly immediately. Zeihan's book is an infuriating read. He makes the argument that the suckers deserve it.Seems like a whole slew of secondary world power shifts are happening and a lot of them do not seem positive for Europe though maybe good for the USA in the medium term.
I really don’t see what starving a bunch of countries out and creating global unrest really gains the US either.
What do we gain from high food prices except more wars and refugees?
There seems to be a much larger global conflict that’s occurring that is occurring at a much grander scale than any one entity can control the strategy for.